House of Representatives
10 October 1951

20th Parliament · 1st Session

  1. House of Representatives
  2. 20th Parliament
  3. 1951

Mr. SPEAKER (Hon. Archie Cameron) took the chair at 2.30 p.m., and read prayers.

page 459

STANDING ORDERS

Mr SPEAKER:

– Yesterday the honorable member for Parkes asked me whether the Standing Orders do not contain certain directions concerning attacks on other governments, including State governments. The Government of the Commonwealth of Australia is the only Government mentioned in our Standing

Orders. There is no reference to State governments or to other British or foreign governments, and I do not know of any such reference in “the Standing Orders of the House of Commons, which are a reserve authority where our own are silent or insufficient. The usage and practice of the House of Commons is described in the fifteenth edition of May’s Parliamentary Procedure, at page 438, as follows: -

Nor may opprobrious reflections be cast in debate on sovereigns and rulers over, or governments of, dominions or countries in amity with His Majesty, or their representatives in this country.

This House is bound by that usage. Honorable members will observe that British parliamentary usage does not prohibit references to other governments. If the other government is in amity with. His Majesty, opprobrious reflections are disorderly. A perusal of the reports of debates on foreign affairs in the British House of Commons discloses quite clearly the bounds set by. good taste in the British Parliament.

page 459

PERSIA AND EGYPT

Mn SPEAKER. - I have examined tha proof report of the question that was asked yesterday by the honorable member for Angas on the Anglo-Egyptian Treaty. The right honorable member for Barton challenged the use of two terms that were employed in the question, namely, “ Its (the British

Government’s) mishandling of the Persian crisis “, and “ the last vestiges of British influence in the Middle East”. It appears to me that’ those very matters are the subject of controversy in countries beside our own. I am unable to apply any one of the many dictionary meanings of the adjective “ opprobrious “ to any part of the question to which I have referred that was asked yesterday. When objection is taken to words used in the House and a withdrawal is ordered, such withdrawal must not be in deference to Mr. Speaker, who is enjoined by Standing Orders 77, 78 and 79 to take action. A withdrawal must bc unqualified. The British usage is described in the fifteenth edition of May’s Parliamentary Procedure, at page 440, as follows : -

The House of Commons will insist upon all offensive -words being withdrawn, and upon an ample apology being made, which shall satisfy both the House and the Member to whom offence has been given.

Here again, British practice is not based upon standing orders, but upon custom, usage, precedent, common sense, and courtesy.

Dr EVATT:
BARTON, NEW SOUTH WALES

– Arising out of your statement, Mr. Speaker, which of course is not a ruling, because the matter has ended, I should like to draw your attention to the fact that in the House of Commons, by the rulings to which we are bound about matters on which our Standing Orders are silent, similar references to dominion matters and the conduct of dominion governments are never permitted by Mr. Speaker. If this matter arises again in this House T consider that it should be covered by an express ruling. The passage that you cited from May’s Parliamentary Procedure implies that many similar incidents have occurred in the House of Commons. I have read detailed reports on them, and I am obliged to you for your explanation.

Mr SPEAKER:

– Last night, I carefully examined every one of the precedents listed in May. It is true that not very long ago - I think in 1948 - the Speaker of the House of Commons refused to allow certain questions about the position of coloured people in the Dominion of South Africa. His ruling was that they were subjects of the King in the Dominion of South Africa and were outside the control of the British Government. It is equally true that when a member of the House of Commons, outside the Parliament, made an attack on Von Ribbentrop, who was then the German Ambassador to Great Britain, the matter was raised in the House of Commons, and the British Foreign Secretary thought fit to make an apology to Von Ribbentrop on behalf of the House. The Foreign Secretary apologized for something that had been said, not in, but outside the House.

Mr OSBORNE:
EVANS, NEW SOUTH WALES

– I direct a question to the Minister for External Affairs, concerning the stated intention of the Egyptian Government to tear up the Anglo-Egyptian Treaty of 1936, on which depends the last right of the British Commonwealth to defend the Suez Canal’. Will this Government express to the Egyptian Government the grave concern of the Australian people at that proposal and make it clear to the Egyptians that such treaty rightsare not only the affair of Egypt and the United Kingdom but are alsoof vital importance to the people of Australia, to other British Commonwealth nations, and indeed, to the whole democratic world? Will the Government also express- to the United Kingdom Government our grave . anxiety and make plain to that Government that the rest of the Commonwealth still regards Great Britain as the trustee of treaty rights for the whole of the British Commonwealth and that those treaty rights should not lightly be set aside?

Mr CASEY:
Minister for External Affairs · LP

– The matters of which the honorable gentleman speaks are of first-class importance, not only to the United Kingdom, but also to Australia. They are of such importance that the Prime Minister as the head of the Government, proposes to make a statement on the subject latex this day.

Dr EVATT:

– Is the Minister able to state whether, in any of the communications from the Australian Government or its Ministers to His Majesty’s Government in the United Kingdom in relation to the present oil dispute with Persia, the Ministers or the Government or any Minister at any time proposed, recommended or suggested to the United Kingdom Government the use of military, naval, or air forces against Persia? Will the Minister make a statement to the House as early as possible, not only in connexion with the Persian oil dispute but also in connexion with the Anglo-Egyptian Treaty dispute?

Mr CASEY:

– The answer to the first question asked by the right honorable gentleman is “ No “. The answer to his second question is, as I have already stated, that the Prime Minister will make a statement on the general subject of the Anglo-Egyptian Treaty of 1936 and the regrettable recent incidents in connexion with it.

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND

– I desire to ask the Minister for External Affairs whether in any communication with the United Kingdom Government concerning Anglo-Egyptian relationships the Australian Government will emphasize the part that was played by Australian forces together with other British Commonwealth forces. chiefly those of Britain itself, in protecting and maintaining the Crown and Government of Egypt in two world wars and in securing Egypt’s trade transport rights and other facilities? Is it not a fact that Egypt later claimed from Britain a payment of £300,000,000 in return for the privilege of having protected Egypt during the last war ?

Mr CASEY:

– I shall certainly bear in mind the facts that have been mentioned by the honorable member.

page 461

ROYAL VISIT TO AUSTRALIA

Mr MENZIES:
Prime Minister · Kooyong · LP

– by leave - I have to-day received through His Excellency the Administrator, the following information: -

On his doctors’ advice, the King lias now most regretfully decided that since his proposed tour would follow so soon after his severe operation he will be unable to visit Australia and New Zealand next year.

As suggested jointly by the Prime Minister of Australia and the Prime Minister of New Zealand last June, His Majesty has asked Princess Elizabeth and the Duke of Edin burgh to carry out that part of the tour for him, which their Royal Highnesses will gladly do.

The reference to a joint suggestion by the Prime Minister of New Zealand and myself relates to a document that I have already mentioned in this House. When His Majesty’s health deteriorated, we thought fit to send him a joint message to indicate that he must not feel so pressed by a sense of obligation to come to the two British countries concerned as to run risks with his health. We said that we wanted His Majesty to feel entirely free either to postpone the visit or to substitute some other member of the Royal family. Every member of this Parliament and every citizen of Australia will profoundly regret this postponement of tho Royal visit and its cause. The King’s illness has been a matter of very great concern to his loyal subjects all over the world. Doubtless the illness has been aggravated by the fact that both in war and in peace His Majesty has devoted himself unsparingly to the interests of his great office and of the people over ,whom he rules. As we have already indicated, from this place there goes out to His Majesty and to Her Majesty the Queen, who bears such a great burden in these, days, our warm and loyal devotion and our good wishes for a speedy and complete recovery of His Majesty. All that I need to add is that Her Royal Highness Princess Elizabeth and her husband the Duke of Edinburgh will be welcomed in this country with great warmth and enthusiasm. We look forward to their visit. We shall find in their presence another means of expressing in every way open to us our devotion to the Throne.

Dr EVATT:
Leader of the Opposition · Barton

– by leave - On behalf of the Opposition, I endorse what the Prime Minister (Mr. Menzies) has said. It is certain that, because of the circumstances that have caused His Majesty to make this decision, the Princess will receive a very special welcome. I draw comfort from the fact that her coming seems to assure us that the permanent and complete recovery of His Majesty from this severe illness is now only a matter of time. For his complete recovery we ali pray.

page 462

QUESTION

HOUSING

Mr BIRD:
BATMAN, VICTORIA

– Will the Prime Minister lay on the table the report of the Co-ordinator-General of Works, Mr. Price, concerning applications by the various State governments of the Commonwealth for loan accommodation to enable them to carry out their housing programmes ?

Mr MENZIES:
LP

– I shall look into the matter. The Co-ordinator-General of Works, though in one sense an officer of the Commonwealth, is appointed by and serves under the Loan ‘Council, and it will therefore be necessary for me to give some consideration to the correct procedure involved in replying to the question asked by the honorable member.

page 462

QUESTION

IMMIGRATION

Mr OPPERMAN:
CORIO, VICTORIA

– Has the attention of the Minister for Immigration been directed to a report that the Prime Minister of Great Britain, Mr. Attlee, has publicly stated that the cost of living in Australia is six or seven times greater than is the cost of living in England at the present time? Such an exaggeration may have an adverse effect on the attitude of British people who are contemplating migrating to Australia, especially when it comes from a responsible source. Is the Minister aware of any avenue in the United Kingdom through which a wellpublicized denial could be made of such an inaccurate statement?

Mr HOLT:
Minister for Immigration · HIGGINS, VICTORIA · LP

– I have not seen the statemen tT’ attributed to the Prime Minister of Great Britain, and I should be most astonished to learn that he had made any such statement. In fact, the reports of travellers to the United Kingdom who return to Australia, and my own experience when I was there a few years ago, indicate that living costs in the United Kingdom, so far as many people are concerned, compare very unfavorably with those in Australia. That is certainly so in relation to foodstuffs, clothing and a variety of other commodities. I shall ascertain whether T can obtain information about whether any such statement was made. We try to keep our staff at Australia House up to date with details about living costs, wages, conditions, and so forth, in Australia for the benefit of intending immigrants. I shall ask the officers at Australia House to report, first, on whether any such statement was made; and, secondly, whether, if it was made, they have adequate information to refute it. I shall also ask them what action they consider would be useful to ensure that the Australian situation shall be put clearly before the people of the United Kingdom.

Mr THOMPSON:
PORT ADELAIDE, SOUTH AUSTRALIA

– Can the Minister for Immigration say whether any alteration has been made in the control of hostels for immigrants since the new company, Commonwealth Hostels Limited, was established to supervise them? Will British immigrants receive the same consideration as they received previously? Will the existing system in respect of such immigrants go by the board and will the new controlling body set up a new set of regulations with respect to payments by residents of such hostels? Is there any differentiation between the amounts that are paid by British immigrants for hostel accommodation and those that are paid by new Australians for similar accommodation? Has any arrangement been made or has any instruction been issued under which wives of British immigrants are debarred from working?

Mr HOLT:

– If I should fail to cover all of the ‘points that the honorable member has raised I shall obtain the requisite information concerning any aspect that I may overlook at this juncture. It is hoped that the new arrangement into which we have entered with respect to the administration of immigrant hostels will not only result in greater efficiency in the conduct of them but will also effect some savings which it is hoped will be passed on to residents of the hostels. There need be no fear that less consideration than formerly will be shown to residents of immigrant hostels under the control of the new body, which, after all, will be composed entirely of members of the staff formerly engaged in this work, with the addition of a few outside appointees. There is no difference between the tariff that is charged to British immigrants who’ are residents of hostels and that which is charged to new Australians who are residents of similar hostels. In fact, in respect of accommodation and so far as the provision of facilities for children is concerned, British immigrants receive better treatment than new Australians.

Mr Thompson:

– Are the wives of British immigrants permitted to engage in employment?

Mr HOLT:

– No restriction is placed on the right of the wives of British immigrants to engage in work. Many of them are doing so where employment opportunities are offering.

page 463

QUESTION

BROADCASTING

Mr CLAREY:
BENDIGO, VICTORIA

– I ask the PostmasterGeneral whether radio broadcasts in serial form, such as “ Dr. Kildare “ and “ Hopalong Cassidy “, are made from records imported from America. If so, does he regard such importations as so vital as to warrant payment for them from the dollar pool?

Mr ANTHONY:
Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– I have no information on whether such broadcasts are mode from records from America or otherwise. I shall obtain the information requested and advise the honorable member accordingly.

page 463

QUESTION

COAL

Mr CRAMER:
BENNELONG, NEW SOUTH WALES

– Can the Minister for Labour and National Service inform the House whether the threatened stoppages on the northern coal-fields of New South Wales took place to-day? If so, is it a fact that the stoppages were directed by the northern board of management of the miners’ federation to discuss, among other things, the objection of mineds to this Government continuing in office? Is this a further attempt by Communists to defy the expressed will of the people and to place themselves above the laws of this country?

Mr HOLT:
LP

– I regret to say that about two-thirds of the coal mines in the northern field are not being worked to-day. In consequence there will be a loss of production of about 30,000 tons. The executive pf the northern miners’ federation, which is not Communist-controlled, had instructed the miners not to hold the stop pages, but the northern board of management itself, which is under Communist control, thereafter gave instructions that the stoppages should take place. This is in keeping with the information that the Government has previously given the House to the effect that, for propaganda purposes during the referendum campaign, there was a lull in the activities of Communists. This is undoubtedly a fresh outbreak of Communist efforts to retard production on the coal-fields. The fact that the resolution carried by the northern board of management raised two political considerations - an attack on the budget and an attack on this Government - shows that purely industrial issues were not in question. In fact, although the stoppage was directed against a decision of the Coal Industry Tribunal which penalized the miners by withdrawing entitlement to fifteen shifts in relation to long-service leave for the one-day stoppage held earlier in the year, the tribunal had said that, provided there was no district stoppage between the time the decision was given and the end of the year, ten of these shifts would be restored. The result of to-day’s stoppage, therefore, is that not merely are the miners putting in jeopardy their entitlement to reversion to these ten shifts, but their criticism directed to the budget expressed through their failure to work to-day, will not only cost them pay for the lost shift but will also cost them the attendance bonus that they would have otherwise received. The cost to them of this one-day stoppage will, therefore, be somewhere between £5 and £7 a man.

page 463

QUESTION

GOVERNMENT LOANS AND FINANCE

Mr BOSTOCK:
INDI, VICTORIA

– In view of the widespread misunderstanding in Victoria about Loan Council procedure, will the Prime Minister again make it clear that the allocation of loan money to the States is made by the Loan Council, and not by the Commonwealth? Will he also make it clear that the Premier of Victoria is a member of the Loan Council, and that at the last meeting of the council he agreed to Victoria’s allocation of loan money?

Mr MENZIES:
LP

– The facts are quite simple, although attempts have been made to cloud them. The States submitted works programmes to the Loan Council involving the expenditure of a little more than £300,000,000 of borrowed money. The claims were reduced to £225,000,000 by a vote of the Loan Council, in which there was a majority of four States to two for the resolution. Victoria voted with the majority. Thus, the Loan Council, by a handsome majority, adopted the loan programme of £225,000,000. If the money had been divided according to the formula in the Financial Agreement, Victoria would have received what some of us thought to be an unduly small share, having regard to the way in which the formula operates. The Premiers then went into consultation amongst themselves about the allocation, and some of them agreed to accept less than the amount that would have been their share under the formula so that Victoria’s share might be increased, with the result that Victoria was eventually allocated some millions of pounds more than it would have received under the formula. Thus, the decision to reduce the total loan programme to £225,000,000 was taken with the concurrence of the Government of Victoria, which also agreed to the allocation of the reduced amount. As the Commonwealth was not taking any share of the £225,000,000, we took no part in the consultation at which the allocation was made.

Mr JOSHUA:
BALLAARAT, VICTORIA

– At the recent meeting of the Loan Council, when the States considered their loan requirements and programmes, did the Treasurer indicate that he believed that only £225,000,000 could be raised by way of loans in the current financial year ? If so, upon what information did the right honorable gentleman base his estimate?

Sir ARTHUR FADDEN:
Treasurer · MCPHERSON, QUEENSLAND · CP

– The discussions of the Loan Council are held in camera and are confidential.

Mr W M BOURKE:
FAWKNER, VICTORIA

– In view of the fact that the fall in the price of some issues of treasury bonds to £93 has inflicted great hardship on many small investors, who advanced their money to the Government in good faith, will the Treasurer indicate what action the Government proposes to take ,to restore public confidence in Commonwealth loans? Does the Government propose to increase the rate of interest on existing 3 i per cent issues to the current rate of 3f per cent. 1 Does it propose to stabilize the bond interest rate at 3f per cent., or is a further rise in interest rates contemplated when the next loan is floated?

Sir ARTHUR FADDEN:

– The honorable member’s question gives me the opportunity to set out the true facts concerning .loan raisings and the Australian Government’s responsibility in connexion with the loan market and loan transactions generally. The Loan Council in which the Australian Government is a partner with the States, the six States having one vote and the Commonwealth having two votes, determines the rate of interest, the terms of maturity and the general conditions of all loans raised. The loan raisings are decided by the Loan Council, and the Australian Government acts as the agent or trustee for the States in the raising of various loans, subject to the conditions under which the loans are issued. The Australian Government under the authority of the Loan Council undertakes to pay a fixed rate of interest for the determined period of time, and that rate of interest will be paid, and has always been paid, during the currency of the loan. Loans are repaid upon maturity at their face value.

Mr CREMEAN:
HODDLE, VICTORIA

– Will the Prime Minister say whether it is a fact that at meetings of the Loan Council, each State has only one vote whilst the Commonwealth has two votes and, in the event of equality in voting, a casting vote? Is it not also true that two States and the Commonwealth can together out-vote the majority opinion of the other four States? Are not meetings of the council each year generally held after several months of the new financial year have already elapsed? Would it not be preferable to hold future meetings just prior to the completion of each financial year ?

Mr MENZIES:

– Yes.

page 465

QUESTION

WATERFRONT EMPLOYMENT

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP

– I ask the Prime Minister whether the Government is aware that the shortage of wharf space in Sydney is more serious now than ever before, even at the height of the war ? Is it a fact that at the present time cargo is stacked on the roads at Walsh Bay and is left there without warning lights at night? As this Government might well be held responsible for the position because it has launched upon a vast policy of import procurement without taking the necessary steps to provide the additional wharfage facilities required, will the Prime Minister say what the Government is doing to remedy the present chaotic situation on the waterfront in Sydney, and thereby to reduce the enormous wastage at present taking place ?

Mr MENZIES:
LP

– I shall regard the question as having been placed on the notice-paper, and it will be referred to the Minister who deals with these matters.

page 465

QUESTION

POSTAL DEPARTMENT

Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND

– Can the Postmaster-General say whether it is true that shifts have been so arranged in the General Post Office, Brisbane, as to avoid the payment of shift penalty rates? Is it also true that in the postal depots men who were previously receiving Saturday penalty rates are now deprived of them because they start later? Is the PostmasterGeneral aware that the public will be inconvenienced by the late start in postal -depots? Does he know that the mail branch in Brisbane is hopelessly understaffed, and that when overseas mails reach the Brisbane General Post Office, letters which were posted the previous afternoon are not sorted into the private boxes at the General Post Office by 9 o’clock the following morning? Will the Minister remedy this position by increasing the number of mail officers in the Brisbane General Post Office ?

Mr ANTHONY:
CP

– I am not aware that the mail branch of the General Post Office in Brisbane is hopelessly understaffed. Of course, the volume of postings varies, and on some days, particularly l’ust before overseas mails go out, postings are very heavy. On such days the staff is usually brought back to deal with the situation. In the current reduction of staff every effort has been made to avoid inconvenience to the public. The great bulk of staff reductions has been affected by the discontinuance of some of the expansion work which would otherwise be done, and not by reducing recognized services to the public. I shall have the other matters that were raised by the honorable member investigated.

page 465

QUESTION

DAIRYING

Mr DAVIDSON:
DAWSON, QUEENSLAND

– I desire to ask the Minister representing the Minister acting for the Minister for Commerce and Agriculture a question which arises from the general lack of knowledge on the extent of the assistance given to the dairying industry by the Australian Government by way of subsidy. I ask the Minister what the retail price of butter would be if there was no Commonwealth subsidy? What proportion of such retail price would be received by the farmer, what proportion by the retailer, and how much would be absorbed in other costs?

Mr ANTHONY:
CP

– If there were no Commonwealth subsidy the retail price of butter would be 4s. 3d. per lb. The J 01nl Dairying Industry Advisory Council recommended that the farmer be paid 3s. 6d. per lb. in order to cover his cost of production. The cost of manufacture is 4d. per lb., wholesalers’ distributing costs are three farthings per lb., the cost of wrapping and freight and all retailers’ margins are approximately 4£d. per lb., which makes a total of 4s. 3d. per lb. However, the Government’s subsidy is paid at the rate of ls. l£d. per lb., which permits a retail price of 3s. lid. per lb. to be charged to the consumers in those States which have adopted the recommendation of the Joint Dairying Industry Advisory Council. Consequently, 3s. Iia. per lb. is the ruling price in the four southern and western States of Australia. Iri New South Wales and Queensland the fixed price is 5d. per lb. under the cost of production so that farmers in those States are only receiving 3s. Id. per” lb. compared with 3s. 6d. per lb. in the other States.

page 466

QUESTION

ROADS

Mr LUCHETTI:
MACQUARIE, NEW SOUTH WALES

– In view _ of the unsatisfactory condition and vital importance of this country’s road system to the defence and development of Australia, will the Treasurer assure the House that the total proceeds of the petrol tax will henceforth be made available to the State governments for the maintenance and development of the roads throughout Australia?’ ‘

Sir ARTHUR FADDEN:
CP

– The States are now the recipients of a proportion of the petrol tax which, is allocated to them according to a formula which was decided upon some years ago and which has been continuously and sympathetically increased by this- Government.

page 466

QUESTION

WOOL

Mr FULLER:
HUME, NEW SOUTH WALES

– Will the Treasurer assure the House that the 7-J per cent, wool contributory charge will be returned to wool-growers before the 31st December, 1951? In’ view of the fact that legislation, introduced by the Chifley Labour Government, has been passed which provides for the distribution of the £63,000,000 profit of the Joint Organization and as ‘70 per cent, of wool-growers are small flock owners, will the Treasurer give an. assurance that he will distribute those profits to growers before the 31st December, 1951? Is the Treasurer aware that many growers left the industry before the present boom prices became operative and that in some cases they are desperately in need of their Joint Organization money?

Sir ARTHUR FADDEN:
CP

– The Government will return to the wool-growers the proceeds of the Ti per cent, levy in accordance with the provisions of the legislation that has already been passed by this Parliament.. Distribution will be made as expeditiously as is practicable. The disposal of the Joint Organization profit of £63,000,000 is still being- considered by the Government in the light of proposals that have been submitted by various bodies associated with the industry.

page 466

QUESTION

STEEL

Mr BERRY:
GRIFFITH, QUEENSLAND

– Is the Minister representing the Minister for Shipping- and Transport able to give the House any information on when the 12,000 tons of steel for the Queensland ports, now awaiting shipment at Port Kembla and Newcastle, will be shipped ? The matter is most urgent. a* many Queensland industries that use steel are so short of supplies that they are on the. verge of closing down, or of- making staff retrenchments.

Mr ANTHONY:
CP

– In view of the importance of the honorable member’s question I shall endeavour to obtain the desired information as soon as possible. .

page 466

QUESTION

SULPHUR:

Mr LUCK:
DARWIN, TASMANIA

– Will the Minister foi Supply state whether adequate supplies of sulphur are available for all purpose? in Australia at the present time? Have any arrangements been completed for the provision . of, necessary supplies for 1952-53? What steps, if any, are being taken to augment supplies from Australian sources? Is the Minister aware that deposits of pyrites are available on the west coast of- Tasmania, ‘though many of them are not recorded as they have been classed by prospectors as of no commercial value? .

Mr BEALE:
Minister for Supply · PARRAMATTA, NEW SOUTH WALES · LP

– I do not know whether it can be said that adequate supplies of sulphur are available in Australia. We have’ a reserve supply and we have obtained additional imports. As consumption of sulphur is steadily increasing I ani not in a position to say whether or not supplies are adequate. Provision hae also being made for additioria.1 supplies of sulphur for 1952-53, but I shall need to look up the records in order to furnish the honorable member with the detailed figures. Steps are being taken in the production of sulphuric acid to effect a change over from sulphur burning, to pyrites burning. The requisite machinery is being imported and the industry is being assisted to make the change over as quickly as possible. It is ‘well known that there are substantial deposits of pyrites in Tasmania. These deposits have been dealt with in a report of the Bureau of Mineral Resources which has surveyed them. I am not able to give the honorable member details of the extent of the resources.

”’ . ; KOREA. : ‘ ‘

Mr HULME:
PETRIE, QUEENSLAND

– Is the Minister for External Affairs in a position officially to inform’ the House whether cease-‘fire negotiations have been resumed in Korea, or whether such negotiations are due to take place?

Mr CASEY:
LP

– I have not heard any news in the last few, hours, but I shall obtain as soon as possible the information asked for by the honorable member, and advise him of it.

page 467

QUESTION

PUBLIC SERVICE

Mr EDMONDS:
HERBERT, QUEENSLAND

– I. ask the Minister for Civil Aviation whether it is correct that the staff qf the Department of Civil Aviation has not been excluded1 from the Australian Government’s plans to dismiss certain public servants, and that the night staffs on aerodromes have been reduced, and in some . cases eliminated, causing what is generally considered to be great peril to night flying aircraft? If that is correct, will the Minister give consideration to the great danger involved to aircraft, with a view .to having the matter re-adjusted and the dismissed members of the night staffs re-employed ?

Mr ANTHONY:
CP

– -The reduction in staff in the Department of Civil Aviation has taken into account the various activities of’ the staff engaged. The staff engaged on safety operations, or on work that is essential to the. safety of the travelling public or for navigation and the like, have been specially excluded or have been not unduly touched. Any reductions which have occurred have been made in the light of all the factors mentioned by the honorable member.

Mr BERRY:

– Can the Minister for Labour/and National Service say whether, to his knowledge, any public servant who has been dismissed under the Government’s retrenchment scheme has failed to find suitable employment in private industry?

Mr HOLT:
LP

– LIn response to my invitation made in this House to any public servant who, having been dismissed, had not been able to find suitable employment elsewhere to make his situation known, I received only one letter.

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– 1 raised cases iri this House in the absence of the Minister. .

Mr HOLT:

– -I am giving any _ own answer to the honorable member for Griffith. The only case that has come to my knowledge is the one to which I have referred. I placed the matter in the hands of. ,my department immediately, and I shall ascertain whether a suitable appointment was found. If any other honorable members wish to cite specific instances, I shall be glad to investigate thom promptly.

page 467

QUESTION

ELECTORAL

Mr BRUCE:
LEICHHARDT, QUEENSLAND

– Would the Minister for the Interior take steps to increase the remuneration of electoral presiding officers and poll clerks? The present remuneration is an entirely inadequate, reward for the long hours that they work and the great responsibility devolving . upon them in the carrying out of their duties.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– The matter of the remuneration of poll clerks was discussed with the Chief Electoral Officer just before appointments were made in connexion with the last referendum. At that time the Chief Electoral Officer considered that the remuneration was adequate for the performance of the duties involved.

page 467

QUESTION

OFFICE ACCOMMODATION

Mr TURNBULL:
MALLEE, VICTORIA

– Will the Minister for the Interior inform me whether it. is the intention of the Government to adopt the last Labour Government’s plan to build Commonwealth offices on 9 acres of land in the City of Melbourne? If so, has the Minister considered the need to. disperse administrative staff as a safeguard against . the effects of future warfare? Is it true that a very large percentage of Commonwealth staff could operate at least as effectively in a decentralized area, and will the Minister further consider the matter with a view to reversing Labour’s centralization policy?

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– The Australian Government has considered reversing the policy of the last Labour Government on this particular matter, but on finding that the Government, even if further contemplated moves were made to

Canberra in the future, would still need to occupy a large amount of office space in Melbourne which should be restored as rapidly as possible to industry in that city, it decided to continue with the plan on a modified scale. Consideration has been given to the dispersal of staffs, but it is considered that many staffs would not operate as efficiently if widely dispersed as they would if they were, working together. Should an emergency arise staffs could be dispersed but, in the meantime when no emergency exists, it is considered that efficiency would be decreased by dispersal. Furthermore, the Government is endeavouring to secure the lease of a certain suburban area for a specified period, provided the Victorian Government will approve of the erection of buildings, not for the Commonwealth, but for a local government authority. If that is done, badly needed office space in the City of Melbourne can be returned to the owners or lessees.

page 468

QUESTION

CIVIL AVIATION

Mr DRAKEFORD:
MARIBYRNONG, VICTORIA

– I wish to ask a question which has both civil aviation and legal aspects and I should prefer it to be answered by the Prime Minister. Can the right honorable gentleman say whether it is a fact that air route charges or landing fees are still being paid by Qantas Empire Airways Limited, TransAustralia Airlines, and by airline operators in various parts of the Commonwealth who receive subsidies from the Government? Is it correct that the Government has abandoned or is not pressing the claim by the Department of Civil Aviation in the courts for the payment of air route charges by Australian National Airways Proprietary Limited and/or Ansett Airways Proprietary Limited, although such charges are being accepted by the Government from TransAustralia Airlines and Qantas Empire Airways Limited, as well as from subsidized airline operators? If that be correct, will the Prime Minister be good enough to explain to the House why more favorable treatment has been and is still being given to Australian National Airways Proprietary Limited and Ansett Airways Proprietary Limited than to

Qantas Empire Airways Limited, TransAustralia Airlines, and subsidized airline operators?

Mr MENZIES:
LP

– I cannot answer the questions that the honorable member has asked, because I am not familiar with the facts. I think the Attorney-General should know the position. I shall find out what it is and then supply an answer to the honorabe member.

page 468

QUESTION

INCOMES OF MINISTERS

Mr WARD:

– Has it been the practice of the Prime Minister to advise his colleagues that upon selection for Cabinet rank he expected them immediately to relinquish any active association thatthey had with private business establishments? If that is so, would he regard retainers that are paid to Ministers who are members of the legal profession, particularly retainers that are paid by private business interests that have contracts with the Government, as coming within the scope of his direction ? Would he also state whether such retainers are of nominal amount and are paid according to a regular scale of charges?” Exactly, what is the practice in respect to the payment of retainers to members of the legal profession?

Mr MENZIES:
LP

– It seems unfortunate that I should have to explain the technique of the legal profession to the honorable member. I have no views hostile towards legal members of a government holding a retainer. There is a -very great misapprehension about retainers. Many people who read novels get the idea that persons who hold retainers at the bar thereby receive thousands of pounds. The fact, which I mention reluctantly, is that if the honorable member for East Sydney decided to retain my services, for example, for the rest of our joint lives he could do so on one payment of a fee of £1 ls.

page 468

TAXATION

Sir ARTHUR FADDEN:
CP

– I lay . on the table the following papers: -

Commonwealth Committee on Taxation - Reports -

Concessional allowances for dependants. Exemption of country entertainments from Entertainments Tax.

Income Tax -

Concessional allowances for educational expenses.

Concessional allowances for life insurance premiums, superannuation fund contributions, &c.

Concessional allowances for medical, dental, optical and funeral expenses.

Concessional allowances in respect of gifts to certain funds and institutions in Australia.

Concessions to industry.

Scholarships and similar payments for educational purposes.

Taxation of superannuation allowances and pensions, and income of aged persons.

Income Tax rates schedule and Statements Nos. 1 and 2.

Taxation of excess profits - Reports dated - 12th December, 1950; 23rd February, 1951; 23 rd May, 1951; 7th June, 1951.

In addition to the reports which are now tabled, reports on other subjects have been received, and the Government is giving consideration to them. Any necessary legislation arising therefrom will be introduced in due course. Those reports are as follows: -

  1. Income tax forms of return and notices of assessment.

    1. Assessability of amounts received in relation to employment and to retirement from employment.
    2. Taxation of mining industries in Australia.
    3. The assessment or exemption of income derived from primary production.
    4. The taxation of incomes of companies - private and non-private and of shareholders.
    5. Trading stock (provisions other than those relating tolive stock).
    6. Contributions by employers to pension funds.
    7. Deductions in respect of retiring allowances and pensions paid to employees, former employees and their dependants.
    8. Application in Australia of Canadian system of self-assessment for individuals.

page 469

EGGEXPORT CONTROL BILL 1951

Motion (by Mr. Anthony) agreed to -

That leave be given to bring in a bill for an act to amend the Egg Export Control Act 1947-48.

Bill presented, and read a first time.

page 469

QUESTION

BUDGET 1951-52

In Committee of Supply: Consideration resumed from the 9th October (vide page 454), on motion by SirArthur fadden -

That the first item in the Estimates under Division No.1 - The Senate - namely, Salaries and allowances, £16,400 “, be agreed to.

Upon which Dr. Evatt had moved, by way of amendment -

That the first item be reduced by £1.

Mr BLAND:
Warringah

.- Having listened very carefully to the remarks of honorable members during this debate, it seems to me that there still exists a great deal of confusion and misunderstanding concerning the nature and purposes of the budget notwithstanding the informative documents that have been distributed by the Treasurer (Sir Arthur Fadden), the lucid explanations that he has given, and the magnificent exposition that was made by the Prime Minister (Mr. Menzies). The budget will serve two main purposes. In the first place, it will enable the Government to do more than has been possible up to date to make adequate provision for defence. In the second place, it will give coherence to the various deflationary measures that the Government has introduced during the last few months. These purposes are complementary. If it be the duty of the Government to provide for the adequate defence of the country and its people against the assaults of its enemies, so also is it becoming recognized as the duty of the Government to protect the economy of the nation against the fortuitous assaults of fortune, whether they come from external sources or from internal sources. The budget, of course, is only one of the instruments that can be used to give effect to the purposes that I have mentioned, but it is one of the most cogent of them. Measures both for defence and for deflation are designed to bring about increased production and to restore balance to an economy that has been thrown out of equilibrium by external or internal forces. Provision has been made in the budget to restore balance to the economy by restricting private investment, for which purpose the tax instrument is to be used, and by more positive methods, such as credit restriction, and, supplementarily, , by the. diversion of resources of all kinds, embracing manpower, capital and equipment. “ Low production, ‘ as has been stated again and again during the course’ of this debate, is as much an effect as a cause of inflation, arid therefore any increase df the volume of goods must, be all to the advantage of those who are seeking to restore balance to the ‘economy. So much has been said, about the various methods of ensuring deflation and about the effects of inflation that it is unnecessary for me to recount them or even to refer to them., Therefore, I propose to confine my remarks to four aspects of the budget.

Honorable members are aware that the budget provides for several -courses of action; and I shall refer to them so as to give point to what I have to say. First, it provides for higher rates of direct and indirect taxation as a means of diverting resources from unessential industries to essential industries and thereby restoring balance, to the , economy. Secondly, it provides for greatly increased expenditure upon defence. Thirdly, it provides for the expansion of the benefits that are enjoyed by Australians under the national welfare scheme to new heights and new breadths. Fourthly, ‘ it provides that the Government shall assume responsibility for the financial stability of the States by undertaking the underwriting of their loans in order that their public, works programmes shall not. be unduly disturbed. Finally, it provides for .a very large surplus, which is one of the matters that I shall discuss at length. Those proposals have been discussed and criticized. They follow a well-founded economic theory. The problem that we face is whether circumstances will permit the theories to work out in practice. If they do, the budget will provide us with an excellent opportunity for making a further effort next year to curtail inflation! If -they do not, we shall have enough on our hands without indulging in a prophecy.

I shall now deal briefly with four aspects, of the budget that appeal to me. I am sure that the Prime Minister (Mr. Menzies) and the Treasurer, (Sir Arthur Fadden) have/thought about them, but they have not, been discussed in this chamber to the. extent .that I would have desired. For the present I shall merely sketch them, but I hope to fill in the background later if I have time.

The . first thing that strikes any one is’ the terrifying rate at which the money Costs of government have expanded in recent years.. 1 am sure that it has not escaped the. notice of honorable members that the cost- of government has more than doubled in the’ last four years. That seems to indicate . that something more effective than mere occasional overhauls Of the’ machinery- of government is needed. ‘ I therefore’ suggest that immediate steps ,be taken to give effect to the policy that was enunciated in the Governor-General’s speech and repeated by the Treasurer, namely, the reestablishment of the Public Accounts Committee. I consider that its re-establishment is essential in order to provide the Parliament with its own instrument for the examination arid checking of public expenditure, and to enable an independent investigation of the kind of ‘organization that has been built up in connexion with that expenditure. : v-

The second matter to which. I wish to draw attention is the unprecedented expansion of social services. They are reaching such proportions as to blur entirely the connexion between cause and effect. In this instance I support with all the power that I have the insistence by the honorable member for Sturt (Mr. Wilson) that , the means test should be replaced quickly by a system that would encourage individual responsibility on the one hand arid provide some measure of economic justice on the other.

Thirdly, there is the matter of applying the principle of increasing imports to repeat the effects of the 100,000,000 dollar loan that were so vividly described by the Prime Minister recently.. I suggest, with all deference to the Treasurer, that a sterling loan is an alternative to the’ proposal of the. Government to underwrite State loans. I consider that the sterling balances in London should be left, untouched, in order to meet the various demands industry or other corporations will ma.ke. As a corollary the estimated surplus of £114*000,000 would become a real surplus. If it i3 not used for underwriting .the loans, there will be no danger of that money contributing at the beginning of next year to a further inflationary move.

Fourthly, I draw attention to the increase of grants and payments to the States during the last few years. According to- the budget papers, the total of grants to the States for all purposes, including reimbursement of income tax, has increased from £84,637, SS5 in 1947-48 to .an estimated £190,338,200 iii 1951-52. There is every indication that the amount will rise still- further in future. These immense payments are tending not only to dominate and distort the finances of the Commonwealth, but also to undermine the federal system and the substance of .parliamentary government in the States. I urge a root and branch revision of the Constitution which will seek to restore .the States to a position in which they can control their own financial household, and be directly answerable to their electors.

In amplification of my contentions I point out that expenditure for 1950-51 was originally estimated at £73S,000,000. However, in June this year the Parliament approved supplementary estimates which brought the expenditure for last financial year to £783,000,000. This financial year the estimated expenditure will be £926.000,000, which both ‘the Prime Minister, and the Treasurer have stated is the irreducible minimum that can be reached by any kind, of reorganization, : If this is so, I wonder whether, if war occurs within the next .three years, there will be- sufficient elasticity left in our taxing system to enable us to meet the additional costs that will be involved. For that, reason I consider’ that measures should be taken, beyond ordinary Public Service controls, to ensure more drastic economies and more rigorous supervision of the growth .of Commonwealth expenditure, I concede that whenever there is an increase of the scope oi government there- must be a corresponding increase of the cost of government. This causes dismay to every Liberal, because he fears that fresh faces are being created which will make the individual public servant more and more impotent. Therefore, I again emphasize the necessity for the reestablishment of the Public Accounts Committee.

As I have already mentioned, the Treasurer has stated that the budget surplus will be used partly to redeem war savings certificates of an unknown amount that may be maturing this year, and the remainder, after being paid into the National Debt Sinking Fund, may be used for underwriting State loans. If the Treasurer uses the surplus to redeem war savings certificates, it is obvious that he will release purchasing power that was latent in those certificates before they -were redeemed. Therefore, as a result of the redemption, there will be that much more money in circulation during this financial year. If he uses a part of the surplus for the purpose of underwriting State loans to the- extent of £70,000,000, £150,000,000, or whatever the figure might be, that amount of purchasing power will be released either for the carrying on of public works, or the production of equipment for those works, or for the establishment of new factories. The effect of underwriting the loan would be that another £70,000,000 or a larger sum would go into the economy and would give a new impetus to the inflationary forces that the right honorable gentleman is seeking to stem. Therefore, I have looked at the alternatives. The one that has appealed to me is a sterling loan. I know that it will be argued that we have large sterling balances in London, but I point out that we cannot estimate with any accuracy the demands that we shall be forced to make upon those reserves during . the next two or three years in order to finance the imports that we shall require. In considering the question of a sterling loan, I have adopted the principles that the Prime Minister applied in con.sidering the advisability of negotiating the 100,000,000 dollar, loan. A sterling loan would enable us to obtain ready-made equipment such as railway engines, diesel engines and electric . plant. If we could not get the equipment that we needed from England, we might be able to get it from Denmark, Holland, France or -other countries in the sterling bloc. A sterling loan would provide us with ready-made material, without forcing us to upset our economy in the way in which underwriting the States’ loans would do. We should get the equipment readymade, and we should get it quickly. I commend a sterling loan to the sympathetic consideration of the Treasurer. I know that official policy is opposed to the floating of loans, but I believe that, in the light of the circumstances in which we are placed, the proposition is worthy of consideration.

I shall deal now with the National Welfare Fund. In 1950-51, the original appropriation for the fund was £127,000,000. That was increased to £132,000,000 by supplementary appropriations. This year, the appropriation will be £185,000,000, or £53,000,000 greater than that of last year. Although £185,000,000 is to be appropriated, it has been estimated that this year only £138,000,000 will be expended from the fund. That will leave a nest egg that the Treasurer will be able to use next year if defence preparations involve additional expenditure or the Government considers it desirable to reduce taxes. More money is. being appropriated for the National Welfare Fund than would need to be appropriated if the formula were adhered to. It will be recalled that ‘the formula is based upon the total sum derived from the pay-roll tax, plus certain other items. We must accept the position that social services will continue to expand. I believe that the welfare state has come to stay and that there is no government that will not vie with other governments in seeing how much money it can expend to ensure what is called the welfare of the people. What I question is whether a policy of that kind is consistent with a sense of individual responsibility and integrity. I am wondering whether it might not be more desirable to develop a policy that will ensure that individuals shall have a sense of responsibility for their own live3 rather than be constantly dependent upon a paternal state for the things that they want. It is a question of wants and needs. I suggest that the time is coming when the needs of the community will have to bo balanced against the wants of the people. When that time arrives, we may find that the wants of the people will have to give way.

Let me deal now with the grants that are made to the States. Last year the total grant, including money for disbursement to roads authorities, was £128,000,000. Of that sum, £90,000,000 was paid in respect of tax reimbursement. This year, the grant will be £194,000,000, if we work on the wider basis, or £161,000,000 if we work on the restricted basis of tax reimbursement. The grants to the States have moved upward every year. There is no need for the Treasurer to tell us of the conflicts that occur at conferences of Commonwealth and State ministers in connexion with the amounts that the States demand. It seems to me that we cannot escape the conclusion that next year the States will ask for more than they have asked for this year. Therefore, it is necessary for us to review the basis upon which the grants are made. Some persons have suggested that the uniform taxation policy should be abandoned and that we should revert to the conditions that existed before 1942, but the figures that I have cited indicate the impossibility of doing that. It has also been suggested that a taxation council should be established, based on the principles of the Loan Council, and that that body should distribute the moneys that are necessary for the States in terms of the States’ demands. The establishment of a taxation council would give rise to difficulties similar to those to which the establishment of the Loan Council has given rise. The Loan Council is a statutory body which decides what the loan requirements of governments are, what borrowing policy shall be and what rates of interest shall be paid. As a statutory body, it determines what the policy of governments shall be. It seems to me that the establishment of a body on the lines of the Loan Council to deal with payments to the States would not overcome the real difficulties. Sovereign States would still have to resign their sovereignty to a statutory corporation, which could dictate what they should do The Premiers could. still say that they got only what, money that corporation decided to give to them. They would no longer be answerable, in accordance with the principles of parliamentary government, for the things that they did. For similar reasons I reject the suggestion of a development of the Commonwealth Grants Commission. The recommendations of that commission will shortly come before the Parliament for ratification. For the last twenty years its recommendations have always been ratified. The commission decides what shall be done for sovereign governments. It seems to me that that is undesirable.

The best course open to us is to have a root and branch revision of the Constitution in order that there shall be allocated to the States, as there was under the Braddon “blot” in the early days of federation, moneys that will be theirs inviolably and which need not be allocated to them by any statutory body. The States would then be sovereign in their own households, responsible for their own financial arrangements and for the efficient government of the territories that they control. In this matter I am in a greater dilemma than I have ever been in before. I say, with all due respect to the Leader of the Opposition, that until the right honorable gentleman took part in the last referendum campaign I had felt that we could rely upon his giving objective attention to constitutional reform. Having regard to his actions during the referendum campaign, I do not think that we can rely upon him to do so. I say without malice that we cannot have a constitution convention without the Leader of the Opposition and that we cannot have one with him. In both instances, the convention would fail. While the political climate is as bad as it is at the moment we must put up with conditions as they are. If they become so bad that they are likely to break down of their own weight, either we destroy the whole federal system under which we have worked for the last 50 years, or we institute a system which will make the States independent in their own households.

The budget serves notice upon us that there are problems threatening this generation that are not soluble by governmental action alone. There is a task for this generation which transcends all party lines. It seems to me that we have an urgent problem on our hands. The most that this Government can do by means of the budget is to say that it has set an example to the community. The only thing that worries me is whether the community will be prepared to save itself by its own exertions.

Mr PETERS:
Burke

.- This country passed through a period of depression or deflation from 1930 onwards. During that time there was an excess of goods and services over ‘ money demand. The Scullin Government attempted to stimulate demand by the utilization of bank credit and by other banking operations, but was prevented from doing so by the Commonwealth Bank Board and by a reactionary Senate. Financial interests, backed by complacent economists, forced upon this country savage cuts in wages, pensions and social services, reduction of interest rates and restriction of credit. Their solution of the problem of over-production was to reduce consumption. To-day, a section of the community is suffering from the effects of inflation. There is an excess of money demand over goods and services. By means of this budget the Government seeks to deprive a vast mass of .the people of a proportion of their purchasing power. There is short supply of many commodities, but the Government proposes to take hundreds of millions of pounds from the productive field where goods are produced, pour that money into the non-productive services of the Government and utilize it to bring about a surplus.

The Leader of the Opposition (Dr. Evatt) has rightly stated -

It has been said that this budget is intended to bring prices down, but it sets about doing so by ensuring that prices will rise over a very large range of goods because of increased sales tax and excise. In addition, the carrying through of the proposed increased company taxes will affect the whole cost price structure. The basic wage must be increased as a consequence.

That, of course, is undeniable. The present Government attained office in 1949 because it promised to tackle the problem of inflation. Its supporters promised to give to the people of this country greater purchasing power. They said to the age pensioners and the wage and salary earners, “ Put us back into power and we will enable you to obtain those things which you cannot now obtain with j our’ pensions and . salaries “. What actually happened was very different. Inflation grew more rapidly than ever before in the history of this country. At the same time the purchasing power of the people decreased more rapidly than ever before. A noted economist, Professor J. F. Cairns, has pointed out. that in 1938-39 the gross national expenditure of the people of Australia was £938,000,000 and the gross national production also £938,000,000. The two figures balanced. - In 1948-49 the gross national expenditure had increased to £2,267,000,000, while the gross national production had increased to £],;526,000,C00. That is, there Was a difference of £741,000,000, which represented the inflationary gap in existence when this Government came into office. In 1950-51 the gross national expenditure had increased to £3;25 0,000,000 and the gross national production to £1,700,000,000, which meant that the inflationary gap had increased to £1,550,000,000. In 1949-50 the inflationary gap widened by £300,000,000 and by more than £500,000,000 in 1950-51. It has been consistently widening at a rapid rate ever since.

Some people in Australia have suffered because of inflation. In the budget papers the Government points out that in 1945-46 the percentage of the national income which went to wage and salary earners was 60.9. In 1950-51 it was- 48.2, which means that there was a 12.7 per cent, reduction from 1945-46 to 1950-51. That reduction meant that one-fifth of the share of the national income that had gone to wage-earners in 1945-46 ceased to go to them in 1950-51. But, of course, the position u even worse than those figures indicate. In 1948-49 54.4 per cent, of the national income went to wage and salary earners. In 1950-51 it had been reduced to 48.2 per cent. That means that during the term of office of this Government about 13 per cent, of their share of the national dividend has been filched from them. Where has it gone? Not into thin air! .The national income still exists, but a part of the share of the wage and salary earners and the pensioners has been filched from them by the speculating, business and primary producing interests of the nation.

It is the responsibility of government and the duty of statesmanship first and foremost to restore to the wage and salary earners and the pensioners .that proportion of the national income that has been taken from them during the last few years. This Government, of course, does not attempt to take any such action. Its members do not come before us, as’ they should contritely and humbly, and say, ”’ Nostra culpa, we ‘ desire to make amends and atone for the past “. Instead, they arrogantly bring forward a .budget which they claim to be disinflationary or deflationary - they use different terms to describe it. But how will it be disinflationary unless it bridges or reduces the inflationary gap of £1,550,000 that I have mentioned ? To be disinflationary it will have to restore to the wage and salary earner portion at least of that share of the national dividend of which he has been deprived during the last few years. Will the budget accomplish that? It certainly will ‘not! It will not even reduce the gallop of inflation to a canter, much less cause an anti-inflationary movement. The Government is taxing companies equally irrespective of whether they produce luxuries or essentials. It is imposing sales tax and excise duties which, in addition to the company taxes, will, as the Leader of the Opposition has pointed out, be reflected in the price structure and so increase the costs of commodities to the consumer. Because of the exactions that are being imposed on the ordinary members of the community to provide a budgetary surplus, their capacity to meet their requirements for food* shelter, clothing, education for their children, hospital and medical attention for themselves and their families will be reduced. That will be the position as the result of this budget if full employment is preserved. But the budget cannot increase the quantity of goods to be consumed and cannot enable the average person to secure more and more of his or her needs. It would be an inflationary budget if full employment were to be preserved, but, of course, under it full employment will -not- be preserved. In order for it to arrest inflation it would be necessary for the Government to force into the production of essentials more and more money and more and more of the labour: services of the. community. That is the contention that people who support the budget advance. They claim that the, sales taxes placed on .’motor cars and other luxury products will cause people to refrain, from buying such com’modities Everybody here knows that people who, wish to buy motor cars at the present time are willing to pay not. merely the trade ‘ price for’ them, but’ will pay hundreds of pounds above that price. People pay considerably, above the trade prices, for all kinds of luxury items that are in short supply. Excise and sales taxes will not deter such people from securing luxury commodities thar, they wish to have.

The Government also claims that its ‘ policy of regulating investments will cause the flow of investment to be diverted from the production of luxury items to the production of essential goods. The obvious reply to that contention is that other actions that the Government is taking will prevent that diversion of money. As I have pointed out before, the Government has increased company taxation, which will mean that hundreds of millions of pounds will, be taken out of production of essentia] goods and be diverted to the purposes of government. Because of that, the regulation of investments as envisaged by the. Government, and as it would be operated by the Government, certainly will do nothing to stimulate the production of necessaries, [n order to stimulate the production of essentials there would have to be more money available for such production. If there is less money available to produce essentials then the production of essentials will be reduced, not increased. In addition to that the Government, as honorable members on this side of the committee have pointed out, has restricted the governmental loan programme. It has said to the people of Victoria, “You cannot have £76.000,000; you can have only £56,000,000 “.

Ifr. Turnbull. - Has the honorable member never heard of the Loan Council ?

Mr PETERS:

– I have heard of the Loan Council.’ At its last meeting it was dominated by this Government. Down1’ through the years the Commonwealth has. told the States .that it was essential that- they. increase means for the production of essential -goods. As a result, the’ States’ embarked” on schemes’ to increase such .production.; Victoria, embarked upon . the Nambrook-Denison. and Rocklands schemes, .the ..Cairn-Curren scheme, and; a :number of other schemes that , would ;make fertile the ‘almostdesert areas, that exist in the district from the which the honorable member for .Mallee (Mr. Turnbull) comes. These schemes are to be closed down because of restrictions that are to continue over a long period , of years. It is essential to stop blackouts in industry because they interfere with production. Therefore, it is necessary to push on with the. Yallourn and Kiewa power projects which, at the present time, are within a few years of completion. However, because loan money will not be available, the projects must be scrapped, and the acute shortage of manufactured goods will continue. The present shortage of transport and housing will be prolonged because of the financial methods insisted upon by this Government. Such methods must lead to unemployment. The budget would be inflationary if full employment were to be maintained, but it will be deflationary because it will produce unemployment, and that unemployment will spread. As the Leader of the Opposition said, the budget may be described as a blueprint for depression. The way to arrest inflation is to equate demand and supply, hut the Government’s idea of effecting this equation is to reduce demand by throwing people out of work. As was the case in 1930, there will be bankruptcy and ruin among the primary producers and manufacturers, and destitution and starvation among salary and wage earners.

Mr Turnbull:

– -If the honorable member knows of any unemployed, I suggest that he sends them to the mallee districts. We shall find work for them there.

Mr PETERS:

– When people were thrown out of work during the last depression because of the curtailment of government ‘activities, we were told by persons like the honorable member for Mallee that they could find work elsewhere, and perhaps those who said it believed it. A good many people believed that, although some might fall by the wayside, they themselves would be all right, but ultimately most sections were engulfed. The Government may set out to create a pool of unemployment, but it will not be able to control the dimensions of the pool. Some highly placed economists say it is necessary to have a pool of unemployment. They say that what we have now is not full employment but over-employment. This Government is setting out to destroy full employment, which is the fruit of the policy applied by the Labour Government. In this respect, Labour set an example for the rest of the world. Those who want an unemployment pool do not want to be put into the pool themselves. They want civil servants, or carpenters, or bricklayers, or farm labourers to be in the pool, but not professors or bankers.

I am convinced that this budget will hot do what the Government claims it will do. I do not think that members of the Government really believe what, they say. Members of the Australian Country party may believe it, but they would believe anything. I do not think that members of the Government really believe that the budget will have the effect of stabilizing the country’s economy. Rather do they hope that some fortuitous combination of world events will save us from the calamity which threatens, and which this budget will do nothing to avert. For that reason, I am. strongly opposed to the budget. It will destroy the purchasing power of the average man and woman. Already that purchasing power has been severely cut since the Menzies Government came in office, and the effect of the budget will be to produce a depression that will be accompanied by all the horrors of the 1890’s and the 1930’s.

Mr FAIRBAIRN:
Farrer

.- The honorable member for Burke (Mr. Peters) brought out that old and rather worn shiboleth of the unemployment pool. We have heard of it on many previous occasions^ particularly during the election campaign in December, 1949. We were then told that it would be “mighty cool in Menzies’ pool “.

Mr Haylen:

– I think it was “ Hytten’s pool “.

Mr FAIRBAIRN:

– That was so originally, but later it became Menzies’ pool. We have been told by the Minister for National Service (Mr. Holt) that his department has at least 125,000 vacancies which it is unable to fill. When members of the Labour party speak of the danger of unemployment they are thinking in terms of conditions of fifteen years ago, but conditions at present are the very opposite of those.

The honorable member mentioned Commonwealth and State financial relations, and he complained that this Government had reduced the amount of money made available to the States, particularly to Victoria. He went on to say that the Loan Council was dominated by the Commonwealth. I should like him to show me how the Commonwealth, with two votes out of a total of eight, can dominate the Loan Council. The Premiers of the six States met in Canberra, and the Co-ordinator-General of Works discussed inflation, and explained how much money was likely to be raised by loan. As a result, they voluntarily agreed to a reduction from £300,000,000 to £225,000,000.

As has been pointed out on many occasions, four States voted for that reduction. The two States that did not vote for it were New South Wales and Queensland. The Premier of Victoria voluntarily voted for the reduction. He then returned to Victoria and proceeded to abuse the Australian Government for the way that Victoria had been treated by the Loan Council. He said that Victoria faced a catastrophic period in power production which would continue for the next fifteen years unless action was taken to obtain the money that his Government needed. Although the total amount asked for was reduced by £75,000,000, the amount decided upon was still £60,000,000 more than the Loan Council raised during the previous financial year. Although the Premier of Victoria has stated that the Australian Government has placed his Government in a catastrophic position, in the Age of the 8th October there appeared. a completely different story. Last Monday, after being told that the Minister for Defence Production (Mr. Eric J. Harrison) had ensured that there would be ample power in defence establishments by ordering overseas package units for the generation of electricity, Mr. McDonald said - 1 have been assured by S.E.C. authorities that more power will be available in 1<J52 and by 1903 all shortages will have been completely overcome. In fact, in 1054 the State Electricity Commission will he looking for customers.

Yet, a week before he had said that his State was facing catastrophic conditions. I suggest to the Premier of Victoria that he should put his own house in order first. [ know that it is very difficult for a government with a large works programme to ensure that it is efficiently carried out. But, even by stretching the truth to the furthest limit, it cannot be contended that the Kiewa scheme has been operated efficiently. It is known as a loafer’s paradise. I consider that it is just as well that the Australian Government should not agree to provide money for works which it has every reason to believe are not being constructed as efficiently as they should be. The Victorian Premier’s attitude is that of a person who hits a policeman on the head with a bottle and then asks the injured man to show him the way home.

The Government has been criticized for its proposal to increase taxes. Honorable members have been told that if taxes are increased, incentive to produce will be decreased. There is a certain amount of truth in that statement. But does any honorable member believe that the additional taxation that is proposed in the budget will make any difference to incentive? Under the proposed schedule a man receiving £1,000 a year will pay £91 10s. a year in taxes whereas he previously paid £83 4s. That is a difference of only £8 6s. a year. A man in receipt of £1,500 a year will pay £228 19s., compared with £208 3s. which he paid previously. 3 think that those figures are sufficient to illustrate that nobody, whether a wage or salary earner, a farmer or a businessman, will be required to pay a sufficiently large increase in taxes to reduce his incentive to produce. Taxes are considerably higher in New Zealand and the United Kingdom than they are in this country.

Honorable members of the Opposition have also attacked the Government on the grounds that the defence expenditure proposed in the budget was not sufficient. On the one hand, the Government has been attacked for increasing taxation, and on the other hand it has been criticized for not spending sufficient money. The proposed defence expenditure is less than that to which some other countries have committed themselves. At present, Australia is spending 5.9 per cent, of its national income on defence, America is spending S.2 per cent, and the United Kingdom 9.9 per cent. One of the reasons for the difference in expenditure is that Australia has much larger commitments than other countries for immigration and development. The Government proposes to spend £20,000,000 on immigration. The United Kingdom and the United States of America have no commitments corresponding to this. Almost a third of the total expenditure of this budget is to be used by the State governments or the Australian Government for development.

Honorable members of the Opposition have stated that the reimbursements for social services proposed in the budget are not sufficient. The Minister for Social Services (Mr. Townley) quite recently introduced legislation to increase age pensions by 10s. which, added to the increase of 7s. 6d. a week granted last year, makes a total increase of 17s. 6d. a week during the 21 months in which this Government has been in office. Exservicemen may now receive an advance of £2,750 from the Government for the building of war service homes, whereas previously they could only obtain £2,000. Because of its liberalizations of, and improvements in, social services such as child endowment, the Government is now spending £44,000,000 a year more than the Chifley Government expended on those services.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– What percentage is the present basic wage of the basic wage that was payable in 1948 ?

The CHAIRMAN:

– Order !

Mr FAIRBAIRN:

– In times of prosperity it is necessary that the Government should ensure against times of recession. For that reason £48.000.000 has been paid into the National Welfare Fund and will be available for use when there are not sufficient returns, to- meet claims on the fund.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– What does; the honorable member think of a contributory scheme?

Mr FAIRBAIRN:

– I am wholeheartedly in favour Of it. Before this Parliament is dissolved I believe the Government will have introduced one.

The CHAIRMAN:

– Order ! The honorable member for Hindmarsh “(Mr. Clyde Cameron) will obey the Chair and cease interjecting.

Mr FAIRBAIRN:

– The Government has been accused of failing , to observe sufficient economy in management. .It is amusing to hear such statements as that because only a short time ago honorable members of the Opposition attacked the Government for making a modest reduction of 10,000 employees in the Public Service. I am certain that these dismissals can be made without adversely affecting the efficiency of the Public Service. The Prime Minister in outlining the Government’s policy in relation to the reduction of the Public Service stated that the total number of persons employed under the Public Service Act had increased by approximately 50,000 during the last three years of the Chifley regime. The figures cited by the right honorable gentleman showing the growth of the Public Service were as follows: -

The greatest number of retrenchmentsare to be made in the PostmasterGeneral’s Department, which has been directed to effect a staff reduction of 4,000. It should be possible for the department to effect that reduction without loss of efficiency. During’ the’ 21 months in which the present Government has been in office the lag in telephone installations has in large measure been overtaken. I trust that that improvement will continue. If some officers who face the prospect of dismissal are now engaged in the , installation of telephones their loss might be offset to- some degree by a return to. the practice followed by. the [department,, in. earlier, - years,., under which tenders were invited for. the erection of telephone poles and lines for .new. installations. , Up to 1Q30 the department., in many . instances called tenders and signed contracts for the erection of poles and lines under ‘ the supervision of .its technical officers. In 1930 the practice wa3 discontinued because, owing t6 financial stringency caused by the depression, many permanent employees of’ the department did not have sufficient work to keep them occupied. Unfortunately it has not since been reintroduced. In almost every instance in which a contract was signed the cost was- considerably lower than would have been the case had the department undertaken the work. Many persons in country areas, particularly soldier settlers, who are urgently waiting for telephone connexion would tender for the erection of poles and lines if by doing so they could obtain telephone connexion sooner than would otherwise be the case.

There is also much scope in the Postal Department for the eradication of red tape and the improvement, of efficiency. A good deal has recently been done in that direction. J understand that the costing system formerly operated by the department has been temporarily abandoned because of the unnecessary waste of time it involved on the part of a large number of employees. There are other avenues in which economies could be effected. I saw a file of papers recently which, if it is a typical indication of what goes on in. the department, reveals great inefficiency. The file related to an engineer, employed by the department and stationed at Wagga, who. was sent to Sydney to undergo instruction and to sit for an examination. Under the . conditions governing the examination, if he obtained 75 per cent, of the maximum number of marks allotted he became entitled to the reimbursement of his return fare to Sydney. ..The officer concerned obtained more than 75 per cent. ,of the maximum marks, but before he obtained the reimbursement . no fewer than, ten departmental letters were written in Wagga. Sydney.- Canberra and Melbourne and two urgent telegrams were despatched. Copies of all of these were on the file. An ordinary private firm would have ascertained the result of the examination by the most rapid means of communication and would have paid its employee immediately. If the Postmaster-General (Mr. Anthony) desires to inquire into this matter I shall be pleased to furnish him with the number of the file to which I have referred. An unnecessary waste of time could be avoided if the regulations governing examinations of that kind were overhauled.

The budget has been very fully covered in principle by the Prime Minister, the Treasurer, and honorable members on this side of the chamber. I propose to discuss its incidence on country dwellers. I welcome the Government’s decision to repeal the Wool Sales Deduction Act, particularly at this time when there has been a fall in the price of wool. At the beginning of this year wool-growers received an average of 75d. per lb., compared with more than 200d. last year, when Wool prices were at their peak. If the act had remained in force grave hardship would have been caused to many of them. Principally because of sympathetic handling on the ‘part of the Deputy Commissioners for Taxation, many cases of hardship which came before them were granted relief.

Mr Fuller:

– Only about 1 per cent, of them from my electorate were so dealt with.

Mr FAIRBAIRN:

– The honorable member has not represented his electorate for a very long while.

Mr Fuller:

– ^1 was out of the Parliament for quite long enough.

Mr FAIRBAIRN:

– Collection of the wool sales deduction has involved wool firms in considerable additional work for which they have received no reimbursement, and they, too, will welcome the Government’s decision. I direct the attention of the Treasurer to the fact that, owing to the fluctuating price of wool, growers will be asked to pay in income tax and provisional tax this year far more than they received from the sale of their product last year. A grower’ of wool on a large scale has shown me figures which demonstrate that this year in in come tax and provisional tax he will br called upon to pay £22,000 more than Inearned last year.

Mr WARD:

-Just a battler!

Mr FAIRBAIRN:

– Small woolgrowers, particularly soldier settlers, will have difficulty in meeting their commitments if they are required to pay provisional tax based on the assumption that their earnings this year will be the same as last year. Indeed, some of them will be very fortunate this year if they earn onethird or one-half of what they earned last year. I ask the Treasurer to consider whether it would be practicable to reduce the provisional tax levied on growers and soldier settlers who, in New South Wales, do not own the land which they are farming, or have little or no equity in it and are consequently unable to mortgage it to finance their income tax commitments.

I add my support to the request of other honorable members, particularly the honorable member for Moore (Mr. Leslie), that an interim distribution of the profits of the Joint Organization bc made to those wool-growers who have gone out of the industry. Most of those who have left the industry have done so because of advancing years. They want their money now rather than leave it to be collected by their children. The Government might well consider making an interim payment now, leaving the final payment to be made at a later date.

Provision has been made in the budget, under defence expenditure, for an amount of £15,500,000 to purchase aircraft from overseas and for the production in Australia of -Vampire, Sabre and Comet aircraft. I desire to know what amount of money is now being expended on aircraft production in Australia, particularly in view of the report in the Sunday Herald of last Sunday, which reads -

The Commonwealth Aircraft Corporation, Fishermen’s Bend, Melbourne, has completed preliminary work on the development of ;i new twin jot, long-range, all-weather attack fighter and a new elementary trainer for the Royal Australian Air Force . With the Can burra jet bomber and F.8B jet fighter, the two new types will form the nucleus of replacement orders for Mustang fighters, D.H. “Vampires and other types formerly built in Australia hy government and private enterprise.

I now want to throw some light on this project because I feel - I am only speaking personally - that we cannot produce in Australia a fighter which will be at all comparable with those which can be produced overseas. I do not know how we can succeed at the present time in such a project when those before us have tried to succeed so often and have failed, lt is true that all fighter aircraft built in Australia, when put into active service, have fallen far short in their performance compared with those operating in other parts of the world. The “Wirraways were originally designed as military aircraft, and they were first put into operation when flown by six gallant men who went up to defend Rabaul, but were shot to pieces.

Mr Ward:

– The Wirraway was designed as a trainer.

Mr FAIRBAIRN:

– That is not so. When the orders for the machine were first placed it was described as a military aircraft. The Wirraway was followed by the Boomerang, which was a completely useless aeroplane. Its speed was about 200 miles an hour slower than that of operational aircraft used by’ Germans, Japanese, British and Americans. We iri Australia are bound to produce aircraft which are obsolescent by the time they are delivered to our squadrons. I know that after the Boomerang we produced the Mustang, but it was not delivered until the last six months of the war, and by that time the Royal Air Force squadrons were being re-equipped with jet fighters. I believe that we can produce a sound bomber because bombers do not get out of date as quickly as do fighters. A bomber such as the Canberra would be serviceable for some considerable time. Such a bomber may escape enemy aircraft by operating at night or by being adequately armed. When it is said that we can produce fighters here, it must be remembered that we have not even started yet on the production of Sabre aircraft. Before we get quantity production two or three years , will elapse, and by that time Russia, England and America will be ahead of us and will be producing still more modern types.

We need only about 150 fighter aircraft, at the most 200, so let us order these from England or America. In .that way we shall be able to get the most modern aircraft immediately. Then our squadrons will be the equal of any in the world for perhaps the next three years. I have seen nearly every military aircraft which operated during the last war, and I believe that the British are outstanding in military aircraft design and production. I should like to see the best of their fighters standardized in the Royal Australian Air Force. However, it must be remembered that if the Americans are again to operate in Australia it would be easier to get spare part3 and replacements if our squadrons were equipped with American aircraft. It is also well to realize that the Americans design” their aircraft to operate at greater ranges than do the British. However, let us decide upon some up-to-date fighter, whether British or American, and equip our Royal Australian Air Force with it immediately. That will give us a modern striking force.

While we are using the services of about 5,000 employees in making aircraft in Australia, which I claim will be out of date by the time they are ready to be issued, there is a great shortage in this country of other essentials. We have been told that Australia will be called upon ,to provide great supplies of food in the event of another war. But at the present time food production is slowing down, especially wheat production, because farmers cannot get sufficient agricultural machinery. I know of one area in which 149 headers have been ordered for stripping wheat, yet last year the Australian producer of agricultural machinery was able to supply only one. Yet we are contemplating the continuance of military aircraft production and are thereby absorbing valuable materials, men and resources that would be better employed in our vital primary industries. I believe that we should purchase our aircraft overseas and produce those things which W 1-1,1 make Australia a great primary producing nation. In conclusion, I support the budget wholeheartedly. No critic of its proposals has been able to suggest a better way of achieving what is required, and I commend it to the chamber.

Mr SHEEHAN:
Cook

.- The budget introduced by the Treasurer (Sir Arthur Fadden) is ostensibly for the purpose of dealing with the inflationary position in Australia. The Government has stated that it is deeply concerned about the trend of events in Australia, particularly the steady increase of the amount of money in the community and the widespread inflation of the currency. During the year the Government called an anti-inflation conference for the purpose of trying to find ways and means to deal with the inflationary position in this country. It invited to that conference representatives of various sections of the people, commercial, industrial, social and religious. But it is noteworthy that a very small percentage of trade union representatives or workers’ representatives were invited to it. That conference dealt with the position only from the point of view of the interests represented at it, that is, certain vested interests. The conference offered nothing which might bc useful in solving the problem of inflation. Consequently, the Government had to get advice from financial interests and draw up its budget according to the way in which those interests believed that the country should be run during a period of inflation.

This budget deals with an increase of the national wealth. Such an increase is neither desirable or beneficial unless it is utilized to raise the standards of life of those who have been deprived of a sufficiency of necessaries and of reasonable comfort. If an increase of national wealth results in widening the gulf between the different social classes then discontent will be engendered among the people and the foundations of society will become less stable. I suggest that this budget will give rise to such a position; that is, the foundations of society in Australia will be made less stable because of the Government’s paltry attempt to halt inflation.

The honorable member for “Warringah (Mr. Bland) said that four things in the budget caused him concern. He said that the first was the terrifying rate at which the volume of money in circulation was increasing, and he suggested that a -joint committee on public accounts should be established.” I point out that such a suggestion has often been made before. Moreover, a joint committee on public accounts has at times functioned in this country. The honorable member for Warringah gave as his reason for making the suggestion his belief that such a committee would help to stem the rapid increase of the volume of money in circulation. I do not think that a joint committee on public accounts would be able to stop that increase or stem the tide of inflation.

The honorable member’s second point was that there had been an unprecedented expansion of social services and a reduction of the means test during that expansion. I submit that the Government’s method of dealing with the means test is not at all satisfactory. The means test must be given deep and serious consideration by all governments. I do not say that the means test should be completely abolished. But pensions were introduced originally for the needy and not for the greedy. If people who seek superannuation payments or other similar incomes were able also to cash in on the age pension, they would deprive genuine pensioners of a chance to secure increased payments. However, consideration must be given to an amelioration of the means test so as to enable pensioners to earn more than the present permissible income of about 30s. a week. Why should pensioners be compelled to rust away when they are capable of doing some work at least ? Few are able to work full time, but if their only reliable source of income is the age pension, they can never hope to make a fortune even if they are permitted to earn £10 or £15 a week. When Labour returns to office it will deal adequately with the means test.

Thirdly, the honorable member for Warringah said that the Government should raise a sterling loan in London to underwrite State loans in this country. The starving of the States of loan money for legitimate undertakings is something of which this Government cannot possibly be proud. In all States there is an urgent need for improved public services and the establishment of new public utilities. That is entirely a State province. There is particularly a need for improved hospital accommodation and services, and better educational facilities, and the withholding of fluids from such vital work gives to the States a legitimate grievance against the Commonwealth. After al the people of the States are also Aus.tralians. They elect the Commonwealth Parliaments as well as the parliaments of the States.

The honorable member for Farrar (Mr. Fairbairn) referred to telephone services. Under the Government’s Public Service retrenchment scheme, 4,000 employees of the Postal Department have been or are to be dismissed, in spite of the fact that the demand for telephone installation still far exceeds the capacity of the department to provide them. The dismissed employees include hundreds of men who were engaged on the provision of additional telephone services. The Government seeks credit for its efforts to reduce the deficit of the Postal Department, but, as all honorable members are aware, in spite of increased postal charges, telephone services are far from satisfactory. For instance, there is apparently no check or record for the subscriber on telephone calls. Recently I made four calls and was told each time that 1 had the wrong number and that the lines were out of order; but’ I still had to pay for the calls. That is happening every day in the capital cities, very often because of interference with cables by employees of the Telephone Branch. T realize that telephone services are sometimes dislocated by storms and other such happenings that are beyond the control of the department, but when communications are interrupted, sometimes for six or seven hours a day, because cables are disturbed by Postal Department employees, the public has a legitimate grievance.

The budget is a clumsy attempt by the Government to cure Australia’s economic ills. It proposes to raise revenue which will exceed its needs by £265,000,000. The actual surplus may be even more. Last year, the Government had £57,000,000 to expend on the stockpiling of strategic stores and equipment, but the actual expenditure was not much more than £9,00p,000. Therefore, the remaining £48,000,000 must be added to the prospective 1950-51 surplus. This year, the estimated expenditure on defence has been increased from £.148,000,000 to £1S2,000;000. Will so much money really be expended? Surely that will depend very largely upon an improvement of production in basic industries. The budget is . calculated not to stimulate but to retard production. It will depress industry, cause resentment, and undermine public confidence. Further, it will help to raise costs to such a height thai sectional unemployment, may result. In the words’ of the Leader of the Opposition, it is a “ blueprint for depression “, and I support the amendment to it that the right honorable gentleman has moved.

The Government has forsaken the principles that it enunciated so forcibly when it asked for a mandate from thipeople in 1949. On the contrary, it now asserts that high taxes will cure the ills that beset the community, struggling as it is to meet rising inflation. The budget has been a shock to the people of Australia. By increasing taxes, the Treasurer will boost revenue far in excess of estimated expenditure. The surplus, estimated at £115,000,000,. will be much greater than the Treasurer has admitted that it will be. In addition, he will add another £48,000,000 to the National Welfare Fund, and will pay £102,000,000 out of revenue for capital works and sevices apart from defence works. Thus, taxes will provide £265,000,000 in excess of the revenue required. The huge surplus provided by sharp increases of taxes will be borrowed to pay for State works. The general increase of 10 per cent, in income tax is a betrayal of a promise made to the people. The proposed increases of indirect taxes, including the sales tax and excise duties, will fall heavily on goods in popular demand. That mus necessarily drive living costs still higher. It is difficult to be anything but resentful of a government which promised the people to reduce taxes and then repudiates that promise- and betrays the confidence of the people. Many people now subscribe to the view that the Australian Government, by slashing its own works pregamme, is furthering its carefully designed .plan to establish, .a pool of unemployed, , and thus pave the way for.. wage reductions .and increased working hours, Indeed, the closer one, examines the. Government’s .plan, the more is one convinced that that is its object. First, there is the dismissal of 10,000. Commonwealth public servants.

Secondly, there is a 40 per cent, cut in works programmes which already has resulted in, the dismissal of practically the entire wages staff of the, Victorian irrigation authorities. The New South Wales Government, too, will find great, difficulty in keeping its public works going. By restricting credit to . cooperative building societies and business concerns, the Government has made it practically impossible for workers to build, or acquire, their own homes. Even big investors who are its main supporters have lost confidence in it. For instance, the recent Commonwealth loan was not fully subscribed in spite of the fact that it was issued at a rate of interest higher than that of previous loans. The Chifley Government had no difficulty in filling any of the loans that it launched, although each of them was issued at a rate of interest lower than that of the last loan. The reason for that Government’s success was that the people had complete confidence in it. But how can people have confidence in a government like the present Government, which does not keep its election promises? Labour, .when it was in office, earned a. reputation for honesty. Labour did not make lavish promises that it knew it could not fulfil. After the recent war ended, the Chifley Government reduced taxes substantially and established full employment. The present Government is breaking, its promises to the people by now increasing faxes and, through its financial policy, by causing unemployment. Developmental works programmes are anathema to the Government because, such works tend to maintain full employment. In these circumstances, the Government must be thrown out of office if we are to avert another depression.

I repeat that the Government has betrayed the people. I can. substantiate that claim, merely by quoting some of the statements that- members of the present Government made in criticism of the last budget that the ,. Chifley Government brought down. Speaking in this chamber on that occasion, on;. the 21st September, 19.49,, the present .Prime Minister (Mr. Menzies),, who .was then Leader, of. the Opposition, said - ,

What can ; we buy with our money V , Thireal index, oi . national prosperity is how much value there is. in our pound. I believe that ti i f real task in 1940-50 is; to bring back value into the pound. All I emphasize is that we do badly when we talk so much in terms of national income, as the index when the 0111 real index nf prosperity is what the average citizen can buy: ‘

What is the position to-day? The Government has failed to honour its promise to put value back into the £1. It has made it impossible for the average citizen to purchase many of the necessaries of life. Its record is a sad one from the viewpoint of the basic wage earner. When the Chifley Government was in office the average worker could afford to’ purchase amenities for his home and thus relieve his family of much of the drudgery of household work. At that time the worker could afford to purchase radios, washing machines and vacuum cleaners, as well as many other electrical appliances for the home. To-day, however, the basic wage earner cannot afford to buy sufficient food for his family. That is one reason why so many wives of basic wage earners have accepted work in industry during the last few years. It would be interesting to .know the number of married women who have accepted employment in order to supplement the earnings of their husbands because these have been insufficient to enable them to buy adequate supplies of foodstuffs for their families.

In 1948, Labour warned the people of the necessity to retain prices control on anationwide basis. The people ignored that warning. What was the result? During the eight years from 1939 to 1947 the basic wage was increased from £4 2s. to £5 12s. a week, or an increase of 30s. For six years of that period Labour was in office. Furthermore, the country was then at war and, necessarily, many commodities were in short supply. Under such conditions prices tended to rise. When the recent conflict had ended, Labour foresaw that the. demobilization of hundred? of thousands of ex-service personnel, who were due to receive deferred pay, would intensify shortages and that, consequently, prices would continue to rise. With the object of meeting that danger, the Chifley Government asked the people at a referendum to give to the National Parliament the power to continue prices control on a nation-wide basis. However, members of the present Government, who were then in Opposition, told the people to take no notice of that warning on the ground that the States could control prices more effectively than the Commonwealth could. During that campaign I appeared on the same platform as State Ministers who told their audiences that the States could not control prices so effectively. What was the result of the people’s rejection of the Chifley Government’s proposal on that occasion? During the three years from 1947 to 1950 the basic wage increased from £5 12s. to £7 2s. a week, that is, an increase of 30s. But what happened after prices control had reverted to the States? During the twelve months from 1950 to 1951, for the whole of which period the present Government was in office, the basic wage increased from £7 2s. to £9 13s. a week, or an increase of £2 lis. That increase resulted from rising prices because, as the Chifley Government had forecast, the States failed to control prices effectively. In view of those facts it is clear that a Labour government must be returned to office if our economy is to be stabilized.

I deprecate the Government’s proposal to increase the sales tax on radios, particularly radios that are purchased on behalf of schools or hospitals. I point out that sales tax is not imposed on newspapers because it is recognized that newspapers are virtually a public utility and render an essential service to the community. For a similar reason radios should be exempt from sales tax. They are in the same category as newspapers. Recently, representations were made to me to urge that watches be exempt from sales tax. The incidence of the sales tax gives rise to serious anomalies. Increased rates of sales tax will be payable on watches in which synthetic stones are set. A watch merchant informed me that a watch in which beads that cost only Id each had been set in the figures on the dial, was 3s. dearer than a similar watch without such beads. As a result of the operation of the new rates of sales tax, the price of a watch in which synthetic stones are set will be increased from £10 to £13 or £14. Watches that are ornamented with synthetic jewels should not be subject to a high rate of sales tax, because they do not come within the classification of an ornamented jewelled watch. Obviously, the definition of “ ornamented jewel watch “ is too vague. The officials who administer the sales tax probably do not understand the true position.

The rate of sales tax on fountain pens has been increased from 8-^ per cent, to 12£ per cent. In my opinion, such useful articles should be exempt from sales tax. They are indispensable to students, and are used by nearly two-thirds of the people who work in industry. There is no necessity to levy such an imposition upon fountain pens, and the Government, by doing so, is unjustly taxing working people and students. Nearly every child, once he or she begins to write, uses a fountain pen. The old style of pen holder and steel nib, which is still provided for the use of honorable members in this, chamber, is completely out of date. I realize that it is somewhat difficult to draw a distinction between what is, and what is not, a fountain pen. Manufacturers can make a pen that will serve the same purposes as, but is not strictly, a fountain pen.

This budget will cause the community greater distress than was caused by any budget previously presented to this Parliament. The Government, although it boasts about its increases of social services benefits, has not increased unemployment and sickness benefits. Obviously, the Treasurer is not concerned about the plight of sick and unemployed persons. The present rate of unemployment benefit, which is £1 5s. a week, was fixed by a Labour government some years ago when the basic wage was approximately £4 a week. The basic wage to-day is £9 13s. a week, yet the unemployment benefit remains at £1 5s. a week. The failure of the Government to increase unemployment and sickness benefits proves conclusively that it has no sympathy for sick and unemployed persons. The Labour party, in having provided a generous scale of social services payments, has a record of which it can be justly proud. I recall that the Curtin Labour Government increased by 100 per cent, the range of social services payments that was in existence when it assumed office.

The Postmaster-General (Mr. Anthony) is proceeding with a plan to resume land in Redfern. Approximately 250 families live in the area that is to be acquired, and the plan envisages the demolition of 80 houses, and the erection on that site of stores for the PostmasterGeneral’s Department, at a cost of £5,000,000. Age pensioners who own and occupy some of those houses, will be compensated. However, I fear that, immediately they receive their cheques, they will forfeit their pensions, because they will have ceased to own their homes and will have some hundreds of pounds in the bank. That position may be covered in the Social Services Consolidation Bill, and the Minister for Social Services (Mr. Townley) may be able to say to such a pensioner, “ The Commonwealth has deprived you of your home and has compensated you for that loss. In the circumstances, you will not forfeit your pension “. I hope that such a discretionary power will be vested in the Minister. In my opinion, it should have been granted years ago.

Some invalids between the ages of 16 and 21 years are not being paid a pension in their own right, and are obliged to rely on their parents to maintain them. If the income of the parents is £9 a week, or approximately 13s. less than the basic wage, a young invalid is not eligible for a. pension. Those young men and women, if they were employed in industry at the age of sixteen years, would earn between £3 and £5 a week. At 19 or 20 years of age, they would earn between £10 and £15 a week. Yet their parents, if their income exceeds £9 a week, are compelled to maintain them. Such a position demands urgent attention.

The CHAIRMAN:

– Order ! The honorable member has exhausted his time. Sitting suspended from 5.16 to 8 p.m.

Sir EARLE PAGE:
Minister for Health · Cowper · CP

– Before I discuss the budget in detail, I pay a tribute to the Treasurer (Sir Arthur Fadden) for the courage, skill and ingenuity that he has revealed in introducing this mammoth budget to meet one of the greatest crises of our history. “With masterly judgment he has made provision for a vast expansion of our defence programme as well as for an improvement of the lot of pensioners and lower-paid citizens merely by restricting non-essential investments and the use of consumable goods, which may easily be made to last for a year or two longer than they might be expected to last in less threatening circumstances. The Treasurer has been subjected to criticism on various points of his economic policy, and I shall reply broadly to that criticism before I proceed to an analysis of the budget. Much of the criticism has referred to the amounts of loans that have been raised, the times at which they have been raised and the rates of interest that have been fixed for them. The truth is that all of these factors are determined by representatives of this Government and the State governments jointly at meetings of the Loan Council. The Treasurer is not the master at meetings of the Loan Council; in fact, he is the servant. This position was brought about by an alteration of the Constitution that was authorized by the people in 1928 by a majority of four to one throughout the Commonwealth. The States enjoy a majority representation of six members to two at Loan Council meetings. Therefore, the moans that we hear from time to time from Premiers of the various States concerning loan policy and the apportionment of loan funds are absolutely hypocritical. In the last analysis, the State Treasurers are able to decide loan policy if they have the wit to stand together on such issues.

The keynote of the Treasurer’s budget is clear. The right honorable gentleman has made a Herculean attempt to solve the urgent problems of defence and inflation. These problems have made tax increases unavoidable. However, I can say at the outset that, whatever taxes are openly levied under the provisions of this budget, the amount of the overall increase will be insignificant in comparison with the concealed tax that inflation is levying and will continue to levy at an increasing, rate; unless, it is, .checked. , X have. listened- care. fully to various members of the Opposi-tion during this debate,. but I have listened in vain for some ‘indication, of their, aprpreciation of .the,, urgency of. .the world situation which has,, necessitated, the, presentation of a budget , of this .nature. AH the Parliaments of other. Englishspeaking democracies., have, already demonstrated their realization .of the urgency of the international situation by their adherence to a- common policy for the pursuit of peace and the control of. inflation. The Government of the United Kingdom, for example, has brought down a budget that .provides for the expenditure of £4,700,000,000 on defence. That Government is now going to the people two years before it is necessary to do so in order to enable them to elect a strong government at this time of emergency. The Government of New Zealand did likewise. It went to the people two years before its term of office was due to expire, in. order to secure a definite mandate to pursue its . policy. Since its return to office as the result of that election it has presented a budget, that is similar in all respects to the budget that we. are now considering. The Governments of Canada, and the United States of America also have implemented similar budgets.

Not only the governments, but also the great labour unions of those countries, have demonstrated their realization of the urgency of our situation. On. the day when I left San Francisco recently - the very day on which the Australian Labour party and several Australian trade union leaders helped to thwart the Government’s plan to control communism in this country. - the American Federation of Labour announced that it had decided to take control of the waterfront in the United States, of America and put an end to the activities of the Communists who had been sabotaging production. In Denver, Colorado, about a week previously, the Congress of Industrial Organizations, the other .great American labour organization, held a huge convention .at the hotel at which I was staying. That convention adopted a resolution, approving the policy of ‘ the United States Government, in help-

Sir’ Earle Page ing European .countries to. rearm against the .threat , of: communism;

The ‘Australian Labour, party committed a’ stupid political ‘ error when it Opposed- . the’ Government’s attempt ! ‘ to obtain power, by means of a referendum, to deal with communism’. Ah analysis of voting at the last two general elections and at the referendum. ‘discloses that, on all three occasions-, most of the Australian people endorsed the Government’s antiCommunist policy. At the general election of 1951, the Government parties were returned with majorities ‘ in both Houses of this Parliament. At the referendum, 6S electorates voted in favour of the Government’s proposal, compared with 53 electorates that opposed it in accordance with the Labour narty’s recommendation. I appeal to the Opposition to-night to make a contribution towards the maintenance of world peace and the good name of Australia. It can contribute materially to the progress and prosperity of this country by co-operating with the Government in dealing with the threat of communism. Surely every honorable member at heart supports the policy of the pursuit of peace and the control of inflation. We may disagree about the methods that should be adopted, but we must be in. agreement on the general policy. The ultimate control of inflation depends upon the maintenance of a lasting peace because another devastating wai would cause an acceleration of inflation in its most vicious form. I believe that we now have at our hands a wonderful opportunity to ensure the preservation of peace throughout the world.

We have three great assets that we have never had previously in a- period of national danger. In the first place, the great democracies of the world have realized that the danger of war exists. They have acknowledged that we must prepare in time of peace so that we shall have the strength, to repel any attack, The democracies have formed organizations for that purpose, notably under the terms of the North Atlantic Pact and the Pacific Pact. By this means, we have presented a common front to our potential enemies. The Colombo plan’, which this Government sponsored,-.” was designed for the purpose of lessening the danger of com munism in Asia. The second great asset that we have at present is the extraordinary volume of production that has been achieved in some of the free democracies during the last five or six years. Production in both Canada and the United States of America is now about 100 per cent, above the pre-war level. In Great Britain, the improvement has been between 40 per cent, and 50 per cent. .In Australia, results, have not been so good as that because, of,., the activities of saboteurs . in key industries. Our third great asset is the, unity of policy and purpose, of all free nations pf the world. That is exemplified by the fact that at present there are fighting in Korea units of practically every free nation of the world, including Turkey, which was our enemy in World War I, They are fighting shoulder to. shoulder, in au effort to repel Communist attacks and to prevent the Communist menace from., spreading into the Pacific area. Other evidence of unity of , action has been the introduction, of budgets similar to ours in the parliaments of those countries. But a big liability exists’ in Australia. I, refer to the divided outlook of the people of this country with respect to communism and the ways in which inflation’ should be dealt with. One of my principal reasons for addressing the committee to-night is to appeal for the development of another front against communism. The Opposition, the trade unions of Australia, and especially all the people who voted against, the recent referendum should get together to help in this connexion. In effect the people rejected the anti-Communist legislation that was passed by the Parliament on two occasions, although’ they had returned this Government with a large majority. Therefore, the onus is now on the people.

An attempt is being made to extend the hold-up of production on the coal-fields. Even to-day Ave have suffered a loss of 30,000 tons of coal, which we can ill-afford. The time has arrived when the Australian Labour party and the trade unions should take positive action to correct that state of affairs. Let up consider the obstacles to peace in the world to-day. The principal obstacle is the feverish rearmament of Russia and the. propaganda that is being disseminated by that country: Why should Russia organize the distribution of propaganda in Australia, a country situated thousand.* of miles from Moscow, and which contains millions of square miles of undeveloped land”? Russia is supplying funds for the carrying on of subversive activities in Australia, iri a.n attempt to convert the people of this country to the Russian way of life. I do not believe that that objective will be achieved. Although 30’ years have passed 3ince the. Australian Labour party adopted the Communist manifesto as its- platform, only for four years in that period has that political party commanded a majority in both Houses of the Parliament. I venture to say that- if Labour persists in not giving the Government a helping hand to destroy the menace of communism and Communist sabotage, in this country, it will not enjoy a; majority in both Houses of the Parliament for even four years during the next 30 years.

The English-speaking democracies have all brought down budgets to provide for huge , defence preparations, and haveintroduced measures to combat inflation. They have also introduced legislation to deal with the Communist menace in their respective countries. Canada has introduced its biggest peace-time budget for revenue of 2,900,000,000 dollars, which is expected to result in a surplus of 203,000,000 dollars. At the present rate of exchange, that surplus would be equivalent to’ £A.100,000,000. The taxes that have been levied by Canada are somewhat similar in their incidence to ours, in that efforts have been made to see that they shall not bear too heavily on. the poorer sections of the people: In- the ‘United States of America a mammoth budget to provide for an expenditure of 90,000,000,000 dollars has been brought down with the general approval and publicly expressed support of two Labour organizations in that, country. An amount of 7,500,000.000 dollars’ will be provided to help the free countries of the world. Great Britain has introduced a budget of £4,700,000,000 in order to meet the present” crisis. An extraordinarily large budget has also been introduced in New Zealand.

Two general elections and a referendum have been held in Australia within the last two years. The present budget is in accordance with the announced policy of the Government in 1949-51, and it is deemed to be necessary in order to deal with the present situation. The policy of this Government in connexion with communism and inflation is practically identical with that of the other great democracies to which I have referred. The governments of some of those countries are of a different political colour from the colour of the present Australian Government, but their budgets are national budgets in the highest sense of the term. Our soldiers fighting in Korea voted two to one in favour of the Commonwealth being given additional power to combat communism at the recent referendum. What is the difference between power in the hands of the States and in the hands of the Commonwealth?

Mr Curtin:

– A lot.

Sir EARLE PAGE:

– It is obvious that the honorable member for Watson (Mr. Curtin) does not expect that the Australian Labour party will ever be in office again in this country. Surely the matter of additional power for the Commonwealth should be dealt with on its merits. That is the way in which I have always endeavoured to deal with that subject since I have been a member of the Parliament.

Mr Ward:

– What attitude did the right honorable gentleman adopt in 1944 ?

Sir EARLE PAGE:

– My obvious answer to the interjection of the honorable member for East Sydney (Mr. Ward) is to ask what he did in 1926. In that year the proposal to hold a referendum on the question of a grant of additional powers for the Commonwealth was supported by all political parties. However, in order to preserve their own interests, certain organizations that support the Australian Labour party campaigned successfully to prevent it from being carried in tbe affirmative.

This budget is a balanced budget, which complies with the Government’s policy that was developed in 1949 and carried out as far as possible in 1950. Part of that policy is to try to restrict nonessential credit. During the past few weeks large advertisements have appeared in the

Melbourne and Sydney newspapers which have announced reductions of prices by city department stores. I recall seeing in a recent edition of the Sydney Morning Herald a double-page announcement by Grace Brothers Proprietary Limited of a 50 per cent. reduction of prices.

Mr Ward:

– The banks are forcing them to bring down prices.

Sir EARLE PAGE:

– That is because of this Government’s policy of credit restriction. We believe that while we areproviding for increased defence expenditure, we should also look after the poorer people in our community. Honorable members opposite may smile, but people are saying, “I paid 30s. less for my trousers than my mate paid a fortnight ago,” or “I have bought carpets for 25 per cent. less,” or “ I bought pyjamas at half the price at which they were being sold a few weeks ago “. The effects of the Government’s restrictive credit policy are already being felt in the community.

The budget shows that the Government is exercising strict control of its own expenditure. It is reducing the cost of the Public Service. That can be done only by reducing its strength, because the wages of public servants are determined by the Public Service Arbitrator. A “ pay-as-you-go “ policy is being followed in relation to expenditure upon defence, public works and administration. Thedefence programme is being financed by revenue derived from taxes. The levels of ordinary personal consumption are not being unnecessarily reduced. Room is beingmade for the defence programme- in the field of capital investment and consumer durables. The financial policy of the Government is not interfering with the social amenities of persons in the lower income groups or causing theirliving costs to increase. Age and invalid pensions, war pension and the allowances that are paid to sufferers from tuberculosis are to be increased. The Government has been enabled to grant thoseincreases owing to the skilful manner in which the Treasurer has dealt with the problems that confront him.. Provision is being made for an expansion of the Government’s national health scheme, which has got off to a wonderful start, as far as free life-saving drugs and free medical treatment for pensioners are concerned. Sales tax is not imposed upon more than two of the 156 items in the “ C “ series index. The general rate of sales tax has been increased only slightly, although it is true that the rate at which the tax is imposed upon luxury goods has been increased fairly substantially. Increased taxes are being imposed in a way that will permit of quick relief being given if the international tension lessens and the threat of war diminishes.

The following table, in which the sums that were paid in income tax and social services contribution during war-time a’re compared with those that are being paid now and those that will be paid in future, speaks for itself: -

The favorable position that is enjoyed by taxpayers in this country compared with taxpayers in the United Kingdom and New Zealand is shown by the following table: -

Anybody who says that the Government <san implement the huge defence programme that is necessary for the security of this country without increasing taxes is speaking with his tongue in his cheek. The general rate of sales tax, to which t have already referred, has been in creased from 8J per cent, to 12J per cent., and the sales tax imposed on luxury goods has been increased to a greater degree. In Canada, the general rate of sales tax has been increased from 8 per cent, to a fraction over 10 per cent. The Treasurer has discontinued the special depreciation allowance that has been in operation since 1946. It was granted to encourage the purchase of new machinery to replace plant that had been worn out during the war years. The allowance has been discontinued because companies have had an opportunity to buy the new machinery that they required. The discontinuance of- the allowance will merely restore the system that was in operation before 1946. The full cost of plant may still be written off in annual deductions at normal depreciation rates. The Canadian Parliament has passed a law which provides that the right to charge depreciation as an expense shall be deferred for four years. After four years, Canadian firms will be permitted to transfer plant to .the depreciable asset account at full original cost. They will lose only time.

Against whom are we preparing to defend ourselves? We are not preparing to defend ourselves against other countries of the British Commonwealth. The only nations that we have any cause to fearare Russia and its satellites, against one of which our troops are now fighting in Korea. Preparations to defend ourselves against external foes will be of little value if we permit Communists in this country to sabotage production. As the honorable member for Macquarie (Mr. Luchetti) said recently, increased production and harder work by every one of us is the only way in which to control inflation, which is the greatest and most insidious tax of all. That was said also by the late Mr. Chifley, the previous member for Macquarie, shortly before he died. This budget is designed to deal with world-wide issues such as the pursuit of peace and the control of inflation. The obstacle to peace and the cause of inflation are the feverish arming of Russia and the counter-preparations that are necessary in the free countries.

The Government’s financial policy must receive the support of everybody in the community. It- must be supported, not only by honorable gentlemen opposite and the trade union movement, but also by the State governments, especially the Government of New South Wales, which governs two-fifths of the people of this country and .which, at the present time, is receiving from the Commonwealth by way of loans or tax reimbursement £91,000,000 more than it received .in 1947-48. That is the position in which New South Wales has been placed by the liberality of this, Government. Therefore, nix obligation has been imposed upon the Government of that State, which has legislative power to deal with the obstructive and subversive activities of Communists, which controls a great railway system and, which has an opportunity to undertake the construction of great electric power schemes that would enable us to increase our production. Under this budget, the States are being guaranteed more, money for public works than they borrowed between 1922 and 1930 or between 1930 and 1939. This year, the Commonwealth is guaranteeing £225,000,000 for State public works, as against £200,000,000 expended by the States between 1922 and 1930’ and £142,000,000 between 1930 and 1940. Yet one hears screams of anguish because there is no money.’ I point out to honorable members that New South Wales is now receiving twice as much money from the federal aid roads scheme as it did when the honorable member for East Sydney (Mr. Ward) was the Minister for Transport.

Mr Ward:

– But the money is not worth anything now.

Sir EARLE PAGE:

– I ask the honorable member why the value has gone out of it? One reason is that- the New South Wales Labour .Government pushed the 40-hour week upon the people before the Australian power development was ready for it. That government has ‘allowed the railways and road systems of New South Wales to go to pot. At the same time, the savage freight charges that it proposes to impose will prevent production from being maintained on farms. It must coma into line and help this Government with (he problems that face the country to-day.

The CHAIRMAN:

– Order ! The right honorable gentleman’s time has expired.

Mr WARD:
East .Sydney

.- It was appropriate that the Minister for Health (Sir Earle Page), the former title, holder and the original tragic Treasurer, should have paid a compliment to the new titleholder, the present Treasurer .(.Sir Arthur Fadden). I fail to see, as the right honorable; gentleman suggests, that it requires . courage and. ingenuity to impose upon the Australian people a budget such as that which we are now consider-ing, . Every member of the Government is still relying on the old stock in’ trade catchery of “Communism “ to explain away everything that the Government has failed to do. There is one thing on which the Opposition can agree with the right honorable gentleman, and that is that we are facing the greatest crisis in our history. If I recollect correctly, in 1.949, at the time when this Government first took office and when there was comparative stability in our economy, its members stated that they would cure all of the nation’s ills. They have now been in office for almost two years, and yet they admit that we are facing the greatest crisis in our history. It is the very thing that the late leader of the Australian Labour party, Mr. Chifley, predicted would happen if the Labour Government ‘ were defeated. Of course we are facing an inflationary situation. :If we look calmly at the position, we must recognize that Australia is being committed to too great a task. In Australia to-day we are witnessing the ruination of a great country because of bad government.

Honorable members opposite speak oi our obligations to the United Nations’. What are those obligations? It is true that Australia is a member of the United Nations. Every speaker on the opposite side of the chamber has indicated that the existing inflation is due to only one thing. That thing is the international . tension which has involved this country in great expenditure in prepartion for war. No member of the Opposition has argued that we should attempt to escape our obligations to the United Nations, but I contend that we are entitled to know ‘what those obligations are. .Pandit Nehru of India, who has a greet country and a great population behind him, and who subscribes to th, decision* of .the. United Nations! ‘in-, .regard to the Korean conflict, has ‘Stated’ that India is unable ito participate- ‘actively in the i conflict because1 of the problems with which that country -is faced. Therefore, £ say ‘that, what is. being prepared for in this. country to-day- and it is as well that the Australian’ ‘people should know the truth-i - -is not a plan for home ‘defence but a plan to arm this nation’1 and’ -t’o commit it’ to vast expenditures’ in order that Australian forces may be’ sent to’ any theatre of the world where, there is- an outbreak of war.

We have heard some abuse of the Attlec Labour Government in the United Kingdom because of its handling of the situation in Persia. It is a, very fortunate thing that the British people . have in command during these difficult years a nian of the stability and foresight pf .Mr. Attlee, rather than a man such as Mr. Winston . Churchill. The honorable gentlemen opposite would have had this country involved in. war in Indonesia, i;o full-scale warfare in. Malaya’ ,and elsewhere, and to-day . they would have . us involved, in- the Persian, dispute. I -think that Mr. Attlee has adopted the correct attitude.;. If it is. in order for the British Government to exorcise the right to nationalize the steel industry of: that country, what is wrong with the Persian Government nationalizing the Persian oil industry and using the wealth produced for the benefit of the Persian people? When we charge this Government with being a war-m’ongering government, I’ am of the opinion that we’ have every reason for doing so. ‘ “We must recognize that a great deal of our financial difficulty to-day is due to the fact that enormous. expenditure was incurred , by a young country, with a very sparse population, participating in previous wars. Approximately onethird of our total expenditure is now used to prepare for future participation in wars and to pay the costs incurred by participation in past wars. I ask honorable members opposite, “ “What is the future of this country and what are the future, prospects of the Australian Community, generally “. The members of , the Government have told ,us that we have, until the end “of 19 5 3’ to arm ‘ourselves! They say1 that that ‘applies” no’t only ‘to Australia) ‘-but also1 to’ the other’ democratic nations throughout the world.” ‘ One might ask what is to happen at the end of 1953. According ‘ to’ their reasoning, ‘We- shall then be so powerful’ that Russia ‘will -be afraid to attack us. If that is* so and there is no war, do we’ then return ‘t’o a peace-time economy? Do we disband our armaments, or do we attack, in order to destroy Russia? When the honorable gentlemen opposite speak of the, ‘ inevitability of war, ..I suggest that, they believe that, having built up a great military machine throughout the world, it’ should not be allowed to fall into misuse. Their attitude no doubt is that if the other side does not fight, we do.

The urgent need throughout the world to-day is that there should be Labour governments, in control. It is. interesting to hear the hypocritical statements of honorable members opposite when speak ing about great sacrifices.

The CHAIRMAN:

– -Order ! The h’onorable member’ must withdraw the word “ hypocritical “. ‘

Mr WARD:

– I withdraw,. it. Some honorable members opposite have spoken of the great, sacrifices that have. -been made by the, people, of the United Kingdom.’. While they are speaking about those great sacrifices- and surely they will not blame the Communists for this - they are’ exploiting the difficulties of the people of the United Nations and those of’ the United Kingdom in particular,1 because already one of the members of this ‘ Government isin the United Kingdom endeavouring to take advantage of those difficulties by trying to exact higher prices for Australian meat, wool and other, primary products. If the Government is sincere and genuine and really believes that a united effort is being made, why does it wish to retain the auction system for the sale of wool? Why is there not an international agreement so that a price may be fixed which will have some real relationship to costs of production? I suggest that the supporters’ of this Government exploit every situation which gives them th, opportunity to secure higher prices.

No member of the Opposition would refuse to do whatever is necessary in order to defend this country in the event of it being threatened by invasion. The Minister for Immigration (Mr. Holt) made the following statement at a citizenship convention which was held in Canberra earlier this year : -

We cannot afford loose thinking on our defence problem; if we do, we will involve ourselves in great waste of resources. Australia’s defence problem to-day is not the defence problem of the 1940’s. Then we had an aggressive, well-equipped maritime power literally threatening our shores. The world situation to-day is undoubtedly grave, and the threat of a third world war persists. Australia would almost certainly find itself involved in such a war, fighting with its allies of the western democracies, but there is in sight no world power or combination of world powers which could, for many years, develop the maritime resources to launch successfully an invasion in strength on our shores.

The same opinion was expressed in this Parliament by the Prime Minister himself. So if we are not to be threatened by invasion, is it not logical to ask, “ “What contribution is it possible for this country to make in regard to a united effort in the event of a third world war ? “ I say that in view of the great- sacrifices that have been made by this country, and the great need we have for development and for the use of our man-power in other directions, Australia ought not to be called upon to be committed to use its armed forces to the extent of the commitments that the Government has agreed to. Naturally the Government will say that it is acting on the advice of Navy, Army and Air Force experts. But the Treasurer himself once had something to say on this matter of experts when he made the following statement: -

Naval and military experts often seek to take advantage of critical times in order to urge expenditure on projects calculated to advance the interests of the professional sailors and soldiers rather than those of the country.

That has been the experience of all governments in this country. Is it not rather interesting to note that whilst both the Prime Minister and the Minister for Labour and National Service have admitted that we can be threatened with invasion only by a great maritime power the Government has agreed to the rearming of Japan, our former enemy? If the security of this country is to be threatened in the future that threat is more likely to come from Japan than from any other quarter. The Government has betrayed the Australian people by agreeing to the rearmament of Japan. It is quite true that for political reasons the Government has said that it was opposed to the Japanese Peace Treaty. The Prime Minister himself said so, according to a report in the Sydney Sun of the 27th April, which read in part -

As for the charge that the government wanted to rearm Japan, that was lying and Labour knew it.

Australia had consistently expressed its opposition to Japanese rearmament, but the United States of America and the United Kingdom did not agree. . . .

What did Labour want? - to declare war on. these countries. “What we want to know is what the Prime Minister’s objections to the rearmament of Japan were, and, if he had objections, why the Government did not refuse to sign the peace treaty which authorized that rearmament. Asa matter of fact the United Kingdom was not in agreement with the United States on the policy of the rearmament of Japan. It sought the inclusion of a provision to limit the shipbuilding rights of the Japanese, because the British people also recognize that if Japan once again becomes a great maritime power it will be able to threaten the security of the nations of surrounding areas. Mr. Spender, who is now our representative in the United States, also said, according to the Sydney Morning Herald of the- 12th January,” 1950- ,

It is asking too much of us to believe that the forces of militarism in Japan are dead.

In the event of a conflict between the Communist and non-Communist worlds, a Japan’ with renewed military strength might re-assert herself in the Pacific and Asia in the exhaustion that such a world conflict would produce.

This is too great a gamble for Australia *tr** bc asked to take.

Those honorable members who read an article by Mr. Richard Hughes in the Sydney Sunday Sun and Guardian recently will recognize that the Japanese are not the changed’ people that the Government wants us to believe they are. They are merely awaiting their opportunity to rise again and strike south and so endanger the security of this country. If that is the position, what right has the

Government to commit Australian troops for service outside Australia when there may be in the future, as a result of the Government’s treacherous act, a threat to the security of our own shores? “What we have to consider is the great task that lies ahead of this country. The Prime Minister directed a question to the Opposition. He said, in effect, “ Very well, answer me this. Would you reduce expenditure or would you increase revenue, or would you mend the gap between revenue and expenditure by the issue of treasurybills ? “ We certainly do not agree to the issue of treasury-bills in the existing situation, and we do not believe in the financial burden being placed on the people in the manner that is proposed in the budget.

We say that, having regard to its economic situation, this country is being committed to too much in the military sense by the Government. We should have a mind to the nation’s obligations in other directions. Here we have a great young country which is not fully developed and which has great expanses of empty territory and a sparse population. Members of the Government have talked in general terms about State works. If I remember correctly, the Prime Minister referred to them as “ sideshows “. We do not regard them as “ sideshows “. We do not regard the building of homes for the people, as “ sideshows “. We do not believe that great power projects and water conservation works are “ sideshows “. The Government claims that its policy will lead to the withdrawal of labour and materials from the production of luxury goods. But what constitute “ luxury goods “ ? Is it really the intention of the Government to cause some restriction in regard to the purchase of what it terms “luxury goods “? The budget itself shows that the Government is expecting greater sales of beer and liquor upon which higher excise duties will be charged. It is also expecting increased revenue returns as a result of heavier sales tax. What it proposes to do is to force up prices of goods that are in short supply so that the goods will become prohibitive in price as far as the workers are concerned. The ordinary people will be unable to pay the price for many commodi ties that are to-day generally regarded as necessaries, but that the Government has declared to be luxuries. But the wealthy people whom the Government represents will not be prevented by higher prices from obtaining an adequate supply of those goods.

I turn now to national development. According to the. Prime Minister, funds for State works this year are to be cut to £225,000,000, of which amount £150,000,000 is to be financed from loan money and the balance is to be met by advances made by the Commonwealth from its expected surplus of £114,000,000. But the States have not heard the worst of the story yet, because, according to the Prime Minister, who is still hoping that some day he will be clothed with dictatorial powers in this country, he proposes to call a conference of the State Premiers early next year - but not to discuss their problems. No! The Prime Minister, according to his own words, is going to tell the Premiers what works they may carry out. Everybody knows that the road, rail and general transport systems of this country are collapsing, and that the States have inadequate financial resources to meet the situation. The Government tells the States that they must do something about increasing their own revenues so as to be able to deal with that position. As a result, rail fares and freights and tram fares have been forced up, thereby increasing the cost of living and imposing a greater burden on the community. Yet, while the Government is telling the States that it is unable to assist them to any greater degree, we find that we are making approximately £10,000,000 available as a first instalment to international development and relief. It seems rather amazing that a government which tells the States that it cannot assist them to finance their developmental works is at the same time committing Australia to the Colombo plan, which will . cost the Australian community no less than £31,250,000 in six years. That is to be done although everybody has been talking for years about the need for developing our own territories.

The sum that the Government has committed Australia to contribute to the Colombo plan is millions of pounds in excess bf the amount that it proposes to expend ‘in the’ Northern-‘ Territory and in the development of our “Own country. All I can say is that if - the ; Government has a genuine and sincere desire to defend Australia against any threat of1 invasion it should be expending millions of pounds in the development’ of the northern part, of Australia rather than expending so much- money on the development of other countries. . But .probably’ the Government does not intend to defend all Australia. It may still have in existence a plan that it had in the la3t war, which was a. plan to abandon a large, section of Australian. territory without firing a shot.

Government supporters interjecting,

The CHAIRMAN:

– Order ! Honorable members are making too .much noise. [ ask them to listen to the honorable member for East Sydney (Mr. Ward) in silence. ‘, 1 .

Mr WARD:

– Honorable members opposite may deny what I have said, but they do not have to depend upon my word about the existence of what is commonly referred to as the “ Brisbane line “ strategy, because General Douglas Mac Arthur, who was in charge of that theatre of operations, continually referred to it. In addition, Sir Leslie Wilson, who

WAS the Governor of Queensland at the time, gave a press interview on his return to the United Kingdom in which he spoke about the “Brisbane line “ strategy that .existed., in this country while he was Governor, of that State. If honorable members opposite take the trouble to question some of the officers who were, in charge of. the police districts in Northern .Queensland during the . war, they will find that those men were given instructions about how to act in the- event of a Japanese landing on our shores.

Honorable members opposite assert that increased production’ is the only cure for inflation, yet. the Government is acting. as though it believes that, by increasing taxation on the workers, and forcing up the price of goods it will encourage production. In the long run,’ all taxation comes from the workers because the workers are the only producers. Taxation levied upon workers has the same effect as a direct reduction of wages, so that ‘ the Government is ‘trying to increase the incentive to pro’duce by reducing the effective- wages of .the workers. The Treasurer ‘‘did not always favour that ‘ course. Or “a previous occasion, when speaking . of the Chifley Government, he said: - “ ‘

The Government’s ‘policy’ of maintaining taxation at unduly high levels has killed the incentive to produce.’ ‘

This in turn .has. contributed, to industrial dislocation, absenteeism, spasmodic stoppages of work and a genera] disinclination to work overtime. ‘ ‘ ‘ ‘ .

The Chifley Government may blame th, coa.I-iuinei-3, wharf labourers, or the Communists for the slowing down of production but it alone 13 responsible’ for. the paralysing effect of restrictive taxation.

In those day3 the Treasurer did no.t believe that the Communists were responsible for retarding production. He believed that production was being retarded by the paralysing effect of restrictive taxation. The present Prime Minister (Mr. Menzies), in his .policy speech delivered before the general election of 1946, referred to the Chifley Government in these terms -

It has, by way of outstanding example, been most . reluctant to grapple with the problem of tax reduction.

This is partly because it seems to believe that government departments can spend our earnings for us more wisely than we can (which is a common socialist delusion), and therefore that it is more important to main tain ‘government expenditure than to reduce the taxes which maintain it; and partly because the Government has never come to understand that real tax deductions would be the host of ail incentives to increased effort, earnings and production. No’ promises will bc made recklessly by the Liberal party. We have carefully and soberly studied Australia!problems. .What we promise we will perform.

Those arc the words . of the present Prime Minister who to-day believes, apparently, that the way to get greater production is to increase taxation. Every one knows what has happened since this anti-Labour Government has been in office. One of its first actions was- to abolish the control of capital issues. During the twelve months in which there was no control there was a rush by the wealthy friends of the Government to water company stock by the issue of bonus shares. After great damage had been done to the Australian economy, control of capital issues was re-imposed’.

This budget has been correctly referred to as a rich man’s budget. The Minister for Labour and National Service said that the stock exchange had remained buoyant. Of course it has. [ have taken out some figures which show why those in control of big companies are delighted with the budget. A small company which made a profit of £5,000, all of which it distributed, to its shareholders, would pay £1,25.0 on the old rate of company taxation,, and £2,250 on the new rate, an increase of 80 per cent. A company which made a profit of £20,000, half of which it distributed in dividends, would pay £7,500 tax under the old rate, and £9,000 under the new rate, an increase of 20 per cent. A big company which made a profit of £500,000, and distributed £200,000 in dividends, would pay t’204,500 under the old rate, and £225,000 under the new rate, an increase of only 10 per cent., as against an increase of 80 per cent, for the small company. Of course the big companies are delighted with the budget. This is a budget designed to give big business intersts complete control of die nation’s economy. When a majority of the people voted against the Government’s referendum proposals, they were, in fact, voting against the Government, and the poll indicated a remarkable change of opinion during the comparatively short period that- this Government has been in. power. If an election were held on the issue of the budget there is no doubt what the result would be. The Labour party would be returned with a majority.

On the subject of sales tax, the Government says that it is taxing not so much earnings as spendings. Who are the greatest spenders in the community? The great majority of the workers must live from week to week because their incomes will not allow them to save. Although wages have increased, the position of the workers is worse than ever because prices have increased at u greater rate than wages. The Government has heavily increased sales tax on what it calls luxuries, but many of those items are regarded by the workers as necessaries. I refer - to such things as cosmetics, toys, baby food and refrigera tors. The Government has placed a higher tax on children’s toys than on contraceptives. That is an interesting point to keep in mind about a government which professes to be eager to.’ increase the population.

If ever there was a need to review our immigration policy it inow. At the present time, as 8 result of . immigration and national increase, the population of Australia is increasing at the rate of 3.5 per cent, a year. Experts have stated that no community can safely absorb a greater population increase than 2 per cent. & year. At the present rate of increase it is expected that the population of Australia will be 11,000,000 by 1960. In order to feed that population we shall need to increase food production in th* following proportions : -

What is the Government doing to increase, food production? If there should be another war the United Kingdom would need from us, not a few thousand soldiers who could make very little difference to the outcome of the conflict, but vast quantities of food with which to support its soldiers and civil population so as to give the strength and will to resist. Professor Copland has said that it . requires a capital investment of £1,000. for every immigrant brought to Australia. Thus, in order to finance the Government’s immigration scheme for bringing 180,000 people to Australia in a year, a capital investment of £180,000,000 will be required. The Government is committing itself to this outlay at a time when there is such a shortage of maternity hospitals that there is a long waiting list at every hospital, and prospective patients have to book months ahead. There if also a shortage of school accommodation. For instance, in the district of Bankstown, classes must use a class room in rotation. One class has to t?o outside for physical drill while another occupies the classroom. There is also an acute shortage of houses. It is a disgrace and a tragedy that the Government should curtail house construction.

The CHAIRMAN:

– Order ! The honorable member’s time has expired.

Mr FAIRHALL:
Paterson

.- The honorable member for East Sydney (Mr. Ward) has reversed the physical law that heat generates light. Surely a man who refused to give evidence to a royal commission on the “Brisbane line “ because a file was missing-

Honorable members interjecting,

The CHAIRMAN:

– Order !

Mr FAIRHALL:

– There was a missing file and the honorable member was discredited. He has never heard a shot fired in anger except, possibly, in the lanes and alleys of East Sydney. If it were not for the fact that there are more important matters to be dealt with, I should deal with the lies and prejudice which punctuated the honorable member’s speech. I want to approach the subject of the budget in the light of the debate that has taken place, but from a somewhat different angle. I am concerned at the offence which this budget gives to certain principles which I and other honorable members hold dear. Honorable members have heard statistics quoted in order to support various propositions. However, taxpayers still behave like people and it is to the taxpayers as people, and not to statistics, that T wish to turn my attention. We cannot hide the instability of our economy which has resulted from the misdirection of the country’s productive effort. I remind the honorable member for East Sydney that the Labour Premier of New South Wales was loud in his condemnation of the inaction of the Australian Government at the recent conference of Commonwealth and State Ministers, but he, himself, might almost be called the author of inflation. In the midst of shortages that had been created by five years of war, he was responsible for .the introduction of a 40-hour working week. He virtually bludgeoned the Commonwealth Arbitration Court into giving a judgment in favour of the 40-hour week. He caused the retirement of mine-workers long before their useful life was finished, at a time when they themselves did not want to retire. In a period of galloping inflation, he has been responsible for forcing workers who have been in industry for twenty years to withdraw from production in order to take long service leave. In pursuit of the adulation of his supporters, he is now advocating a 35-hour week.

In these times of unbalanced production, millions of pounds changed hands during a week-end racing carnival held on a day that was devoted to the promotion of the six-hour working day. It is the object of this budget to rectify this state of affairs, and it should have the support of every thinking person. The Government has proposed to spend £180,000,000 on defence. In view of the disturbed state of the world and developments in the Middle East who will challenge the necessity to spend that amount? It is proposed to expend £184,000,000 on social services. The need for that expenditure has arisen out of public demand and there is no doubt that the figure must expand. Over £33,000,000 in subsidies is to be poured into the Australian economy in order ,to protect the consumer from the effect of the real price of production and I do not know how that expenditure can be avoided. None of the items of expenditure included in the budget can reasonably be reduced in view of the demands for production and the Government’s commitments in relation to defence, immigration and overseas food supplies. If these commitments are essential - and there is general agreement that they are - then the burden of taxation is inescapable.

This is an extraordinary budget. For L.UU first time the national budget has amounted to more than £1,000,000,000. For the first time it has been proposed that major works should be financed from Consolidated Revenue. For the first time it has brought the State and Federal Governments into a new relationship. Under these proposals, the Government will guarantee State loans although it will have little or no control over their expenditure. Although there is room for reservations, I believe that this budget, presented in a difficult political situation, is evidence of the courage of this Government and its determination that no stone shall be left . unturned and no avenue unexplored in order to find extraordinary and novel methods of attack on the very difficult conditions that exist in this country’s economy. It is a regrettable fact that the presentation of this budget should have been the signal for hysterical denunciation. Honorable members would have been better employed had they given analytical thought to the economic trends disclosed in the budget and which invite careful attention. In 1939, federal revenue amounted to £100,000,000. At present, it amounts to over £1,000,000,000 per annum. In 1930, the sales tax was introduced as an emergency measure at the rate of 2-£ per cent. The minimum rate is now 12-J per cent, and it rises to 66ff per cent. Income tax collections have risen from £5,000,000 before the war to £427,000,000 this year. Company tax has risen from £6,000,000 to £135,000,000 in that period. The payroll tax, which was non-existent before the war, is now producing £40,000,000 a year. Sales tax collections have risen from £9,000,000 before the war to £117,000,000. Surely there is a grim warning in these figures of what will happen in the future if the present trends in our economy cannot be corrected.

I do not pretend to be enthusiastic over the budget surplus. Inflation may be called a great unbalance between goods and money and that unbalance must be adjusted if inflation is to be cured. There are two lines of approach to this problem. Purchasing power may be withdrawn or production may be increased. It is obvious that the withdrawal of purchasing power is the easier method to pursue, but because of the tremendous impact of this method on the standard of living, attention must be given to the problem of increasing production so as to bring about a greater supply of goods both from local production and from overseas. There is a considerable conflict of opinion between economists on these subjects. If it is accepted that the budget surplus will provide a way out of inflation the Government must accept the advice of economists who state that when the national revenue exceeds 25 per cent, of the national income it has reached the point at which diminishing returns become a problem. This budget demands 34 per cent, of the national- income.

The Prime Minister (Mr. Menzies) dealt with the irreducible character of the items of expenditure. If we accept the principles on which the budget has been based we must accept that expenditure as irreducible. Social services must expand. It is obvious that the defence expenditure proposed is simply the first instalment of a heavy burden which must be carried through the immediate future years. Expenditure has been proposed on national works in respect of projects which will not become revenue earning for from three to ten years, so that that expenditure must continue on the same scale during the coming years or the projects which have been commenced will not become productive. There is little likelihood of any real reduction of administrative costs except in relation to those items which represent reserves in the National Welfare Fund and reserves for defence purposes. There is no way of reducing the proposed expenditure on defence; it will remain very much the same as it is at present. As the result of the impact of high taxation, the re-entry of Japan into markets that might have been ours had we not sacrificed them on the altar of increased leisure and industrial inefficiency, and the probable fall in the wool market, despite the acrobatics of that market in recent weeks, it is likely that the national income will fall. It is probable that next year or the following year revenue for governmental purposes will eat up 50 per cent, of the national income if our economy does not collapse in the meantime. If any one can view that prospect with equanimity I beg to be excused from his company.

I have mentioned these matters because I detect in these trends a great move towards socialism. The record- is full of words spoken and deeds promoted by the Opposition indicating that it wishes to tax the community into a state of complete socialism. My aim is not to aid and abet the Opposition’s cause -but to combat it. I have always believed that high taxes inhibit production. Faced with the choice of leisure, or increased earnings less tax, there is a tendency to choose leisure. A day off costs less when taxes are high, and leisure may be more attractive than what is left of income after taxes have been paid. In these circumstances there is a trend towards less work and more leisure. As an honorable member on this side of the chamber said recently, we shall have to pay the cost of loafing in this country.

Just as high income tax discourages individual effort, so also do high taxes on business undertakings discourage production and encourage the expenditure of money on items that are deductible from income under the taxation laws, such as plant repairs and maintenance, which make heavy demands on man-power and materials but contribute little to production. The tax gatherer and the taxpayer will be at war for the proceeds of enterprise and labour, and no matter who may win the battle, the country will surely lose. The rates of taxes proposed in this budget will enable the Government to secure a half share in every successful enterprise. By the taxpayer in a competitive market the new rates are regarded as a tax on efficiency. Decreased net returns from investment in productive industry will slow down the machinery of production. There will be less incentive to risk a loss in the development of new processes and projects, and there will be a drying up of venture capital.

Australia is a young country which still has frontiers on social and industrial development. We cannot afford to discourage the initiative and enterprise that is necessary to extend our frontiers because, for us, development is the only road to survival. Year after year, under all governments - let us not talk about what has happened under a Labour government - the field of taxation steadily expands; temporary and emergency taxes become permanent, tax rates increase and concessions are curtailed or withdrawn. Like a bankrupt, living from hand to mouth on shortened terms, whereas formerly the Treasurer waited for twelve months to collect his taxes, he must now collect them as the taxpayer earns. Wage-earners now pay as they earn. Last year, the wool-growers were called upon to pay their income tax in advance. This year, companies will pay an advance levy.’ While those measures may be justified on the ground of uniformity, nothing can alter the fact that we are bringing collections forward to meet our current obligations. In other words, we are eating up our seed corn and making no allowances and providing no reserves to meet future difficulties. I hope that our circumstances in the years that lie ahead may prove to be much better than they have been in the past. I have never approved of the use of the taxing power as an instrument, of policy. I have always cherished the old-fashioned notion that earnings, the rewards of private enterprise, and, in fact, everything except the profits of monopoly, are peculiarly the property of the individual.

While I .believe that the Government, is entitled to demand from the people the minimum requirements of the State, on moral grounds it is not entitled to eat further into their incomes in pursuit of economic policy. It is idle to suppose that the taxing power is not always an instrument of policy; but the recent growth of the idea that it should be the most important instrument of policy should be discouraged. The effect of this idea is seen in the application of the new sales tax schedule. No one doubts that there is urgent need to divert man-power and material from non-essential to essential industries. To-day, all sorts of unneces-.sary commodities are being produced, displayed and sold in great quantities, while essential industries are languishing. The use of the taxing powers to curtail, perhaps to the point of extinction, enterprises that have chosen to engage in production now classified as non-essential, poses moral questions which, I believe, merit further consideration.

On purely practical grounds I believe that there will be little useful diversion of man-power and materials from industries engaged in the manufacture of commodities that are subject to sales tax at the 66$ per cent. rate. I might be happy to agree to such a proposal if there were no alternative, but there is an alternative. If we are to achieve industrial efficiency we must undertake a drastic downward revision of tariffs. Such a revision would not only expose hot-house industries that now shelter inefficiency behind tariff walls but it may go further and redress the unbalance between primary and secondary industries of which we shall hear more as the increasing food shortage plays havoc with our exports, and possibly with domestic consumption. I believe chat the writing is on the wall for our primary industries unless action is taken in the field of tariff reform.

There is another most important aspect of unbalanced production to which insufficient attention has been directed. During the last few years prices control has been operated by the States in a manner that is best calculated to accentuate our difficulties in the field of essential production. Attempts to keep down the prices of essential goods without having effective control of the cost factors involved have resulted, not in prices being stabilized, but in the disappearance or near disappearance of essential goods from the market. The fixation of selling prices below production costs has resulted in the destruction of profit margins in many industries. In the electorate which I have the honour to represent a major concern engaged in the most essential field of food production which has many overseas orders awaiting fulfilment is practically being forced out of business as the result of State prices control because it refuses to trade on the black market. Essential industries are languishing almost to the point of extinction as the result of prices control but there is no effective prices control on non-essential lines. As a result of that situation, non-essential industries have been able to attract man-power and materials which would otherwise flow to essential industries. If we are to correct ohe present unbalanced state of our economy, prices control must be applied to all non-essential items, or better still, completely abandoned, leaving production and prices to be determined by the law of supply and demand.

The attempt to cure all this maladministration, much of which has not been caused by the Government, through the budget proposals, is bound to create anomalies and injustices which are obviously being resented throughout the community. It has been said that this country is taking in too much territory. The budget may be trying to do the same. Because of the anticipated failure of the loan market it is proposed to finance £100,000,000 of public works from the Consolidated Revenue Fund. If this is a device to drain away purchasing power I have no doubt that it will be effective, but I .believe that some more equitable method of apportioning the cost of public v0rk3 should have been found. There is a case for this section of the revenue to be treated as a compulsory loan or as a pre-payment or advance payment to be credited in future years against taxation. Alternatively - and this is a matter of paramount importance in regard to public works - we may establish the principle that in part the cost of public works should be borne in the form of a betterment tax against the increment of land values which may arise directly from the benefits of such public works. I put that suggestion forward more in hope than in expectation. “Whatever may be the political colour of the Government in power, the trend towards oppressive, even destructive, taxation is constant. As revenue rises - and indeed the reserve shown in this budget would have met the entire cost of the Government services a little more than ten years ago - I believe that all governments lose perspective. However much we may rely on the present budget to do an essential and worth-while job under the present conditions, I believe that the time has come to return to first principles; we should examine the taxation structure, which has grown without forethought as to its effects, and ascertain whether something can be done to simplify and reduce burdens which are easy to impose but hard to bear.

Mr DUTHIE:
Wilmot

.- J congratulate the honorable member for Paterson (Mr. Fairhall) on having put before this chamber some of the most constructive ideas that have emanated from honorable members on the Government benches during this debate. I hope that the Treasurer (Sir Arthur Fadden) will read his speech very carefully and, before this Government is defeated, will follow some of the suggestions put forward by the honorable member.

Mr MCBRIDE:
Minister for Defence · WAKEFIELD, SOUTH AUSTRALIA · LP

– The Treasurer will have plenty of time to do that before the Government is defeated’.

Mr DUTHIE:

– The Government will have only two more years in office. I express my utter disgust at the vicious, unjust and unfair attack made in this chamber this week by certain new members of the Liberal party on the Leader of the Opposition (Dr.. Evatt) and Bishop Burgmann. This wild and ridiculous talk is nauseating to all fair-minded people no matter what their party may be. It was a deliberate attempt, to belittle and besmirch a leader who was elected unanimously by the Federal Labour party and who is fully accepted throughout the Labour movement as. its new leader. Little men love to gain, notoriety by attacking the characters of big men. They will always be little men if they follow this: hateful policy of character assassination. Bishop Burgmann is a courageous religious leader, but these little Liberals want to muzzle him, and muzzle all church leaders who think differently from themselves. I was a clergyman for eight, years before I entered the Parliament and I have seen the same type of attack made many times, and I know the kind of men who use this method of attack. They would have us believe that a clergyman has. no mind of his own. If the Liberals believe that clergymen should have no minds of their own why do not they be honest and take away the franchise from them? Unless church leaders are granted the right to speak openly on political and controversial issues, then the removal of their franchise is the only logical end of the argument.

The 1950-51 budget is the second child of the marriage between the Liberal and Country parties, the second child of this unhappy coalition government. The first child, the 1949-50 budget, turned out to have a very nasty disposition, but the second offspring of -this political marriage already shows signs of having been born with criminal tendencies: Having studied its strange behaviour and its ‘effect on people who so far have met it, I prophesy that this second child of the unhappy marriage will develop into a ruthless cold blooded thief,, destined as it grows up to pick the pockets of the people, pick more value out of the Australian fi, remove more £l’s out of the tills1, the. pay envelopes and the farmers’ incomes. Furthermore, I foresee this intruder with, criminal tendencies breaking into our savings^ our pensions, our superannuation, robbing right and left, day and night, on a ruthless orgy of picking, pockets.

The CHAIRMAN:

– Order ! Thehonorable member must, moderate hislanguage. He has no right to impute improper motives to any honorable member of the Parliament.

Mr HAYLEN:

– Can you, Mr. Chairman, tell me the Standing Order under which the. word “ robbery “, used in a general sense, is prohibited?

The CHAIRMAN:

– The honorable member should read the Standing Orders. No honorable member shall impute improper motives to any other member. That rule is embodied in Standing Order 78.

Mr DUTHIE:

– I am speaking only metaphorically. Emboldened by success,, this, budget child will even force people out of employment and take more valueout of overtime.. In fact, for twelve months or longer it, will continue on a’ destructive rampage through our nation’s economy, destroying confidence, attacking our security, smashing our peace of mind and building up the psychology of <feat,. drink and be merry for to-morrow theTreasurer will, get you “. Eventually the people, resentful and revengeful, will have to call on the Labour party, either to take the present parties of the marriage intothe divorce court or put them where they or their wayward rampaging children can do no harm - that is on the Opposition, benches.

The general widespread assessment of the Government’s budget is one of astonishment, resentment and disillusionment. The people feel about thisbudget as would people who had been promised a free fortnight at Hayman Island but instead had to walk to work in the rain for a fortnight without pay. The Hobart Mercury, the Sydney Morning Herald and the Melbourne Sun haveall published articles protesting against the budget proposals. In its leading article of the 27th September, the Melbourne Sun said -

Practically everything a woman uses from the handbag that contains her steadily vanishing shopping money to the various preparations with which she contrives to present a happier face to adversity, are to be still more heavily taxed.

Increased sales tax will bring an additional £35,000,000 into the Treasury through the increase of sales tax on many essential items from 10 per cent, to 20 per cent. Such items include motor cars, confectionery, ice-creams and so on. The tax will be increased to 33-J per cent, on other items such as toys, wireless sets, musical instruments and all sporting goods. At this point I desire to refer to a letter which I received to-day from the Sports Goods Federation of Tasmania, of which a Mr. Burroughs is president. That letter pointed out that from now on cricket matting will cost £50, tennis racquets £8, and tennis balls 10s. a pair. They are just a few items of sporting equipment that were mentioned. When it is considered that 20 per cent, of the boys who are called up for national service are rejected because of poor health, it is a very serious thing indeed to tax sporting goods in this way. Australia has always been, is now, and I hope always will be, a sporting nation, and this is a very severe slug indeed. The tax on other items will be increased to 50 per cent. Such items include toilet preparations, lipstick, rouge, razor blades, brushes and ladies’ handbags. All of that proves that there is no romance whatever in this budget. Had the Treasurer been 25 years younger, he would never have dared to impose high taxes on lipstick, rouge, and other articles that are part of a woman’s armament. The Treasurer said that the budget was “nasty medicine that we must take for our own good “ ; but doctors are not always right in their diagnosis, or in the remedies that they prescribe. “ Dr. Fadden “, if I may use that term, must not be surprised if an already heavily taxed public, although quite prepared to make big sacrifices in war-time, kirks violently when it is asked to take this medicine. In fact, the medicine may easily paralyse the patient before twelve months bAr,8 elapsed. Perhaps the sneer of the public would have been assauged a little if the right honorable gentleman had put his medicine on the free list of potent drugs, but he has denied the people even that luxury.

Having regard to the economic plight of the country - a plight that has been accentuated by the spendthrift policy of this Government - drastic measures are necessary to save it from a tailspin into a depression, or from a fatal collapse; but the remedies now prescribed are “ too much, too late “. Last year, when wool prices soared sky high and inflation broke into a reckless gallop, was the right time to do something really drastic. Now it is too late. The medicine might quite easily kill the patient. Surely, October, 1951, with wool prices down so far from last year’s levels; with credit restrictions threatening to cripple the expansion of industry, home building, and production generally; with an unfavorable trade balance forecast; and with runaway prices under lopsided State prices control already reducing the spending power of families, is not the time for a further coldblooded raid on our pay envelopes and savings. Honorable members opposite talk a lot about hitting inflation, but .so far they have hit it only with kid gloves. The crucial decision was made by the the people at the 1948 referendum. Un fortunately, they voted “ No “, and we have suffered ever since. It is interesting to note that the latest Gallup poll reveals that approximately 80 per cent, of the Australian people to-day would, if they had a chance, vote for Commonwealth prices control, in the hope of restoring sane prices. When the referendum was lost, the plug was pulled out of our economy.

The budget is a colossal gamble on the belief that a third world war will start before the 31st December, 1953 - a little more than two years from now. The Prime Minister and his followers are prophesying a war just as, towards the end of the last century, certain people confidently prophesied that the world would end in 1898. Subsequently, that date was advanced to 1920, and so on. The budget heralds a ruthless onslaught, through indirect and direct taxes, to bolster up the Prime Minister’s prophecy, regardless of what may happen to our security in the meantime. Defence expenditure is to be increased by £33,600,000. In addition, a further £32,500,000 is to be appropriated for the purchase of strategic stores and equipment, making a total of £66,000,000. The fantastic feature of the Government’s stockpiling policy is that although an appropriation of £57,000,000 was made last year for this purpose, only £9,000,000 was expended leaving a balance of £48,000,000 in the Stores and Equipment Reserve Fund.

Mr Wight:

– The Labour party has helped the “ Commos “ to sabotage our defence preparations.

Mr DUTHIE:

– I heard the honorable member for Lilley (Mr. Wight) speak yesterday and he was a disgrace to the Parliament. To set aside another £32,500,000 for the stockpiling of defence equipment when £48,000,000 of last year’s allocation remains unexpended is sheer highway robbery.

Why is the Government experimenting by seeking a budget surplus of £114,000,000 in the current financial year? The Treasurer has assured us that he has to drain off £114,000,000 of our spending power as an antiinflationary measure. In other words, he believes that we may expend more than we should, and therefore he proposes to take some money away from us and put it where it can do no harm. If the additional revenue were to be gathered by a graduated increase of income tax which would hit big incomes harder than those of the wage earners, and if the sum of £114,000,000 were to be frozen so that it could be paid back when inflation receded, the proposal would be economically sound. Too much money chasing too few goods is inflation, and the freezing of some of the spending power of the people would reduce demand and so help to cure our inflationary madness, but the Government does not intend to freeze the £114,000,000. The taxpayers will not be able to spend it, but I have no doubt that the Government will have spent it all by September of next year. Much of it may be used to underwrite the public works programmes of the States. In these circumstances, how can budgeting for a surplus of £114.000.000 be antiinflationary? The proposal is a complete fraud, and may be placed in the same category as the wool deduction of £120,000,000 featured in the 1950-51 budget. That money was expended by the Government instead of by its rightful owners, the wool-growers. So, surplus budgeting on this occasion is a callous fraud. It is a trick to squeeze additional millions of pounds from the taxpayers.

A graduated increase of income tax would have been fair, but the proposed 10 per cent, levy on every income, large or small, will mean that people in the lower income groups will suffer much more than their fair share of hardship.

The Treasurer has said that there is too much money in the community. 1 should like to take him around some of the towns in my electorate, as other honorable members would no doubt like to do, and then ask him, “Where is this surplus money?” The wage-earner, the small businessman, the small farmer, and the pensioner, cannot be said to have too much spending power. Only the wealthy members of the community are in that fortunate position. A few single men may be comparatively well off, but certainly no married man with a family is finding himself embarrassed by too much money. Where is the excess profits tax of which the Government has talked for so long? Such a tax would no doubt have a steadying effect on the enormous profits that are being made by some large organizations.

The budget will lower our living standards. The increases of the sales tax and income tax will force prices up and our £1 will buy even less than it does to-day. The importation of cheap Japanese goods will force certain other prices down by unfair competition with Australian products. Japanese workers are paid only £10 a month, and if rigid control is not exercised over Japanese imports, they could eventually cause at least a partial closing down of some industries, and thus force men out of work. Already 32 ships are loading at Japanese ports with 150.000 tons of cargo which will bc the first instalment of the dumping invasion of Australia. How can the impact of this unfair competition be met under such a budget as this ? The Government is tying the hands of businessmen and workers alike.

The budget will cause unemployment in several ways. The Government is following a vicious financial and economic policy that could easily lead to the fulfilment of the infamous “ Hytten-Miss “ plan for an unemployment pool of from 5 per cent, to 8 per cent. Some supporters of this Government and therefore of monopoly capitalism, have the nerve to say that capitalism cannot work without a pool of unemployed. There are five danger signals that must be heeded if a pool of unemployed is to be avoided. First, the increases of sales tax and income tax could well reduce the purchasing power of those on the lower ranges of income to such a degree that they would be obliged to reduce their purchases of goods and thus oblige manufacturers and retailers to put off employees as their volume of sales decreased. Secondly, the wholesale sacking of public servants could throw employment generally out of equilibrium, particularly when we remember that men and women in their fifties cannot find suitable alternative employment. That fact will be generally recognized in spite of what the Minister for Labour and National Service (Mr. Holt) has said to the contrary. It must be clear that a person who is, say, 55 to 58 years of age, and who has been employed in the one occupation for over twenty years, will be completely unfitted to undertake work of an entirely different kind. Thirdly, the reduction of the public works programme by 25 per cent, has already resulted in the dismissal of thousands of employees in Victoria and Tasmania. Relating this fact to the rapid increase of immigration it is easy to visualize that within- a year an “ Aussie “ and an immigrant may be competing for the one job. Subsequently, five persons may be competing for three jobs, and so on. That constitutes an economic crime which could assume serious proportions. That is why I asked whether the Government would review its immigration policy in order to see whether our economy is capable of absorbing the present intake of immigrants without endangering the future of this country. Fourthly, the restriction of credit will halt industrial expansion. If we are to absorb the present intake of immigrants we must extend both secondary and primary industries, including the production of coal and hydroelectric power. Such a restriction could close up avenues of employment that are vital to our expanding population. Fifthly, the Defence Preparations Act is a dangerous weapon in any government’s hands because it gives to a government power to stop the supply of raw materials to any factory that it may consider to be engaged in non-essential or semi-essential production. Thus, many factories could be closed down and their employees forced to look elsewhere for work. Those are the five sinister moves that the Government is now making and they could usher in, first, economic conscription of man-power, and, secondly, unemployment. Economic conscription in peace-time is detestable to Australians. They will not willingly allow a government to force a man out of a job and compel him to. look for another job elsewhere.

After screaming for years that more production is the answer to inflation the Government has introduced a budget that will not increase, but will restrict production. Such a policy is fantastic. It is also hypocritical because supporters of the Government, when they were in Opposition, attacked the Chifley Government’s taxation as a brake on production despite the fact that that Government reduced taxes in the aggregate by £164,000,000 during the three years up to 1949. At that time honorable members opposite raised the cry, “ Tax less and we will produce more “. What is the position to-day? The Government’s proposals to increase taxes on all sections of the community will kill the incentive to work longer or harder on the farm or in the factory. That is a tragic development. The cry in 1949 was, “ We won’t work for Chifley “. The people, to-day, will say, “ We won’t work for the MenziesFadden Axis. We won’t work for Australian depression Incorporated “. The most disastrous aspect of the budget is that’ when increased production is a matter of life and death to the nation, thu Government is breaking promise after promise and will kill the incentive to produce more. In the past, members of the Liberal party and the Australian

Country party continually warned the people of a coming food famine. Now, when they are in office, they are implementing policies that will make famine a certainty. How can we fight a war, or undertake a great defence preparation programme, without adequate production of foodstuffs? What are the facts? The population of Australia is increasing at the rate of 3 per cent, per annum whereas our rural production is increasing by only 1 per cent, per annum. Unless we bridge that gap disaster will befall us. On the basis that our population will be 10,500,000 by 1960 we shall need to increase the production of foodstuffs during the next nine years by the following percentages : - pig meats, 74 per cent. ; mutton 55 per cent. ; potatoes 40 per cent. ; beef and veal 36 per cent.; milk 34 per cent.; eggs 28 per cent.; sugar 25 per cent.; and lamb 21 per cent. That is a colossal programme which must be undertaken. Yet, the budget gives no incentive whatever to increased primary production. On the contrary, it will hinder production to a serious degree.

Has the Government really endeavoured to reduce expenditure? I have examined the estimates of expenditure in respect of 26 departments and I have found that whereas in three of them, since the present Government assumed office, a reduction of just over £5,000,000 has been effected, expenditure in the remaining 23 departments has increased by £71,500,000. That means that departmental expenditure in respect of those 26 departments shows a net increase of £66,500,000 during the last two years. Is it any wonder that the Government now seeks to impose this sledge-hammer increase of taxes?

The only flicker of light that one can discern in the darkness of this budget is the Government’s proposal to liberalize social services benefits. That improvement is long overdue and is desperately needed by recipients of such benefits. It is proposed to remove certain anomalies. In this respect I pay a tribute to the Minister for Social Services (Mr. Townley)-

Mr FREETH:
FORREST, WESTERN AUSTRALIA

– He is a Tasmanian.

Mr DUTHIE:

– Yes. I congratulate him upon his administration of the Department of Social Services and upon the manner in which he has endeavoured to give effect to suggestions that have been made, by not only his own colleagues, but also members of the Opposition. He proposes to iron out various anomalies in respect of social services. However, whilst war service pensions generally are to be increased, no additional benefit will be given to 160,000 ex-service personnel on the basic rate. It is proposed to increase loans in respect of war service homes to £2,700 and to lift the limit in respect of property disqualification of age and invalid pensioners to £1,000. In addition, pensioners who previously have been ruled to be ineligible, or who have lost their pension, because they were not living in their own homes, .which tenants refused to vacate, will now be protected. In that matter the Director-General will be given discretionary powers. Invalid children from sixteen years to 21 years of age are to be eligible to receive the invalid pension if the income of their parents is less than £12 a week. That was not so previously, and the alteration is a big improvement. The special tax concession for aged folk who are not eligible for the pension, in order to encourage thrift, is also a splendid idea.

Certain extensions of social services must be introduced eventually. The Commonwealth should establish a factory on the mainland, possibly in Victoria, to manufacture artificial limbs for civilians. At the present time, factories that are controlled by the Repatriation Department are making those limbs, but they are overloaded with work. Civilians who require artificial limbs are obliged to pay heavily for a new arm, leg or hand. The number of crippled persons in the community is increasing considerably, partly as the result of road accidents, and the need exists for the Department of Social Services to make artificial limbs for civilians.

Adequate provision should be made for mothers who are suffering from tuberculosis. At the present time, because of her husband’s income, a wife may not be entitled to a pension. While she is in hospital, perhaps for a period of twelve months, the husband may have to care for two, three or four children, pay for help in the home and for special foods for the sufferer, and hear the cost of travelling to visit her. Some remuneration should be given in those circumstances. A spinster who gives up a career in order that she may assist her aged parents should also be considered. I think that an allowance of £1 a week is payable to her at the present time, if she is lucky. The allowance should be £2 a week while the spinster remains at home to care for an aged parent or parents.

The allowable earnings of age pensioners should have been increased in this budget from 30s. to £2 a week. That would have been a most important, progressive step at this stage. I regret that the Government has not seen fit to increase unemployment and sickness benefits. The provision of specialist treatment for patients in country hospitals, or the payment of a patient’s travelling expenses to enable him to proceed to a hospital in a city for specialist treatment, should become a responsibility of the Commonwealth. The Government of Tasmania is rendering a magnificent service in that respect. If a resident of that State requires a specialist or specialist treatment, the Government will pay the cost of his air fare to a hospital in Melbourne, and, if necessary, will send a nurse with him, and defray the cost of his return journey. The provision of such services should be the responsibility of the Commonwealth.

I conclude on an even more serious note regarding the general tone of our democracy. So prone is the mid-twentieth century mind to think in terms of dollars and dividends, stocks and shares, security and sex, materialism and mammon, and prestige and power that we are failing to see the real values of life and to appreciate the grave illness from which democracy is suffering. It may be a fatal illness. Stemming out of fundamental Christian ethics, and feeding on moral and spiritual values, democracy came into being. Through the centuries of trial and error, suffering and courage, faith and selfless service, the world has emerged out of the night of tyranny and wrong into the light of day. Democracy has survived the mighty battles of the mind and the struggle of ideas, not so much through military might, as through its spiritual awareness and moral fibre. That has been democracy’s strength.

The CHAIRMAN:

– Order! The honorable member has exhausted his time.

Mr HASLUCK:
Minister for Territories · Curtin · LP

– This debate on the budget has proceeded so far, and over so wide a territory, that perhaps it will not be out of place at this time for me to remind the committee of what we are considering. It may seem that we areengaged in an election campaign rather than discussing a series of financial proposals. Of course, that is quite customary. From the first year in which this Parliament met the debate on the budget has always been seized upon by the Opposition of the day in order to score as many points as it possibly could against the Government. “We have seen that process ever since the debate on the present budget began. The debate has ranged over a wide territory, and has produced many varying examples of parliamentary eloquence. Even this evening, we have had the example of the honorable member for “Wilmot (Mr. Duthie), who made a gentle complaint as he picked his way delicately from one dry spot to another dry spot in this great mass of figures. Earlier in the evening, we heard the frantic yells of the honorable member for East Sydney (Mr. “Ward). [Quorum formed.] When the honorable member for East Sydney kindly took steps to secure an audience for me, I was in the process of making a comparison between the various kinds of parliamentary eloquence to which we have listened during this debate. I was at the exact point of recalling the frantic yells of the honorable member for East Sydney, as he splashed through the muddiest places that he could find in any of the proposals which are now before the chamber. What are we actually doing? We are discussing the budget, and, in particular, the amendment which has been moved by the Leader of the Opposition (Dr. Evatt) to reduce the first item by £1. That motion, of course, is the customary and most extreme way in which an Opposition can express its disapproval of a budget, and we can take it, as a starting point, that the Opposition condemns this budget and will not have any part of it. But what must cause some puzzlement to this chamber and to the people of Australia as a whole is the difficulty of finding the exact reason why the Opposition has taken such a stand. Every member of the Labour party who has spoken in this debate has produced a different reason for condemning the budget. Some of those reasons are extremely trivial - so trivial that one could be excused for thinking that the proposals under consideration were wholly and solely to increase the price of ice-cream. To such a trivial issue have honorable gentlemen opposite reduced this debate! But if one listened to the speech of the honorable member for East Sydney, one might well imagine that the whole purpose of the Government was to enter into some sort of international conspiracy, which would lead this country into war.

I do not intend to follow the Opposition in its frantic search for election issues and for points large and small on which to criticize the Government. I shall attempt to put forward in a positive way, quite briefly, the substantial points in favour of this budget. At the risk, perhaps, of being too elementary, I remind the committee that a budget has a two-fold purpose. On the one hand, it is a proposal in regard to the management of the public finances - a statement about revenue and expenditure. On the other hand, it is an application of various decisions which are intended to bring about certain economic results. Any budget contains those two elements, namely, an accounting of public finances, and the application of an economic policy. Any budget asks for judgment on both sides - as an accounting of public finances and as an application of economic policy. Sometimes more attention is given to one side of the budget than to the other, but I suggest to the committee that, on this occasion, the economic purposes to be served by this budget are perhaps the more important side of it. What sort of criticism has the Opposition offered of the economic purpose that this budget frankly serves - that of taking measures against inflation? If we pursue honorable members opposite- through all the tangled windings of their contributions to this debate, do we find any consistent suggestion for the solution of the inflation problem? Far from it! The Opposition has not offered one constructive suggestion either in criticism of the budget or in support of it. The Leader of the Opposition dodged from point to point, during the speech that he made. At one time he suggested that the budget did not provide for sufficient expenditure on social services, but in the next breath he said that it involved the raising of too much money. He said that so much money would have to be collected from the taxpayers that a depression would result, but in the next breath he said that he feared that the Government was doing nothing to stop inflation. Throughout his speech he was trying to have it both ways, first by criticizing the budget on points of detail and then by failing to face up to the proposals of the Government for the countering of inflation. In other words, he did not like the budget for galloping in one direction, yet he criticized it for trotting in some other direction !

Mr WARD:

– He sacked the honorable member once. He showed good judgment then.

Mr HASLUCK:

– I took the initiative in that matter.

The Government takes the view that the danger of unchecked inflation is one of the most serious threats that hangs over Australia to-day. Therefore, apart from the measures that are crystallized in the budget, it is taking other steps to counter inflation. Amongst those for which the budget provides are measures that are intended to withdraw surplus spending power from the community, to check the growth of demand for consumption goods, to check the investment demand on resources and encourage the diversion of resources of all kinds from non-essential uses to essential uses, and to rigorously check the expansion of credit. Those are four positive measures for which the budget provides and to which the Government will give effect in order to counter inflation. Throughout this debate I have not heard one effective word of criticism of any one of those proposals, and, more seriously, I have not heard from the Opposition any alternative constructive proposal for the checking of inflation. Those four measures are to be implemented by the mechanical means of higher taxation, the financing of Commonwealth works from revenue, and budgeting for a substantial surplus. Furthermore, the measures that are embodied in the budget are complementary to the other measures that the Government is taking outside its scope. Honorable members should appreciate that fact. If the Government were to take steps to counter inflation outside the budget but do nothing else, its efforts would be inadequate. Likewise, if it were to take measures inside the budget but do nothing else, it would fail. It is in the combination of what the Government is doing in the application of its general economic policy and in the application of the policy that finds expression in the budget that we hope to find a means of imposing an effective check on the course of inflation in Australia.

Now I turn my attention to the other side of the structure of this budget - -th: side that relates to the handling of the nation’s accounts and the financing of the inevitable expenses of government. In this budget, as in all other budgets, there are certain items of expenditure that are inescapable and that cannot be reduced in any way because they are essential to the maintenance of governmental activities and services. I do not believe that any honorable member would suggest that these essential basic services should be reduced in any way. Nobody suggests that social services or repatriation benefits and services, for instance, should be cut. So far the Opposition has failed to point to any item in the budget relating to the essential services of government that could be substantially reduced. One large item is that which relates to payments to the State*. Nobody would suggest that that should be pruned.

Finally, however, I come to one item which honorable members on this side of the chamber consider to be essential but which some members of the Opposition unfortunately regard as superfluous. It is the increased provision for defence expenditure. The Government and its supporters, taking a clear and considered view of the state of the world to-day and the situation of Australia in that world, make no, apology for but on the contrary are proud of the provision that is made for defence in the budget. Earlier this evening, the honorable member for East Sydney (Mr. Ward) said that a great deal of the proposed defence expenditure was superfluous. He counselled an entirely different attitude towards national security from that which the Government has adopted. In the present state of feeling in Australia, I would not suggest that any member of this committee is a Communist but I do say that there is a close similarity between arguments of the type that the honorable member for East Sydney uses on the subject of defence and arguments of the type that is used by the enemies of this country.

Mr Ward:

– They are entirely dissimilar.

Mr HASLUCK:

– On the contrary, they have a marked similarity. The suggestion that Australia is over-reaching itself, the suggestion that it should not be doing so much as it is doing, the suggestion that it should limit its defence activities, the suggestion that it should allow its allies to carry out defence measures without assisting them, all are suggestions which are not customarily made by Australians who are concerned about the security of their country but which frequently come from Radio Moscow and similar sources of propaganda.

We on this side of the chamber, having taken a considered and clear view of the danger in which Australia stands to-day, have deliberately and of cool counsel decided that defence expenditure must be increased. Therefore, we have increased the provision for defence this year under various headings. The general vote for defence will be increased by the small amount of £208,000. For the Navy, we propose to increase the vote by nearly £10,000,000 from £24,000,000 to £34,000,000.’ For the Army, we propose an increase of £21,000,000 from £26,000,000 to £47,000,000. For the Department of Air, we propose an increase of £20,000,000 from £27,000,000 to £48,000,000. An entirely new item in this budget is the amount of £7,000,000 for defence production. The proposed . expenditure on defence, therefore, represents a total increase of £58,000,000 over last year’s figure. We do not make any apology for these proposals. We realize the awful nature of the perils in which we may find ourselves if we remain unprepared, and we know that the most effective contribution that we can make to the future peace of the world is our own preparedness. That is why we are proud of the fact that the budget provides for the expenditure of an additional amount of £58,000,000 for defence this year. Notwithstanding what honorable members opposite may say and the doubts that may permeate the Labour party about whether Australia is worth defending, we stand by our decision and invite the judgment of the people on the measures that we propose to take for the security of the country.

I return now to my main theme. The Government is faced with certain items of inescapable expenditure amongst which, in its estimation, is the increased pro vision for defence. It declares that none of those items can be reduced. Therefore, provision must be made in the budget for the collection of additional revenue. On that basis, the basis of necessity, the case rests for extra taxation. As a part of the counterinflationary measures in which we are engaging, as I have mentioned before, we are budgeting for a surplus. If we add to that inescapable essential expenditure the necessity to budget for a surplus, as a counter-inflationary measure, we have to accept as inevitable the burden of extra taxation. After full consideration, the Government has decided to place that extra burden of taxation on the Australian people and to invite them to display their usual patriotism and. concern for the economic stability of our country. We believe that they will accept and bear that burden cheerfully, in the knowledge that the Government has not imposed it because of a love of high taxation, or because it wants to soak this or that section of the community. We regard it as essential for the welfare of our nation.

There are two alternatives before the committee. On the one hand we could have no extra taxation, no measures to counter inflation, no extra provision for defence, no regard for the States’ works programmes, and no additional provision for social services. On the other hand, we can have extra taxation, measures to counter inflation, important defence preparations, and additional social services benefits. We commend the second to the people. I shall not enlarge on this aspect of the matter, since already it has been quite capably dealt with by previous speakers. The burden of taxation will be distributed so that it will be borne by those most able to bear it. Secondly, it will be distributed so as to achieve most effectively the counter-inflationary tendency that is intended.

Mr WARD:

– Does the Government want to reduce the workers’ living standard?

Mr HASLUCK:

– The test of this budget is whether the people of this country are prepared to face up to the stringent measures necessary to counter inflation, and the extra provisions necessary for the defence of our country.

This debate has revealed that the essential difference between the attitude of the Government and that of the Opposition relates to inflation and defence. I listened attentively to the speech of the Leader of the Opposition. It seemed to me that he could be compared with the chief of a fire brigade who wanted to put out fires without stopping them from burning, because that is exactly what he sought to do throughout his speech. In effect, he said, “ Stop inflation, but do not change the effects of it “. When we, in this budget, had begun to play the hose on the flames, he said, in effect, “ If you put out the fire the people will not be so warm as they used to be “. It appeared to me that his speech was designed to preserve the warmth of those people who have been enjoying benefits from inflation. He would preserve the comfortable and pleasant conditions of that section of the community that has been enjoying inflation because they had benefited from it in some way. There wa3 nothing in his speech to counter the impression that although he wanted to put out the fires of inflation, he did not want to stop them from burning or to destroy the warmth that certain sections of the community had been enjoying. As a result of the efforts of the Government in this budget undoubtedly the fire will be diminished. Ultimately it will go out.

I commend the budget as an honest and sincere attempt to counter inflation, and as one which makes adequate provision for the defence of our country, or at least, as adequate as we can make it with our present resources. The Opposition has not suggested any other method of achieving either of those desirable objectives, and it has not pointed to any substantial flaw in our proposals. Honorable members opposite have contented themselves by rambling from one end of the budget tables to . the other, picking on small items here and there and talking about trivial matters rather than the big national issues involved. I consider that this budget will achieve the two very desirable objectives I have named, and I commend it accordingly.

Mr ANDREWS:
Darebin

.- A few days ago I had an opportunity to speak to an old teacher friend of mine, who by successive stages has reached the top of his profession and is now in charge of a first-class school. During our conversation he revealed to me a remarkable characteristic when he said, “ During the whole of my lifetime I have made only one decision, and that was wrong. Therefore I am not going to make a decision again “. While listening to the Treasurer (Sir Arthur Fadden) I became convinced that he was a man who had reached a decision which he was destined to learn was a wrong decision. I believe that he should join the class of my teacher friend and decide not to make another decision, because his outlook is such that he will never be able to reach a correct decision. As in the depression days the experts and government representatives very largely got together to decide what greater burdens could be placed on the working class in order that the difficulty that threatened the community might be overcome, the present Government, in these days of inflation, has turned to the lower wage groups to see what can be done to take way from them what it presumes to be surplus cash and luxury spending power in their hands. Thus, under the budget proposals, taxation is to press very heavily on family groups because of the proposed sharp increases of sales tax on commodities which I deny are in the luxury class.

Mr Treloar:

– Which ones are they?

Mr ANDREWS:

– I shall mention them in a moment. I deprecate first the proposed increased sales tax on toys. As everybody knows, the prices of toys are already excessive. It is apparent that the people who have already suffered from inflated conditions are to be called upon to carry an additional burden through this medium. It is ever the case that the poorer sections of the community have the larger families. Usually there are several children to one breadwinner in a household. It is equally true that in such instances the breadwinner is called upon to pay the indirect tax over and over again on behalf of the family that he is rearing. A serious misunderstanding of the word “ luxury “ is revealed when sales tax increases bear most heavily upon a class of the community that is least able to pay them.

I deprecate the increase of sales tax upon cosmetics. My objection to the increase is not based only upon the fact that our womenfolk will now have to pay more for cosmetics. Probably the average woman does not use more than two or three lipsticks a year, and the effect of the increase of the sales tax upon them will be to increase her yearly expenditure by only 5s. or 6s. The same remark applies to face powder and rouge. I deplore the fact that the Government appears to be trying to persuade the women of Australia that cosmetics are quite unnecessary. I believe that Australian girls and women are as attractive as they are because they have a balanced pride in their appearance. In my opinion, as a woman grows older she should give more attention to her appearance. The alternative is slovenliness, which, of its very nature, is immoral. I hope that the Government will make no further attacks upon the appearance of the women of this country, who are regarded with a good deal of pride by those of us who have any aesthetic sense.

Having listened to the speech that the Prime Minister (Mr. Menzies) delivered in defence of the budget, one could be pardoned for coming to the conclusion. that the right honorable gentleman’s conception of a cure for intiation is to take money from the purses of members of the community. It is true that he referred to the necessity to obtain more basic materials, whether by increased production or by importation. But he did not state how the Government proposed to obtain more of those materials. Apparently he was content merely to mention that that was desirable. Then, most illogically, he proceeded to cite figures which purported to show an improvement in the production and procurement of basic materials that had occurred since this Government assumed office. He claimed that there had been a substantial increase of the quantities of iron and steel, timber, machinery and coal available in this country, but he overlooked the fact that, if such an increase occurred under the organization that existed last year and under a budget such as that which was presented to the Parliament last year, all that the Government had to do was, so to speak, sit on that organization, because, having regard to the steady improvement of the position that he claimed had taken place, inflation would be cured automatically. If the figures that the right honorable gentleman cited were accurate, why did he associate himself with this undoubtedly unpopular and unsatisfactory budget?

The fact of the matter is that, in his attempt to justify the budget, he set up an Aunt Sally and proceeded to knock it down. The right honorable gentleman asked whether the burden of taxation was spread fairly over the community and inquired whether taxes could be reduced. Of course, after a spate of words, he arrived at the conclusion that taxes could not be reduced and asked us to assume that the burden of taxation was fairly distributed. He merely expressed the hope that increased production could be achieved as a result of the persuasive effects of his oratorical performances in this chamber. Undoubtedly, the budget is designed to reduce the quantity of basic goods available to the community as a result of either production or procurement. That is the only cure for our economic ills that the Prime Minister has to offer. I ‘believe that his statement that an increase had occurred was an unintentional error in’ logic. However, he has made the error, and it will be very difficult for him to escape from it when he attempts to explain the budget to the people, as undoubtedly he will be called upon to do at a later date.

The budget is unsatisfactory in respects other than its taxation proposals. Temporarily and permanently incapacitated ex-servicemen are, quite properly, to be given some relief, but the needs of those who have a lesser claim upon the nation have been ignored. Invalid pensioner* have been treated parsimoniously. Little regard has been had to the cost of living, because subsidies are to be reduced considerably. In my opinion, the Government is trying to find a short cut through the present inflationary period, but it is obvious to anybody who has studied the position that there is no such short cut. The only possible way in which inflation can be checked is by planning in a definite way. As I see the position, the Government is planning for a recession. As the Leader of the Opposition (Dr. Evatt) said, the budget is in reality a blueprint for depression.

Essential commodities are in short supply in this country. Primary production is declining, and if the decline continues at its present rate we shall, in a very few years, have insufficient primary products available to meet even our internal requirements. Only 15 per cent, of our employable population is engaged in primary production now. The decrease of the number of persons engaged in primary production has been progressive and we must expect it to continue unless the Government takes steps to prevent it. Approximately 28 per cent, of our labour force is employed in manufacturing industries, and 57 per cent, in the tertiary industries. They are alarming figures. Unless a long-range plan be formulated and action taken, we shall not emerge from the inflationary period through which we are passing at present. Although the United States of America is one of the most highly industrialized countries in the world, only 22 per cent, of its labour force is employed in manufacturing industries. Primary production transcends in importance the manufacturing interests of this country as it is placed to-day. At the moment there is a certain overseas demand for our goods, some of which are sold at economic prices. T believe that there is no defence guarantee for this country short of a huge surplus of supplies over our needs. “When I speak of overseas markets, I recall that something should also be said about the fact that the inflation which exists at present is due in large measure to the method of distribution of our produce. Because of agreements, custom or sentiment, most of our primary products are being sold to overseas countries that are virtually bankrupt. Whilst we may have book credits with overseas countries, they are of very little use to us because we are receiving so little in return for such credits. We receive pre-fabricated houses, timber, machinery and cars. I think that that practically summarizes the goods which we are receiving in return for our overseas credits. Undoubtedly, those credits, which have been established by the payment of Australian currency, have done much to accelerate inflation. The 25 per cent, advantage that accrues to exporters raises the cost of imports to this country, and aggravates the inflationary tendency.

Although the subject has been avoided by almost all political parties, there seems to be no alternative but to return to world parity prices. When that is done, there should then be appreciation of the £1. I believe that if such action disturbs any of our trade relations with Great Britain we can well and justly afford to make a present to that country of £100,000,000 worth of goods a year in order to assist in its economic recovery and also as a reward for the defence which it provides for this country. The United Kingdom is our first line of defence.

I have already said that primary production must be stepped up and I believe that many incentives could be offered with a view to bringing that about. Not the least of those incentives is housing, associated with closer settlement. At the present time, in our top-heavy cities, houses are being built at a cost of between E2.000 and £3,000 to meet the demands of a population which should gradually be drifiting away from the cities. I believe that the amount of money that is being expended on each housing unit erected in the cities would be ample to cover the closer settlement of a family in a rural district. If that were done it would ensure increased production of dairy products, fruit and the produce of market gardens, all of which are vital. I consider that with a movement of decentralization along those lines, manufacturing interests would also move towards the rural area3 in order that they might have the opportunity to absorb surplus labour, all of which could not be used for the purposes of closer settlement. Surely there is no one so bold as to deny that decentralization of manufacturing concern? would be in the best interests of the general economy of this country and of the defence organization which should be established. lt is true that in the State of Victoria a short time ago a threat was made that further factory development within the Melbourne metropolitan area would be disallowed. Why action was not taken to bring about such a desirable state of affairs is beyond my understanding. Apparently the scheme fell through, but ultimately it will have to be revived if common sense is to prevail. In the meantime, and prior to such action being taken, I believe that immigration should bs directed towards the stepping up of our primary production. Many thousands of people, whose normal avocations were associated with primary production on the other side of the world, are coming to this country. Surely both they and the Australian people are entitled to the stability which would automatically follow proper direction of their labour. In my opinion, closer settlement has been deliberately and selfishly forgotten. I am in almost complete agreement with a learned professor who recently said that the sheep are eating the guts out of Australia simply because wool is at a high price, due to the threat of war.

Rural development is one of the greatest guarantees against the increase of communism in this country. I remind honorable members that there is very little development along Communist lines in areas where rural pursuits are followed; where the people are living close to tb, earth and have something which they can call their own. The need for rural development is most pressing. Dairyfarming is at a very low ebb, and reafforestation has been neglected. As one honorable member opposite has stated, there are valleys in Australia that are simply awaiting water and cultivation in order to provide the harvests which the country needs.

I wish to emphasize what I consider to be the foolish action of this Government in dealing with a grave national situation. When great national undertakings are under way they should not be subjected to serious setbacks. It seems that there is a tendency to soft-pedal on the Snowy Mountains scheme, and that the Kiewa power scheme is being seriously handicapped. Action which prejudices the completion of such schemes must be regarded seriously by any person who considers the economic stability of the country. It does not matter who has blundered. What is important is that the all-abiding worth of such schemes shall not be whittled down one iota. If the schemes to which I have referred meant less than they in fact mean to Australia, it would not be difficult to agree with the Prime Minister (Mr. Menzies) and the economic experts, that national projects can afford to wait, but such schemes are far too important to be threatened at the present time. In my opinion, the Premier of Victoria, Mr. McDonald, had a good deal of effrontery in committing his State to large expenditure on public works before consulting the Loan Council. It appears that he and his departmental heads were advised to place orders in advance so that materials might be available for the schemes about to be commenced in Victoria. He apparently acted in the same manner as the Premier of another State once acted and he was successful in doing so. However, that does not absolve the Austraiian Government from doing less than its utmost in order to ensure the future stability of the country.

Mr Hamilton:

– Who said that it did anything else?

Mr ANDREWS:

– I say definitely that it does. The services of many employees of the schemes to which I have referred have been dispensed with.

According to a report published in the Melbourne Herald of Saturday last, hundreds of men are leaving the Kiewa scheme in order to seek employment elsewhere, so there is not even the slightest doubt that the Kiewa scheme is facing a very serious setback.

Mr Hamilton:

– That is the fault of the Premier of Victoria.

Mr ANDREWS:

– It is not his fault. I consider that there should be an immediate review of the decisions of the Loan Council, in an attempt to arrive at a formula that will ensure that national undertakings designed to bolster our general economy and our defence preparations shall be carried forward to fruition.

The Prime Minister has indicated that there have been steady increases in the annual imports of many basic commodities. He said that the imports of iron and steel had risen from 160,000 tons in 1948-49 to 685,000 tons in 1950-51 and that the quantity of timber imported had risen from 222,000,000 super.- feet to 375,000,000 super, feet in the “same period. He said also that, there had been a substantial increase of coal production, that there was good procurement of machinery and that transport services had improved. If I understand his argument correctly, he ascribed most of the credit for increases of production to the immigration policy, because he went on to say that 90 per cent, of the immigrants coming here had been directed into employment in the basic industries. But he did not explain to us how it was proposed to use the public servants with whose services the Government proposes to dispense. It is very interesting to note that the original figure of 10,000 dismissals has been whittled down to 5,000 by one means or another, mostly, apparently, through retirement or processes of that kind. The statement now made is that about 5,000 public servants will receive dismissal notices. In view of that fact it seems that there must have been some irresponsibility in the original declaration that 10,000 dismissal notices were to be issued to public servants, the prospect of which so staggered the community. What will be the ultimate figure in relation to these dismissals?

Nobody can guess, but I believe thai many sections of the Public Service are at present understaffed. The Postal Department is one such section. The honorable member for “Wills (Mr. Bryson) has pointed out how serious will be the effect upon the efficiency of industry if the Postal Department is disorganized. I claim that the position of that department at least should be considered most carefully before any real damage is done by the projected dismissals.

One thing that we want to know from the Prime Minister is how he proposes to change 10,000 Public Service clerks into brickmakers and iron and steel workers or agriculturalists.

Mr Ryan:

– Who said they were clerks ?

Mr ANDREWS:

– I have a very good idea of what they are. I agree that production must be stepped up, but what I want to know, and what the country is entitled to know, is, which industries are to have their production stepped up. Why should the Government be silent about the particular industries that require revitalization? I believe that it should give an indication of the particular industries whose production should be stepped up so that the owners of capital will know to what industries they can with safety transfer capital. Workers should also know to what industries they may transfer and still have security of employment. The public should, be informed of these matters and if there was not the necessary response after the information had been given to them it would be quite easy to regulate luxury industries and the capital, either fixed or circulating, associated with them. As far as I see, the Government is planless and as far as I can glean it simply intends to draw the tooth in order to end the pain from which the community is suffering at the present time. But the patient may easily be bled to death if the dentist is ruthless and inefficient.

Progress reported.

page 513

ADJOURNMENT

Rail Transport - -POSTAL Department.

Motion (by Eric J. Harrison) proposed -

That the House do now adjourn.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– A matter that I wish to bring before the Parliament concerns the naming of a diesel locomotive that was purchased recently and put into operation at Port Augusta. For some reason best known to itself, the Government decided that the locomotive should be named Robert Gordon Menzies. The Government, having made that mistake I suggest that the next locomotive put into operation on the Commonwealth Railways be named Joseph Benedict Chifley. It would have been more fitting had the first locomotive been given the name of our late beloved leader, who contributed in no small way to the development of the Commonwealth Railways, particularly in view of the great deal of praise that Government leaders have uttered in regard to the late Mr. Chifley. I am sure that Mrs. Menzies, for whom everybody has the greatest admiration and the highest regard, and who is certainly a perfect lady, would have derived great pleasure had she been given the opportunity to name the locomotive after .the former Prime Minister. I ask the Government to give consideration to naming the next locomotive after the late Mr. Chifley.

Mr COSTA:
Banks

.-During the war there was an acute shortage of telegraphists in the Postal Department, and, in order to make male telegraphists available for war purposes, the government of the day and the Director-General of Posts and Telegraphs entered into an agreement with the trade unions concerned to take females into the Telegraph Branch on the condition that female telegraphists would receive the same rates of pay as male telegraphists, because each would be required to perform exactly the same kind of work. The Government and the Director-General not only agreed to take these women into the service at male rates of pay during the war but also agreed that, if their services were required in the post-war period, they would still receive the full male rate. That was not a written agreement, but a gentleman’s agreement, and it should be kept. At the moment it is being repudiated, because three female telegraphists have been taken on to the staff of the Telegraph

Branch at the Melbourne General Post Office to perform telegraphist duties at only 75 per cent. of the male rate of pay. The situation now is that some females are working at 75 per cent. of the male rate whilst others are receiving the full male rate because they were originally employed during the war. I ask the Postmaster-General (Mr. Anthony) not to allow a continuance of this repudiation and to adjust the matter. I propose to quote from the policy speech which the present Prime Minister (Mr.Menzies) delivered in 1949.

Mr SPEAKER:

-(Hon. Archie Cameron). - Order ! The honorable member is dealing with a matter which he could quite well discuss when the Estimates for the Postmaster-General’s Department are being considered.

Mr COSTA:

– The Prime Minister, in his policy speech, promised equality of treatment for women employees, but that promise is now being repudiated. I could read in a few minutes what the Prime Minister said on the subject.

Mr SPEAKER:

– The honorable member is trying to get round a ruling which I have given. Last night the honorable member for Hindmarsh (Mr. Clyde Cameron) also discussed on the motion for the adjournment of the House a matter that would properly have been raised in the debate on the Estimates.

Mr COSTA:

-I appeal to the PostmasterGeneral to correct this anomaly. Having two girls doing the same work, one receiving higher pay than the other, breeds discontent.

Question resolved in the affirmative.

page 514

PAPERS

The following papers were presented : -

Dried Fruits Export Control Act - Twentyseventh Annual Report of the Dried Fruits Control Board, for year 1950-51, together with Statement by Minister regarding the operation of the Act.

Egg Export Control Art - Fourth Annual Report of the Australian Egg Board for year 1950-51, together with Statement by Minister regarding the operation of the Act.

Lands Acquisition Act - Land acquired for Department of Civil Aviation, Defence and Department of the Interior purposes - Western Junction, Tasmania.

Meat Export Control Act - Sixteenth Annual Report of the Australian Meat Board, for year 1950-51, together with Statement by Minister regarding ‘ the operation of the Act.

Norfolk Island Act - Regulations - 1951 - No. 1 (Advisory Council).

Public Service Act - Appointment - Repatriation Department - A. R. Parkin.

House adjourned at 10.52 p.m.

page 514

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Government Loans andfinance

Mr Ward:

d asked the Treasurer, upon notice -

  1. Will he inform the House whether it is proposed to make up the deficiency of ?8,000,000 in subscriptions to the recent Commonwealth loan by the issue of treasury-bills?
  2. If it is not so proposed, what alternative method is contemplated?
Sir Arthur Fadden:
CP

– The answers to the honorable member’s questions are as follows : - 1 and 2. It is not proposed to issue treasurybills to meet the deficiency in subscriptions to the Thirteenth Security Loan. Further loans will be floated as opportunity offers.

Basic Materials.

Mr Beale:
LP

e. - On the 9th October, the honorable member for Darling (Mr. Clark) asked a question concerning the sources of supply and landed cost of copper and zinc. I now advise the honorable member as follows : -

After allocations are made by the International Materials Conference it becomes the responsibility of the consumers to make their own arrangements as to the sources from which supplies are obtained and price to be paid. This price will not be known until firm orders are placed. In the case of copper, Australia will require to import portion of its allocation and whilst it isprimarily the responsibility of consumers to obtain acceptors for their orders, the Government will render all possible assistance. In thecase of zinc. the Australian output is greater thanthe allocation made by the International MaterialsConferenec so that no supplies will require to be imported.

Amalgamated Wireless (Australasia) Limited

Mr Peters:

sasked the Minister for Supply,upon notice -

  1. What is the value of and what are the articles ofgovernment plant and equipment onloan to Amalgamated Wireless (Australasia) Limited?
  2. For how long has the company had this plant and equipment?
  3. What is the Government obtaining in return for the loan of this plant and equipment?
Mr Beale:
LP

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

  1. The articles of government plant and equipment on loan to Amalgamated Wireless (Australasia) Limited and Amalgamated Wireless Valve Company Proprietary Limited under a joint agreement with the Commonwealth were valued at£1 8,500 at the time of installation, and consist of plant for testing the tropic-proofing of service electronic equipment, plant for testing electronic valves to service specifications, and certain special equipment for the production of radar valves.
  2. This plant and equipment has been held by the companies since it was installed during the war for defence projects, mainly in 1043 and 1944.
  3. The Government is obtaining from Amalgamated Wireless (Australasia) Limited a number of secret equipments and components for the long range weapons project. In many instances the company is actively associated with the development as well as the production of the equipment. The value of current orders of this nature is £150.000. Although the work on testing the tropic proofing of service electronic equipment has been very limited since 1945, the volume will increase considerably in the near future when additional service equip- ment becomes available.

National Service

Mr Cremean:

nasked the Minister for the Army, upon notice -

Have any national service trainees, who were drafted into camp atPuckapunyal in August last, died: if so, how many and from what causes?

Mr Francis:
Minister for the Army · MORETON, QUEENSLAND · LP

– No national service traineehas died since being drafted into camp at Puckapunyal in August last.

Non-essential Industries.

Mr Mulcahy:
LANG, NEW SOUTH WALES

y asked the Prime Minister, upon notice - 1.. Will he inform the House whether it is the intention of the Government to close down non-essential industries under the Defence Preparations Act as indicated by public statements made by the Prime Minister and some Ministers during and since the last elections?

  1. Will he state whether this will be done in order to divert labour to other industries?
  2. Is it a fact that such a close-down would enable Japan to export those non-essential materials to Australia under international trade agreements?
  3. Would this create widespread unemployment and mean the elimination of small and growing industries which would not be able to compete with cheap Japanese labour?
Mr Menzies:
LP

– I have never said that the Government intended to close down non-essential industries under the Defence Preparations Act, nor, so far as I know has any other Minister.

Incomes.

Mr Menzies:
LP

s. - On the 3rd October, the honorable member for Burke (Mr. Peters) asked the following questions: -

Is the Prime Minister aware that the President of the United States of America it seeking the enactment of legislation that will provide that the incomes of members of the Government in that country shall be subject to reports made public by the American equivalent of our Auditor-General? Will the right honorable gentleman consider that proposed legislation with the object of deciding whether if would be appropriate to enact similar legislation in this country?

I believe that recently the President of the United States, in addressing Congress requested legislative action to require all federal officers, including congressmen and judges who receive 10,000 dollars or more per annum, to file public statements once a year of income, gifts and loans received in addition to government salaries. I cannot imagine that similar legislation would be of any great benefit in this country. There are, as the honorable member knows, several major points of dissimilarity between the administrative machinery of the United States and of this country.

Lantana

Mr Swartz:
DARLING DOWNS, QUEENSLAND

z asked the Prime Minister. upon notice -

  1. Is it a fact that lantana is still spreading uncontrolled in certain areas on the east coast of Australia?
  2. Has any decision been made by the Commonwealth Scientific and Industrial Research Organization in conjunction with the Government of Queensland regarding the control or eradication of lantana?
  3. Was an officer of the Commonwealth Scientific and Industrial Research Organization investigating this problem overseas?
  4. Has this officer returned to Australia, and if so, is any information yet available regarding the methods that were being investigated ?
Mr Menzies:
LP

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

  1. In many areas on the eastern coast of Australia there is no direct control of lantana. Commonwealth Scientific and Industrial

Research Organization has no evidence, however, that the area infested by lantana is spreading.

  1. The possibility of controlling or eradicating lantana is still under discussion between Commonwealth Scientific and Industrial Research Organization and the Departments of Agriculture in New South Wales and Queensland. A meeting of the Queensland Weeds Co-ordination Committee, on which Commonwealth Scientific and Industrial Research Organization and the Queensland Department of Agriculture are represented, is to be held within a few days.
  2. Yes.
  3. This officer has now returned to Australia and has reported that in Hawaii importations of insects’ which are parasitic on lantana were made some years ago. The evidence so far indicates that these insects have not eradicated lantana although they may have reduced it somewhat in certain areas. It is possible that it would be worth while to introduce these same inserts into Australia. Investigations have indicated, however, that there would be a much better possibility of obtaining an insect capable of controlling lantana from Central America where there is a great variety of insect fauna associated with lantana.

Taxation

Mr Tom Burke:
PERTH, WESTERN AUSTRALIA

e asked the Treasurer, upon notice -

  1. Who are the members of the Commonwealth Committee on Taxation?
  2. Have they any political affiliations and have they held any party offices!
  3. On what grounds did they recommend against an excess profits tax?
  4. Are the committee’s reports made available to the Parliament; if not, why not?
Mr Fadden:
Treasurer · MCPHERSON, QUEENSLAND · CP

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

  1. Chairman - Honorable E. S. Spooner, F.C.A. (Australia) ; Members - Mr. J. A. L. Gunn, F.C.A. (Australia), Mr. S. B. Holder, F.C.A. (Australia), Mr. R. S. Turner, F.C.A. (Australia), Mr. Gordon Wallace, K.C., and Mr. J. W. R. Hughes, Deputy Commissioner of Taxation, Sydney.
  2. I have no information regarding any political affiliations of or party offices held by the members of the committee.
  3. The committee’s reasons for recommending against an excess profits tax are contained in its reports which have already been tabled.
  4. Reports of a committee of ‘this nature are considered to be confidential to the. Minister of State concerned unless a.nd until they are tabled in Parliament by him. It is my intention at the appropriate time to table all reports which are considered to be of interest to Parliament and to the public.
Mr Tom Burke:

e asked the Treasurer, upon notice -

  1. Was the alteration of the “ averaging of incomes for primary producers “ referred to the Commonwealth Committee on Taxation for investigation and report; if not, why not?
  2. What is the reason for the differential treatment accorded to primary producers as distinct from business firms to whom an “excess profits tax” would have applied?
Mr Fadden:
CP

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

  1. No; the proposed alteration is a matter concerning the level of the rates to be applied to the incomes of primary producers. As such it is a question of governmental financial policy which is not within the scope of the committee’s inquiry.
  2. There is no relationship between the proposed alteration to the system of averaging of incomes of primary producers and any possible form of excess profits tax. Therefore, the question of differential treatment does not arise..
Mr Tom Burke:

e asked the Treasurer, upon, notice -

  1. What fees or allowances are paid to the Commonwealth Committee on Taxation?
  2. Did the committee travel overseas in pursuit of its inquiries? If so, what were the costs of this travel in (a) sterling and (6) dollars?
  3. If the committee travelled overseas, what information did it obtain that could not have been obtained otherwise? ‘
  4. What are the total costs of this committee to date?
  5. What reports have been furnished, and to whom does the committee report?
Mr Fadden:
CP

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

  1. The fees paid to the chairman and each member of the committee, other than Mr. J. W. R. Hughes, Deputy Commissioner of Taxation, Sydney, were at the rate of £7 7s. for each sitting day from the. 2 1st February, 1950 - the day on which the committee was constituted - to the 31st December, 1950. Since then, fees have been paid at the rate of £12 12s. for each sitting day. Mr. Hughes is paid his official salary while serving on the committee. From the 21st February, 1950, to the 31st May, 1951, travelling allowance at the rate of £2 2s. a day to cover out-of-pocket expenses was paid to the chairman and any member of the committee required to travel interstate on the business of the committee. Since the 31st May, 1951, the travelling allowance waa increased to £2 10s. a day to conform with the increase in the travelling allowance payable to permanent heads of departments, as well as to othersenior officers and members of statutory bodies, &c, to whom the rate of £2 2s. previously applied. Fares are borne by the Commonwealth.
  2. The committee as a whole did not travel overscan. However, on the 17th May,1950, the chairman, Honorable. E. S.Spooner, left Australia on a private visit to the United Kingdom, United States of America and Canada. He returned to Australia on the 19thAugust, 1050. Mr.Spooner did not travel at the expense of the Commonwealth, but he agreed to examine the taxing systems In operation in the three countries mentioned. Mr. Spooner was paid at the rate of £77b. a day for the time occupied by him onhis investigations on behalf of the committee and was reimbursed the extra expense incurred by him as a result of those investigations. The payment of fees amounting to £264 12s. and the reimbursement of expenses amountingto £352 10s. were made in Australian currency and no expenditure of sterling or dollars was Involved. Mr. Spooner was assisted in bis investigations by Mr. Hughes, who was paid his official salary while abroad. Travelling allowance paid to Mr. Hughes, including transportation expenses, was (a) £234 sterling while in the United Kingdom and (6) 1,332 dollars while in the United States of America and Canada. Fares for Mr. Hughes were paid in Australian currency and amounted to £585.
  3. See answer to question 2. Valuable information was obtained and this information is reflected in reports of the chairman and Mr. Hughes. The benefits of first-hand knowledge arising from the investigationabroad will be revealed in legislation that will be introduced later.
  4. £8,521.
  5. The committee’s reports are made to the “Treasurer.

Wool

Mr Clark:
DARLING, NEW SOUTH WALES

k asked the Treasurer, upon notice -

  1. What is the total amount of money which has been collected from the wool-growers under the7½ per cent. tax on the sale of wool?
  2. What is the total of the profits made under the Joint Organization scheme which are due for ultimate distribution to the wool-‘ growers ?
  3. What is the total amountcollected under the Wool Sales Seduction Acts?
Sir ARTHUR FADDEN:
MCPHERSON, QUEENSLAND · CP

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

  1. The 7½ per cent. charge on the sale of wool which operated as from the26th August, 1950, consisted of a levy of 7¼ per cent. to provide funds for a plan of reserve prices to succeed the Joint Organization, and a levy of¼ per cent. to meet the expenses of wool use promotion and the disposals plan. Up to the 30thSeptember. 1951. £46,734,034 had been collected. Of this amount £44,992,880 represented the proceeds of the7¼ per cent. levy.
  2. It is estimated that Australia will ultimately receive about £90,000,000 as its share in the profits of the joint Organization’s transactions in wool. An interim distribution of £24,400,000 has already been made to growers.
  3. The amount collected under the Wool Sales Deduction Acts to the 30th September, 1951, was £120,377,034. commonwealthbank.

Mr.Cremean asked the Treasurer, upon notice -

What amount of profit has been made by the Commonwealth Bank of Australiaand the Commonwealth Savings Bank of Australia since their establishment?

Sir ARTHUR FADDEN:
MCPHERSON, QUEENSLAND · CP

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

The aggregate profits of the Commonwealth Bank of Australia and the Commonwealth Savings Bank of Australia from their inception to 30th June, 1951, are: - Commonwealth Bank of Australia (excludingNote Issue Department), £23,920,735; Commonwealth Savings Bank of Australia (including £7,386,437 paid to State Authorities under Pavings Bank Amalgamation Agreements), £20,395,630. In addition theNote.Issue Department of the Commonwealth Bank has made a profittotalling £55,092,920 from the 15th December, 1920 (the date of the transfer of the note issue to the bank), to the 30th June, 1951.

Rail. Transport

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP

on asked the Treasurer, upon notice -

  1. It it a fact that only 15,000,000 dollars were allocated to rail transport requirements from the 100,000,000 dollar loan?
  2. How was the figure for rail transport arrived at?
  3. How was the amount allocated amongst the various State and Commonwealth railway systems?
  4. What amount for dollar expenditure has been sought by the various Stateand Commonwealth railway systems since the. 1st January, 1949?
Sir ARTHUR FADDEN:
MCPHERSON, QUEENSLAND · CP

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

  1. The amount of the 100,000,000 dollar loan allocated for rail transportequipment at the time the Loan Agreement with the International Bank was concluded inAugust, 1950, was 8,000,000 dollars. Applications for licences to import American and Canadian equipment to a value considerably in excess of this figure .was subsequently received from the various railway authorities. To enable these requirements to be met the consent of the International Bank was obtained to au increase in the loan allocation for rail transport equipment to approximately 14,000,000 dollars.
  2. See reply to question 1.
  3. The value of licences granted to the various railway authorities for equipment to he imported under the loan is set out below -
  4. The various railway authorities purchase many of their requirements of goods of dollar origin through agents and from stocks held by merchants and there are no statistical records al the total value of dollar import licence applications which have been lodged by, or on behalf of, the Commonwealth and State railways over any given period.

Cite as: Australia, House of Representatives, Debates, 10 October 1951, viewed 22 October 2017, <http://historichansard.net/hofreps/1951/19511010_reps_20_214/>.

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