Senate
17 September 1942

16th Parliament · 1st Session

  1. Senate
  2. 16th Parliament
  3. 1942

The President (Senator the Eon. J. Cunningham) took the chair at 3 p.m., arid read prayer*.

page 399

QUESTION

PRICE OF ORANGES

Senator AMOUR:
NEW SOUTH WALES

– Has the Minister for Trade and Customs read in’ the Sydney press that oranges are costing 5d. and 6d. each retail in that city. What is the cause of the increased price of this fruit, and -will the Minister make an investigation regarding the matter?

Senator KEANE:
Minister for Trade and Customs · VICTORIA · ALP

– The sudden increase of the price of oranges is due in part to misunderstandings concerning the supplies of citrus fruits that would be available for the fresh fruit market. Action has been taken by the Government to ensure that a certain proportion of the fruit produced by all growers will be consigned to manufacturers for processing into fruit juice, which is urgently required for the military services. The whole of the crop has not been frozen, and substantial supplies will be available in the open market. The Prices Commissioner has already held a satisfactory conference with the representatives of growers of citrus fruits throughout Australia, and arrangements have been made to review the position in the event of prices reaching an unduly high level. A temporary disturbance of the market owing to a misunderstanding concerning a government order should not be mistaken for permanently high prices. The Prices Commissioner is in close touch with the representatives of the growers, and he arranged for an examination of citrus fruit prices in Sydney yesterday. The margin available to retailers is under control, and the increase of price that took place early this week was due .to the excessive buying by retailers who were under the impression that the whole of the crop had been frozen. Now that that impression has been removed, the market will reach a more satisfactory level

page 400

QUESTION

PUBLIC SERVICE

Appointment of Returned Soldiers

Senator COLLINGS:
Minister for the Interior · QUEENSLAND · ALP

-On the 3rd September Senator Cooper asked the Minister representing the Prime Minister the following questions, upon notice : -

  1. What is the number of male non-returned soldiers appointed to permanent positions in the Commonwealth Public Service, Third Division, during the present war?
  2. What is the number of returned soldiers appointed to permanent positions in the Commonwealth Public Service, Third Division, during the present war?
  3. What is the number of male non-returned soldiers appointed to permanent positions in other divisions of the Commonwealth Public Service during the present war?
  4. What is the number of returned soldiers appointed to permanent positions in other divisions of the Commonwealth Public Service during the present war?
  5. What is the probable number of vacancies in permanent positions in the Commonwealth Public Service, all divisions, during the next three years?
  6. What steps have been taken to ensure that the greatest number of returned soldiers will be absorbed in permanent positions in the Commonwealth Public Service?

The Prime Minister has furnished the following answers : -

  1. 142 (twelve only since 30th June, 1941).
  4. 1,439.
  5. 2,500. Many of these vacancies will be filled by the advancement of junior officers and the appointment of new juniors.
  6. The principle of preference to returned soldiers forms part of Commonwealth legislation and is being observed to the greatest possible extent. Consideration is being given to the problems which must be met under the circumstances arising out of the present war.

page 400

QUESTION

INTEREST ON LOANS

Senator KEANE:
ALP

– On the 3rd September Senator J. B. Hayes asked the Minister representing the Treasurer the following questions, upon notice: -

  1. What was the amount paid in interest on loans - both Federal and State - for the years eliding 30th June, 1922, 1932 and 1942, and the capital amount owing on each of the above dates?
  2. What were the interest payments per head of population on the same dates?

The Treasurer has supplied the following answers: -

1.-

  1. Interest payments per head of population -

page 400

QUESTION

NATIONAL DEBT

Activities of Private Banks

Senator KEANE:
ALP

– On Thursday, the 3rd September, SenatorDarcey asked the Minister representing the Treasurer the following questions, upon notice: -

  1. By what amount has Australia’s national debt been increased since the declaration of war?
  2. By what amount has it been increased by the present Government?
  3. What amount in inscribed stock, war bonds and treasury-bills have the private banks purchased since the declaration of war?
  4. What amount in treasury-bills have the banks convertedin the same period?
  5. Will the private banks be allowed to purchase bonds in the forthcoming loan, and will they be permitted to advance money to enable the public to subscribe to this loan?

The Treasurer has supplied the following answers: -

1.-

  1. Commonwealth debt at 30th September, 1941, £551,059,789; at 30th June, 1942, £718,150,848; increase, £167,091,059.
  2. Trading banks’ holdings of Government and municipal securities (including treasurybills) increased by £69.5 million between August, 1939, and December, 1941. Since then they have fallen by £16,000,000. 4.Treasury-bills fall due for conversion every three months and therefore total conversion since the outbreak of war would amount to very large figures. The net increase in trading banks’ holdings of treasurybills between August. 1939, and July, 1942. amounted to £19.2 million. This amount is included in the figures given in answerto question 3.
  3. It is not proposed to allow the trading banks to subscribe cash to the forthcoming loan, but they will be invited to convert their present holdings of maturing securities. The administration of the National Security (Wartime Banking Control)Regulations is vested in the Commonwealth Bank of Australia and unless the most exceptional circumstances obtain it does not permit the trading banks to lend money for investment in Commonwealth Government loans.

page 401

QUESTION

VOLUNTEER DEFENCE CORPS

Senator COLLINGS:
ALP

– On the 3rd September, Senator Lamp asked the Minister representing the Prime Minister the following question, upon notice -

Will the Government issue instructions that all men exempt from military duty who are not engaged on munitions work are to perform a stated number of hours’ duty with the Volunteer Defence Corps each week?

The Prime Minister has supplied the following answer: -

As its name implies the Volunteer Defence Corps is an entirely voluntary organization, and it is considered inadvisable to introduce into its recruiting any form of conscription.

page 401

REGULATIONS AND ORDINANCES COMMITTEE

Senator SPICER:
VICTORIA

– As Chairman, I present the fifth report of the Standing Committee on Regulations and Ordinances.

Ordered to he printed.

page 401

DEATH OF THE HONORABLE JAMES NEWTON HAXTON HUME-COOK

The PRESIDENT (Senator the Hon J Cunningham:
WESTERN AUSTRALIA

– I have received from Mrs. J. Hume-Cook and family a letter of thanks and appreciation for the resolution of sympathy and condolence passed by the Senate on the occasion of the death of the Honorable James Newton Haxton Hume-Cook.

page 401

DEATH OF THE HONORABLE RICHARD BEAUMONT ORCHARD, C.B.E

The PRESIDENT:

– I have received from Mrs. R. B. Orchard and family a letter of thanks and appreciation for the resolution of sympathy and condolence passed by the Senate on the occasion of the death of the Honorable Richard Beaumont Orchard, C.B.E.

page 401

QUESTION

UNIFORM INCOME TAXATION

Release of Man-power.

Senator SAMPSON:
TASMANIA

asked the Minister representing the Treasurer, upon notice -

  1. Has the passage of the uniform taxation legislation released man-power from the various State Taxation Departments for war service?
  2. If so, what are the numbers of male staff so released in each State?
Senator KEANE:
ALP

– The Treasurer has supplied the following answers:-

  1. Yes.
  2. The numbers of officers released will be supplied later.

page 401

QUESTION

WAR PENSIONS

Senator SAMPSON:

asked the Minister representing the Minister for Repatriation, upon notice -

Is it the intention of the Government, having regard to the rising cost of living, to increase incapacitated soldiers’ war pensions, in view of the fact that the Government has already increasedold-age and invalid pensions for this reason ?

Senator CAMERON:
Minister for Aircraft Production · VICTORIA · ALP

– The Minister for Repatriation states that the matter is at present under consideration by the Government, and it is anticipated that an announcement will be madein the near future.

page 401

QUESTION

HOUSE RENTS AT LAUNCESTON

Senator LAMP:
TASMANIA

asked the Minister representing the Treasurer, upon notice -

  1. Is the Commonwealth Statistician’s price index figure of 19s. 3d. a week for a four or live roomed house in the City of Launceston a measure of value; or is it just a price index figure used in the past for the measuring of fluctuations?
  2. If it is intended as a measure of value, will the Treasurer have an inquiry made with the idea of having the true value reflected in the figures?
Senator KEANE:
ALP

– The Treasurer has supplied the following answers: -

  1. The second hypothesis is correct.
  2. See reply to 1.

page 402

QUESTION

COST OF LIVING

Effect on Maternity Allowance.

Senator LAMP:

asked the Minister representing the Treasurer, upon notice-

  1. What percentage increase in the cost of living has taken place during the six months’ period January to June, 1942?
  2. Will the Government consider adding the increase to the statutory qualification in regard to the maternity allowance so as not to penalize the working-class mothers of Australia?
Senator KEANE:
ALP

– The Treasurer has supplied the following answers : -

  1. Five per centum.
  2. The matter will be given consideration.

page 402

ENTERTAINMENTS TAX ASSESSMENT RILL 1942

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- I move -

That the bill be now read a second time.

In introducing this bill for the imposition of a uniform entertainments tax for the whole of Australia, I desire to explain to honorable senators that for some time the Government has had under review the question of diverting to the Government some portion of the amount expended upon amusements, some of which has been made available to the people by reason of the extraordinary war expenditure by the Commonwealth Government. Despite the curtailment of many forms of sporting activities, attendances at entertainments show a tendency to increase. The Government does not wish to impose undue prohibitions on the people, but it is of the opinion that, whilst many of our men are absent on active service, and many others are working additional hours in war industries, those who still have the leisure and the money to frequent places of entertainment should be prepared to make a contribution to the war effort when they do so. In order to give effect to its desire for a uniform entertainments tax, the Commonwealth Government asked the States at a recent conference of Commonwealth and State Ministers to vacate the field of entertainments tax and leave it entirely to the Commonwealth upon the payment of compensation to the States. At the request of the conference, the Commonmonwealth put its proposals in writing, and the States have agreed to vacate the field, but some of them have asked that the basis of compensation should be the revenue derived by them from this source for the financial year 1941-42. The Commonwealth had proposed that they should be compensated upon the average revenue received by them for the financial years 1940-41 and 1941-42. In making this proposal, the Commonwealth Government adopted a basis similar to that recommended by the Committee on Uniform Taxation in respect of compensating the States for vacating the field of income tax. However, as the increased compensation payable on the basis requested by the States involved only a relatively small amount, the Government decided to accede to the request. The necessary measure to provide for this compensation will come before this chamber shortly, and I shall then give honorable senators a more detailed explanation of the basis of compensation.

The rates of entertainments tax proposed are heavy, and will serve to bring home to patrons that this country is engaged in a war involving the freedom of the people. This is the second occasion upon which the Commonwealth has obtained revenue from an entertainments tax. This field was entered for the first time during the last war. After the end of the war, the Commonwealth progressively vacated the field, leaving it finally in 1933, as one of the measures forming part of the financial arrangements made to enable the States to recover from the effects of the depression. As the Commonwealth vacated the field it was progressively occupied by the States, except Queensland, where no entertainments tax has been imposed by the State government. The present bill follows substantially the lines of the previous Commonwealth legislation, which also formed the basis for the measures passed by the States. Consequently, there will be a continuity of policy in main principles in those States in which an entertainments tax was imposed. The bill provides for the exemption of a number of classes of entertainments such as those where the whole of the takings, without any charge being made for any expenses of the entertainment, are devoted to public, patriotic, philanthropic, religious or charitable purposes. Exemption is also granted in respect of entertainments of a wholly educational character, as well as entertainments of a partly educational and partly scientific character conducted by a society, institution or committee not carried on for profit. Entertainments in respect of which the whole of the net proceeds are devoted to the erection, maintenance or furnishings of memorial halls for the use of soldiers, sailors or airmen are also exempted. In addition to these exemptions, there is an exemption for entertainments where the net proceeds are devoted to public, patriotic, philanthropic, religious or charitable purposes, or to such funds of a society or association not carried on for profit as are set apart to provide sick, accident or funeral benefits on behalf of its members, and where the expenses of the entertainment do not exceed 50 per cent, of the receipts thereof. There is a proviso that if such expenses exceed 50 per cent, of the receipts by reason of inclement weather or other unforeseen circumstances, the Commissioner may still grant the exemption. The bill also provides for the imposition of the tax upon dinner or supper dances and similar entertainments which escaped tax in the past owing to a flaw in the legislation. No attempt will be made, however, to impose the tax upon meals which are accompanied by incidental music.

The bill provides for the registration of all entertainments. It also imposes an obligation upon the owner, or lessee, of the premises in which the entertainment is held to see that no unregistered entertainment is held on his premises. The tax is collected by the person controlling the entertainment, and is paid over to the Commissioner of Taxation. The tax is paid by the person conducting th» entertainment either prior to the enter tainment by the purchase of tax tickets, or, if. he has made arrangements with the Commissioner, and. has supplied a satisfactory security upon returns made to the Commissioner, after the entertainment has been held. The usual provisions are included in the bill for the imposition of penalties for offences against the provisions of the act.

The Government estimates that the gross revenue that will be collected for a full financial year will be £3,250,000. The compensation payable to the States will amount to approximately £765,000, leaving a net revenue to the Commonwealth of about £2,485,000. For the balance -of the current financial year it is expected that the gross revenue will be about £2,430,000, out of which compensation, amounting to £575,000, will he payable to the States, leaving a net revenue to the Commonwealth for the current financial year of £1,855,000. The bill provides that the tax will operate on and from a date to be proclaimed. The intention of the Government is that the date of commencement shall be the 1st October, 1942. It is provided that this legislation will continue for the duration of the war and one year thereafter.

Senator McLEAY:
Leader of the Opposition · South Australia

– I understand that the Government is anxious to pass this bill and its two cognate measures as expeditiously as possible. We shall not oppose the measure. I take this opportunity to remind the Government once again of the statement contained in the budget speech to the effect that the Government is opposed to indirect taxation; it prefers direct taxation. The fact remains, however, that in the present financial year £14,400,000 is to be raised exclusively by additional indirect taxation. I shall repeat what I said last Friday. It is about time that the Government abandoned its policy of putting extra, money in one pocket of the taxpayer, in order to fulfil election promises, and then taking it out of another pocket by increased taxes. Let it say clearly what is its real intention. At a conference of returned soldiers held recently in Sydney, attention was drawn to increases of excise on beer and tobacco. Now, the rax on entertainments is to be increased. The soldier is entitled to beer, tobacco and entertainment at as low a cost as possible. Many soldiers on leave are more or less compelled to attend entertainments. So far, however, the Government has not decided to grant any concessions to them in these matters. I mention these facts in order that we shall not deceive ourselves that we are granting any real additional benefits to soldiers by way of increases of pay, when, at the same time, such increases are more than offset by increases of indirect taxes.

Question resolved in the affirmative.

Bill read a second time and reported from committee without amendment or debate; report adopted.

Standing and Sessional Orders suspended.

Bill read a third time.

page 404

STATES GRANTS (ENTERTAINMENTS TAX REIMBURSEMENT) BILL 1942

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– I move- -

That the bill be now read a second time.

This bill gives effect to arrangements made by the Government with the States upon their agreement to vacate the field of entertainments tax ‘ and to leave it wholly to the Commonwealth. The bill provides, for the compensation payable to the States for the balance of the current year and also for the annual amounts of compensation to be paid during the period in which the act will be in operation. At a. conference of Commonwealth and State Ministers held recently in Melbourne, the government approached the States with the proposal, to vacate this field and leave it to the Commonwealth. It was suggested to the States that they should be compensated upon the basis of the average of their annual collections for the financial years 1940-41 find 1941-42. In proposing this basis of compensation the Government adopted a principle similar to that recommended by the Committee on Uniform Taxation for the purpose of compensating the State, for vacating the income-tax field. Tasmania agreed at the conference to vacate the field upon the conditions suggested by the Commonwealth. The other States asked that the Commonwealth proposals be put in writing in order that they could give further consideration to the matter. This was clone, and some of the States requested that compensation should be paid on the basis of the revenue derived by them from this source for the financial year 1941-42 instead of the average of that and the previous year as suggested by the Commonwealth. The Government gave consideration to this request and while adhering to its opinion that the basis proposed by it was reasonable it decided, in view of the relatively small amounts involved in the change of basis, to grant the request. The compensation will, therefore, be paid to the five State governments which had entered the field of entertainments tax upon the basis of the revenue derived by them from this source during the year ended 30th June, 1942. The Queensland Government had not imposed any entertainments tax in that State, and, consequently, it has not been necessary to provide for compensation to that State.

The bill provides in the first schedule for the amounts payable to the States for the balance of the current financial year provided that they cease to collect an entertainments tax under their acts as from the date on which the Commonwealth provisions come into operation. The second schedule provides the amounts to be paid each year during which the act is in operation. They are -

lt is pro-posed to introduce the Commonwealth tax on a date to be fixed by proclamation, and it is expected that the five State governments concerned will cease collecting entertainments tax from that date. Upon the assumption that the proclaimed date will be the 1st October, 1942, and that the States cease to collect the tax the compensation payable for the balance of the current financial year will aggregate £574,341, and will be payable to the States as follows: -

The amount in each case represents three-fourths of the annual amount payable. It may be thought that the Government has been over-generous in the matter of these grants. If it had compensated the States on the average of the years 1939-40 and 1940-41, being the years chosen by the Committee on Uniform Taxation as a basis for income tax compensation, the total amount payable for ;i full year would have been about £700,000. Had the basis proposed by the Government at the conference of Commonwealth and State Ministers been adopted, i.e., (he average of the financial years 1940-41 and 1941-42, the amount payable would not have exceeded £750,000. The basis adopted will result in the annual amount being approximately £766,000 and this will be paid without any reduction on account of the savings in costs of collections which will accrue to the States from vacating the field. For the current year the only adjustment, made in the annual sum is to reduce it by an average of three months’” revenue- for .1942-43, representing the proportion of the current year for which the States have collected the tax. As an offset to the foregoing it is to be borne in mind that in the first year the States may be called upon to repay to persons conducting entertainments amounts collected ir> respect, of stamp tickets purchased iii advance. They may also have to refund the tax paid on lump sum payments by members of clubs, societies, irc, applicable to entertainments which will not lake place until after the Commonwealth tax commences and the State tax ceases to operate. The bill provides that, the act shall operate for the duration of the Avar and one year thereafter.

Senator McLEAY:
South AustraliaLeader of the Opposition

– In supporting the bill, I take the opportunity of drawing attention to thu amounts to be paid in compensation under the various schedules. It is interesting to note that Victoria will be paid £279,944 as against Siew South Wales £1.20,623 for the current financial year. I mention this because it supports the contention advanced by the Opposition in moving to amend the amounts repayable to the States under the recent uniform taxation scheme. We then clearly pointed out to the Government how, in working out Hie amounts of compensation, it had done a very grave injustice to Victoria. It will be remembered that, apart from the amounts included in the uniform taxation grants schedule, Victoria was paying £50 per head in other taxes, as against £30 by New South Wales. We now have in this bill concrete evidence of one item which shows the injustice the Government did to Victoria by its previous legislation. I am pleased to see that, Victoria has now made a start to get. back something to which it is justly entitled.

Senator FOLL (Queensland) [3.3SJ.- I draw the attention of the Senate to the weak manner in which the Commonwealth Government, has acted in its negotiations with the State governments. The States selected as the basis of their claims for compensation what was undoubtedly a boom year in entertainments. The Common wealth Government, on the other hand, in submitting its proposals, selected what it considered to be i fair average of tax receipts, but the States, being naturally anxious to drive as good a bargain as they could, insisted on the financial year 1941-42. The Commonwealth Government, instead of standing up to it? obligations as it should have done, in view of its great responsibilities, weakly replied : “ Well, another £60,000 or £70.000 does not mean anything; we might as well let: it go “, and consequent.lv agreed to the States- proposals, with the result that the amounts to be made available are higher rhan were previously intended. Without being unduly critical of the State government, I point out that, on account of the huge war expenditure which the Commonwealth Government has to meet, the large amount of employment given, and the large sums available for entertainments owing to war expenditure, there is at the present time an undoubted boom, whilst concurrently the State governments are being relieved of a tremendous amount of financial responsibility which they would have had to shoulder in normal times. Yet up to the imposition of uniform income taxation, they were still collecting huge sums for unemployment relief, whereas there was no unemployment to relieve. State transport revenues also are buoyant because of the huge defence traffic on the State railway systems, which is being paid for by the Commonwealth Government. If honorable senators opposite are earnest in preaching their austerity campaign to the community generally - rightly so, because luxury expenditure cannot be permitted to continue as it has in the past - the same policy should apply to the State governments. Itcannot be denied that the financial responsibilities of the States have been lightened to a remarkable degree because of the vast sums of money that the Commonwealth has been obliged to spend for war purposes. Therefore, I contend that it would not have been unreasonable had the States been asked to surrender this field of taxation without recompense. Such action would have been a noble gesture by the States in view of the enormous expenditure of which they have been relieved. I wish also to emphasize the point made by the Leader of the Opposition (Senator McLeay) that the taxing of entertainments will not affect the rich people of the community. The claim that this tax will be imposed largely upon people who have leisure in which to spend their money is hardly correct. Picture shows . and other similar entertainments are patronized extensively by members of our fighting forces on leave, by their depend- ants who already are struggling alone on little enough, and by those hardworking individuals who are employed in muniitions and allied industries.

I commend the Government for its decision to allow special concessions to entertainments conducted by live artists, but I am afraid that if the suggestion made by the Deputy Director of Man Power, Mr. Bellemore, that chorus girls must not be under 45 years of age is put into effect, attendances at such shows will diminish very quickly, and there will be a serious reduction of revenue from this tax. I strongly urge that that proposal be not put into operation.

Senator LECKIE:
Victoria

.- I am not concerned with the States as such; I am concerned only with the individuals who live in those States, and I am a little bit dubious in regard to this matter. The Leader of the Opposition (Senator McLeay) complimented the Government upon its generosity in compensating the States for the loss of the entertainments tax field. By paying such a compliment, one is saying, in effect, “For once in your life you are not robbers. Apparently you have turned over a new leaf and reformed “. But Senator Foil said that the Government was entirely at fault. Apparently he contends that the Commonwealth Government should have robbed all the States except Queensland. I see neither generosity nor excessive honesty in this bill. The proposal is to return to the States the amounts that they collected by way of entertainments tax last year. Apart altogether from the sums which the Commonwealth will refund to the States, this measure will provide the source of a considerableamount of revenue. I have no quarrel with that. I have always endeavoured to give to this Government credit when it has deserved it, but in this case I cannot see that any particular credit is due. However, I trust that honorable senators opposite will not fall from grace and accept Senator Foil’ssuggestion that all the States, with the exception of Queensland, should be robbed. I believe that the Government recognises that it has an honest duty to the people of Australia as a whole, and that it will treat the various States according to their lights, although, judging by some previous actions, treating the States according to their lights would present a. sorry sight. This bill provides that the Commonwealth Government shall return to the States that which legitimately belongs to them, and therefore I have no fault to find with the measure.

Senator DARCEY:
Tasmania

– I support the bill. I cannot agree with Senator Foll when he urges that the States should hand this source of revenue over to the Commonwealth without compensation. The States are faced with a difficult task in meeting their financial obligations. Commonwealth grants have been considerably reduced, and even when certain sums were sanctionedby the Loan Council, they were reduced by the Commonwealth Co-ordinator of General Works, Sir Harry Brown. It has been claimed that this tax will fall heavily upon a section of the community which is already suffering considerable hardship, but when one sees picture shows and other entertainments crowded almost every night of the week, and people paying asmuch as 7s. for a seat, one can only come to the conclusion that this is a source of revenue which the Government is justified in tapping. The compensation which is to be paid to Tasmania for loss of the entertainments tux field is only £36,469, whereas in the case of Victoria it is £373,259. It is obvious that the people of Victoria have a lot of money to spend on entertainments, when New South Wales is to receive only £160,830. Every effort should be made to see that in measures of this kind equality of sacrifice is the guiding principle. If this money were not refunded to the States it would simply mean that the States would have to raise the revenue in some other directions. Inthe present circumstances the Commonwealth Government is justified in exploring every possible avenue of revenue. If notice had been taken of the advice I have been tendering for a long time regarding national finances, these taxes would not he now necessary. As I have previously said, the attendance in this chamber usually thins considerably when I rise to speak on financial matters.

Senator Leckie:

– Whose fault is that?

Senator DARCEY:

– It is the fault of those honorable senators who walk out, although they are paid to remain and hear what is said in this chamber. I am glad that, there is a good attendance of honorable senators on this occasion. I hope that the bill will be passed without opposition, and will become part of the scheme to which the Government intends to adhere in order to raise the necessary war credits.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.

Standing and Sessional Orders suspended.

Bill read a third time.

page 407

ENTERTAINMENTS TAX BILL 1942

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– I move -

That the bill be now read a second time.

This measure is complementary to the Entertainments Tax Assessment Bill, 1942, which has already been agreed to, and provides for the imposition of the entertainments tax at the rates set out in the schedule to the bill. There are two scales of rates in the schedule, the lower rate in the second column of the schedule applying to entertainments where all the performers are present and performing and the entertainment consists of a stageplay, a ballet, a performance of music, whether vocal or instrumental, a lecture, a recitation, a music hall or other variety entertainment, a circus or a travelling show. The full rate set out in the first column applies to all other classes of entertainments. The full rate commences at 3d., which is the tax upon an admission price of1s., and increases by 2d. for each 6d., or part thereof, by which the price of admission exceeds1s., to 5s. Thereafter, the rate increases by 3d. for each additional 6d., or part thereof. At 10s., the full rate of tax is 4s.1d. The lower rate of tax set out in the second column of the schedule, which commences at 2d. on1s., represents a benefit of approximately 25 per cent. of the full rate which the Government decided to grant in respect of entertainments in which live artists are employed. One of the reasons of the Government for granting this benefit is its desire to encourage the cultural aspect represented by the stage and concerts giving opportunities to local artists. Another reason is that such entertainments involve much heavier expenses than, say, picture shows.

In granting this benefit, the Government decided to take the rate in the relevant grade to the nearest penny, in order to obviate the drain on the copper coinage which would be caused by taxes involving half-pennies, and also to obviate the difficulties arising at box offices from the necessity to give change it) half-pence. Where the actual calculation resulted in an odd farthing or halfpenny, it has been dropped, and where the fraction amounted to three-farthings, the tax has been taken at the nearest penny. The tax will come into operation, as I have already explained, on a date to be proclaimed. The intention of the Government is that it shall operate as from the 1st October, 1942, andit is anticipated that all State entertainments taxes will cease as from the 30th September, 1942. Suitable arrangements have been made with the State, governments regarding the vacation of this field of taxation. I explained the details of those arrangements when I introduced the bill providing for the compensation payable to the States.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without requests or debate; report adopted.

Standing and Sessional Orders suspended.

Bill read a third time.

page 408

ESTIMATES AND BUDGET PAPERS 1942-43

Debate resumed from the 16th September (vide page 328) on motion by Senator

Keane -

That the following papers be printed: - Estimates of Receipts and Expenditure, and Estimates of Expenditure for Additions, New Works, Buildings.. &c.. for theyear ending the 30th June. 1943.

The Budget1942-43 - Papers presented by the Hon. J. B. Chifley, M.P., onthe occasion of the Budget of 1942-43.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– The figures in the papers before us constitute a record for an Australian budget. The requirements for civil expenditure have increased by leaps and bounds with the result that our expenditure to-day in respect of social services is almost as much as the total annual expenditure of the Commonwealth a few years ago. We realize that finance must be provided and that it is the prerogative of the government of the day to say how the money shall be raised. But it is also the prerogative of individual senators to criticize the means by which that money is to be raised and allocated. Our defence programme must necessarily take precedence over all other expenditure; in fact, that programme must be proceeded with irrespective almost of its money value. At the same time, existing conditions demand that civil expenditure shall be curtailed. In curtailing it we must, if possible, prevent inroads being made on the capital assets of both primary and secondary industries. We must try to keep them intact, so that they will be available for use to the best advantage in the post-war period. We are fortunate that we are not alone in our defence programme, although some time ago there seemed to he a lack of appreciation of the part being played in the war by the Mother Country. More recently, however, it has been generally realized that if Britain falls, we fall also. The entry of Japan into the war has awakened the majority of the people to their responsibility, and of the part which we in this country must play. There can be little criticism of Australia’s war programme; its foundations were laid by a previous government.

Senator SPICER:
VICTORIA · LP

– They were laid well.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– The present Government has merely built on that groundwork. It has, of course, consulted with our allies. In my opinion, comparisons in respect of our achievements to-day and, say, twelve monthsago, are invidious. For instance, it is not a fair comparison to say that so many articles were turned outin June, 1941, and so many more articles were manufactured in June, 1942. Such progress is inevitable once the groundwork had been well laid.

Before surveying the budget figures. I wish to refer to a few matters which are engaging the attention of the people generally, because they tend to limit the capacity of the people to subscribe to war loans to the degree that they would wish. These matters are detrimental to wholehearted co-operation in the war effort by the people. In saying that, I do not lose sight of the magnitude of the task confronting the Government, and of the impossibility of avoiding some mistakes. Some overlapping is inevitable, particularly in relation to such matters as the rationing of various commodities, the best use of the available man-power, price fixing, and the regulation of industry. Nevertheless, if we are to have the maximum effort of which the people are capable, we must do all that we can to treat essential industries fairly. Unfortunately, the regimentation of our resources was founded on wrong principles. Simultaneously with the declaration of war, there should have been a declaration of political peace between the several parties in this Parliament. There should have been an all-party government.

SenatorFraser. - Honorable senators opposite cannot agree among themselves.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– A government comprising the best intellects in both Houses should have been formed.

Senator Keane:

– We have achieved that.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– That is a matter of opinion. The first thing that a national government should have done would have been to follow up the work already accomplished in connexion with the national register made in 1939. The population of Australia should have ‘been divided into three groups - one to be employed on active service, the second in manufacture, and the third in providing food and clothing. The previous Government is as much to blame as the present Government for failure to do so, and for the chaos which has resulted.

Senator Ashley:

– It should have been done when the war broke out. At, that, time another government was in office

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– That is so. Had action along those lines been taken, there would not have been the trouble which has arisen through trying to fit square pegs into round holes. However, we must take things as they are.

Some of the decisions made bythe Minister for War Organization of Industry (Mr. Dedman) would be ludi crous were they not so serious. A great mistake was made when notice of the intention to ration clothing was made about two months before the scheme was to commence. That premature announcement of government policy caused the greatest orgy of buying that this country has ever witnessed. Following the introduction of the scheme, coupons were issued to the people, various articles of clothing requiring the production of so many coupons at the time of purchase. It is generally agreed that those responsible for fixing thenumber of coupons for the various articles of clothing showed either a lack of knowledge of the subject, or gave insufficient consideration to it. However, the Minister went on unperturbed. Eventually he decided on something spectacular: he posed before the camera like a mannequin in a “ victory suit “. I do not think that the progress of the war will be greatly affected whether or not a man wears a waistcoat or a double-breasted coat, or has cuffs on his trousers. It is a pity that failure to comply with the Minister’s orders in regard to these things should be regarded as a criminal offence. A much simpler scheme, which would have been equally effective, could have been devised. The clothing trade could have been relied upon to reduce the use of clothing material. The fact remains that the measures adopted by the Department of War Organization of Industry created confusion in the public mind. Perhaps the Government desired such a result in order that the attention of the people might be diverted from its other blunders.

I admit that the allocation of manpower under existing conditions is most difficult. Had we approached this problem by dividing the population into the three groups I suggested earlier in my remarks, our difficulty in this respect would not now be so great. Practically every member of the Parliament has emphasized the necessity for releasing men from the armed forces in order to maintain adequate food production. We have also stressed the necessity for the greater diversion of man-power to factories engaged in supplying clothing and. equipment to the armed forces. Without proper clothing and equipment the soldier is useless. Similarly, adequate food supplies must be kept up to our armed forces. The armed forces and the primary industries have received the least consideration of all sections in the community. Certainly, slight increases of soldiers’ pay have been provided, but the position of the soldier is not to be compared with that of the factory worker who has been given many industrial concessions and continues to enjoy the amenities of home life. In addition, the claims of the primary producer for greater help on the farm have been almost entirely disregarded. Yet we are dependent upon the farmer for our daily bread, the staff of life. The wheatfarmer, for instance, has been obliged to shoulder difficulties arising from the failure of the Government to stabilize the wheat industry. In addition he is now refused payment by the Government for wheat which has been delivered to the Government. I refer to wheat pools Nos. 2, 3 and 4, each of which has been finalized. Delivery in respect of the wheat in these pools has been taken from the farmer and the Government has received payment for the wheat, yet it withholds payment of £2,000,000 due to the farmers for such wheat. Can any feasible reason be given for the Government’s failure to make the final payments from these pools? Six months ago the Minister for Commerce (Mr. Scully) announced that so soon as the last payment in respect of this wheat was received by the Government it would be distributed.

Senator Fraser:

– Is the honorable senator referring to the excess production of 13,000,000 bushels?

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– No, I am referring to pools Nos. 2, 3 and 4, each of which has been finalized. In respect of the excess production of 13,000,000 bushels to which the Minister for External Territories (Senator Fraser) has just referred, which relates to No. 5 pool, I cannot understand why the Government is not prepared to make payment on that production at the rate of 3s. 101/2d. a bushel, the figure guaranteed in respect of the base production of 140,000,000 bushels. The crop of 140,000,000 bushels was estimated on the acreage licensed. However, owing to a very favorable season, that estimate was exceeded by 13,000,000 bushels. The Government took delivery of that excess production, but so far it has failed to indicate what payment, if any, it will make to the farmer in respect of it. At one stage, the Government intimated that it would deal with this matter by spreading the guarantee for the estimated crop of 140,000,000 bushels over the total actual crop of 153,000,000 bushels.

Senator Ashley:

– Was not an agreement reached on that matter between the wheat-growers federation and the government of the day?

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– As I have already said, this matter is still under discussion. I urge the Government to pay for the excess production of 13,000.000 bushels at the guaranteed price of 3s. 10-1/2d. a bushel. Incidentally, it has been estimated that approximately 500,000 bushels was produced by certain growers on unregistered acreage, and I understand that the Government proposes to pay for that wheat at the rate of 2s. a bushel. In view of the fact that that wheat was produced on land that was not registered, such a proposal is to say the least audacious; particularly when the Government refuses to give the fair guaranteed price of 3s. l01/2d. in respect of excess wheat produced on registered acreage solely because of very favorable seasonal conditions.

Senator Fraser:

– The Government has not declared that it will not make a payment in respect of that excess production.

Senator JAMES McLACHLAN.

The fact remains that it hasnot promised that it will make a payment in respect of that wheat.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Did nor the Minister give a promise that a payment would be made in respect of that wheat ?

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– No. Reverting to the problem of releasing man-power from the armed forces for urgent primary production, one cannot helpbut notice considerable overlapping in this matter. It is most difficult to obtain the release of a member of the armed forces for this purpose. Generally speaking, one realizes the difficulty of providing for any general release of manpower for primary production. However, no such difficulty should exist when specific applications are made to meet specific shortages of man-power on certain farms. T can give many instances of disappointment in this respect. When I applied for the release of one man I was first told that he could not be released because he was a member of an armoured unit. Next, I was told that he could not he released for work in a certain district because he had to remain within 24 hours’ journey of his unit. Then I Was told to interview the district man-power controller in order to find out whether sufficient man-power was not available in the particular district. Some of the anomalies are ludicrous. For instance, I might mention the case of a member of the fighting services who sought temporary release in

Order to shear his own sheep, which were being looked after by his aged father. After pressing this matter for a fortnight C was officially informed that my request could not be granted. I forwarded that information to the father of the man concerned, and to my surprise he replied that his son had been released and was actually shearing his sheep.

Price fixing is another subject which has been agitating the public mind. The price-fixing system., as far as I can gather, is also based on wrong premises. Whenever the price of an article is to be fixed, the Commissioner starts off by taking into consideration what the consumer is going to pay for it. Next, he takes into account what the middleman is to receive. After finishing with him, he calculates what transport is to cost, and then fixes the price, but he does not care about the man producing the article because that poor fellow does not come into the matter at all. We have heard a good deal through the press of complaints by the Prime Minister (Mr. Curtin) about criticism. Some matters call for criticism. I can cite cases where it has been of benefit, because it lias brought redress. Firewood is an example. Its price has been fixed in South Australia, and probably in other States also. It was a burning question for some time in my own State. We were in trouble this year because many in the metropolitan area had to go short of wood for warmth and cooking purposes, but the shortage was even more serious in the irrigation settlements along the river Murray, where a number of industries use steam power. These were practically at a standstill, but the Prices Commissioner went to Adelaide and fixed firewood prices, . with the result that we got a good deal of satisfaction. It was a little late in tue season so far as providing the city with firewood was concerned, but the industries were kept going in the country, and a certain amount of assistance was given to city people. That was a case where criticism was quite useful, and had the desired effect.

A few days ago I asked a question about citrus fruits and received from the Minister a reply for which I do not blame him personally, because I do not suppose he knows very much about the subject. It was a departmental reply, containing, inter alia, the following assertions: -

This price was higher than the prices paid in previous years for fruit of similar quality. The fruit in question is not fruit nominally sold in the open market, and, in Now South Wales, State legislation actually prevents its sale in the open market.

The facts are that a great number of citrus-growers along the river Murray in South Australia, the majority of them returned soldiers, have been struggling for a number of years on their blocks. They were repatriated just after the last war, and have not been able to reach any great condition of affluence. They have been trying for many years to find a market for their citrus fruits, and have, at their own expense, experimented with shipments of oranges to England, and have even lost money on many consignments. This year has been favorable, prices tending their way. Oranges have gradually gone up in price, and have been worth from 8s. to 10s. a case. The price- fixing system was applied. The military authorities wanted a certain quantity of oranges for the troops, and commandeered them -at £10 10s. a ton, or about 3s. ‘6d. a case. In the reply I have just quoted, it was said that the oranges in question were not of the quality normally sold in the open market. That is a nonsensical assertion. I saw the oranges being bagged at the river settlements, and they were quite equal to what I saw marked up in Sydney several days ago at 4d. each. Criticism, of course, comes in here again. Since it has been publicly made, the Prices Commissioner has been good enough to raise the price from £1.0 10s. to £15 a ton.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– What happened to the fellows whose oranges were taken at £10 10s. a ton?

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– They have no chance of getting the higher price. The department shelters itself behind the assertion that we have now used up the inferior fruit, and are dealing with the better quality article. I do not know what happened in New South Wales and Victoria, but, as I say, I saw this fruit being bagged along the river Murray settlements, .and it is all “hooey “ to talk about its being second rate, because it is quite good.

Senator Ashley:

– Were the oranges Valencias?

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– They were both Valencias and navels.

We now hear of a proposal to control meat prices, and to curtail flocks. To talk about controlling meat prices in this country is to my mind simply ridiculous. There is no necessity or reason for meat prices to be controlled. We have plenty of meat. There has been no shortage of it, nor will there be in the future. In saying that, I am talking about the whole of Australia, and the figures T shall quote are taken from the last. Commonwealth Year-Book.

Senator Keane:

– They are too old. Large numbers of cows have been killed in the interim.

Senator JAMES McLACHLAN We slaughter in Australia every year 4,000,000 head of cattle, small and great, nut of which. 1.000,000 head used to be exported as meat. We have little or no shipping available now, and must therefore make up our minds to use in Australia the greater proportion of the 1,000,000 carcasses which used to be sent overseas. According to the Commonwealth YearBook, we have from 120,000,000 to 1.25,000,000 sheep in Australia, and probably by Christmas time they will have increased by 50,000,000, so that no shortage of mutton is at all likely. Perhaps for the time being, say, up to a few months ago, we had practically a drought in many districts, and it is usual at this time of the year for meat prices to rise on account of the shortage of supplies, but directly we shall find ample supplies available, and there is therefore no reason to interfere with meat prices.

Senator Keane:

– Retail meat prices are the biggest racket in Australia, with lamb at ls. Id. per lb. retail, and the grower receiving about 2d. Laugh that one off!

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– That is a real indication of the effects of price fixing. The Minister would give to the producer of lamb 2d. per lb., and sell it to the people at about Sd.

Senator Keane:

– I am telling the honorable senator what has happened, and it is going to be stopped. If we cannot get the meat, we will seize it.

Senator JAMES McLACHLAN.The Government has the power for the time being, but will be playing with fire if it begins to handle the flocks and the meat of Australia. There is also a proposal on foot for the curtailment of our flocks. That is another task undertaken by the Minister for War Organization of Industry (Mr. Dedman). A reduction, of flocks would be not only a grave mistake so far as the future of this country is concerned, but also a breach of contract with the Imperial Government, which has undertaken to buy. not merely some of our wool, but all of it. If we curtail our flocks then obviously we shall find it necessary to curtail the quantity of wool supplied to the United Kingdom. Why should our flocks be curtailed? It is well known that the prominence that this country lias achieved in the eyes of the world has been due almost entirely to the sheep industry. What other industry in Australia returns £70,000,000 a year? I understand that one reason given by the Minister for War Organization of Industry for the curtailment of flocks is that with flocks at their present high numbers a drought would result in the loss of many millions of sheep. I admit that a proportion of our wool is grown on low rainfall country, and that severe losses are sustained during periodical droughts, but I point out that there is something else in the back country which should he taken into consideration, namely, the rabbit pest. If the Minister withes to reduce anything, let him reduce the rabbits. It is estimated that ten rabbits eat as much as one sheep, so that for every ten rabbits that are eradicated, an additional sheep can be grown. Rabbits do more harm to our pastoral lands than has ever been done by overstocking, and I urge the Government to give some attention to this problem. The action taken last June, when the export duty on rabbit skins was raised from 9d. per lb. to a maximum of 2s. 6d. per lb. was very detrimental to the eradication of rabbits. I also point out to the Minister for War Organization of Industry that, flocks have not increased to any degree in the marginal areas. The increases have been due to She application of scientific pasture improvement, the growing of clover and other grasses, and the use of superphosphate. Such improvements can be carried out only where there is a rainfall of from IS to 22 inches, and the Minister can rest assured that droughts do not occur in those areas. Unfortunately, the restricted supplies of superphosphate will have a detrimental effect upon pasture improvement. We should bear in mind what happened at the end of the last war when we had hundreds of thousands of bales of wool in Australia and in Great Britain worth only about 6d. per lb. Some “ wiseacres “ even urged that the surplus wool bc tipped into the sea so that the new clips could be sold. However, only r few years elapsed before wool soared to new record prices. Wool is not subject, to destruction by pests such as weevils, and will keep almost indefinitely. I am certain that when this war ends the world will be wool-hungry. If the Minister wishes to decrease our flocks, let him do so by canning or dehydrating mutton. He and his colleague, the Minister for Commerce (Mr. Scully) - both would-be giants of organization - should realize that primary production depends entirely upon seasonal conditions which cannot be controlled. They would be well advised to leave things as they are at present.

This budget is a remarkable document. Its preamble indicates that its sponsors ill ave a full knowledge of the importance, magnitude, and urgency of the tremendous task which confronts them. It makes an appeal for austere living, and demand.? that every one shall accept his responsibility towards the war effort. It warns the people distinctly that as little as possible of war debt should be left over, so that post-war problems will be lessened ; it also distinctly warns the people thai the use of what is called bank credit must become eventually a responsibility and a burden upon the people. It admits that, sooner or later, inflation must be paid for by the people. However, in spite of those definite statement.?, the budget contains almost, a direct repudiation of the principles propounded in the preamble. One has to agree with the following summingup contained in a leading article in tho Sydney Morning Herald a few days ago:-

Unhappily, Mr. Chifley’s budget stands condemned by the standards that he himself lays down.

It would be fitting to apply to the Treasurer that famous saying by John Armstrong -

Of right and wrong he taught truths »s refined as ever Athens heard; and (strange to tell ) he practised what he preached.

It is a pity that, the Treasurer does not practice what he preaches in this budget. The object of budget debate? in the past has been to ensure a judicious spending of revenue, but the main consideration of this budget is the raising of money for a specific purpose; we are endeavouring to purchase life and freedom for om selves and our allies. We are not fighting for territorial gain; we are not fighting for anybody else’s country; we are fighting for the right to continue living in the way we choose. Life and freedom are just as dear to the man who lives in the cottage as they are to the man who lives in a mansion. At no time in our history has spending power been greater than it is to-day. It is estimated that our national income has now reached the colossal figure of £1,000,000,000 per annum. Trade of all descriptions is unable to meet public demands. Places of entertainment are crowded and racing clubs report record attendances and record totalizator figures. It is said that lottery receipts have fallen, but tickets are still so much in demand that they are passed over the counter almost before the. ink on them is dry. Yet the Government. cease making requests to the people in regard to loans subscriptions; let it make demands. As a democratic people, are we to allow overlords like Hitler and Mussolini to show us how a nation can be organized? Let us make it clear to these men that as a freedom-loving people we are capable of making a war effort better than that of any fascist country. The main plank of a democratic platform is “ Trust the people “, and I believe that we must trust the people. But as the elected representatives of the people, we should realize our heavy responsibility with’ regard to the future welfare of this country. When the occasion demands it, unpopular things must be done.

This is the second budget brought down by the present Government. In presenting its first budget, it asked that £210,000,000 be raised by loans and war savings certificates. An appeal was made to the people and the Prime Minister (Mr. Curtin) used all the eloquence he could command, yet he fell short by £80,000,000 of the goal at which ho aimed. On the present occasion, he must appeal for £300,000,000. He knows that last year his appeal fell on deaf ears, yet to-day he thinks it will be easy to get double what was obtained by means of loans last year and eight times the amount that was raised by means of War savings certificates. It must be admitted that last year there was a falling off in the purchase of war savings certificates. The Prime Minister has been out on his austerity campaign, and in his appeal to the people he has asked wage-earners to save 3s. a head a week. I take it that that is the right honorable gentleman’s idea of what the people are able to do. He would not ask them to give more than he knows they are able to give. If they are able to save 3s. a week, why does he not see that they give it. It is not a matter of asking; Australia must have the money. If we do not get it from the people, it must be raised by means of what is known as central bank credit.

There are in Australia 2,780,000 persons whose average income tax amounts to only £8 8s. a head, and their total earnings are nearly £600,000,000 a year. If every taxpayer contributed an extra 3s.a week, a considerable sum of money would certainly be raised, but I shall suggest to the Government a different method. The salaries or wages of the 2,780,000 persons who earn about £600,000,000 range from £100 to £400 a year, and they contribute in tax only £23,500,000, or an average of £8 8s. a head. Of this number, 450,000 earn £30,000,000 a year, but their incomes amount to £100 a year or less. Persons earning from £100 to £150 a year number 400,000, and I would tax them at the rate of 2s. a head a week, or about the equivalent of the value of one packet of cigarettes. They would then contribute to the finances an additional £2,080,000. There are 450,000 persons earning from £150 to £200 a year. I would tax them at the rate of 4s. a head a week, which would give £4,680,000. I now come to the 1,480,000 earning £430,000,000 per annum. Those I would tax at 8s. a head a week, which would yield extra revenue to the amount of £30,794,000, making a total of £37,554,000. That is only an average of 6s. a head a week, spread over the three classes to which I have referred. If our people were taxed at the same rate as in New Zealand, the sum of £73,000,000 would be raised, which is about £10,000,000 less than the amount that would be obtained if my suggestions were adopted.

Senator Lamp:

– But we should not have the social benefits for which the people of New Zealand are paying.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– I have not dealt with the 450,000 persons in receipt of incomes of £100 a year or less. I have started with those earning between £100 and £150 a year, and I ask from that group only the value of a packet of cigarettes a week.

Great exception has been taken to the proposal of the last Government for the establishment of post-war credits, but, as we are taking from the soldiers an amount equal to about £14,000,000 a year, surely the munitions workers and others receiving good wages should be prepared to make some sacrifice. It seems that the national credit is to be expanded considerably. We increased it last year by about £80,000,000, which brought the total to about £150,000,000. I realize that it is necessary to use even this method of finance in certain circumstances. We are told that it can be safely resorted to up to a certain amount, but 1 have never heard what the safety limit is. Senator Darcey told us a few days ago that the banks do not lend their deposits, but that is absurd. The banks lend money, and they have only three sources from which they can lend ittheir capital, their reserves and their deposits. They have been known even to lend on their credits. I have no doubt that, up to a certain point, they fix a safety limit. We remember the financial tragedies that occurred a few years ago in connexion with our banks. A few years ago the banks throughout Australia were at breaking point. At that time they had resorted to credits far exceeding the amount of their deposits. Once a nation extends its credit beyond the productivity of the country, it sails dangerously close to the wind. The Commonwealth note issue has increased to such an amount to-day that we are approaching the clanger point. During the last twelve months, it has been increased by £33,742,000. If it is increasing at What rate, the stage may be reached when the notes will not. be worth anything like their face value. Addressing a meeting of returned soldiers in Sydney recently, the State Governor spoke of inflation, and reminded his audience that, after the last war, a big brewery in Vienna, which had for its trade mark a representation of a 100-mark note, used genuine 1,000- mark notes as labels on bottles, following the depreciation of the mark, because they were practically worthless, and cost less than the printing of sham notes. Instead of pleading for the money that it needs, the Government should follow the example of Great Britain and take from the people by means of taxes the money that it requires. In this respect, Australia is far behind Great Britain and New Zealand. In Great Britain, a nian with an income of £120 a year has to pay £7 1.0s. to the Government; the position in New Zealand is much the same. In both countries, the taxation is much heavier than in Australia. Since the war began, New Zealand’s war expenditure has been £S1 7s. Hd. per capita, compared with £63 9s. lOd. in

Australia. Had the people of Australia been taxed on the same basis as their kinsmen in New Zealand, the £80,000,000 of national credit required last year to finance the war would have been provided by the taxpayers, and we should have had about £40,000,000 in hand. For the present financial year, New Zealand has increased its taxation on 1,500,000 people to a greater degree than has Australia on its ‘population of 7,000,000 people.

Senator Collings:

– Does the honorable senator know that, for those heavier taxes, the Government of New Zealand gives back to the people six times as much as is returned to the people of the Commonwealth?

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– Practically the only taxation imposed on many of the people of Australia is indirect taxation. There was a time when I thought that indirect taxation would become a thing of the past, should a Labour government ever occupy tb« treasury bench.

Senator Collings:

– Is the honorable senator aware that Japan has entered the war against us?

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– I am well aware of that fact. Indeed, I regarded Japan’s entry into the war as a distinct possibility long before that country actually took up arms against us. In. 1939, when the budget provided for a war expenditure of £14,000,000, the then Leader of the Opposition (Senator Collings) asked, “Where is the enemy; whom are we to fight; why is the money necessary ? I am aware that Australia is at war. and was at war long before Japan took up arms against us. 1 agree with the Government that indirect taxation is all right.

Senator Collings:

– The Government does not say that it is all right, but that under existing conditions it is inevitable.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– I repeat that indirect taxation is all right. The Government has not gone far enough in imposing such taxes. The way in which picture show3 in Australia are flourishing is evidence that the Government has not gone far enough in taxing them. There are in this country 1,500 picture shows, at which the average week-night attendance, exclusive of Saturday nights, is 350,000 people. As it is estimated that 1,000,000 people attend picture shows every Saturday night, that means that each week the attendance at such shows totals 3,750,000 people. The average price paid for admission is1s. 6d., so that £137,500 a week, or over £7,000,000 per annum, is spent on this class of entertainment. Those figures show that the motion picture industry has not been taxed sufficiently. I would impose heavier taxes on such entertainments.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Are the picture show proprietors taxedat all?

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– Only through the company tax. It might be well to tax the picture shows as well as those who attend them.

The budget speech contains a reference to a proposal to submit certain proposals to the people by way of a referendum. Although I am of the opinion that the Constitution needs to be overhauled, I do not think that the time is ripe for that overhaul. Other matters of much greater importance should be occupying our attention. Under the National Security Act, the Government can obtain all the power that it wants.

Senator McBride:

– It is doing all that it wants to do.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– Not yet; but I am afraid that that time will come. For the time being, the Government should shelve its proposals to hold a referendum. “When the time docs come to consider an alteration of the Constitution, there should be a national convention along the lines of the convention held over 40 years ago.

In conclusion, I shall summarize my comments. It is the responsibility of the legislators in this Parliament to stir the people to a realization of the nation’s peril. The Opposition strongly objects to the vague and dangerous financial proposals of the Government in relation to the raising of the necessary war funds. We advocate a wider and more equitable system of income taxation, and a scheme providing for post-war credits or compulsory loans. We urge the Government to forget “ electioneering budgets “ and to substitute sound “ sincerity budgets”. In preference to the Government’s proposals for an alteration of the Constitution, we advocate that a national convention, free from party political interests, be called at the appropriate time in order to review the Constitution. I voice a grave warning of the catastrophe which will confront the nation should the Government persist with its present financial proposals. I repeat the Opposition’s appeal for one army, with one set of conditions and equal responsibilities. I reiterate our appeal for a national all-party government. Let the Government give to the people the real lead for which they are looking. Let it abandon the peace-time practice of sectional politics. The people will then eagerly rally around it.

Senator CAMERON:
Minister for Aircraft Production · Victoria · ALP

– During the budget debate in this chamber and in the House of Representatives, and, indeed, in the political arena generally, much has been said on the subject of inflation. However, so far as I have been able to ascertain, no effort has been made by any speaker to define precisely what inflation means. All of the criticisms and condemnations of inflation have been uttered in general terms which make it very difficult for intelligent and discriminating people to understand exactly what the critics are driving at.

SenatorCollings. - They do not understand themselves.

Senator CAMERON:

– They may understand; but my complaint is that, in view of the importance of the subject, and as it is emphasized so frequently, and so vigorously, one would think that these critics would tell us exactly what they believe inflation to mean.

Senator Gibson:

– It means depreciation of currency.

Senator CAMERON:

– That is correct up to a point. Addressing a gathering in Sydney yesterday the Governor of New South Wales, Lord Wakehurst. aid-

To a great many people inflation is just an economic term, but some ofus recall the disaster which it brought about in Europe after the last war.

Apparently, His Excellency comes within the category of those who generalize on this subject. Senator Gibson just interjected that inflation means depreciation of currency. I agree with him; but it means something more. It means the issue of money in excess of, or below, its gold value. When money is issued in excess of its gold value, the result is inflation; and one reason why gold is not allowed to circulate to-day is in order that inflation can be adopted intentionally without letting the people know to what degree the currency is inflated.

Senator McBride:

– What determines the gold value?

Senator CAMERON:

– Labour and the price of gold provide the index by which we can gauge the degree to which the currency has been inflated. Although we are at present off the gold standard, gold is still the measure of value when we compare and adjust different currencies. For instance, if we can compare the value of a ship-load of wheat with that of a shipload of coal, we do so always in terms of gold. Regardless of how governments may manipulate their currencies - the various forms of money in notes, coins and cheques - the relative value of these currencies will show their purchasing power in relation to a definite quantity of gold. For instance, before the last war an ounce of gold was worth, say, £4. With £4 one could then purchase a very good tailormade suit. To-day, with an ounce of gold, which is worth about £10 10s., one can also purchase a very good tailormade suit. Although the price of the suit has been increased in terms of a depreciated currency, gold is still the measure of value. I do not think that that can be denied. What I am leading up to is this: While honorable senators opposite are now warning the Government against inflation, the previous governments, which they supported, inflated the currency. In the words of Senator Gibson, it depreciated the purchasing power of money. Thus, the present. Government has inherited an inflated currency whereby the purchasing power of money has been depreciated by fully 60 per cent., that is, if we take the price of gold as the basis of comparison. We must remember also that, at present, the price of gold is pegged at £10 9s. 6d. an ounce in Australia, £8 8s. in Great Britain, and approximately £10 in the United States of America.

Senator McBride:

– Why does not the honorable senator argue out this matter with the Treasurer?

Senator CAMERON:

– If I succeed in helping the honorable senator to form some intelligent idea of the problems which confront us to-day, I shall be amply rewarded. In these days of unprecedented dangers, the time has long passed when we can afford to tolerate too many political clowns in Parliament. We should approach these problems not in levity, but dispassionately and courteously with the object of trying to find out exactly where we stand with regard to them. Our currency was inflated by not only the previous Government but also its predecessors. Gold value is the standard by which we measure inflation. To-day £2 10s. in our depreciated currency will purchase only what £1 would purchase in 1914. Suppose, for instance, 1 had a bank-note worth a sovereign, and I wanted to purchase a pair of shoes now priced at £1. If I handed over my banknote worth a sovereign, I would receive a pair of shoes and 30s. change; and the shopkeeper’s profit would not be reduced in the transaction. This cannot be denied. There again is proof of “inflated currency. The gold value of the £1 note to-day is at most 8s. as compared with 20s. in 1914. A man earning £10 a week now actually receives, in terms of gold value, only £4. Therefore, when honorable senators opposite speak of high wages, I ask them to keep in mind that there is arising in Australia and Great Britain a position similar to that which happened in Germany. Although there is more money in circulation, it is depreciated money, and will not purchase any more commodities than did the previous currency. In terms of commodities, such as housing, food and clothing, the basic wage to-day in my judgment is lower than it was in 1907 when it was first fixed, and lower than it was prior to the last war. Another important aspect of the present situation is that the capital value to investors, particularly to small investors, of debentures and inscribed stock has been depreciated in terms of gold by fully 60 per cent.

The people were condemned in May of this year for participating in what was regarded as a spending orgy, but the fact that the currency was inflated, and it was felt, and rightly so, that if the money was not spent in. commodities of intrinsic value it was likely to be valueless, was responsible for a feeling in the minds of the people that it was wiser to spend it.

Senator McBride:

– They had lost confidence in the Government’s currency.

Senator CAMERON:

-The people refused to be fooled and robbed bya depreciated currency, in the creation of which the late Government played an important part. Even rationing is a proof that the currency has depreciated. Where there is an orgy of spending, and rationing is resorted to, it is perfectly clear that there is in circulation much money in excess of the gold value of the articles to be purchased. The amount of money which can be used is what is required, at its gold value,to settle the total transactions at the time, and where that amount of money is in excess of its gold value you find depreciated currency and increased prices.

In my judgment those who talk about inflation confuse what we call finance with what we call economics. Finance has everything to do with money transactions, and the manipulation of money against wages, small salaries, small business men and so forth. Economics has everything to do with the production and distribution of wealth, so the point I want to emphasize as vigorously as I can is this: The Government is being embarrassed every day in the week; the embarrassment is going to become worse as the result of the way in which the currency has been inflated by previous governments, and we are rapidly reaching the point where deflation may be resorted to with disastrous results. That may occur if we are not prepared to take action against those responsible for, and those who benefit by, inflation, the people are going to suffer very much indeed, and we shall have both in Australia and Great Britain a position similar to that which occurred in Germany during the years 1922 and 1923. I am emphasizing this matter so that it may be said that at least one member of this Parliament directed attention to the fact that inflation had been resorted to by previous governments, and had resulted up to date in the depreciation of the purchasing power of the £1 note, the 10s. note, and coins in circulation, to the extent of 60 per cent., and that, if the position be not adjusted at the expense of those responsible for and benefiting by inflation, the people are likely to suffer even worse than they did during the depression years.

Senator Spicer:

– What is the honorable senator going to do about it?

Senator Gibson:

– Inflate more.

Senator CAMERON:

– I know honorable senators opposite would like us to inflate more. The intention behind that interjection is to try to manoeuvre the Government into an impossible position in that respect, with the blessing of the Opposition, but I can assure them that we are no mere neophytes or children in politics, and it will not be done. Before there is further inflation so far as I am concerned, there will be a capital levy in cases where the money is available, and where the money is not available, but real estate worth millions of pounds exists, there will be compulsory mortgages. That is what is likely to happen and it will be one of the best antidotes for inflation that I know that is, a good stiff capital levy, and, failing the capital levy in terms of money, compulsory mortgages where the money has been put into property of all kinds.

Senator Gibson:

– Who would the mortgagees be?

Senator CAMERON:

– The Government.

Senator Spicer:

– What will they get in exchange?

Senator CAMERON:

– The Government may own the properties eventually. It is not unreasonable to ask honorable senators opposite to participate in sacrifices at least equal in extent to those made by the men in the front lines and in the workshops. Honorable senators opposite are not prepared to do that. So far as they are concerned this is not an austerity but a prosperity campaign. They want to capitalize, as they did in the last war, the sacrifices the men made in the field of battle. It is time they were told what their duty is. It is high time that we exposed the humbuggery, hypocrisy and specious pleading in which they indulge, and let them know exactly where they stand as compared with the two important groups, those in production and those in the fighting line, not in sheltered positions such as honorable senators opposite occupy to-day, criticizing a government which is doing its best in the most difficult conditions possible, in spite of all the obstacles they have raised, all the white-anting they are trying to do, and all the whispering they are indulging in. They pose as ultra-patriots and men who would lead the nation. If I desired to indulge in personalities, I could use much harsher terms with ample justification.

The monetary or financial problem of financing the war should not be one of great magnitude, provided that the necessary man-power and materials are available. A war is not conducted by money itself; money is simply the medium by means of which the commodities needed by those who are fighting or working are exchanged. Therefore, so long as we in Australia have sufficient man-power and materials at our disposal, there should be no difficulty in financing the war to the very limit of our resources. Yesterday, Senator Lamp directed attention to the economic resources of India. He pointed out that had those resources been developed to the extent that they should have been the Empire would have been in a much, stronger position than it is to-day. That contention is unanswerable, and is supported by some of the best authorities, not only Indians, but also Englishmen who have studied India and are qualified to speak with first-hand knowledge. What Senator Lamp said of India can be said also of Australia. Had Australia’s resources been developed to the degree that they should have been, particularly during the depression years, we could have played a bigger part in the defence of the Empire than we are playing now. Unfortunately, our resources were not developed,, for the same reason that India’s resources were not developed. There is a school of thought in Great Britain and in Australia which, in the past, has made every possible effort to retard the development of our secondary industries. I remember quite well that on one occasion in this chamber prior to the outbreak of war, Senator James McLachlan, in replying to an interjector who asked why ships were not being built in Australia, said that we could buy ships cheaper overseas. He said, “ Why should we pay more per ton for ships built in Australia than we were paying for vessels obtained from overseas?” That same school of thought which the honorable senator represents has been responsible for holding up much valuable work that could have been done in this country. For instance, the standardization of railway gauges would have been of incalculable value from a defence point of view, but it was not done ‘because shipping and other interests which would- have been affected, were too strongly represented in this Parliament. Yet some of these men to-day are posing as our leading patriots, and have the audacity to brand some unfortunate striker as a traitor to his country. If we could weigh these actions on the scales, we should find that some of the interests to which I have referred have done more to make it impossible for this country to defend itself than 100,000 strikers could do. We should not forget that school of thought because it still exists in Great Britain and in Australia, and none knows it better than those who have been privileged to negotiate with overseas and Australian interests in regard to the future development of our secondary industries as a war-time necessity. When the history of this war is written, the negotiations that have been conducted by this Government in that regard will come as a surprise to many people.

It has been argued that as the group of people earning less than £400 a year represents 90 ,per cent, of Australia’s income-earners, on that group should rest the main responsibility for providing war finance. The main reason why honorable senators opposite advocate the taxing of low incomes is to make sure that it. will not be necessary to tax high incomes any more than they are taxed to-day. I point out, also, that £400 to-day is equivalent to only £160 in gold. When we speak of financing the war, we should hear in mind the degree to which our currency has depreciated.

I come now to the cost of living. I preface my remarks by stating that there is a difference between what is known as the cost of an article, and what is known as its price. The cost of producing a commodity is very different from the price charged for it. In terms of labour-time or gold, costs of production have never been lower than they are ro-day, and they are continuing to fall to the degree to which our methods of production become more efficient and more economical. Real costs are falling all along the line. That will not be denied by any one who examines this question as closely and critically as it should be examined. Most people confuse prices with costs. The rationalization of industry which was given effect extensively during and after the last war, and much more during the present war, has done more than anything else in recent times to reduce the cost of production in labour time and in terms of gold, yet prices are increasing.

Whilst a good deal has been said about increases of prices, not much effort is being made to establish the relationship which could be shown between cause and effect. Why are prices increasing? They can be increased by restricting production, which is the policy adopted in recent years. That is the policy of the privately controlled monopolies, not only in Australia, but also throughout the world. These monopolies restrict production, with the object of keeping up prices. Another way to increase prices is to increase the capital charges which are included in and collected through prices. For example, as the result of rationing, traders found that they were not able to do as much business as previously, but their capital charges in the form of high rente remain the same, and prices were increased to enable them to pay their way. In the capital cities those charges are exorbitant. Rents, overhead charges, interest on capital, and directors’ fees are still as high as ever. When the Prices Commissioner examines the costs of trading concerns, and is told that they cannot sell their products at the prices previously charged, price increases are authorized. If an attemptbe made to increase prices beyond a certain level, much more trouble in industry will be caused than can be coped with. Although the average worker may not realize how much he is being robbed as the result of increased prices, and particularly under the price-fixing policy laid down by the last Government, there is a-, limit to the degree to which this policy can be applied. The time will comewhen it will be necessary to reduce all capital charges which are included in and collected through prices, and that is the last thing which honorable senators opposite would do. Instead of that they would tax the lower incomes, in order to save the class which they represent from loss of rent, interest or profit. Their watchword is, “ Save us by taxingothers “.

Depreciation of the currency is oneof the causes of high prices. If we produced a commodity valued at one unit, and issued money valued at one unit, on the principle of value for value, therewould be no increase of price; but, if we issued two units for the one article, the price would be increased 100 per cent.,, and all the price-fixing authorities in the world could not prevent it. The orgy of spending in May last was largely the result of the increased velocity of the circulation of money caused by the depreciation of the currency. If we issue worthless money, prices will rise, whetherwe like it or not.

Senator Gibson:

– That is so.

Senator CAMERON:

– The .Government which the honorable senator supported is responsible for that. Some of” the shrewdest and most successful scoundrels that this country has ever produced were associated with the last Government in giving effect to this policy, sothat they could continue to do what they had done in the past, and build up monopolies at the expense of the wage-earner,, the small farmer, and the small business man. That is why, in all our capital pities, and particularly in Melbourne and Sydney, there are palatial offices and’ residences costing millions of pounds,, whilst thousands of workers live in t,hesame hovels as have been occupied by them for the last 40 years.

Senator Gibson:

– That is good Yarra bank stuff.

Senator CAMERON:

– It would havebeen an excellent thing if some of thosewho base their beliefs on assumptions that have been instilled into them by theschool of orthodoxy attended a few meetings on *be Yarra bank as an intellectual corrective. Had I the power to conscript, that is -the first direction in which I should use it. The Yarra bank is a university of adversity, as contrasted with the institution with which Professor -Copland has been associated. I do not wish to reflect on 11 im or any other economist. They are but the creatures of the school in which they have graduated. As they have been taught, so they act. In the economic classes in the universities of Sydney and Melbourne students are taught the fine art of exploiting and impoverishing the working class for the benefit of the capitalist owners of -the means of production. Prices are fixed so that the workers and their children may not have more to eat and wear than they have had in the past, or enjoy more of the amenities of life than can he helped. That is the whole system.

Senator Spicer:

– Is the Prices Commissioner not employed by a Labour government?

Senator CAMERON:

– Yes. Notwithstanding that I may disagree with his theories of economics, I have sufficient confidence in Professor Copland to believe that if he were given the task of dealing with the capital charges that are responsible for increased prices, he would do the job as thoroughly as any other man would do it. I trust that I ha.ve made the position perfectly clear; but if any honorable senator opposite requires certain points to .be further elucidated I shall do my best to give the information desired.

In advocating a system of compulsory loans, the Leader of the Opposition said that as it is compulsory for men to fight so it should be compulsory for others to lend. In order to assist in winning the war I am prepared to go farther, and to make certain that those who ‘are best able to pay shall pay. If that, section of the community were called upon to pay according to their ability to do so we in this Parliament should begin by reducing our own parliamentary allowances as an example to the rest of the nation. On previous occasions I have said that before any person with an income of les3 than £500 a year is taxed all persons with incomes in excess of that amount should bc taxed down towards the £500 level. I still hold that that is the proper thing to do. If we are to have equality of sacrifice financially, we cannot justify one person enjoying a much higher income than that of a man who is fighting to defend the nation, or the worker who is providing the nation’s needs. I use the term “ worker “ to include technicians and all engaged in essential work. Just as in a shipwreck, preferential treatment in respect of males is not allowed, so in time cf war we should not allow one person to escape taxation whilst others are being hard hit. .1 have not heard anything to convince me that I should change my opinion in this connexion, but. by way of compromise, where the currency has been depreciated, we could say that no one in receipt of an income under £1,000 should be taxed until all persons with incomes exceeding £1,000 are taxed down towards that level.

Senator Spicer:

– The yield from incomes above £1,000 would not be much.

Senator CAMERON:

– That has yet to be proved. During this debate some honorable senators have advocated the establishment of a national government. When I endeavoured to ascertain what they meant I was told that a one-party government was intended. I submit that we cannot have a national government in the true sense until all managerial and working staffs associated with essential industries are directly responsible to the Government. It would not be a truly national government if the policy laid down by it were opposed by boards of directors of essential industries under private control, or if such persons were able to say, as they have said, that they are not prepared to carry on except on their own terms, and were able to dictate to the Government.

Senator Leckie:

– Have they been dictating to the Government ]

Senator CAMERON:

– They have attempted to do so. If I had taken the action that I desired to take in order to prevent them, some of them would be in gaol now.

Senator Leckie:

– That should not have stopped the Minister.

Senator CAMERON:

– It did. stop me, ljec.au.se I believed that iu a democratic country I ought not to adopt a Hitlerite attitude ‘by acting without, the agreement of not only my colleagues but also, if possible, honorable senators opposite. In this connexion I believe that the longer the war lasts the greater will be the need to take into consideration the necessity to deal with people in control of industries, who would be a law unto themselves unless prevented. At the moment I am stressing that there cannot be a truly national government where there is divided control of essential industries. Even a so-called national government would have in it representatives of the “ haves “ as well as of the “ have-nots “. So long as there is divided control in industry there cannot be complete unity of purpose politically for any considerable length of time, whether or not the Government in office is styled a national government. It would still be a camouflaged party government.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Is the Government of New Zealand a camouflaged party government?

Senator CAMERON:

– I do not happen to live in New Zealand, and I cannot speak with first-hand knowledge of the situation there. Moreover, I know far too much about the gentlemen who express the views of the owners of industry through the medium of the public press to’ take too much notice of what is published in newspapers. If I were called upon to express an opinion of what is happening in New Zealand or Great Britain, before doing so I should require more knowledge of actual conditions in those countries than I now possess. Speaking generally, however, the present Government of New Zealand is simply a government of the kind I have just described. It is not a national government true to label, but a camouflaged party government. It is called a national government in order to mislead many fine people who are doing their very best in the interests of their nation, but who, unfortunately, know very little of the chicanery associated with politics.

The Leader of the Opposition (Senator McLeay) described the Broken Hill Proprietary Company Limited as a shining monument tothe efficiency of private enterprise. Up to a point I admit that private enterprise has played its part; but let us remember - and it will be admitted by the controllers of the Broken Hill Proprietary Company Limited themselves - that national enterprise inthe last war did more to build up the Broken Hill Proprietary Company Limited than the company itself was capable of doing. In this war, national enterprise is also doing more to increase the strength of that great monopoly than the company itself would ever be capable of doing in a time of peace. The demand for man-power for the fighting services and war production acts as an accelerator in eliminating the small man. Thus the Broken Hill Proprietary Company Limited and other monopolies are being placed on a stronger footing, in spite of themselves, owing to the exigencies of war.

Senatoruppill. - The Minister for the Navy said that the Broken Hill Proprietary Company Limited has performed a great service to this country.

Senator CAMERON:

– I give credit to the honorable senator, or any man, for being as sincere as he thinks he is; but I question the honorable senator’s judgment in this matter. Most men with whom I daily come in contact throughout the Commonwealthhave rendered great service to this country. The Broken Hill Proprietary Company Limited has no monopoly in that respect. Why should it be singled out for special reference in this matter, when no mention is made of others who, individually, are doing just as great a service for the nation. I have no quarrel with the honorable senator when he expresses an opinion different from that which I hold. All I ask for, and all I have a right to expect, is the right to express my own opinion in reply.

I am sorry that the Leader of the Opposition has just left the chamber, because I now propose to deal with the subject of compulsory unionism. This matter has become a mania with the honorable senator. Whenever he thinks, or speaks, about compulsory unionism be sees red. Compulsory unionism, as any intelligent person should know, is the physical and mental expression of. a self-defence reaction against compulsion. It enters the realm of polemics as the result of the arbitrary policy of owners of industry. When such owners wish to become a law unto themselves, and lay downthe terms upon which I, or any one else, shall be privileged to earn a living, and when they seek to hire and fire at a moment’s notice, or to ignore their domestic and national obligations and treat employees as the unfortunate untouchables in India are treated, the natural and inevitable reaction of men who have red blood in their veins is to take a stand against them. That is the origin of the demand for compulsory unionism to-day. All men who work and claim to be men, and are prepared to honour their obligations to themselves and their fellow men, so far as they possibly can, resort to compulsory unionism, or some other form of coercion, against these people so long as the latter seek to coerce them in the way I have described. It is remarkable that the idea of compulsory unionism is permeating the most respectable sections of the community, and, possibly, the least appreciated, but, in a dialectical sense, the most useful sections of the community. I refer now to the members of the Australian Journalists Association. Yesterday I received the following letter from the general secretary of the Australian Journalists Association : -

I have been directed to inform you that the annual meeting of the New South Wales district of the association held last month reaffirmed that it supported with all its strength the principle of compulsory unionism. It urged the Federal Government to proceed as rapidly as possible with its reported plans to make it obligatory for employees to be members of appropriate unions.

The meeting stressed that -

Members of the Australian Journalists Association have for many years worked under Federal Arbitration Court consent awards making membership of the Australian Journalists Association obligatory and giving preference to members of the association with resulting satisfactory industrial relations and great benefits to all concerned.

It resents recent statements by poli tical leaders that compulsory unionism is “ Fascism “ as a slur on the Australian Journalists Association and as showing ignorance of the nature of Fascism.

Employees’ association in trade unions should be strengthened to aid in the fight against Fascism, which has always made smashing of trade unionism one of its first objectives.

Employees who are not members of trade unions should not share in the hard-won benefits of trade unions.

I was instructed to forward this resolution to you with the endorsement of my federal executive.

Sitting suspended from 6 to 8.15 p.m.

Senator CAMERON:

– When the sitting was suspended, I was referring to the fact that the Australian Journalists Association, through the medium of its federal executive, which represents the whole of Australia, had declared emphatically in favour of compulsory unionism. Another very influential and respectable body that not only declares for compulsory unionism, but also is strong enough within itself to enforce it without any assistance from the Government, is the British Medical Association. It is strong enough in itself for one reason only, that its members are practically indispensable to the community, as compared with the members of ordinary unions, such as waterside workers or coal-miners. It is not so easy to obtain the services of a qualified medical practitioner as to obtain those of a worker on the waterfront. The more indispensable a man is in society, the more influential he is. Exactly to the extent that he is a power so does he exact respect, and command the support of members of the Opposition, who, at the same time, declare emphatically against compulsory unionism for coal-miners, waterside workers, or members of the building and textile trades. Their attitude is not only inconsistent, but also shows that, if men and women are not strong enough in themselves to enforce what is really necessary for their own protection, and the consideration to which they are entitled from other people, the members of the Opposition ignore their rights. If they are weak, then, in the eyes of the Opposition, compulsory unionism is anathema. To members ofthe British Medical Association, or to legal practitioners, who can enforce compulsory unionism in their own ranks, nothing is said. That is the typical attitude of the members of the Opposition, who are against the weakest in society, but have nothing but praise and encouragement for the strong. It is a case of might making its own right. Where they are mighty, they establish the right, and no objection is raised, but where they are weak, in the sense that the ordinary wage-earner is weak, the Opposition regard the advocacy of compulsory unionism as a form of fascism. The motto of the right honorable member forKooyong (Mr. Menzies) and others is : “ Always strike at the weakest, but do not utter a word against those who are strongly established, and able to be practically a law unto themselves whether you like it or not “. With the latter, members of the Opposition negotiate and try to come to terms, but the weakest among the workers must be kept down and out all the time. If my friends opposite think that is to continue during and after the war to the same extent as in the past, they will be painfully disillusioned, and, in order to avoid unnecessary friction, I advise them to be prepared to take up a much more tolerant and sympathetic attitude in their approach to trade unionists who are asking for something which is quite within reason. I can quite understand honorable senators opposite taking up a stand against them when they make exorbitant requests, but, so far as I know, the average trade unionist errs on the side of modesty. I am strengthened in that belief when I hear references opposite to the big wages that are earned.

SenatorFraser. - What about legal fees?

Senator CAMERON:

– I have said that legal gentlemen are practically a law unto themselves. The right honorable member for Kooyong, or Senator Spicer, or Senator A. J. McLachlan. in dealing with wealthy clients whose money is sure, have their price, and a pretty stiff price it is, and not a word is said against their attitude.

Senator Leckie:

– What has that to do with compulsory unionism?

Senator CAMERON:

– They enforce compulsory unionism. They do more, they enforce their own terms. But members of the Opposition insist on a tribunal, known as the Arbitration Court, or some similar body, or even the employers themselves, being empowered to lay down for what wages and under what conditions members of trade unions shall work. When dealing with strong organizations like the British Medical Association and the legal profession, honorable senators opposite are acquiescent, submit, and have no objection to compulsory unionism. Always the cry of the Opposition is, “ Suppress the weakest, and support the strongest ‘”.

I was greatly interested in, and quite endorse, Senator Foil’s remarks about rationing. He said, in effect, that there should be rationing from top to bottom, and I agree with him. I say further that, unless we have something approximating to that policy, we are likely to have here black market conditions similar to those reported in Great Britain, with war-time racketeers making huge fortunes because rationing was not enforced from top to bottom, as Senator Foll would have it. I quote now from the issue of June, 1942, of the New International. published in America.. The reference there to black markets is brief, but very significant-

The black market in England has become a gigantic war racket, by means of which the rich manage to retain fairly well their prewar standard of luxury. It is estimated now that the blackmarket has a yearly cash turnover amounting to . $600,000,000, and this business is definitely on the up-and-up! All sorts of food, clothing, textiles, gasoline, cigarettes, whisky, cooking fats, &c. are handled on the black market. Naturally, the prices are prohibitive to the working class (cigarettes, 50 cents a packet, a bottle of Scotch $7.00. are a couple of examples) . One of the cleverest (and these British aristocrats are clever) means devised to evade the stringencies of rationing is hotel life. A member of the English bourgeoisie, with money, can live almost in accord with his customary standardsby moving to a hotel “ for the duration “. The hotels have become a beehive of black market and illicit sales activities. In addition, the characteristic pleasures of the British ruling class, dog-racing, horse-racing, fox-hunting, boxing, &c. have been restricted and curtailed, but not liquidated. All in all, the Tory set thrive indefinitely better when it comes to eating, housing conditions, entertainment and special privileges.

Senator Leckie:

– That is an American authority.

Senator CAMERON:

– Yes ; British authorities have reported similarly, and the Americans are in this war.

Senator Leckie:

– They are not in Great Britain.

Senator CAMERON:

– A good many of them, particularly journalists, are there as observers. In any case, I do not ask the honorable senator to believe whatI have read. He can look at it and judge for himself. I simply tell him that that is what is reported. I shall try to give the honorable senator some idea of how the black markets came into existence. There are in society in war-time, for all practical purposes, three groups - the group in production, which provides for and looks after theentire maintenance of society as a whole ; the group in the front line, the members of the fighting forces, who defend society as a whole; and in between those two, more or less on wages all the time, there is a middle group, which in Australia, as in Britain and America, includes thousands of ablebodied men who are profiteering and racketeering at the expense of the other two. It follows that where they can obtain barge sums of money, as they doby means of private and illicit trading, it is a comparatively easy matter for them to hoard supplies, buy stolen goods, and build up what are known as black markets. That condition obtains in Britain because rationing on the lines suggested by Senator Foll is not carried out 100 per cent. It never will be carried out 100 per cent., and there never will be equality of rationing, without something approximating to equality of purchasing power. Therefore, what Senator Foll said I endorse as absolutely necessary. If I understand the Government’s policy correctly, we shall have no black markets in Australia if we can possibly help it.

Senator Spicer:

– The Government is not going to do much about it.

Senator CAMERON:

– I think it is a case of “ wait and see “, as the late Mr. Asquith used to say. I do not believe we shall have to wait very long. I say that because I have in mind the terrific howl that was deliberately organized, engineered and spread by propaganda by our friends opposite when the 4 per cent. limitation of profits from invested capital wasproposed.

Senator Spicer:

– The honorable senator’s party gave it up, and it is in control.

Senator CAMERON:

– The Government was inundated with letters from people organized by our friends opposite, who are more concerned about their profits than about defending the nation. One well-known lady wrote to me, probably without realizing the significance of what she said, to the effect that she would be better off under Hitler at 6 per cent. on her investments than under a Labour government with her profits limited to 4 per cent.

Senator Spicer:

– Why did the Government, give up the proposed limitation?

Senator McBride:

– Because theTreasurer said it was quite impracticable.

Senator CAMERON:

– -Speaking for myself only, although I think I can in this matter speak for the Government also, it was because we realized how difficult a job it would be to police the scheme, knowing that there were so many sharp and shrewd individuals, like Senator Spicer, only too ready to accept a brief to get around it. We know perfectly well that honorable senators opposite are only too ready to raise the question of the constitutionality of any action that this Government may take; only too ready to seize whatever opportunity offers to challenge the validity of legislation in the High Court. I point out that the proposed 4 per cent. limitation on profits was not to be a limitation on capital in which the £1 was equal to 20s. in terms of gold. As I have already pointed out, the £1 to-day is worth only 8s., so that a 4 per cent. limitation would be actually more than 8per cent. The Government’s proposal was a very liberal one indeed. So far, the slogan of honorable senators opposite in this war has been, “ Patriotism plus profits “ ; if there are no profits, there is no patriotism. When they feared that an attempt was to be made to place what they regarded as sacrilegious hands on their profits, they organized a terrific howl throughout the country. In effect, the cry was, “ Save our profits, even if it means sacrificing the country”.

Senator SPICER:
VICTORIA · LP

– The Government was not prepared to stand up to its proposal.

Senator CAMERON:

– If the Government were to give to me the power that I should like to have to deal with some honorable senators opposite and their wealthy friends, I am sure that the honorable senator who has just interjected would not repeat his statement. The Government has been far too lenient, and it would command more respect now were it not for the fact that it has had too much respect for the Opposition, which allegedly wishes to work in unity with it. Ever since this Administration assumed office there has been a cry from the Opposition for a united war effort, but on the first occasion when an attempt was made to reduce profits on capital investment, the Opposition howled like scalded cats and their cry was echoed throughout the country.

Senator McBride:

– Is this a plea for unity ?

Senator CAMERON:

– The Opposition appeals for unity in one breath, and in the next it Avails throughout the length and breadth of the country when action to reduce exorbitant interest charges is proposed. Apparently the mere suggestion of such a limitation is enough to arouse the ire of those individuals who would have us believe that they are ultrapatriotic, and are ready to sacrifice themselves for the defence of this country. When it comes to losing a few paltry pounds of their profits all the opposition that can be organized is brought to bear against the Government. The black markets to which I have referred are organized by people of that type. This Government will do its level best to eliminate black markets, but its success in that regard depends on its capacity to carry out an effective policing and that cannot be carried out so long as there is underground, behind-the-scenes opposition organized by those who advocate unity in this chamber and disunity and domination outside of it.

I should like now to make a passing reference to a matter raised by the Leader of the Opposition, namely, the Rice case. The Leader of the Opposition said -

There we had the sorry spectacle of two prominent Ministers interfering with the important work of the Commonwealth Aircraft Corporation.

What is implied in that statement is that the Minister should not interfere, and that this company should be permitted to be a law unto itself. Early this year there was a hold-up in the Lidcombe workshops in New South Wales. Quite wrongly the workshop committee organized a stop-work meeting without consulting the unions concerned. The matter was referred to the Arbitration Court and the union most affected was not consulted. I made what I considered to be a perfectly reasonable request to the management of the company. I asked if it would be prepared to agree to an adjournment of the hearing so that I could endeavour to settle the case out of court and get the men back to work. I did not ask for an adjournment of days or weeks, but of a few hours. My request was made in the interests of industrial peace, but it was refused. Of course, being what I am, I did not take much notice of the refusal, and I said that I would take that course whether the company liked it or not. I did so, and the strike was settled, and the men went back to work. I have the best reasons for believing that in many instances provocative acts are committed with the object of goading men into creating industrial disputes. That was certainly a popular practice long before the war started, and I am convinced that itis the policy of some individuals nowadays who are opposed to the Labour Government and. to the trade union movement. They foment industrial unrest with the object of discrediting the Government by causing strikes in time of war.

Senator McLeay:

– Why did not the Minister raise the question of Rice’s criminal record?

Senator CAMERON:

– I had nothing to do with the case and I did not come into the picture at all. I am merely dealing with the honorable senator’s statement that the Government should not interfere. What earthly use is there of having a. government? If the Leader of the Opposition were once again Post- inm as ter-General and a dispute occurred because some one “ kicked over the traces “ and caused the Government concern, I cannot imagine him advocating that there should be no interference. What a stupid and absurd statement to make ! The Government is responsible to the people for the smooth running of industry in time of war, yet here we have a responsible gentleman holding the office of Leader of the Opposition in this chamber, saying in effect that the Government should stand aside and let a workshop which was established with 100 per cent, of government capital be forced into idleness. What a ridiculous attitude! I can assure the Senate that as far as I am concerned that will not be allowed to happen. If in my judgment interference is necessary, then, consistent with whatever powers I may have to interfere, I shall do so, and I shall stand or fall by my actions.

I shall now answer briefly the criticism of the Labour party’s policy which has been voiced by the Leader of the Opposition. The honorable senator stated that the Labour party was opposed to sending, men into action. I make no apologies for opposing the despatch of our troops to other parts of the world unless they agree to go, and unless we have reasonable guarantees that they will be properly equipped. I refuse to be a party to a repetition of what happened in Malaya, Singapore, Hong Kong, Greece and Crete. It is the responsibility of any government, whether it be a Labour administration or an anti-Labour administration, to oppose sending men away from Australia unless they are prepared to go, and unless they can be guaranteed proper equipment. After all, who is in control of Australia? Who is to say whether the men shall go overseas or shall stay here? Is the Government to be swept ‘aside and to have no voice whatever in the matter? Is the Government to be merely the blind, docile, servile creature of a few “ brass hats “ who may or may not know what they are doing? The High Command has come into disrepute in this war more than in any other war. Therefore, if a government has a good reason to believe that the proper thing is not being done, it should say so, and should take whatever action the people expect it to take. It is true that governments make mistakes, but it is far better to attempt to do the right thing than to make no attempt at all.

Senator SPICER:
Victoria

.- We have just listened to a very remarkable speech by the Minister for Aircraft Production (Senator Cameron). Probably one of his most remarkable statements was that contained in the last two or three sentences, namely, that at this stage of the war he would not be responsible for compelling one Australian to serve outside Australian territory. Yet he is a member of a Government which is prepared to use conscripted American citizens in the territories which, although outside our country, are necessary for our defence. I say without hesitation that, at this stage of the war, no citizen of this country should have the audacity to make such a statement, and we should be ashamed that there are still people in this land who are prepared to adopt that attitude. However, I am not surprised to hear such statements from a member of the present Government, because I have been reading with a good deal of care and consideration the budget which has been presented to us and which is now the subject of debate. I venture to say that no more remarkable document has ever been presented to this Parliament for consideration. It is almost unbelievable that men could expound so well the principles which should govern the financial affairs of this country at this time, and then entirely fail to do anything to give effect to those principles. I could explain this remarkable position only on one of two bases. One is that the members of the Ministry do not understand the principles which have been expounded in the budget. If that is an explanation which Ministers are not prepared to accept, the alternative is that they deliberately refuse to do the things which they themselves say must be done in order to solve the financial problem which confronts the nation.

Senator Collings:

– We shall solve it.

Senator SPICER:

– I want some signs of that, but, from what I have heard in this chamber up to the present, I am satisfied either that no Minister understands the principles to which he has given his assent, or that he is deliberately refusing to carry them out. I shall not expound my own theories about this matter, because they have never been better expressed than in this document. I would distribute copies of this budget speech in thousands to the people of Australia, and ask them to read, mark and learn every word in it, as the foundation for a proper approach to the present, financial problem. I have no objection whatever to the principles which the

Treasurer expounds. They so far meet with my approval that I believe that they should be circulated throughout the length and breadth of this land. The Treasurer stated in his budget speech -

As we add more and more men and women to the large numbers engaged in war work, we subtract them from the already reduced numbers engaged in producing goods for civilian consumption. But if our financial and economic system is to be kept in balance we must transfer the spending of incomes from civil consumption to war expenditure in approximately the same proportion as we have transferred man-power from pursuits of peace to pursuits of war.

I think that I and other honorable senators have said that. Then the Treasurer continued -

Owing to the great increase in employment and economic activity, incomes have expanded and spending power in the hands of the people is now at a rate greatly in excess of the flow of goods’ and services that the nation can spare for its civil needs.

Senator Collings:

– Hear, hear!

Senator SPICER:

– I am glad to have that interjection, but the Leader of the Senate expounded a very different doctrine when he was Leader of the Opposition. The Treasurer continued -

The Government cannot allow this excess spending power to compete against the nation for the additional man-power and materials that are vital to our defence, or to bid up for the limited goods that are available for civil use, or to operate in “ black “ markets and so menace price stability. The Government is determined on this and will take such measures as may be necessary to impose its will.

There are the principles, and there is the promise. The Government will impose its will. But what does it do in that direction? Absolutely nothing. It refuses to impose its will in order to carry out those principles.

Senator Collings:

– The honorable senator knows that that is not true.

Senator SPICER:

– It is true. The whole of this part of the budget speech is concerned with the problem of bridging the gap of £300,000,000. The Treasurer is not talking about anything else bur that. Referring to the means by which that money is to be obtained, he expounds those particular principles and in relation to that matter he says that the Government will impose its will. Yet the sole contribution that it makes to im posing its will is to say that it will ask the Australian community to make voluntary contributions to loans to the amount to £300,000,000. This is from a Government which has no compunction about compulsion. If it be a matter of compelling men to join trade unions, and contribute through those unions to the funds of political parties with whose principles they are not in agreement, then the Government favours compulsion; but, when it is a matter of every member of the community being compelled to make a fair contribution to the cost of the war in accordance with his ability to pay, the Government says, “ We shall have none of it. We have conscientious objections to compulsion.”

Senator Collings:

– Do not make me weep.

Senator SPICER:

– It is a sorry tale. The Leader of the Senate should weep, since this Government has the audacity to present to the Australian public a document which makes no proposal as to how the money required is to be raised. The Treasurer is not even prepared to say how much he will raise by voluntary loans. He does not make known in this document, and he is not prepared to say, how much he expects to get in voluntary loans. He puts forward a hypothesis and then works out a little sum in arithmetic. I must say to his credit that he does it quite accurately. I invite the Leader of the Senate to point out any other contribution made in this document. The sole contribution of the Treasurer to the problem of raising £300,000,000 is this-

Last year we doubled thereceipts from public loans, and got £120,000,000. If we double them again, we shall get £240,000,000, which will take us a long way on our journey.

If we double £1:20,000,000 we shall have £240,000,000. I do not understand why the Treasurer should have gone to the trouble of working out a sum which merely doubles last year’s figures. It would have been just as intelligent and helpful had he said : “ If we get two and a half times as much as we got last year, then we shall have £300,000,000, and the end of the journey will be reached “. That would have been just as helpful, but, in fact, it would not have got us any further on our journey. It is not sufficient for the Treasurer to come to Parliament and say, “ I have called the heads of the various departments together. They tell me that the expenditure for the coming year will he £560,000,000, and I propose to raise £260,000,000 by way of taxation “. It is surely part of the Treasurer’s business to tell us how he proposes to raise the other £300,000,000, but he has made no contribution whatever to the solution of that problem. J am somewhat doubtful about this “ if “, because the Treasurer is not very reliable in his judgment of the money market, and his forecast of what he is likely to raise. But he is very good at arithmetical sums which involve the multiplication of one figure by two. He did it last year. I shall read whatthe Treasurer said last year in connexion with war savings certificates -

My Government relies on willing co-operation from all classes of income-earners to make their full contribution to saving and lending through public loans and war savings certificates. I hope, indeed, for a very large increase of sales of these certificates. Last year they contributed a net £12,000.000 to war expenditure. This year we must endeavour to double that amount.

Honorable senators will see that it was then, as now, a matter for doubling an amount. If the Government could double £12,000,000 it would have £24,000,000. But what was the result in fact? Less than £9,000,000 was obtained from that source, instead of the Treasurer’s forecast of £24,000,000. In the light of that fact, I think that I am entitled to hesitate before believing that the suggestion of the Treasurer - he is not game to make a forecast - that if last year’s figures can be doubled, he will have £240,000,000, is likely to come true. If, however, he does not get that sum, this country will be in for the worst measure of inflation that it has ever known.

Senator Large:

– Controlled inflation is not dangerous.

Senator SPICER:

– It is beyond control. Apparently, the Minister for Aircraft Production does not agree with the views of Senator Large, because the Minister made plain his views on the subject of inflation this afternoon. It may be said that “he had a bit both ways”. He said that if a government merely “ issues money “ - that is, merely provides the community with two notes where previouslythere was only one note - that does not produce any more goods.

Senator Cameron:

– That is what the previous Government did.

Senator SPICER:

– The only effect of that process is that two notes are required to do the work which one note previously did. In other words, it halves the value of the notes. Such principles are unacceptable to me; but my complaint is that the Government refuses to put its principles into practice. The result is thatthere is looming before us - on top of the heavy reliance upon credit to the tune of nearly £80,000.000 for last year - the possibility that we shall be thrown on that source this year to the amount of £150,000,000.

Senator Fraser:

– So long as we can defeat the Japanese it will be all right.

Senator SPICER:

– There is more in itthan that. It is wrong for the Minister to say that our only concern is to beat the Japanese. Of course, that is essential.

Senator Fraser:

– I am pleased to hear the honorable senator say that.

Senator SPICER:

-IIt is essential, but it must be made possible. If there is one way more than another which will make it less possible it is by continuing to pump into the community spendingpower which will be used by the community to compete against the Government for the goods that are required for war purposes.

Senator Fraser:

– That has not been suggested.

Senator SPICER:

– The Minister cannot have it both ways. Unless, as the Treasurer says, we are prepared to reduce the spending-power of the community in order to reduce its demand on civil production, and transfer that money to the Government to be expended on war production, we shall have to face the position that the civil community will compete with the Government for the supply of goods, labour and services,that are available, and will also compete with the Government in “ black “ markets for all sorts of commodities that ought not to be produced at all. The Minister for

Aircraft Production had a lot to say this afternoon about “ black “ markets. The greatest danger in that direction is the failure of the Government to deal with the problem of excess spending-power. I agree with the Treasurer that it is necessary to reduce excess spending-power in the hands of the people. One reason why the Treasurer is of that opinion is that such action is necessary in order to prevent people with excess spending-power from operating in “ black “ markets, thereby menacing the price structure. I do not think that the Minister for External Territories (Senator Fraser) could have read that portion of the Treasurer’s speech, but it is there in plain language. The Treasurer indicates clearly in his speech that the transfer of spending-power from the civil community to the Government must take place.

Senator Fraser:

– By means of compulsory loans?

Senator SPICER:

– I do not know how it. can be made compulsory otherwise. If the matter be left to the voluntary effort of the individual, I do not believe that it can be done. The Government itself does not believe that it can be done. That is the point. In the House of Representatives, the Prime Minister admitted that in its wildest dreams the Government does not expect to get more than £200,000,000 by voluntary contributions.

Senator Cameron:

– The Government has more confidence in the people than the honorable senator has.

Senator SPICER:

– I am speaking, not of estimates that may be made by responsible banking authorities, but of the greatest sum which the Prime Minister, in his most optimistic moments, is prepared to suggest can be raised. The right honorable gentleman mentioned the sum of £200,000,000. The Treasurer’s multiplication of certain figures by two is meaningless. Apparently, it was intended to mislead the public into the belief that the Government would raise £240,000,000 by some means. Having worked out his calculation, by which he arrived at a sum of £240,000,000 the Treasurer said that that would leave £60,000,000 to be provided by war savings bonds and war savings certificates. I have already said that last, year, instead of obtaining £24,000,000 from war savings certificates, as the Treasurer predicted, only £9,000,000 was received from that source. Yet, in the face of that experience, the Treasurer has the audacity to suggest that he will raise £60,000,000 from that source.

Senator Fraser:

– He has great faith in the people.

Senator SPICER:

– It is not faith, but irresponsibility ; and the Treasurer knows it. The only conclusion I can reach from a. perusal of the budget is that the Government intends to rely largely upon another issue of treasury-bills.

Senator Large:

– Hear, hear!

Senator SPICER:

– I expected that some honorable senators would applaud that suggestion. I should not be surprised if the Leader of the Senate applauded it, because he has for a long time been an exponent of the doctrine that the war should be financed entirely by either treasury-bills or national credit. I had not been a member of this Senate long when I listened to an exposition by the present Leader of the Senate, who was then in opposition, in which he told us how he admired the way in which Senator Darcey put his arguments forward. He attacked honorable senators on this side for their failure to accept the doctrine expounded by that honorable senator’. Therefore, I am entitled to assume that a year or so ago the present Leader of the Senate was a believer in the doctrine that the war should be financed, not by loans or taxation, but by a little more bank credit.

Senator Cameron:

– That is what the previous Government said.

Senator SPICER:

– I direct the attention of the Minister for Aircraft Production to the paragraph in the budget speech of the Treasurer, in which he said -

There are some people’ who think that the war should be financed by central bank credit. The Government is convinced that in that way lies grave danger.

Senator Fraser:

– I subscribe to that.

Senator SPICER:

– I am pleased to hear the Minister’s interjection and to know that one out of nineteen Ministers constituting the Cabinet subscribes to the doctrine set out in the budget. The Minister for Aircraft Production told us this afternoon that other ministries have depended upon bank credit. Of course they have. I do not dispute that. I have never disputed that there is a time in the affairs of a community when one can safely risk a measure of bank credit, thereby bringing about increased production.

Senator Cameron:

– It was not done in the depression years.

Senator SPICER:

– That is when it was done by a Labour government, which made a mess of things. Fancy a member of the Labour party talking about depreciated currency! I believe that it was during the term of a Labour Ministry that this country went off the gold standard. At that time we went to a discount of 25 per cent, on sterling. Therefore, if honorable senators opposite have any complaint on that score, it is to be laid not at the door of the Opposition but of the Labour party. One object of an expansion of credit may be to stimulate the economic structure at a time when we have unemployed resources. In those circumstances the increase of our credit structure would be accompanied by an increase of production of civil goods. To-day, however, the Government proposes to draw on bank credit which will not be accompanied by any increase of civilian production. There was a time at the commencement of the war when the Government could, and did, safely rely upon a measure of bank credit in order to bring unemployed resources into production. At that time many of our men were unemployed, and factories were out of action. By the expenditure of money in that way the Government was able to produce a quantity of new goods corresponding to the amount of new money that was issued. The Government of that day frankly stated what it was doing, and why. However, that is not the case to-day. Those circumstances have gone. “What I am saying is set out in the budget speech. Not only does the Treasurer say that the Government is convinced that there is grave danger in resorting to bank credit, but he also gives the reason. He said -

Expansion of bank credit, therefore, without a corresponding capacity to expand production would increase purchasing power without increasing the supply of goods and services.

Senator Collings:

– That is common sense.

Senator SPICER:

– I am glad to have another concession from honorable senators opposite. The Leader of the Senate is making head way. Perhaps he will soon be prepared to accept the only logical solution of tin- problem. That is to compel the community to make the contribution necessary to stabilize our financial structure.

Senator Allan MacDonald:

– The Government has repudiated the policy advocated by Senator Darcey.

Senator SPICER:

– It has done that, certainly, in word if not in deed. Now that the Leader of the Senate is prepared to concede that the principles I am expounding are correct, all I ask him to do is to indicate that the Government will take the only logical step that can be taken in order to bring about the result which all of us desire. Despite the danger of inflation that confronts us, and the fact that, at present, we can have no increase of the supply of goods and services to the civilian community, the Government proposes to rely upon bank credit to raise at least £100,000,000. “Why? Apparently, the reason is that it is not prepared to take the political risk of taxing the majority of the members of the community whose annual incomes do not exceed £400. What a lot of people fail to understand, although it is so important that they should understand it, is that the cost of war must be carried by the whole of the community. We cannot escape that fact. The Treasurer, in his budget speech, does not attempt to suggest anything to the contrary. The only matter at issue between us is the manner in which that burden is to be spread throughout the community. It can be spread fairly only in one way, and that is by compulsory contributions in the form of taxes, or loans, from every person in accordance with his ability to pay. I do not believe that there is any person with any income who is not capable of making some contribution, however small it might be. It is because I want” the burden to be distributed equitably that I advocate taxation and compulsory loans as the solution. What is the alternative ? The alternative we are offered is that some portion of this money will be raised by voluntary loans. Not all of the money will be raised in that way, because that is impossible. The Government proposes to raise £200,000,000 by voluntary loans. In itself that is a very unfair method of approach to this problem. By that method the good, honest, thrifty and patriotic citizens will make more than their fair contribution, whilst the wasters, and the thoughtless, will not make any contribution. That is the sole result of the voluntary loan system. We have had some examples of the worth of the voluntary system in matters of this kind. I mention, for instance, voluntary rationing in relation to clothes. The people of Australia will take a long time to forget the experience of voluntary rationing in relation to clothes prior to the introduction of compulsory rationing. They will not forget that famous day hitherto known as “ Mother’s Day “. but which, I presume, will be known to posterity as “Dedman’s Day”. At thai time, the man who had a sense of his obligations to the community went without essential clothes ; and when he tried to buy such articles he found that these had all been snapped up by selfish people.

Senator Clothier:

– By selfish people only.

Senator SPICER:

– That is exactly my point in relation to the voluntary system applied to loans. These selfish people will not contribute to voluntary loans. Why should they? They did not contribute to the Government’s voluntary system of rationing of clothes, but rushed the shops and bought everything. How, therefore, can we expect, that they will contribute to the Government’s appeal to make contributions to loans when they are not compelled to do eoi On the other hand, the people who think about these things, and are concerned about the future of the country, will make more than their fair contribution. However, even after the Government has raised £200,000,000 by this means it will still require another £100,000,000. It proposes to find thai sum on a basis which will throw the bin - den most inequitably upon the pooR sections of the community. There is no escape from that fact. The Government may pretend that it is not taxing tinpeople whose annual income is under £400; but that will not be true if w relies upon bank credit to the degree it now proposes to do, because those people will be taxed - and taxed at thisame rate as the rich man - in the price of every commodity they buy. It wi’ not be taxation according to ability !< pay, but according to a person’s needs. That method of raising money has all the objectionable features of indirect taxation, because that is what it really is. The Government which poses as tindefender of the poor and oppressed, prefers to follow a line of action which will bring about that result, although it could adopt a perfectly logical scheme by which a fair contribution would be raised from every section of the community in accordance with its ability to pay.

Senator LARGE:
NEW SOUTH WALES · ALP

– Can the honorable senator explain how the very selfish people will escape taxation which is imposed through increased prices?

Senator SPICER:

– I do not deny that the selfish people to whom I have referred will make some contribution ; but it will be not so great as that which will be made by unselfish people.

One extraordinary statement was made by the Minister for Aircraft Production in this chamber as recently as the 3rd April of last year. On that date be talked quite a lot of sense, and gave us the policy of the Australian Labour party on this very matter. He told us that he was not a supporter of the Government’s policy of raising a loan of £50,000,000. He said-

To indicate the policy of the Australian Labour party, I shall quote two planks in the party’s platform under the heading *’ Taxation and Finance”: - Naval and military expenditure to be allocated from direct taxation . . .

That is the Labour party’s policy on this question according to the Minister, but he is now a party to a programme which proposes to raise, if the Government is successful, £240,000,000 by way of loans.

Senator Cameron:

– Does the honorable senator object to it?

Senator SPICER:

– I thought that 1 had been doing that all the evening. J have quoted an objection by the Minister, based upon the Labour party’s platform, to borrowing for defence expenditure, yet he and the members of the Government are the propounders of a budget which proposes to leave to voluntary loans the whole problem of meeting £300,000,000 of expenditure. I do not understand people who have the mind that these men seem to display, who in April, 1941, had a rooted objection to the raising of money for defence purposes by borrowing, and in 1942 propose to indulge in the biggest borrowing programme that has ever been undertaken in this country.

Senator McLeay:

– But the Prime Minister said last night that they had changed their mind.

Senator SPICER:

– I suppose that they are entitled to do so. They so frequently change it that it will not surprise me in the least if sooner or later, and I hope it willbe sooner, they adopt the policy that we have been expounding on this subject, and accept the programme of post-war credits as part, at any rate, of the scheme for financing the war effort.

The Minister having, as I have indicated, completely failed to provide any solution of this problem, he then proceeds to draw a red herring across the path. That is a favourite trick in politics. It has been done before. If one cannot solve the immediate problem that has to be solved, it is not a bad idea to create a new and fictitious one, and endeavour to concentrate public attention upon it. So we find that quite a fair proportion of the budget is concerned withthe great problem of an alteration of the Constitution. We are told that whilst the other great problem remains unsolved, the Ministry proposes to introduce a measure of constitutional reform, and to take a referendum upon it. My views upon the constitutional prob lem are fairly well known.

Senator Cameron:

– They were not too sound on uniform taxation.

Senator SPICER:

– They were not unsound.

Senator Cameron:

– The High Court did not think so.

Senator SPICER:

– We shall see about that some day, but, so far as the political problem of constitutional reform is concerned, I confess quitefrankly that I believe that it will be most desirable after the war to look closely into the whole framework of the Constitution and have it recast in the direction of providing increased powers for the Commonwealth Parliament. I do not propose to run away from that for a moment, but that is no reason why this issue, which is one of very great complexity, should be introduced into this community in the middle of a war. After all, as we have been frequently reminded by the Leader of the Senate, a war is in progress. The Commonwealth Government has, under the National Security Act, power to issue regulations on any subject, and now, as the result of the uniform taxation decision, there are no restrictions whatever upon its power to raise, in any way it likes, the finance which is necessary for the prosecution of the war. There is, therefore, no restriction on the powers of the Ministry to do all things which are necessary for the purpose of carrying the war to a successful issue. Those powers do not. cease to operate the moment fighting ceases. The National Security Act itself continues for twelve months after the war. It is not as though we were facing a situation in which all these powers may be taken away when fighting ceases. They might continue to operate for years.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– They couldeven be extended beyond the twelve months.

Senator SPICER:

– They may be, or the actual state of war may continue for a number of years after fighting ceases. In fact, some people with a good deal of wisdom have expressed the hope that that formal state of war may continue until a stage is reached at which we can work out the peace treaty upon a much more satisfactory basis, removed from the influence of immediate hostilities. Consequently there is no hurry about constitutional reform at all, and for the Government to suggest that this is the time to deal with it indicates that it wishes to cover up its tracks by directing the minds of the community towards an issue which is not now the real one. In other words, it is just playing politics. On that subject I should like to direct the attention of the Leader of the Senate to some remarks made by a very worthy colleague of his in Queensland recently. I refer to Mr. Forgan Smith, who was reported in the Argus of this week as saying -

It is dishonest to use war for political ends. My breeding and training are such that I will not be a vassal to any one. … If amendment of the Constitution is desirable or necessary, it should be done only when men can meet and reason together, not during a period of emotional thinking.

I entirely endorse every word of that statement. I hope that Ministers will take it to heart and not proceed with this hasty proposal to alter the Constitution at a time when people’s minds should be directed to one issue only, that of winning the war.

I had not intended to say much more, but am tempted to add something on the subject of compulsory unionism, about which the Minister for Aircraft Production was so voluble this afternoon.

Senator Large:

– The honorable senator should be an authority on that subject, being a member of the Law Institute.

Senator SPICER:

– That happens to be a voluntary union, like every other in this country. I am a member of a body in Melbourne consisting of barristers. Membership is quite voluntary, and no one made me join. I am perfectly free to leave at any time I like, and that is just as true of members of the British Medical Association. There are no compulsory unions in this country to-day. I am opposed to compulsory unionism because it is the very antithesis of the conception of freedom which lies at the root of our democratic institutions.

Senator Large:

– Yet the honorable senator favours compulsory loans.

Senator SPICER:

– Yes, I am in favour of compelling citizens to render tribute unto Caesar, but not of Caesarcompelling citizens to render tribute unto some irresponsible body such as the Trades Hall Council. That is the whole difference. Ministers, apparently, arc not prepared to compel people to perform their public duty to the Government, although they are ready to compel them to obey the orders of outside irresponsible juntas. Some reference has been made to the fact that this suggestion of compulsory unionism is an indication of the Fascist trend of the

Labour party, and in fact it is. [Extension of time granted.] I very much regret that I can see quite clearly trends in the Labour party of Australia towards a totalitarian policy. The Labour party in this country to-day is a totalitarian party. Let us examine it from the point of view of this proposition of compulsory unionism. There were days when the Labour party really believed in the freedom of the individual. It is not freedom if you say to a man, “ You must join “. If you are going to have freedom, freedom of religion, for example, thatsurely means that men are free to belong to any religious denomination orare free to refrain from doing so. ‘ The same is true of this proposition. There is no freedom for the individual if we say to him, “ You must join a trade union “. He is free if you say to him, “ You can join or you need not join “. This is the starting-point of the policy adopted in the totalitarian countries.

Senator Cameron:

– All unions are suppressed in those countries.

Senator SPICER:

– Then they immediately create new ones. So long as it is a union of the right brand, it is permitted in a totalitarian country. There, they start the other way round. They begin with the party, suppress the existing unions, and then create new ones of their own. The process in this case is that the workers are forced to join trade unions. Through the trade unions they arc forced to contribute to the funds of the political party, which is the Labour party, and, having gone that far, it is not a very long step to compel them to join the Labour party. In other words, we shall be proceeding from compulsory unionism to compulsory contributions to the Labour party, and thence to compulsory membership of the Labour party - the one party which will take control of everything.

Senator Arthur:

– I rise to a point of order. Senator Spicer has said that compulsory unionism involves compulsory contributions to the Australian Labour party. I should like to know under what law provision is made for compulsory contributions by unionists to the Australian Labour party.

The PRESIDENT:

– The honorable senator is not in order in interrupting the speech of another honorable senator unless he raises a point of order. He has merely asked a question. He will have an opportunity to express his opinion on the subject later.

Senator SPICER:

– I object strongly to compulsory unionism because it will compel men to place themselves in subjection, not to government officials or individuals under the control of the Government, but to irresponsible leaders of trade unions.

Senator Clothier:

– That is not true.

Senator SPICER:

– That is what it involves. If a man is compelled to join a trade union he is compelled, also, to comply with the discipline that membership involves, and whether he likes it or not, he is compelled to subject himself to the dictation of those who happen to be in control of that union. There is no analogy between this proposal and membership of the British Medical Association or any similar organization. There is no law which gives the British Medical Association the right to compel doctors to become members.

This budget is an insult to the intelligence of the community, and it is one of the sorriest documents that have ever been introduced into this Parliament.

Senator Keane:

– It has been well received in London.

Senator SPICER:

– Apparently it has not been understood in London. I can quite understand a London newspaper, having had cabled to it these excellent principles set out in the budget statement, saying that the budget is a good one. Obviously what the newspaper does not understand is that this Government has no intention of raising £300,000,000 by way of loan; that is merely a printed lie.

Senator Large:

– The facts are known in London.

Senator SPICER:

– That is not so. This document suggests that the whole £300,000,000 will be raised by way of loan, whereas on the day that the budget was presented, the Treasurer himself admitted that his most optimistic estimate was £200,000,000. Was that reported in London ?

Senator Keane:

– I presume so.

Senator SPICER:

– The Minister only presumes so; but I am confident that it was not. As I have said, the principles outlined in the budget are laudable, and I would commend them to the people of the country as being the foundation of our financial policy ; but I would tell them, also, that these principles are merely what the Government says, and do not describe what it does. The real test is what the Government proposes to do, and, as I have said, the budget contains no solution of the problem of finance which is now confronting the Government. Because the Government fails to tackle that problem, and apparently relies in an airy sort of way upon the belief that somewhere, somehow, £300,000,000 will be found for the war effort, it is lacking in its duty to the people of this country. I believe that the day will come when the citizens of Australia will wake up to the position, and will realize that all the troubles that will flow from this budget will be attributable to .an irresponsible Labour government.

Senator BROWN:
Queensland

– I have been very interested in the speeches made by honorable senators opposite, who, as usual, are running true to form. When one realizes that for many years they have painted grim pictures of the horrors of inflation, and have claimed that this country would go to the dogs if the Labour party’s financial policy were implemented, their jeremiads now almost make one weep. It is not so many years since a certain Premier of New South Wales required a few million pounds to assist him in conducting the affairs of that State. On that occasion certain people said that, if a large amount of new money were placed in circulation, there would be a possibility of inflation and financial disaster. It is not so many years since we had a Commonwealth Treasurer who asked for a fiduciary note issue of £18, 000,000, and I remember the heart-rending cry that went up from members of the political party to which honorable senators opposite belong. Once again the bogy of inflation was raised. I recall, also, what happened when the Fisher Government introduced a similar -scheme. On that occasion; too, the members of the political party which honorable senators opposite support cried out, probably more in sorrow than in anger, that the country would be ruined absolutely by what were termed “ Fisher’s flimsies “. After listening carefully to the lawyer-like speech delivered by Senator Spicer, I can agree readily with my colleague, Senator Darcey, that, despite continued efforts to impress honorable senators opposite with a deep understanding of finance, the fundamental ideas have not yet percolated into the inner regions of their brains.

Senator Spicer:

– Those ideas do not seem to have percolated into the Treasurer’s brain, either.

Senator BROWN:

– The Treasurer (Mr. Chifley) set out his principles in his budget speech. At first, Senator Spicer complimented the Treasurer upon his work, but afterwards said that he was completely irresponsible, and that the budget was an insult to the people of Australia. I cannot follow that confused reasoning at all, because, from what I know of the Treasurer and his advisers, they are men who have made a close study of finance. They know that they cannot play ducks and drakes with the finances of this country, and they will accept full responsibility for their actions. This budget can hardly be described as an insult to the people of Australia, despite the fact that it does not go so far as Senator Darcey might like, or, for that matter, so far as I might like.

Senator McLeay:

– Then the honorable senator does not subscribe to the principles enunciated by the Treasurer?

Senator BROWN:

– I subscribe to the principles of my party; and I subscribe to the policy of the Government; but, at the same time, I have a right to speak freely on matters that are the subject of discussion in this chamber. I subscribe whole-heartedly to the belief that we should use the finances of this country in such a way. that the production of war goods will be maintained at the highest possible level. I also say emphatically that, despite the wails of the Jeremiahs on the other side of the chamber, not one additional bomb, ship, or aeroplane will be produced as a result of the criticism they have voiced. After listening to the speeches made by members of the Opposition, one would think that, unless we heeded their advice and adopted a system of compulsory loans, our war effort would be weakened. If their arguments were followed to their logical conclusion, this country would be forced out of the war merely because we have not adopted the Fadden, the Menzies, or the Spicer method of raising revenue. That is just as stupid as it would be to say that a man like Mr. Henry Ford, who owns huge motor works in the United States of America, the ships that carry the ore across the Great Lakes, and the railways which carry it to Detroit, would have to cease production merely because the bookkeepers in his offices use red ink instead of black. That, in effect, is the Opposition’s argument. The fact is that whatever method of finance is employed, whilst we have the raw materials and the ability to produce, our war effort will continue. I ask leave to continue my remarksat a later date.

Leave granted ; debate adjourned.

page 436

QUESTION

DEPARTMENT OF THE INTERIOR

Air Raid Shelters at Hotel Canberra - Allegations by Mr. Stacey, M.P.

Senator COLLINGS:
Minister for the Interior · Queensland · ALP

– by leave - In the Senate last week, Senator A. J. McLachlan and Senator James McLachlan referred to the protection provided by the Department of the Interior against enemy action at the Hotel Canberra. I said then that effective protection had been provided. This they denied. The fact is that, not only have slit trenches been provided, but also Pavilion E of the building has been so fortified as to make it the safest place for guests, should the need arise.

In the House of Representatives on Thursday last, the honorable member for Adelaide (Mr. Stacey), made a series of charges against my department. Not one of them has any relation to the facts. Mr. Stacey said -

Three nights last week at the Hotel Kurrajong, nine men worked at perhaps double pay in painting the ceiling. The work wasnot necessary, and the cost would be between £100 and £120.

The work was urgently needed, and had been needed for years. It could only be done at night. Approximately 200 guests are in residence, including members of Parliament and public servants. Meals have to be provided three times daily. The painting could not be done between meals, therefore it was done at night. The total cost of the job, material and labour was ?48, not from ?100 to ?120. Mr. Stacey was himself a contractor and is a property owner, and should have been able to make a better guess at the truth.

Mr. Stacey also said ;

I am told the Government has placed a very nice carpet in the Hotel Canberra at a cost of ?950. I advise the Government not to ask the people to make sacrifices unless it is prepared to make them itself.

The Government does not supply carpets to the Hotel Canberra. A simple inquiry by Mr. Stacey would have elicited the fact that the carpet was purchased by the lessee. I understand that Mr. Stacey was as inaccurate as usual regarding its cost. His final charge was -

I will not mention names, although they are available if requested, but on one occasion last session one of the Ministers took a petrol- driven car to Melbourne, brought his wife and family back, traversed all around Canberra, took the wife and family back to Melbourne in the car which then came back to Canberra. The following week another Minister took a government car to Melbourne. Be brought his wife and two daughters back to Canberra. The wife stayed a week, the daughters longer. The Minister and his wife returned to Melbourne leaving his daughters in Canberra, hut the following week they were sent to Melbourne by car. Is this right!

Here, again, Mr. Stacey did not know what he was talking about. Obviously, he did not wish to. The truth is that petrol-driven cars have not been sent to Melbourne since producer-gas units were fitted in November, 1941.

page 437

ADJOURNMENT

Air-raid Shelters at Hotel Canberra - Cocoa Beans - National Service of Senators - Government Finance.

Motion (by Senator Collings) proposed -

That the Senate do now adjourn.

Senator JAMES McLACHLAN (South

Interior (Senator Collings) in his statement regarding the air-raid shelters at the Hotel Canberra said that I had alleged that there was no shelter at that hotel, but I made no such allegation. I asked why, when the sirens sounded, the people in Parliament House went outside to the shelters, whilst those at the Hotel Canberra were ordered inside. I was in the lounge at the Hotel Canberra at the time. The hotel proprietor and the guests were also there. There was no mention of any shelter, and I made no reference whatever to it.

Senator BROWN:
Queensland

– I understand that, formerly, about 10,000 tons of cocoa beans were imported into Australia annually, and they usually arrived about September. Owing to shipping difficulties, only 2,000 tons have been obtained this year, and the beans have been allotted to various parts of Australia. I understand that the allotment has been made in the past on a population basis, and Queensland should, therefore, ,be entitled to 300 tons; but that State is to receive only 13 tons, 8 tons being supplied to one firm and 5 tons to another. The beans are used in the manufacture of chocolate.

Senator Leckie:

– Are there any chocolate manufacturers in Queensland?

Senator BROWN:

– Yes, Morrows Proprietary Limited and Plumridge Proprietary Limited manufacture chocolates, whilst I believe that Nestle and AngloSwiss Condensed Milk Company (Australasia) Limited is still operating in that State. The importation of cocoa beans into the southern States has declined in the last year or two by over 90 per cent. I understand that manufacturers in Queensland have received information from the southern States that no cocoa beans at all are to be allotted to Queensland. It is only fair that that State should receive a portion of the 2,000 tons of beans landed in this country. A request has been made for 60 tons, which would be only 20 per cent, of the quantity due to that State. T trust that the Minister for Trade and Customs (Senator Keane) will investigate this matter, and see that Queensland receives a fair deal.

Senator BRAND:
Victoria

.- During the budget debate last night, Senator Aylett made some uncomplimentary remarks about me. He was prompted to do so by the statement that I made in this chamber last week ‘that at least half a dozen members of this Parliament - not half a dozen members on the Government side of the chamber as the honorable senator said - should be in uniform and doing a real war job. I had no idea of linking Senator Aylett with that half a dozen parliamentarians. I thought that he was much older than he really is, but his conscience must have pricked him. He cannot hide behind the fact that he has a son in the fighting services. Many fathers are serving in the forces with their sons. Why did not Senator Aylett go to the last war? If he was too young, he is eligible to serve in this war.

Senator Brown:

– He said that he offered his services.

Senator BRAND:

– He wanted to know what war work I was doing. He may obtain an answer to that question by consulting the Minister for the Army (Mr. Forde). I do war work quietly, without publicity, without drawing travelling allowances, and without wasting petrol by travelling around the country in motor cars. Senator Aylett said that I was a “has been”. I remind him that, at the last general elections in Victoria, over half a million electors did not hold that view. Twice as many electors in Victoria as there are men, women and children in the State he represents voted for me, and a very large proportion of them were wage-earners. I am not a professional politician, I am not a soap-box orator, and I do not pretend to be a debater. I certainly prepare my speeches, short and infrequent though they are. No one ever prepared one sentence of my speeches. I do that to make them concise and constructive. I do not ‘address the Senate for long periods, and I speak to the point. As to the reading of my speeches, I point out that the Leader of the Labour party in the House of Commons always reads his speeches. Some months ago, all of the exservice men in this Parliament - there ave 28 of them, excluding the four who are now overseas, met for the purpose of forming an all-party permanent committee to consider post-war reconstruction, particularly as applied to demobilized members of the fighting services. I was unanimously elected chairman, not because of my military rank, but because they considered that I still had a little initiative, energy and common sense. There are four ex-service men sitting opposite who were at that meeting. I could not let the remarks of Senator Aylett pass without challenge. I still say that there are at least half a dozen members of this Parliament who should be in uniform doing real war work.

Senator A J McLACHLAN:
A few minutes ago the Leader of the Senate (Senator Collings · SOUTH AUSTRALIA · NAT

made a statement concerning certain questions which were addressed to him by my colleague, Senator James McLachlan, and myself. If the Minister will look at the report of what was said he will find that I made no complaint about the absence of protection from air raids at the Hotel Canberra, but when my colleague asked why people in Parliament House were ordered out of the building when the sirens sounded and people in the Hotel Canberra were ordered to remain inside, the Minister, not knowing anything about the matter, immediately said that the reason was that the protection for persons working in Parliament House was outside the building, whereas the protection for those at the Hotel Canberra waa inside the building.

Senator Collings:

– That is true.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Having walked about the grounds of the Hotel Canberra earlier in the morning, I asked the Minister where the protection provided inside the hotel was situated. I also made some remarks regarding the dimensions of the trenches which were alleged to be provided in the grounds of the Hotel Canberra. I should have some difficulty in getting into the trenches; and if I did get in I would be confronted with many difficulties. I explained that I was quite unaware of the provision of any protection inside the Hotel Canberra, and apparently the Minister himself was unaware of it when he answered the question.

Senator Collings:

– I ordered the protection to be provided, and so I was aware of it.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The Minister could not answer the question.

As regards the statement by the honorable member for Adelaide (Mr. Stacey) concerning the use of motor cars by Ministers and their families, I suggest that it would have been more appropriate if the reply had been made in the House of Representatives. I notice a saving clause in the statement as to where the oars were alleged to have come from. There are places besides Canberra where the Government has cars in use. It would have been fairer if the statement in reply had been made in the place where the allegations were made, and not in the presence of persons who know nothing of the circumstances and did not hear the statement.

Senator SAMPSON (Tasmania; [10.18]. - I desire to say a few words about what transpired in the Senate last night, and I regret that Senator Aylett is not now in the chamber. I suggest that all honorable senators read the Hansard report of what that honorable senator said last night with regard to Senator Brand. Senator Aylett’s remarks in print really appear worse than his statement in this chamber. His remarks were studied insolence, and were both insulting and cruel. I personally resent them very much indeed. I had the very great honour of being associated with Senator Brand in Gallipoli and France. I remember him as Major Brand, the brigade major of the 3rd Brigade, which made the initial landing at 5 a.m. on that never-to-be-forgotten Sunday. Before the day was over he had won the Distinguished Service Order for gallantry in the face of the enemy. It is the fashion in some quarters to talk about “ brass hats “, but men do not become “ brass hats “ in five minutes. A long apprenticeship has to be served first. I also served with Senator Brand in France; for about three months I was his brigade major of the 4th Brigade - the original brigade which was commanded by the late General Monash. I was associated with him also after the war. Ask any man who was a member of the 8th Battalion, which he commanded at Gallipoli, or any officer or man who served in the 4th. Brigade in France, what manner of man Major-General Brand was, and he will say that he was brave, courteous and a “ white “ man. He was wounded in the service of his country on several occasions. After his return to Australia he served in the Australian Military Forces and held many positions with great credit to himself and benefit to his country. As quartermaster-general during the time that the defences of this country were in a serious state - in 1929- 31 - he carried out a difficult task efficiently and well. I do not suppose that Senator Aylett stopped to think before he spoke last night, but as the years pass, his hair, like that of many of us, will become grey. His remarks last night with regard to our friend and colleague, Senator Brand, were those of an ill-bred man and were most discourteous. Moreover, they were said with intention to hurt. I hope that, on second thoughts, when the honorable senator reads what he said, he will see the error of his way. I am not preaching a sermon, but I feel this matter keenly. I can say with regard to my well-beloved old chief that he did, and is doing, a great job of work. Although he has not been on the active list of officers for many years, he has never forgotten the men who served with him overseas, and to-day he is doing splendid work on their behalf. He is also doing a good job as a member of the committee to which he has just referred. Notwithstanding the cheap sneers to which we listened last night, that is the truth. I hope that there will be no repetition of remarks such as we heard last night. The members of this Senate have a common job to perform, and even though we may disagree on many things, at least we should act courteously towards one another.

Senator DARCEY:
Tasmania

– Honorable senators will give me the credit of abiding by the Standing Orders of the Senate in regard to interjections. I have been a member of this chamber for four years this month, and it can be said that I have not interjected twice. My name has been bandied about to-day by honorable senators on both sides of the chamber. One honorable senator said that it was torture to have to listen to me. To-night Ihave heard a great deal on the subject of bank credit, but in the two or three hours that the matter was debated, the Commonwealth Bank was never mentioned. In order to show that there is a change of opinion throughout the world in support of what I have said in this chamber, I place before honorable senators the following statement which emanated from London this week : -

page 440

AFTER THE WAR

The Financial and Economic Reconstruction Plan agreed upon by the London Chamber op Commerce and the Federation of British Industries.

One outstanding change apart from the others which are now almost of daily occurrence is that which took place during the month of June of this year 1942,which only two years ago would have been beyond the wildest expectations, i.e., “ that a mercantile association representing 9,000 firms and companies consisting of the London Chamber of Commerce and the British Federation of Industries could produce an agreed statement that in fact abandons the financial imperalist doctrine altogether, and proposes among other things:

The London Chamber of Commerce, also gives a general endorsement to the principles set forth in the pamphlet A Twentieth Century Economic System, which Lord Semple presented to each member of the House of Lords after his memorable speech on the Atlantic Charter in the House of Lords on Tuesday, the 18th November, 1941.

Mr. Herbert Feis, of the United States of America State Department, has also written an article on post-war finance in the United States of America Foreign Affairs Quarterly. The Times, on the 2nd June, 1942, states that Mr. Feis is in identical agreement with the London Chamber of Commerce upon the essential point that after the war creditor countries should either accept payment in goods and services or relinquish their claim for payment because when a country sells goods to another it should not expect payment in the buyer country’s currency.

There will be far-reaching consequences in such a change. The absence of this method caused the central source of malefic influence of international finance, throughout thiscommercial age - when the debtor country could not obtain foreign exchange - dollars, sterling or other gold certificates to pay his way by selling its products on the world market, it became shackled with debts that were in practice unpayable, and thus subjected all its trade commerce to that small irresponsible international minority which could understand the debt system and therefore possessed the virtual monopoly of credit and power throughout the world.

On the 3rd September I asked the Minister representing the Treasurer the following questions : -

. By what amount has Australia’s National Debt been increased since the declaration of war ?

By what amount has it been increased by the present Government?

What amount in inscribed stock, war bonds and treasury-bills have the private banks purchased since the declaration of war?

What amount in treasury-bills have the banks converted in the same period?

Will the private banks be allowed to purchase bonds in the forthcoming loan, and will they be permitted to advance money to enable the public to subscribe to. this loan?

To-day I received the following answers : -

Only last night I pointed out that at one end of the counter the banks are not permitted to buy war bonds, or to advance money to any person for the purpose of buying war bonds. Members of the public who wish to buy war bonds must present real money. However, at the other end of the counter, the banks can buy inscribed stock and treasury-bills, and pay for these by cheque. The answer supplied to me describes the Commonwealth Bank as a central bank. It is nothing of the kind. It is the very antithesis of a central bank. It was establishedto function on behalf of the people. We should have had a central bank if Sir Otto Niemeyer had had his way. But when he came to this country he found the Commonwealth Bank in existence. The Commonwealth Bank precludes any possibility of establishing a central bank. The answer supplied to my question also refers to bank credit. It is not bank credit but bank debt.

The PRESIDENT (Senator the Hon J Cunningham:

– The honorable senator is not in order in dealing in detail with subjects which he discussed at length on the motion for the printing of the budget papers.

Senator DARCEY:

– I should not have risen at this juncture but for the fact that my name has been mentioned by honorable senators on both sides of the chamber in association with private bank credit. I have never advocated the Government borrowing from the private banks.

Senator COOPER:
Queensland

. -I also resent the remarks made last night by Senator Aylett about Senator Brand. The honorable senator’s statement was not only unfair, but also untrue. In the last war I had the honour of serving under Senator Brand in France when he commanded the 4th Brigade which consisted of the 13th Battalion from New South Wales, the 14th Battalion from Victoria, the 15th Battalion from Tasmania and Queensland, and the 16th Battalion from Western Australia and South Australia. I know as a result of my travels throughout the Commonwealth that Senator

Brand is not only well known but also highly respected by the men who served under him on Gallipoli and in France. I have not the slightest doubt that when any of those men read the remarks made by Senator Aylett last night they will resent them just as strongly as I do.

Question resolved in the affirmative.

page 441

PAPERS

The following papers were presented . -

Lands Acquisition Act - Land acquired at Beenleigh, Queensland- For Postal purposes.

National Security Act - National Security (General) Regulations - Orders -

Prohibiting work on land (5).

Taking possession of land, Ac. (118).

Use of land (11).

Superannuation Act - Third Quinquennial Report on the Commonwealth Superannuation Fund covering the period up to 3 1st December, 1939 (including the quinquennium ended 30th June, 1937).

Senate adjourned at 10.34 p.m.

Cite as: Australia, Senate, Debates, 17 September 1942, viewed 22 October 2017, <http://historichansard.net/senate/1942/19420917_senate_16_172/>.

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