1956-09-12 22 1 2 SENATE 229 0 1956-09-12 The PRESIDENT (Senator the Hon. A. M. McMullin) took the chair at 3 p.m., and read prayers. 229 Questions 229 229 JSB 0 0 CRITCHLEY, John Senator CRITCHLEY - Is the Minister for Repatriation able to confirm reports that ex-servicemen who are inmates of repatriation hospitals but are not in receipt of pensions will no longer be required to leave such hospitals at the expiration of 90 days as patients, but may remain in hospital for the duration of their illness? 229 JQP CP 0 0 COOPER, Walter Senator COOPER - I did not hear the whole of the honorable senator's question. I understood him to ask whether patients in repatriation hospitals who had been there for three months would get sustenance - 229 JSB 0 0 CRITCHLEY, John Senator Critchley - And be allowed to remain in the hospital during the period of their illness; in other words, that they will not be thrown out. 229 JQP 0 0 COOPER, Walter Senator COOPER - They have never been thrown out. The fact is that in respect of certain ailments - those of 100 per cent, disability such as totally and permanently incapacitated pensioners - there are facilities in the repatriation hospitals for -other than their war-caused disabilities. However, the period as a rule is not longer than three months. According to the Repatriation Act a patient suffering from a chronic complaint is not entitled to stay in the hospital for more than three months, but if it is thought that he will recover I am sure that the hospital authorities will allow him to remain until he is better, or has recovered sufficiently to go into another hospital. I repeat that patients have never been thrown out of repatriation hospitals. 229 229 K0N 0 0 ARNOLD, James Senator ARNOLD - In view of the national importance of the floating dock at Newcastle, is the Minister for Shipping and Transport in a position to advise the Senate when the last survey of the dock was made, and will he assure the Senate that proper maintenance and repairs to this vital establishment are carried out? 229 JZY LP 1 0 PALTRIDGE, Shane Senator PALTRIDGE - I cannot provide offhand the information when the last survey was carried out. The best thing that I can do is to ask the Department of Shipping and Transport for a full report, which I shall pass on to the honorable senator. 229 229 K0L 0 0 PEARSON, Rex Senator PEARSON - My question is directed to the Minister representing the Treasurer. In view of the speculation that is current in the community about the possibility of a further conference of Commonwealth and State Ministers to deal with the inflationary problems at present facing this country, can the Minister give honorable senators any indication whether there will be another conference similar to the one held some time ago? 229 K7A LP 1 0 SPOONER, William Senator SPOONER - I can only tell the honorable senator that I have no information about the matter that he has raised. 229 229 K0Z 0 0 AYLETT, William Senator AYLETT - In view of the press reports about the serious nature of the Suez Canal situation, will the Attorney-General inform the Senate whether Mr. Casey has reported to the Cabinet about this matter, and when the Senate is likely to be informed officially about the situation? 229 JZI LP 1 0 O'SULLIVAN, Neil Senator O'SULLIVAN - I am pleased, as I am sure all honorable senators are pleased, that Senator Aylett appreciates the seriousness and delicacy of the situation overseas. I can assure him, and the Senate, that as soon as the time is appropriate a full statement about the situation will be made. 229 229 KBW 0 0 WRIGHT, Reginald Senator WRIGHT - Can the Minister indicate the approximate level of the special account deposits made by the trading banks with the reserve bank, and will he give the Senate information about the manner in which these moneys are invested, if at all? 229 K7A LP 1 0 SPOONER, William Senator SPOONER - The relevant figures with regard to the level of the special accounts with the Commonwealth Bank are published at regular intervals. I have not the figures in my memory at present. As to the method in which these funds are employed. I prefer, having regard to the technicalities of the matter, that the honorable senator should put his question on notice so that the Treasurer himself may supply an answer to it. 230 230 KOW 0 0 HENTY, Norman Senator HENTY - I refer to the statement made last week by the Minister for Shipping, and the fact that he has exempted the refrigeration ship " Viti " from the clauses of the Navigation Act to allow it to trade on the north and north-west coasts of Tasmania. I ask the Minister: What is the refrigerating capacity of this vessel, what is its tonnage and draught, and will it be able to service the ports of Ulverstone, Devonport, Launceston and Stanley to carry the greater proportion of refrigerated cargo from those ports? 230 JZY LP 1 0 PALTRIDGE, Shane Senator PALTRIDGE - The vessel to which the honorable senator has referred has a capacity of approximately 750 tons. Representations were made to me by the Tasmanian Frozen Foodstuffs Committee, and supported by the Tasmanian Government, to the effect that this ship should be given a continuing licence for five years to enter this trade. No specific ports were mentioned in the reports, but it has always been my understanding that the vessel will be used during the season wherever cargo is available for the next five years. 230 230 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - I preface a question to the Minister representing the Minister for Primary Industry by stating that there is an outstanding question on the notice-paper in my name relating to the disposal by the United States of America of foodstuffs to India. Since my question was asked in the Senate, I believe that Sir Percy Spender, the Australian Ambassador to the United States, has been asked to direct a note to the United States State Department. If that is so, will the Minister include in the answer to be given to my question details of the note communicated to the United States authorities? 230 JZY LP 1 0 PALTRIDGE, Shane Senator PALTRIDGE - I shall refer the further question asked by Senator Hendrickson to the Minister for Primary Industry, and ascertain whether he can accede to the honorable senator's request. 230 230 KQQ 0 0 LAUGHT, Keith Senator LAUGHT - Does the Attorney-General envisage any legislation during the current sittings of the Parliament to bring up to date the official secrets provisions of the Crimes Act? The Attorney-General will recollect that the Royal Commission on Espionage in Australia made certain important observations in relation to the inadequacy of the present legislation. 230 JZI LP 1 0 O'SULLIVAN, Neil Senator O'SULLIVAN - Rather than ask the honorable senator to put his question on the notice-paper I suggest that he write to me in my capacity as Attorney-General and, perhaps, elaborate in greater detail on what he has in mind. I appreciate the importance of the matter. From my recollection of the report of the royal commission, I believe there is quite a vacuum which could be filled in connexion with the matter raised by the honorable senator. I shall be happy to refer the question to the Crown law authorities. 230 230 KMN 0 0 GRANT, Donald Senator GRANT - I direct a question to the Minister representing the Prime Minister. On 7th October, 1951, the Prime Minister said - Australia has agreed in principle to take part in the Middle East Command to guard the Suez Canal. Does that statement still stand in the present crisis, or will the Minister give a guarantee that this Parliament will have an opportunity to discuss the matter before any Australian troops are committed? 230 JZI LP 1 0 O'SULLIVAN, Neil Senator O'SULLIVAN - I do not know whether the honorable senator is relying on his memory in quoting what the Prime Minister said in 1951. If the Prime Minister made a statement in 1951, he did so with excellent reason, and I am sure that what he does in 1956 will be done with equally sound reason. 230 230 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - I preface a question to the Leader of the Government in the Senate by stating that it is reported in the Auditor-General's report that nearly £10,000,000 has been spent on the Australian National University, £2,000,000 on the Canberra University College, £1,000,000 a year on financial assistance to students at universities and £1,000,000 on the Commonwealth Office of Education. It is well known, too, that lack of financial resources hampers the achievements of every Australian university in the capital cities. Is the Government aware that, since 1919, there has operated in England a University Grants Committee, appointed by the Chancellor of the Exchequer, which examines the financial needs of university education in Great Britain? Some time ago, Sir Charles Lowe, a former Chancellor of the University of Melbourne, suggested the setting up of a grants committee, upon which representatives of all Australian universities would sit, to advise the Commonwealth Treasury on similar lines to the University Grants Committee in England. Will the Leader of the Government ascertain whether that proposal has been examined by the Commonwealth Government and, if so, what was the result? 231 JZI LP 1 0 O'SULLIVAN, Neil Senator O'SULLIVAN - I am quite sure that we are all seised with the importance of the matter raised by the honorable senator. I am sure he will appreciate that, offhand, I am not in a position to give him an answer to his question. I should welcome an opportunity of debating the matter, and of supplying further information when the Estimates come before honorable senators in a week or two. If the honorable senator will give me further details, I will obtain a fuller and more detailed answer to his question. 231 231 K3O 0 0 BUTTFIELD, Nancy Senator BUTTFIELD asked the Minister representing the Minister for Labour and National Service, upon notice - Do young men enrolling for national service receive aptitude tests at the time of their enrolment? If so, what steps are taken, particularly by the Department of the Army, to make full use of each trainee's aptitude and to ensure that the training period is of such a nature that the trainee can profit by it later in civil life? 231 K7A LP 1 0 SPOONER, William Senator SPOONER - The Minister for Labour and National Service has supplied the following information: - No aptitude tests are given to national service registrants either at the time of registration or at any other time prior to enlistment in the services. Each registrant is interviewed at the time of his medical examination prior to enlistment, and details of his educational and occupational history are recorded. This information is used to assist in allotting registrants to the services and is passed on to the services at the time of enlistment. I understand that the Army and the Air Force apply aptitude tests to some classes of national service trainees after enlistment and I have asked my colleague, the Minister for Defence, to provide the honorable senator with information concerning' these. 231 231 K0L 0 0 PEARSON, Rex Senator PEARSON asked the Minister representing the Minister for Primary Industry, upon notice - What quantities of wheat were carried over in Australia as at 30th October, in 1952, 1953, 1954 and 1955, respectively, and how much is expected to be carried over at 30th October this year? How much of such wheat, if any, was sold, but awaiting shipment? What was the carry-over during the same period in the United States of America, Canada and elsewhere? What quantities were sold in the same years for (a) export and (b) home consumption? What quantities of wheat were exported during these years in the form of (a) bulk wheat, (b) bagged wheat and (c) flour? Which were the principal countries to which such wheat was sold? What quantities of export wheat were sold as (a) quota wheat in terms of the International Wheat Agreement, and (b) non-quota wheat? To which countries was International Wheat Agreement wheat sold? What was the average price in each year of (a) quota wheat, (b) non-quota wheat, and (c) home consumption wheat? 231 JZY LP 1 0 PALTRIDGE, Shane Senator PALTRIDGE - The Minister for Primary Industry has supplied a long and comprehensive answer to the series of questions asked by Senator Pearson, including complicated tables of figures. With the concurrence of honorable senators, I shall incorporate the reply in " Hansard ". It is as follows: - The Australian " crop year " ends on 30th November each year and the information sought, as at that date each year, is as follows: - As at 30th November in each of the following years, the indicated quantities of wheat (including the wheat equivalent of flour) had been sold for shipment after that date: - In some instances the " crop years " of exporting countries differ from that of Australia. The carry-over quantities, at the end of each appropriate crop year during the period covered by the question, were as follows: - For the crop years ending 30th November the following quantities of Australian wheat were shipped or delivered (including the wheat equivalent of flour): - This dissection of export sales (as per 4 above) is approximately as follows: - Based on minima of 1,000,000 bushels of wheat per annum and 10,000 tons of flour per annum, the following are the principal destinations for exports from Australia: - 1952- Wheat. - United Kingdom, Eire, New Zealand, India, Holland, Italy, Cyprus, Rhodesia, Japan. Flour. - Ceylon, Malaya, United Kingdom, Indonesia, India, Sudan. Mauritius, Egypt, Aden, Pacific Islands. 1953 - Wheat. - United Kingdom, Eire, India, New Zealand, Pakistan, Germany, Rhodesia, Italy, Japan, Cyprus, Holland, Sweden. Flour. - Ceylon, Malaya, United Kingdom, Indonesia, India, Mauritius, Burma, Egypt, Siam, ' Aden, Pacific Islands. 1954- Wheat. - United Kingdom, Germany, New Zealand, India, Rhodesia, Cyprus. Flour. - Ceylon, Malaya, Indonesia, Burma, Mauritius, Aden, United Kingdom, Egypt, Pacific Islands. 1955- Wheat. - United Kingdom, India, Eire, New Zealand, Japan, Rhodesia, Syria, Lebanon, Hong Kong, Iraq, Cyprus, Germany. Flour. - Ceylon, Malaya, Indonesia, United Kingdom, Pacific Islands, Mauritius, Sudan, Burma, Aden, Siam. The approximate dissection of export sales between International Wheat Agreement and nonInternational Wheat Agreement is as follows: - Eire, Norway, Sweden, Holland, Germany, Italy, Persian Gulf, Egypt, Palestine (Israel), Saudi Arabia, Lebanon, Portuguese East Africa, Belgian Congo, India, Portuguese India (Goa), Japan, Portuguese China (Macao), Ceylon, Indonesia, Timor, Philippine Islands, New Zealand, Peru, and to August, 1953, only - United Kingdom, Malta, Cyprus, Aden, Rhodesia, Sudan, Mauritius, Nyasaland, Malaya, Hong Kong, British North Borneo, Sarawak, Brunei and Fiji. The approximate average realizations during the years in question were - 232 232 KBW 0 0 WRIGHT, Reginald Senator WRIGHT asked the Minister representing the Minister for Labour and National Service, upon notice - Will the Minister supply the following information relative to the committee of inquiry constituted in November, 1954, under the chairmanship of Mr. J. B. Tait, Q.C., to inquire into matters affecting the stevedoring industry: - (a) Is the report correct that two -members of the committee of inquiry, namely, Mr. J. F. R. Gibson and Mr. J. Shortell, have been appointed to the new Stevedoring Industry Authority? (b) If so, was the principal report of the committee completed at the date of their appointment? (c) If the report was not then completed, is it intended that those two gentlemen will participate in the completion of the report? 233 K7A LP 1 0 SPOONER, William Senator SPOONER - The Minister for Labour and National Service has supplied the following information; - (a) Yes. (b and (c) The formal hearings of the committee had concluded prior to appointment and the final report of the committee is in course of preparations. The committee has been meeting together in recent weeks for this purpose. 233 233 KNU 0 0 HANNAN, George Senator HANNAN asked the Minister representing the Minister for Territories, upon notice - In view of the desirability of being as self sufficient as possible in strategic raw materials, will the Minister inform the Senate (a) Whether the rubber plantations in New Guinea are yet producing raw rubber suitable for use in the manufacture ofmotor tyres and, if so, what is the approximate annual production of raw rubber from these plantations suitable for this purpose? (b) If any such locally grown rubber is being used in the production of motor tyres, what is the approximate proportion of locally grown to imported rubber used for this purpose? 233 JQP CP 0 0 COOPER, Walter Senator COOPER - The Minister for Territories has supplied the following answer to the honorable senator's question: - (a) Yes. The present annual productionin Papua and New Guinea is approximately 3,800 tons. All of this is suitable for the manufacture of motor tyres. (b) About 80 per cent. of rubber imported into Australia from all sources is used in the production of motor tyres. In 1955 total imports of rubber were 51,685 tons, of which Papua and New Guinea supplied approximately 7½ per cent. Trade figures regarding the approximate proportion of Papua and New Guinea grown to imported rubber used in the manufacture of motor tyres are not available, but the proportion is probably less than 74 per cent. 233 233 JQP CP 0 0 COOPER, Walter Senator COOPER - On 4th September, 1956, Senator Anderson asked the following question: - I direct' a question to the Minister representing the Minister for Health, and preface it by pointing out that in the United States of America a new anti-polio vaccine is being manufactured under the name of Sabin, which certain medical authorities consider may prove to have more lasting immunizing qualities than the present vaccine Salk. Will the Minister have this report investigated, and if necessary, send an appropriate medical officer overseas to investigate Sabin vaccine? The Minister for Health has now furnished the following reply: - There are fundamental differences between the Salk and Sabin vaccines which must be clearly understood in any consideration of their respective values. The Salk-type poliomyelitis vaccine as made by the Commonwealth Serum Laboratories and used in Australia is a mixed vaccine of virulent virus strains which have been killed. It is given by injection. The virulence of the virus evokes an effectual measure of protective response in the inoculated subject whilst the fact that it is not living assures that he will not communicate infection to contacts. The value of the Salk-type vaccine as a protection against poliomyelitis has been amply demonstrated by the successful immunization of millions of children throughout the world. The Sabin vaccine, on the other hand, consists of living strains of virus selected for their lack of virulence. It may be given by mouth and for the best results it appears desirable that a vaccine for each poliomyelitis type be given on separate occasions. The virus multiplies in the body and actually infects the inoculated subject, who subsequently discharges the virus in his excreta for some weeks. The reaction of the body to this infection is claimed to build up a level of resistance to poliomyelitis in the same way and to the same level as follows an actual attack of poliomyelitis. It is argued that resistance will be more enduring than that likely to result from immunization with killed virus as in Salk-type vaccine, but evidence at present available does not support this view. The confidence of the advocates of the Sabintype vaccine is not shared by all medical authorities. Doubts attach to the production of an effectual level of protection unless virulent organisms are used. It has not yet been convincingly proved that the attenuated living virus will not revert to virulence as it is disseminated through a community. As the subject immunized by the Sabin method excretes living organisms for some weeks after taking the vaccine, any such reversion to virulence would be attended by serious risk of infection to contacts. To date the Sabintype vaccine has been submitted to no extensive field trials and it is not in process of manufacture on a large scale. It is virtually still in the stage of laboratory study. Honorable senators may be assured that my department will watch the development of the Sabin-type vaccine closely and consider its production and use in Australia if and when this seems desirable. It is proposed that Dr. Bazeley, Director of the Commonwealth Serum Laboratories, should visit the United States shortly and whilst there he will devote some time to a study of the Sabin-type vaccine and its potential. Meantime, in the Salk vaccine we have a proved effectual agent of protection against poliomyelitis which we will continue to use to the limit of our capacity. 233 miscellaneous Debate resumed from 11th September (vide page 228). on motion by Senator Spooner - That the following papers be printed: - Estimates of Receipts and Expenditure, and Estimates of Expenditure for Additions New Works and other Services involving Capital Expenditure, for the year ending 30th June, 1957, The Budget 1956-57 - Papers presented by the Right Hon. Sir Arthur Fadden in connexion with the Budget of 1956-57, and National Income and Expenditure 1955-56 Upon which Senator McKenna had moved by way of amendment - That all the words after "That" be left out with a view to insert in lieu thereof: - " the Estimates and Budget Papers 1956-57 tabled in the Senate are unacceptable and should be rejected because they seek to implement policies which are seriously detrimental in their effect on the interests of Australia and for which the Government deserves to be censured ". 234 KOU Victoria 0 0 HENDRICKSON, Albion Senator HENDRICKSON . - Continuing the remarks I began yesterday, I should like now to congratulate my leader, Senator McKenna, on the speech he delivered on behalf of the Opposition in connexion with the budget. Needless to say, I wholeheartedly support the amendment he has moved. I dealt at some length with some of the problems mentioned by honorable senators on the Government side, and the only other matter to which I wish to refer now is immigration. I believe that we must have immigration if this nation is to develop, but it must be planned immigration. During the 1920's we saw the spectacle of immigrants coming to this country when we had no work or homes to offer them. A similar position is arising to-day. This country is being inundated with immigrants from overseas and, when they arrive, the State governments have cast upon them the responsibility of housing and finding work for them. The States have no plans for employing these immigrants in a way calculated to serve both their interests and those of the nation. Immigrants are still coming to this country, despite the fact that there are thousands of unemployed immigrants already here. If we are to continue with a policy of immigration, the Government should at least have some reasonable plan for absorbing the immigrants as they arrive. During the course of debates in this Parliament, especially those on budgets, we hear honorable senators on the Government side continually blaming the succession of Labour governments for the position in which the country is placed to-day. I have often heard honorable senators opposite criticizing the late James Scullin and his Government. Now we hear them criticizing what they are pleased to call socialist governments, those led by the late Mr. Curtin and the late Mr. Chifley. I should like to remind the Senate that, when the present Prime Minister (Mr. Menzies), and the present Treasurer (Sir Arthur Fadden), played politics and deserted this country in its hour of need, it was the great Australian Labour party that provided men with the necessary courage and ability to govern Australia and plan its war effort. Nobody can deny that a great job was done by the Labour Administration during the period of World War II. During the last 40 years, Labour has really governed for only six years. Even during the regime of the Scullin Government, Labour was faced with a hostile Senate, because there were only three Labour senators. 234 JZI 0 0 O'SULLIVAN, Neil Senator O'sullivan - Why did not Labour seek a double dissolution? 234 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - Labour did not ask for a double dissolution because the late Mr. Scullin was prepared to go to any lengths in order to set even the keel of the great ship of state. He believed that the legislation that he intended to introduce was in the best interests of the people. He was not prepared to resort to any political tricks in order to beguile the people of Australia into believing that a double dissolution would accomplish things that should be done. From 1941 to 1943, when Labour was in office, it had a minority in both Houses, but from 1943 to 1949 it had a majority in both Houses. Therefore, although Labour was in office for ten and a half years during the last 40 years, it was in effective control of the country for only six years. Despite that fact, many supporters of the Government continue to assert that the present parlous state of the nation is due to the activities of the previous socialist Labour administration. I should like now to refer to the reply by the Attorney-General and Minister for the Navy (Senator O'sullivan) to the observations that were - made by the Leader of the Opposition (Senator McKenna). The Minister said - As a result of recommendations by the Tariff Board, I am proud to say that this Government has increased customs duties for the purpose of protecting and encouraging worth-while and efficient Australian secondary industries. If the Leader of the Opposition is implying that the Labour party is not in favour of protecting Australian industries, I invite honorable senators on the Opposition side who support that proposition to stand and say so. Did honorable senators ever hear anything so ridiculous? The Labour party brought the Tariff Board into existence, and has always wholeheartedly supported it, but the Tariff Board has very little to do with the import restrictions that are crippling industry to-day. The Leader of the Opposition (Senator McKenna) said that the present Government parties won the 1954 elections on the Petrov issue by adopting snide tactics. The political tactics of the Government in that instance have meant a loss to-day of £30.000,000 to the wool-growers of Australia. 235 KSS 0 0 MATTNER, Edward Senator Mattner - How does the honorable senator make that out? 235 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - If the honorable senator will take the trouble to examine statistics, he will find that my statement is correct. That is not because Russia has not received Australian wool. Russia has received our wool, but only after Russian agents have bought it at sales in England. At sales held in Australia that wool was bought by buyers acting on behalf of wool magnates in England, who later resold it in London to the Russians. They made a profit on that £30,000,000, notwithstanding that they had probably never seen an Australian sheep, or even Australia. The position facing us to-day is that Australia has lost many of its export markets. The Minister for Trade (Mr. McEwen) is telling us so every day. We should realize that by selling our wool to Russia we do not necessarily have to agree with Russian political philosophy any more than we accept Chinese political philosophy merely because we may sell some wheat or wool to China. The fact remains that whether we sell our products to those nations directly, or refuse to do so, they will certainly obtain our wool and other products if they need them and have the wherewithal to buy them. If they do not buy their requirements in Australia, they get them in other ways. I charge supporters of the Government, who frequently criticize members of the Labour party and accuse them of being tied to the Communist element in the world, with being themselves the people who are working hand-in-glove with those who control Soviet Russia to-day. There is a definite connexion between them and the Communists because they believe in communism, fascism and nazism. They do not believe in socialism or in the principles which the Labour party supports. The Petrov royal commission was only a political trick to win an election and to remove the Russian legation from Australia so that people overseas who had farmed the farmers for years could continue to do so. Those people who say that we have lost the Russian market should realize that Russia still gets our wool. No honorable senator can deny that that is so. 235 KSS 0 0 MATTNER, Edward Senator Mattner - How much of our wool does Russia get? 235 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - I do not know, but I do know that the party to which the honorable senator belongs pulled the political wool over the eyes of the people in connexion with the Petrov commission. It is interesting to note that in this year's Estimates a sum of £6,000 is provided for the Petrovs. I do not know why, nor do I care why it is provided, but that provision is being made. An age pensioner who was born in this country, reared a family here, and whose members have fought for it, is left with only £4 a week on which to live; yet this great traitor, who was prepared to sell even his wife, is paid £6,000 a year. Yet, we are told that crime does not pay! The Leader of the Government in this chamber (Senator O'sullivan) told us that the Menzies Administration had inspired confidence in Australia overseas, and that, as a result, we could borrow money in almost any country abroad. I tell the honorable senator that a person who has something of value is always able to pawn it. It is never difficult to get a dollar from a pawn-broker for a watch worth £20. Any country in the world is prepared to lend money, on Australia's productive capacity. I am sure that if the Government were to ask the people of the United States of America, or of any other overseas country, for a loan the money that would be offered would be almost unlimited, provided that those who lent it could take over the control of Australia, as happened in 1929-30. It was a Labour government that got us out of that financial tangle. In another paragraph of the Minister's speech he referred to what this Government had done to help those in need. Referring to criticism of the Government in this -connexion, he said - Senator McKenna referred to social services and what this Government did to help those who are in need. It is most unfair ; I will go further and say that it is very cruel ; to use an occasion such as this to lead persons who are necessitous and in poor circumstances to think that, if only a Labour government were in power, their worries would be over and Father Christmas would walk Among them once more. There is nothing more -distasteful than an attempt to capture popular esteem by dwelling on the needs and hardships of the poor. Such a statement from the Leader of the Government in this chamber is unworthy of a man holding such a high office. It shows that invalid and age pensioners are regarded only as a party political football. If supporters of the Government are sincere in their concern for pensioners, they can easily remedy the position, because all they have to do is to give the pensioners some further financial assistance, in which event they would no longer be a political football. I tell the Minister and those who hold similar views that the position of many pensioners to-day is, indeed, perilous. It is not often that I bring forward in this chamber the claims of ex-servicemen and pensioners generally, because I believe that such matters should not be brought forward in order to gain political kudos. I told the pensioners that, but they replied that it was my duty to bring their case before the Senate. It is for that reason that I have done so to-day. I recall some events that happened in Canberra a fortnight ago to-day. A number of pensioners arrived in Canberra and tried to secure an interview with the Treasurer (Sir Arthur Fadden), but he refused to see them. The delegation then said that if he still refused to see them they would sit on the steps of Parliament House until he changed his mind. I advised them not to do that, and warned them that if they persisted in their intention to remain on the steps all night many of them would be in hospital the next day. They then said that such an action on their part would at least be a demonstration, and might lead to something being done in the future to help others in a similar position. I left them about half past nine, and later Senator Cole went out to them and said, " It is quite all right now, you can go home; I have made representations to the Treasurer and he will see you at 11.30 in the morning". They saw the Treasurer in the morning, and even his casehardened soul was softened after he had heard their representations, because he said, " I am sorry for you and it brings a lump into my throat ". When they told me that, I said to them, " I hope that the lump in his throat is so large that he coughs up something to-night for you when he delivers his budget speech ". But, as honorable senators know, the pensioners received nothing in the budget. I do not want this matter to be made into a political struggle, but I point out that before the last general election, when the last budget was brought in by the Treasurer, the age pensioners received an increase of pension. However, under this budget, because there is no general election in the offing, the age pensioners have been granted nothing at all. How is it possible for a pensioner to exist on ?4 a week? Of course, I do not say that the Government can continually increase pensions as the years go by; but this Government, or some government, or some authority, should at least prepare a statement for the Parliament outlining a scheme so that in - the future those who have been maimed in industry and those who have worked in industry and reared families and have now become too old to work, will at least be assured of a shelter, a decent bed, a decent meal and a warm fire in cold weather. No party should make party politics of the pensioners' plight, but if the Opposition does not mention it nobody will mention it. Somebody has to put forward their case. About 130,000 people in Melbourne recently signed a petition asking the Treasurer to give favorable consideration to the requests of pensioners. I challenge this Government to resign to-day and face the electors on_ this issue. 236 JZI 0 0 O'SULLIVAN, Neil Senator O'sullivan - We shall resign any time that the Opposition desires. 236 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - The Labour party was never more ready to contest an election than it is to-day. 236 JZI 0 0 O'SULLIVAN, Neil Senator O'sullivan - Who is the leader of the Labour party? 237 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - That is all very well; but the Liberal party has taken into its ranks another derelict of ours in Tasmania. Anything that is derelict falls into the arms of the old Liberal party or the Australian Country party. Anything that is of no more use, or any traitor, falls into the hands of the Liberal party. A member of the Liberal party who is a Minister said to me only to-day, " Good <3od, another one! What is our party coming to? #34;. I said, " It is coming to what it has always been, a rubbish tip for politicians of the type that leave our party ". I say in all sincerity that at least the Government should have given favorable consideration to the representations of the age pensioners. "Will any honorable senator on the Government side stand up and say that the pensioners have not been treated unjustly? Can they go home to-night to their warm beds And really believe that the pensioners have a reasonable standard of living? 237 JZI 0 0 O'SULLIVAN, Neil Senator O'sullivan - This Government has treated the pensioners much, better than any Labour government ever did. 237 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - Had it not been for the Labour party the pensioners would be receiving nothing to-day. 237 JZI 0 0 O'SULLIVAN, Neil Senator O'sullivan - What rot! 237 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - My mind goes back to 1907, when the Labour party had only a handful of representatives in the Australian Parliament. The price that we sought for our support of the Government was that some assistance should be given to aged people, and the aged were granted pensions of 7s. 6d. a week. What did they get in the years before 1907 from governments such as the Government that we have at present? It was the Labour party mat initiated age pensions; and assistance to pensioners has been Labour's platform since it was formed in 1900. Had it not been for the Labour party there would beno age pensions to-day,, and the same type of busybodies would be going round poking their noses into the business of these poor unfortunate persons and saying, " You can have one pound of flour and one pound of sugar for the next week ". That is not the sort of treatment that the workers should get when they are laid aside; but it is the treatment that they got under previous nonLabour governments and the treatment that they would get to-day if there were no Labour party. Fools rush in where angels fear to tread- 237 JZI 0 0 O'SULLIVAN, Neil Senator O'sullivan - Then why rush? 237 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - The Attorney-General (Senator O'sullivan) has galloped in. He attacked the Leader of the Opposition (Senator McKenna) when he made statements recently about wages. I hope that he does not throw orders about, when he is administering the Navy, as he threw figures about in the Senate recently. If he does so, all our ships, even the old junk that we have got from England, will be on the rocks. The Attorney-General said that when the Chifley Government was in office the basic wage was £4 14s. or £4 15s. That is completely erroneous. The honorable senator discussed the most important matter that confronts this Parliament, that is the wages of the workers, and said that in 1949 the basic wage was £4 14s. or £4 15s. That shows that he does not know what the basic wage was then, because in point of fact it was more than £5 a week in those days. Then, he said that the average wage paid to-day is in the vicinity of £17 a week. 237 JZI 0 0 O'SULLIVAN, Neil Senator O'sullivan - What is the basic wage in Tasmania? 237 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - In the Minister's State of Queensland it is £11 15s. a week. But, what is 45s. a week to the Minister, who receives about £6,000 a year? But, 45s. a week is a fortune to the basic wage earner, and at least the honorable senator, who is the Attorney-General, should know what the basic wage was in 1949. I hope that the previous Attorney-General, who is now the Chief Judge of the Commonwealth Industrial Court, knows something more about industry than his successor does. The Minister says the average wage now paid is £17 a week. 237 JZI 0 0 O'SULLIVAN, Neil Senator O'sullivan - That is quite true. 237 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - I have the official figures before me, and I inform honorable senators that the maximum amount that a tradesman can earn, with all his allowances and margins for skill, is £17 a week. 237 JZI 0 0 O'SULLIVAN, Neil Senator O'sullivan - The honorable senator is quite wrong. 238 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - I challenge the Attorney-General to instruct his secretary or his departmental head to obtain the correct figures and then put them before the Senate. 238 JZI 0 0 O'SULLIVAN, Neil Senator O'sullivan - I have stated the up-to-date figures. 238 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - The figures that I have are up to date, because they have been obtained from the Melbourne Trades Hall. The trades halls are the only places where one finds people interested in the basic wage. 238 JZI 0 0 O'SULLIVAN, Neil Senator O'sullivan - The honorable senator should go to the Commonwealth Statistician for the correct figures. 238 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - The trades halls in the various capital cities are the only reliable places at which to make inquiries about the conditions and wages of the workers. The Minister has stated that the workers are enjoying great prosperity, but if it were not for the fact that the wives of many workers are also working, the average sum coming into the average home each week would be less than the basic wage. Letter carriers and telephone linemen are taking home in their pay envelopes less than the basic wage. This Government is not prepared to assist the letter carriers although, after 40 years' service in all weathers, they receive the same pay as they were given when they began their service. After 40 years of service to the public, they are still on the same salary. It -is scandalous. This Government should be able to do something for the linemen and the mail staff in the post office. 238 KSS 0 0 MATTNER, Edward Senator Mattner - What does the honorable senator mean when he says that the letter carriers get the same salary as they did 40 years ago? Will he explain? 238 JZI 0 0 O'SULLIVAN, Neil Senator O'sullivan - The honorable senator does not have to explain. 238 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - When the little discussion between the Leader of the Government in the Senate and the honorable senator who has wool in his ears has been concluded, I shall make everything clear. I said that if a letter carrier starts in the mailroom at £720 a year, he finishes his service after 40 years on the same salary. There are no increments. The salary varies from time to time, but the letter carrier gets no increments for the service he has rendered to the Postmaster-General's Department. 238 KSS 0 0 MATTNER, Edward Senator Mattner - The honorable senator wants us to believe that a man who starts on £720 a year gets no increase for 40 years? 238 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - That is correct. He gets the same salary - apart from basic wage and cost of living increases, which are something different. The Leader of the Government said that the Leader of the Opposition (Senator McKenna) had had the temerity to talk about defence, and he said that that bewildered a tolerant fellow like himself. I know that the Leader of the. Government is a tolerant fellow, but he doss not like listening to facts. 238 JZI 0 0 O'SULLIVAN, Neil Senator O'sullivan - I do not get a chance to hear them from the Opposition. 238 KOU 0 0 HENDRICKSON, Albion Senator HENDRICKSON - I should like the Leader of the Government to answer the points that I- have raised. I fully endorse the statements that have been made by the Leader of the Opposition. If the Government is so sure of its political grounds, it should go to the people before it draws any more red herrings across the trail, and it would get its answer from the electors. It would be oblivion. 238 K0L South Australia 0 0 PEARSON, Rex Senator PEARSON . - lt is the right of the Opposition to criticize the budget and any other measure that is introduced by the Government; in fact, it is the bounden duty of the Opposition to criticize the Government's proposals, but those criticisms should be constructive. The speeches that have been made by Senator Hendrickson and other honorable senators on. the Opposition side fell short of that requirement. I am getting very tired of listening, year after year, to Opposition speeches which contain nothing constructive to help us to cope with the tremendous problems that face us. Honorable senators opposite are silent, and that indicates that they acquiesce in my statement. I was particularly disappointed with the speech of the Leader of the Opposition (Senator McKenna), and with the contribution made yesterday by Senator Byrne, from whom we expect something worth while. The Leader of the Opposition did himself less than justice. He spent an hour, and the extra time granted to him by the courtesy of Government supporters, in accusing the Government of low aim. 239 K0W 0 0 ASHLEY, William Senator Ashley - We get no courtesy from Government supporters. 239 K0L 0 0 PEARSON, Rex Senator PEARSON - The Leader of the Opposition did get courtesy - we extended his time. 239 K0W 0 0 ASHLEY, William Senator Ashley - Only the courtesy to which he is entitled. 239 K0L 0 0 PEARSON, Rex Senator PEARSON - He said that this Government's chief crime was low aim. Does he not realize the unpopular things that this Government has had to do? 239 K0W 0 0 ASHLEY, William Senator Ashley - The people realize it. 239 K0L 0 0 PEARSON, Rex Senator PEARSON - Senator Ashley has been saying that for a long time, but the people have not believed him. The Leader of the Opposition said that the only concern of this Government was to keep itself in office. 239 KOU 0 0 HENDRICKSON, Albion Senator Hendrickson - That is true. 239 K0L 0 0 PEARSON, Rex Senator PEARSON - Do not the Leader of the Opposition and Senator Hendrickson recall the unpopular things that this Government has had to do? It did not do them for the sake of winning friends. Its efforts have had the opposite effect. The Government has faced up to its problems because it is a responsible government, and is prepared to meet unpopularity. I have only to remind honorable senators opposite of the wool prepayment legislation that enforced prepayment of taxes. The Opposition said that the legislation would be unpopular. How, then, can the Leader of the Opposition say that this Government is concerned only with retaining office? What about the so-called horror budget of 1951? Was that calculated to keep the Government in office? What about the import restrictions which are a tremendous hardship on people in business? Are they calculated to win friends and influence people? I remind the Opposition of the present credit restriction. How can the Leader of the Opposition claim that this Government's only concern is to keep itself in office? If the Leader of the Opposition did not say that, I ask him to correct me now. His statement that the Government was guilty of low aim was unworthy of him. 239 K0W 0 0 ASHLEY, William Senator Ashley - Your opinions do not count for much. 239 K0L 0 0 PEARSON, Rex Senator PEARSON - Perhaps the opinion of the people has more weight. They have expressed themselves in support of this Government four times, much to the chagrin of the Opposition. Winning a battle against inflation is not easy or spectacular, lt is most likely to be achieved by unpopular means, but that has not daunted the Government. Nobody knows the difficulties of the Government better than does the Leader of the Opposition, who was a Minister in a previous administration. He knows that circumstances vary constantly. Many fluctuating factors affect the economy. Does not the Leader of the Opposition remember, for example, that according to the C series index, the cost of living had already risen twice before the Labour Government went out of office. In 1948, it rose by 8.9 per cent, and, in 1949, by 9.8 per cent. That was a total increase of nearly 19 per cent, in the two last years of the previous Government's regime Inflation had already begun. We have been trying to combat it ever since. Does not the Leader of the Opposition remember the basic wage increase of £1 a week granted by the Commonwealth Court of Conciliation and Arbitration, in 1950, and the effect it had upon the economy? Does he not remember the violent upsurge of prices for our exports overseas in 1951? Those prices were of tremendous benefit to the industries concerned, but they have had a big impact on the economy because of the sudden influx of fresh money from outside. Does not he also remember the demand for imports from abroad which that influx of fresh money created? None of those things was present when this Government took office. Does the Leader of the Opposition remember the Korean war, or does he forget it? It cannot be said that that was expected when the Government came into office. We cannot forget the effects of it and the tremendous strain it imposed upon Australia internally. Does not the Leader of the Opposition remember the tremendous and continued demand by the people of this country for expansion of one sort and another, the tremendous and natural demand for homes, schools, hospitals, office accommodation, buildings of all kinds, public works and, last but not least, increased social services? Here, I should like to remind the Senate that in this year of grace, under this very budget, the Government is providing for a record expenditure on social services of £226,000,000. That is one-fifth of the total budget expenditure. In other words, £1 of every £5 which this Government will collect this year is to be spent on social services. The same thing can be said of the defence requirements of the country. This year £190,000,000 is to be spent, and during the last six years an average population of 8,500,000 people has provided £1,000,000,000 for defence. That works out at £12 per head expenditure on defence during the six years this Government has been in office. Most of that expenditure is non-productive and highly inflationary. It is unforeseen and unpredictable. 240 KSS 0 0 MATTNER, Edward Senator Mattner - And justifiable. 240 K0L 0 0 PEARSON, Rex Senator PEARSON - Yes; and I think the people of Australia accept that proposition. I come back to what I said just now. The Leader of the Opposition, as a Minister in a preceding Administration, knows these things better than does any one else, yet he accuses this Government not only of failure, but of low aim, making no allowance for the effect of these things on our economy. He seeks to make miserable party political capital out of the difficulties of the day. He made a remarkable statement which I cannot accept. Generally, I expect great things from the Leader of the Opposition, but this statement was not worthy of him. I remind him - and this must be particularly galling to him - that this Government has been to the country on several occasions. The Opposition challenged us to go to the country, and we went sooner than our opponents relished. In 1951, the people supported us. In 1954* we achieved a similar result. In 1955, after several years of office, the people of Australia sent the Menzies Government back into the House of Representatives with a tremendously increased majority, and in this place we won five out of the six States, something that had never been done before. We very nearly won all six States, lt was a tremendous victory and, surely, an endorsement by the people of Australia, if one were needed, of the policy this Government has been pursuing. It has introduced unpopular measures, but the people of Australia realize that we have a high sense of responsibility; and, after all, they have experienced unprecedented prosperity, full employment and a security of which they never dreamed. A great deal has been said in this debate about the quarterly cost of living adjustments of the basic wage. We have heard: a good deal from both sides as to the wisdom of certain States restoring those adjustments after the Arbitration Court had: suspended them in 1953. We have been told by some honorable senators opposite that the Government has frozen wages. Nohonorable senator can be sincere in making that statement, because he knows that it is not the truth. The court suspended quarterly adjustments in 1953, and, as I have said, certain States have seen fit to restore them. A notable exception is the action of the Premier of the State which I have the honour to represent, South Australia, and I am glad to see that other States are following his good record in this regard, including Victoria, according to reports in this morning's press. What we fail to realize is that the action of certain States in restoring the quarterly adjustments has actually defeated any chance we had of achieving stability in our economy. It is rather ironical to consider the statements of some Labour leaders both inside and outside this chamber. Before the suspension of quarterly cost of living adjustments, statements were made by prominent trade union leaders criticizing their continuance. I have not time to read all those statements, but I shall give the Senate the names of some of the gentlemen who made them and the dates on which they were made so that they can be checked. On 23rd October, 1951, a statement was made by Mr. Albert Monk, whose name is a household word in Australia and who is recognized as being one of the sanest presidents of the Australian Council of Trades Unions. He said - Each rise in the nominal wage due to quarterlyadjustments seriously lowered the value of skilled' workers' margins. Then, Mr. Cahill, on 18th April, 1952. had this to say - Every time the wage goes up prices rise to a new peak. In the final check, wage-earners are worse off. This is an endless spiral ending in frustration. It is demoralizing to our economy and is undermining rural and industrial stability. That statement was made by the Premier of New South Wales, but he has since seen fit. to restore the quarterly adjustments in his own State and, to-day, he refuses to back down on that issue. 1 believed Mr. Cahill the first time, and most people did also. I have copies of similar statements made by trade union leaders and responsible people outside the Parliament, and I accept what they have said on that subject. Let us now trace the history of quarterly adjustments and consider some figures in regard to the effect of their restoration. In 1951, after the £1 a week basic wage rise was granted by the court, the cost of living, as shown by the C series price index went up by approximately 19 per cent. In 1952, there was a further rise, of 20 per cent. In 1953 - and this is. interesting because it followed the suspension of the quarterly adjustments - the. rise was only 3.8 per cent. We almost achieved stability. In 1954s. the rise was only 1.4 per cent. Those are very significant figures. In 1956, after five States restored the quarterly adjustments, the cost of living rose immediately by 6 per cent. 241 JQN 0 0 COOKE, Joseph Senator Cooke - Give, the Senate some figures about the rise in profits. 241 K0L 0 0 PEARSON, Rex Senator PEARSON - Senator Cook interjected something about profits. That is another matter altogether. I shall address myself to that subject if Senator Cooke will give me time. At this juncture, I am pointing out the effect of quarterly adjustments on the cost of living as shown by the C series index. I agree with the proposition that there is a crying need for some system of uniformity between the Commonwealth and the States in regard to wage fixation. I agree also with the statement made by the Minister for National Development (Senator Spooner) the other night. I quote him. He is always worth quoting, by the way, and on this occasion particularly so. He said - There is much to be gained from a substantial unity throughout Commonwealth and State jurisdictions in the principles and practices of wage determination. This must be achieved if the present chaos is to be eliminated. We must all accept the principle advocated last night by Senator Wright that regard must be had, in the fixation of wages, to the ability ot industry to pay. That is about the most sensible and constructive statement that has been made during this debate. In 1951-52, after the tremendous rise of wool prices, the Arbitration Court quite rightly awarded a prosperity loading, based on the ability of the industry to pay h. Do honorable senators opposite say thai that was not a proper principle to observe then? I consider that it was right that the workers who shore the sheep should enjoy some of the profits gained from the prices then current. 241 JQN 0 0 COOKE, Joseph Senator Cooke - The last price paid for wool was a record, but the shearers are now receiving lower wages. 241 K0L 0 0 PEARSON, Rex Senator PEARSON - The last price was not a record, which shows how much Senator Cooke does not know about this subject. A couple of years ago the price averaged J20d.; this season it was down to 60d. Does the honorable senator refute that fact? When the Queensland Industrial Court made an award for the shearing industry in Queensland last year, it recognized partially the fall in wool prices, but because the rate of wage was accordingly lower shearers all over Queensland have gone on strike, and the current wool sales in Brisbane' have been threatened. I wish that people engaged in industry, both employers and employees, would agree to accept a wage based on the maximum ability of industry to pay. 1 would be content with that at any time, and it is a principle which must be observed in the system of wage fixing. But when a court makes an award, no threat should be made by any government, either Commonwealth or State, to countermand it. It is deplorable that after a court has expressed itself in regard to quarterly adjustments, its decision should be countermanded by the action of certain States. In regard to the raising of loan money in Australia J endorse Senator Wright's comment that the taxpayers cannot continue to provide, through taxation, about £200,000,000 a year to be spent on Commonwealth and State public works in order to make up the short-fall in. loan raisings. The taxpayers should not be asked to do that. According to this budget they will contribute £100,000,000 in taxation for the Commonwealth's own public works programme, and about £109,000,000 of the estimated budget surplus will be rebated to the States to enable them to carry on wilh their loan works programme. If the taxpayers are asked to contribute either this or a smaller amount to make up the short fall in loan raisings, they should be given some acknowledgment by the Treasury of the amount so contributed. If this amount is to be raised it should be regarded as a form of compulsory saving, and the contributor should be entitled to receive some increment for investment. In normal times, public works would be financed from loan moneys, the taxpayer would be called upon to pay interest and the bondholder would receive his interest. The taxpayers who contribute this sum of £200,000,000 are in a most invidious position. They are called upon to make direct tax contributions to the Treasury to this extent, a portion of which is rebated to the States. The States are charged interest, and the poor unfortunate taxpayer again pays his share of interest on that money also, and again on sinking fund payments. He should not be expected to continue on that basis. In the light of present conditions, a system of priority should be applied to public works, both Commonwealth and State. I know that the Commonwealth has put a proposition to the States which certain Premiers have rejected, but in view of the fact that the expenditure of loan money on public works is, in many ways, inflationary, the Commonwealth should proceed, with those works which have the highest priority and set a better example than it has done in this budget. Certain States must also show more sense of responsibility in regard to loan expenditure. It is all very well for them to sit back and say that they would do much more if the Commonwealth would give them the money. A degrading and appalling stage has been reached in Commonwealth and State financial relations. Everything possible must be done to make investments in Commonwealth securities more attractive. In this budget the Government might have increased the 2s. tax rebate. I am not suggesting what it should be, but an increase would have encouraged people to invest. There are counterattractions for the investment of what money is available. I should not like to see the interest rate raised, and I am confident that the loan market could be made more attractive. I agree with Senator Laught that the Government should accept Commonwealth securities at their face value, in satisfaction of Commonwealth estate duty, provided that those securities have been held for a stipulated period of three or four years. The States also should play ball in regard to their succession duties, and this would be an inducement to investors to put their money into Commonwealth loans. I wish that the States would tackle the matter of hire purchase, which is a direct competitor with loan investment.- I am not attacking the hire-purchase system, because I have bought many necessary articles under hire-purchase agreement. Hire-purchase business, however, offers unfair competition to loan raisings, because articles can be purchased without deposit. That is a trap, a snare and a delusion for the person who signs the hire-purchase agreement, and it is a type of business which should not be allowed. The same criticism applies to the purchase of articles on very low deposits. According to the press reports of the Victorian Premier's budget speech, Victoria is tackling this problem, and time alone will show whether its method will be successful. The States should all tackle this problem, in their own interest as well as in the interests of persons who sign hire-purchase agreements and of the country as a whole. Senator Benn made certain statements in his speech, which, I am confident, he will, upon reflection, regret. I hope that when opportunity offers he may correct the impression which he made. According to the " Hansard " report of his speech he said - The primary producers of Australia are falling down on their responsibilities and obligations to the people. He was referring to the shortage in the production of potatoes. He went on - They have the land and equipment to produce potatoes, but they do not produce them. I shall leave my colleague, Senator Mattner, to deal with the subject of potatoes, because he grows them, but I want to take Senator Benn to task for his general statement that the primary producers of Australia have let this country down. If he cares to examine some appropriate figures he will find that primary production has increased in volume, and is still increasing. The tragedy of the whole thing is that values for these products are falling lower and lower; but the primary producers themselves have done a marvellous job over the last few years in lifting their production, as the figures for wheat, barley and other primary products will show. Senator Benn implied that this Government had given certain hand-outs to the wheat-growers. He ought to know that the legislation to which he referred was introduced by a Labour government. We have simply improved it, and carried it on for a further term. Actually, if anybody has got anything out of that legislation it has been the consumers of Australia who have benefited to the extent of at least £150,000,000 during the eight years it has been in operation. If wheat had been sold in Australia for all purposes at export parity, the wheat-growers would have received at least £150,000,000 more than they did, and the consumers would have paid that much more. I have much pleasure in supporting the motion and opposing the amendment. 243 K0W New South Wales 0 0 ASHLEY, William Senator ASHLEY . - Senator Pearson, like all other speakers on the Government side, has criticized the Leader of the Opposition (Senator McKenna) and appealed for some constructive thought. As this request has been repeated by almost every speaker from the Government side, it indicates to me that the Government is sorely in need of sound advice; and I assure Senator Pearson that by the time I have completed my remarks the Government will have received such advice. He attacked Senator Benn for his statement about primary producers, but he failed to tell the Senate that although the average production of wheat per acre has increased from 13 to 15 bushels in the last five years and, last year, reached the record yield of 19 bushels, there has been no reduction in the price of bread to the consumer. Senator Pearson is concerned only about the producers; he gives no thought at all to the consumers. I congratulate Senator Buttfield on the excellent speech she delivered last night when she traced the history of the Snowy Mountains hydro-electric scheme. She certainly gave us some interesting details. She told us of what the River Murray Commission was doing to mitigate floods. I always understood that the main purpose of that commission was to apply water to the land for irrigation purposes. She also suggested the setting-up of more commissions and boards. In that respect, she certainly qualified for No. 1 position on the bandwagon. She admitted, however, that the Snowy Mountains hydro-electric scheme was initiated by a Labour government in co-operation with the Governments of Victoria arid New South Wales. But she failed to tell us - probably this was because she was not in the Parliament at the time and, therefore, was not aware of the fact - that the Liberal and Country parties boycotted the official opening of that scheme. If she had brought out those facts during the course of her excellent speech, the true picture would have been presented to the public. Senator Marriott joined in the constant appeal from the Government side for small investors to contribute to Government loans. He suggested that some provision should be made for collecting this money from those people; but I remind him that many financial interests, such as trust and investment companies, are paying higher rates of interest to-day, and the small investor is just as entitled as is the large investor to place his capital in the most lucrative market. Many opinions have been expressed about the budget, but the most effective condemnation of it and of the fiscal policy of the Menzies-Fadden Administration will not be heard in the Senate or in another place, but outside where it has been condemned most effectively by the people who contribute most to our national development, the primary producers, manufacturers, business people and workers of the community. During this debate it has become more apparent than ever that the Menzies-Fadden Administration is absolutely incapable of coping with- the deepening economic crisis facing Australia or with the problems which are disrupting our economy and lowering the standards of the Australian people. Never in the history of responsible government has Australia lacked guidance or national leadership as much as it does to-day. Some weeks ago, the Acting Prime Minister (Sir Arthur Fadden) called a conference of Premiers in Canberra for the purpose of attempting to arrive at a means of stemming the tide of inflation. He sought to place the responsibility for introducing controls for this purpose solely upon the State Premiers, but his ruse failed completely. Even the conservative Premiers of South Australia and Victoria, Messrs. Playford and Bolte; joined with the Labour Premiers of the other States in unanimously rejecting the proposals put forward by the right honorable gentleman. Prior to the calling of that conference, the federal executive of the Liberal party had become alarmed at the rapid deterioration in the economy of this country. So disturbed were those gentlemen that they warned the members of the Parliamentary Liberal party that the basic philosophy of the party was supposed to be opposed to controls. This is somewhat ironical when one considers the number of controls that were imposed some time ago and which are still in operation. The concern of the Liberal party and the action taken by it were unnecessary and a waste of effort. It was wasted for this reason: The controls that the Menzies Government proposed to introduce, if it could obtain the support and co-operation of the State Premiers, were in relation to wages and the freezing of the cost of living adjustments, both of which had been imposed previously by this Government, in accordance with the policies of the Liberal and Australian Country parties. The truth of the matter is that the Menzies-Fadden Administration and its supporters are unwilling to deal properly with an economy that has been allowed to run to seed. All that this Government has offered to the people of Australia have been the conflicting counsels of despair that have emerged from the Cabinet room, in the shape of the control of wages and the freezing of the cost of living adjustments, supported by a spate of advice from advisers and others who advocate a state of economic anarchy, which they arc pleased to label a basic philosophy. 244 KBW 0 0 WRIGHT, Reginald Senator Wright - From what is the honorable senator reading? 244 K0W 0 0 ASHLEY, William Senator ASHLEY - -I am not reading as much as Senator Wright did during a certain debate recently, and I hope that he is not so bored as I was on that occasion. The cardinal principle on which they agree is that nothing must be done to disturb the plunderers and the profiteers. The Menzies Government is in a position to call on a panel of political professors to prescribe policies which are as objectionable to the Labour party as was Labour's policy of full employment to the tories led by the Prime Minister (Mr. Menzies). There is now a team of professors on the prowl, who adjust their economic and financial theories, according to the complexion of the government in office. In the past, they were not slow to see virtue in what has been loosely described as doctrinaire socialism, but today they are the white-haired wonders of the Menzies Government. Indeed, they were responsible for advising the Acting Prime Minister (Sir Arthur Fadden) to call the Canberra conference to consider another Premiers' plan, the victims of which would be the workers and the people in the lower income ranges. Already, there are signs of an economic crisis, due to the hit or miss, policy of this Government. Sir Frank Richardson, who is the president of the Australian Council of Retailers,, and a confidant of this Government, said in a statement a few weeks ago that therehad been seven major changes in the financial policy of this Government during the last four years. What hope can there be for either economic security or a measure of national development when so many capricious changes of policy are made? 244 K7A 0 0 SPOONER, William Senator Spooner - There have been no capricious changes of policy. 244 K0W 0 0 ASHLEY, William Senator ASHLEY - Owing to the restrictive fiscal policy of the Government, and the restriction of imports, thousands of workers, in this country have lost their employment. I now am coming to a subject that might: interest the interjector. 244 K7A 0 0 SPOONER, William Senator Spooner - Interjector? 244 K0W 0 0 ASHLEY, William Senator ASHLEY - Despite the questionable propaganda that was disseminated by the Minister for National Development (Senator Spooner) during last week-end, due to the financial controls imposed by this Government there has been a marked decline of home building. According to the quarterly bulletin of New South Wales building statistics recently released by the Bureau of Statistics and Economics, permits for buildings to cost £152,349,000 were issued during the last financial year. Only 25,527 of the permits were for new houses, and flats, the third lowest total since the war. The numbers represented a fall of 12,461 when compared with 37,988 permits issued.' in 1950-51. When speaking over the air last Sunday, the Minister referred continually to a drop of 2,000 in the number of houses. He has since been reported in the press to that effect. How does the Minister reconcile his assertion that there has only been a drop of 2,000 in the number of new houses and flats a year with the fact that the number of permits issued for these buildings was 12,000 lower last year than in 1950-51? The Minister endeavours to mislead both this chamber and the people of Australia when he says that this Government is annually increasing housing accommodation for home-seekers, including immigrants. 245 K7A 0 0 SPOONER, William Senator Spooner - If the honorable senator reads a statement that will be published in to-morrow's press, he will be able to get up to date on this subject. 245 K0W 0 0 ASHLEY, William Senator ASHLEY - The Minister employs a snide method of deception. He says that percentage figures, based upon production and the capital cost of buildings, reveal an increase of home-building activity, but in fact, owing to the Government's restrictive financial policy, there has been a serious fall in home-building. His analysis of the housing position, as late as the last week-end, conveniently overlooked the main factor which has led to a recession in the building trade. The undoubted cause of the shortage of housing accommodation has been the restriction of finance for home building for both private persons and State housing authorities. Not only has finance for home building become more difficult to obtain, but also the rate of interest has steadily risen because of action taken by the Commonwealth Government. I do not think that the Minister for National Development will deny that, or that the result is that the average home seeker is placed at a great disadvantage and finds the utmost difficulty in obtaining a home. The Minister claims that in spite of the reduction by 20 per cent, in the first two years and by 30 per cent, in the succeeding three years of the money allocated to the Housing Commission of New South Wales and the granting of more money to cooperative building societies, the number of homes built will be increased. That is absolutely false reasoning, because not one more house will be built as a result of the action of the Government. I agree that over a long term of years there will be some gain, so far as the co-operative societies areconcerned, because their loan terms are much shorter, with the result that the money will be turned over more quickly. That isa long-distance plan, but it makes no provision whatever for the distress that exists to-day because of the lack of houses. That shortage is solely the responsibility of theMenzies Government, because of its neglect to provide necessary finance for home building. Some indication of the position, as it relates to co-operative building societies in New South Wales will be seen, from the fact that whereas, on 31st March, 1952, they had 11,175 subscribers who hadprovided £17,523,290 for the purchase of homes, on 31st March, 1956, there wereonly 4,942 subscribers who had provided £12,066,780. Those figures are significant, despite the inflationary state of Australia's finances. They reveal a drop in the number of subscribers, and of over £5,000,000, in a period of four years. Those figures do not take into account the inflated state of our currency to-day. According to the " Sydney Morning Herald " of 8th September, 1956, the vice-president of the Real Estate Institute, Mr. Daniel Currie, isreported to have said that the central bank should make more money available for home building. The report in the- " Sydney Morning Herald " of his statement continues - Building material production was at a record level, labour was plentiful and building costs, were steady. That is true - The bank should act now and assist the trading, banks to make finance available. A great deal more than the few millions now being made available by the new private savings banks is needed. He went on to say - Co-operative building societies have a waiting., list of 25,000; war service homes 13,000, and the Housing Commission another 25,000. With such lucrative rates of interest offered by many large Sydney companies to the general public, the amount of mortgage money available from this hitherto good source is now negligible. Never before has there been greater need for finance from the banking authorities. That last remark applies also to the Government's financial policy. Many thousands of Australian families are waiting for housing, accommodation; yet the housing authorities, throughout Australia admit their inability to- provide them with even emergency accommodation. The result is that thousands of people are living 'in emergency huts, garages and tents. They are waiting in vain for success in housing ballots. Others are living in tents and caravans on building allotments that they have bought, and although they have finance ranging from £500 to more than £1,000 there is no authority, either governmental or private, which is prepared to provide the balance of the finance necessary to enable them to construct homes on their holdings. Many ex-servicemen are in a similar position. They have to wait for two years for approval and final action in connexion with a loan from the War Service Homes Division. A few days ago I referred to the group building system, but my remarks were treated with derision by the Minister, to the delight of some of the cheer squad sitting behind him. Under that system, until recently a deposit of £250 was required from an ex-serviceman seeking a home of three bedrooms, but now he is asked to put down a deposit of £750. What is the reason for the change? I" know that there is inflation in this country, but I did not think that it had galloped that fast. If an ex-serviceman requires a two-bedroom home, he is asked to put down a deposit of about £650. Moreover, the conditions under which he now obtains a home are completely different from the conditions under which a home was made available when the deposit was £250. Previously, an ex-serviceman could choose a home that had been finished, or. could select one that was partly complete. At present, he is shown plans of fourteen houses, and after he has selected one, he has to put down his deposit of £750. However, his trouble does not end there, because he has to wait until £750 has been deposited in respect of each of the fourteen homes before the construction of any one of the houses is started. Therefore, with a group of fourteen homes, approximately £10,000 is collected from ex-servicemen before one brick is laid. It seems as if the ex-servicemen themselves are practically financing the group homes system. I have been impressed by the fact that almost every speaker in this debate from the Government side has blamed increased wages for the inflation with, which we are afflicted, and they have advocated that wages should be reduced. A few weeks ago the Minister for Immigration (Mr. Harold Holt) delivered a statement in which he said that it was true that the Government had imposed some restrictions last March, but they were working out just as had been planned. He said that those restrictions had not been imposed to create a depression, but to consolidate our prosperity. What a statement! I cannot understand how our prosperity is being consolidated while thousands of people are losing their employment. The best prosperity that we can have is to have a state of affairs in which every man who wants to work is able to get it. The Minister for Primary Industry (Mr. McMahon) also delivered a statement on the same day as the Minister for Immigration, and he said that there are ups and downs in every economy. Unfortunately, there are too many downs in our economy. He also said that the fact that the economy has regressed a little will not prove to be harmful, and that we should have to produce more, and produce it more efficiently. Again, the workers have to suffer. The economic backwoodsmen in the Government cannot talk of any one except the workers, and they blame the workers for all the disruption that has occurred in our economy. Any measures taken by the Menzies Government are taken only in an effort to cure our economy of the ills and ailments that this Government is responsible for creating. Recently, a most outrageous appointment was made to the Commonwealth Industrial Court. I repeat that the appointment of Senator Spicer as Chief Judge of the newly created Commonwealth Industrial Court is a political outrage. Senator Spicer drafted the recent industrial legislation for the Government, and piloted it through the Senate, and now he has been given the job of administering it. Surely he will administer it in a party political fashion. The Opposition will be disappointed if he does not! Why did he not disclose to the Senate that he would be an applicant for the position of Chief Judge? Because if he had done so, he would have disqualified himself from presenting the bill to the Senate! We appear to have gone back to the 1920's when Judge Lukin, Judge Drake-Brockman and Judge Dethridge were on the Bench, and when there was what might be called political arbitration, which caused industrial disturbances. I am sorry that Senator Spicer finished up in the way that he did because it is outrageous for the Government to make such an appointment. That appointment will not bring any confidence to the industrial movement. We hear many wails and claims from some honorable senators on the Government side as they appeal to us for a suggestion to cure our economic ills. If it were not for the fact that there is something wrong with our economy there would be no appeals from the Government for such suggestions. I support the amendment moved by the Leader of the Opposition, and I hope that it is carried. 247 KOW Tasmania 0 0 HENTY, Norman Senator HENTY .- I join with my colleague, Senator Pearson, in expressing regret at the contribution made to this debate by the Leader of the Opposition (Senator McKenna). I look for something better than was put before us in this debate by the honorable senator. I took the trouble of looking through the major speeches that Senator McKenna has made in this chamber during the last few years, and after my secretary had obtained them all for me, I said, " Why did you cut out so many? If you had cut out the first one, it would have been all that I required, because all the speeches are the same". In all those speeches Senator McKenna referred to Amalgamated Wireless (Australasia) Limited, to the Commonwealth Oil Refineries Limited, or to the Australian Whaling Commission. Moreover, all his references to those bodies were along the same lines. However, in the speech that he delivered in this debate I noticed that the Government is no longer accused of wrecking the Commonwealth Bank, apparently because the bank has made such great profits under this Government that not even Senator McKenna has the hide to charge us with trying to wreck it. Indeed, according to the press this morning, the Commonwealth Bank has made a profit of £4,400,000. That, honorable senators should remember, is the institution that Senator McKenna said in the past we are trying to wreck. In the face of the evidence of the bank's stability, even Senator McKenna has discovered that he must cease his attacks on the Government about its alleged wrecking of the Commonwealth Bank. The honorable senator has also veered off his course about the sale of Commonwealth ships. For some years he maintained that the Government intended to give the ships away. Now he has changed his course, and says that the Government has passed legislation which will make it possible for private shipping lines to dominate the coastal shipping of this country. 1 commend him for dropping his attacks on the Government about these two matters, and suggest that there are other matters that he could well drop. We make no bones about selling government enterprises. Ever since 1949 we have stated clearly to the people of Australia that it is our policy to sell these undertakings. On that policy the people elected the present Government, and has re-elected it several times. Therefore, we have every right to believe that the people approve our policy. The Opposition should also remember that the Government made a good deal in selling its undertakings. Any one who looks at the record, particularly the share values a few months after we sold the Commonwealth share holdings in Amalgamated Wireless (Australasia) Limited, will find that the. Government did a good stroke of business. We make our policy clear. What does the Australian Labour party do? I turn to the booklet, "The Light Glows Brighter ", the new policy for the Australian Labour party which has been produced by Dr. John Burton with a foreword by the federal president of the Australian Labour party and an introduction by the Leader of the Opposition in the House of Representatives (Dr. Evatt), who has stated, in effect, that " this is a course for action ". At page 22 of this great production, Dr. Burton has made this statement with reference to government enterprise^ - This should, of course, be done gradually by bringing under parliamentary control the production of key raw materials such as coal and steel, the operation of national transport by land, sea and air, and the institutions of finance such as banks and insurance companies. 247 K6P 0 0 BROWN, Gordon Senator Brown - What is wrong with that? 247 KOW 0 0 HENTY, Norman Senator HENTY - That is all right. There is nothing wrong with it. I hope the Opposition sticks to that policy, because the people will throw it so far away from office that it will not get back into office as a government for twenty years. 1 hope the Australian Labour party sticks to the nationalization of banking, but why does it not tell the people about its policy? 248 K6P 0 0 BROWN, Gordon Senator Brown - I have been telling the people for 50 years. 248 KOW 0 0 HENTY, Norman Senator HENTY - Yes, but they would not believe you until you tried to put it into effect, and then they kicked you out. I wish to refer now to the continual references by the Leader of the Opposition- 248 K6P 0 0 BROWN, Gordon Senator Brown - He is the best man to hold his office for many years. He is a brilliant man. 248 KOW 0 0 HENTY, Norman Senator HENTY - He is a good man, but it is a pity he is getting so dreary. He referred continually to taxation policy, but he. did not get down to the true basis of taxation. The Leader of the Opposition persists in referring to the quantum of taxation instead of rates of taxation. I should like to challenge his figures. Total tax collections in the past three years were - That was an increase of £133,000,000 in three years. Those figures are correct in relation to the quantum of tax collections, but what about the national income in the same three years? Let us examine the figures because the comparison is fair although the Leader of the Opposition skips away from it at every opportunity. The national income in the same three years was - Thus, in three years, there was an increase of £476,000,000 in the national income. What counts in this world is the wealth that is left over, and if we deduct the additional taxes from the increase of national income in the past three years, we find that the people had £343,000,000 more left to them. The Opposition is. afraid to cite those figures. Where does that money come from? We hear criticism of company profits, but they should be compared with wages, and the, figures for the past three years are available to everybody for comparison. Company profits in the past three years were - The increase in the three years was £72,000,000. The wages bill for the same three years was - The increase was £378,000,000 compared with an increase of £72,000,000 in company profits, and £343,000,000 extra was left in the hands of the community after additional taxes had been paid. Those figures cannot be refuted because they are. in the White Paper that was published by the Government. It is interesting to study, in this context, what the taxation policy of the Australian Labour party is likely to be. I turn again to the great book, " The Light Glows Brighter " because, after all, it has a foreword by the federal president of the Labour party and an introduction by the Leader of the Opposition in the House of Representatives, who has said, in the introduction, that the book " is designed to suggest positive action ". This is the Labour party's policy on taxation as contained in " The Light Glows Brighter " - The basic essential is far higher, and far more progressive personal income tax. . . . Why does not the Opposition tell the people these things? Why do not honorable senators opposite rise and say, " We stand for far higher taxes than those imposed at present "? 248 KOU 0 0 HENDRICKSON, Albion Senator Hendrickson - Not for higher taxes on the workers, but upon those who can afford to pay. 248 KOW 0 0 HENTY, Norman Senator HENTY -I have noted that I shall read on and give the Opposition a fair go. This book states - The basic essential is far higher, and far more progressive personal income tax, with greater exemptions on lower incomes. Furthermore, income tax should be based on personal real income.. . . If the Opposition would tell the people of Australia that it believes in higher taxes, the people would know where the Australian Labour party stands. We do not hear statements to that effect from the Opposition. It is very silent on this subject. Let me direct my attention now to the budget. It refers to the necessity forus to expand our exports. There is only one way in which, we, as a nation,, can get away from import, restrictions: - we can export ourselves oat of them. Except for the private enterprise country - the United States of America - which has money to lend, the world is hungry for capital. Great expansion has. taken place in India, China, West Germany and the Argentine, to mention a few of the rnajor countries of the world, and they have been trying to get capital wherever it is available so that they can increase industrial production. With, that trend, in addition to the expansion in Australia and Great Britain, it is not difficult to understand why there is a shortage of capital throughout the world. We need at least £.1,000,000,000 worth of exports; a year to cope with the demand within Australia for imports. 249 KSL 0 0 MAHER, Edmund Senator Maher - We need that to pay for our imports. 249 KOW 0 0 HENTY, Norman Senator HENTY - That is true. That is our target, and we must achieve it. We rely upon our rural producers to obtain most of that export income. One of the tragedies that was mentioned by Senator Wright in his excellent speech last night is the decrease in the income of the rural producers of Australia. It has dropped by £105,000,000 in three years. That is a danger point in our economy. The people upon whom we rely almost entirely for income to pay for our imports have had their income reduced in three years by £105,000,000 owing to falling prices and rising costs. I shall suggest one; or two ways in which wecan increase our exports. I had the great privilege, (during the recess, of visiting some of the countries to our near north. Having been 40 years a trader, naturally my mind and my eye turned, as I wandered through those lands, towards the possibility of Australia's developing a trade with those countries. A land that we have neglected' is the Philippines, which has 20,000,000 people. 249 K6P 0 0 BROWN, Gordon Senator Brown - There are1,000,000,000 in China. 249 KOW 0 0 HENTY, Norman Senator HENTY -I did not get to China; no doubt that will come in time. There are 20,000,000 people in the Philippines, which is very close to us, and in the years gone by they have been good customer for our flour and beef. We have had the opportunity to export our flour to the Philippines but have neglected it. As we did have a substantial trade in flour, when I came back I brought this matter to the attention of the Department of Trade and asked a series; of questions. I asked why we were losing our trade with the Philippines to Canada and. the United States of America.. The Department replied that Canada supplies high protein flour,, and the United- States and Australia relatively low protein. Australian flour is,, therefore, directly competitive- with American but not with Canadian.I completely disagree with that departmental thinking. The. valuable trade of Canada with the Philippines at the present time is in high protein flour, and yet no better high protein wheat is grownin the world than that grown in northern New South Wales and in Queensland. If the farmers of northern New South Wales and Queensland were given the incentive to grow high protein wheat, and if we were to get away from this stupidnon-segregation of wheat whereby we put everything into " fair average quality " we would be able to. capture at a profitable level the specialist markets that should be ours. 249 KOU 0 0 HENDRICKSON, Albion Senator Hendrickson - Honorable senators opposite comprise the Government and have done so for seven years. 249 KOW 0 0 HENTY, Norman Senator HENTY - Just listen a little, whileI talk about this. I am not playing at a political level, I want to say something that is of use to the nation. Let us for the moment forget about politics. 249 KOU 0 0 HENDRICKSON, Albion Senator Hendrickson - Tell what you have to say to your caucus. 249 KOW 0 0 HENTY, Norman Senator HENTY - I am telling it to the Senate and it is my right to do. so. If we give an incentive to the farmers of northern New South Wales and Queensland, and interest the wheat-growers and millers of- those areas,, and, at the same time, develop a shipping, service from Queensland ports, as the nearest ports to the Philippines, we have a grand opportunity to regain a great part of that Philippine trade in flour, particularly in high protein flour, because nowhere else in the world can wheat-growers match the. colour of. Australian flour. I suggest that we could sell, to the Philippines 150,000 tons of flour a year and that would be little because their total consumption is in the region of 275,000 tons. We could capture at least 150,000 tons of that trade if we were to go out for it. One thing we do not do in Australia is go to our customers and say " What are you using? We will grow that for you and provide the stuff you want". Our attitude is, "This is what we grow, you take it or leave it ". We spent eight or nine days in Formosa and another 10,000,000 customers exist in the Republic of Free China in Formosa. What a different approach they have towards trade! I discussed trade with them quite a lot. They buy butter and wool tops from us and they also provide a good market for milk products, the things we in Australia want to sell. They get their butter via Hong Kong at the moment, but complain that they do not get a continuity of supply. That is something we should look at. We have no trade commissioner there. I think we should have a trade commissioner wherever we can do trade. In turn, they want to sell us tea, and this is the point I want to talk to honorable senators about, because I think it is of great importance. They do not say, " We grow Chinese tea, therefore you have to take that tea ". I said to them, " We in Australia consume very little of the Chinese type of tea and, therefore, I do not think there would be a good market for it ". They replied, " Ah, we know the tea you want. We have imported seed from India and are growing the black Assam tea that you use in your market, because we want part of your trade. If we want part of your trade we have to grow what you want ". That is the proper customer consideration. I know that at the present time it would be difficult to develop a large trade because of the deficit in our cash balances. We would have to come down to barter, but what is wrong with a good bit of healthy barter with good people? And make no mistake, these people are good people; they know what they are about. I should like to spend a minute or two of the time at my disposal in talking about the trip we had and the people we met. I approached this trip to Formosa with a perfectly open mind. I have heard honorable senators opposite say certain things, just as I heard one say just now in very derogatory terms, " Chiang Kai-shek ". 1 went to have a look at this place. Having read the propaganda that has been put out in Australia, 1 thought that we would go into a dictator land and that we would see great banners of Chiang Kai-shek everywhere and all the flapdoodle one sees in dictatorship countries. Nothing was further from the truth. We never saw one photograph, one statue or one banner. Everywhere we went it was Sun Yat Sen, the Father of the Republic. That is what greatly impressed me. This was no dictatorship, this was a country which was setting up a proper republic. Then, 1 had a look at the systems of elections. They have universal suffrage of all over twenty years of age. I had read that the mainland Chinese under General Chiang Kai-shek had gone to Formosa, had squatted on this land, and were ruling it with military dictatorship. I found that of the 55 members of the elected Nationalist Assembly 52 are native-born Chinese of Taiwan or Formosa and that only three are mainlanders. I found that in the constitution of this republic 10 per cent, of the members of the Nationalist Assembly, must, by law, be women. I am sure that our women senators will appreciate that fact. I found that their system of local government sets an example to the world and certainly to Australia. In Australia election results show that throughout the continent we have 25 per cent, and 30 per cent, polls, but in Formosa the local government polls amount to 94 per cent, and 97 per cent, when the people are electing their prefectural chairmen, or as we call them, wardens of municipalities. Of the 23 elected on that island 21 are native Taiwanese, or Formosans, and two only are from the mainland. How can any one substantiate that there is a military dictatorship over this island when there are freely conducted elections for everybody to go and see? Results show what is happening. Any suggestion that a military dictatorship exists in Formosa is a complete myth. I was very interested and was quite frank in speaking to them. From what I had gathered I felt that the government which had gone from the mainland of China was a government that had been full of graft. I had heard that suggested in this chamber and I put it to them. They frankly admitted that, in the disintegration of China, after ten years of fighting the Japanese, after the revolution, and following the Communist and Kuomintang wars, some of the " wise guys " of the Government traded with the enemy and did all sorts of things, and were able to get their money out to America. " But ", they said, " those who did that are either living in America to-day or they were shot on the mainland of China. They are not in Formosa ". These were little pointers which were eloquent of the high moral standard which prevailed. In the city of Tai-peh there are 750,000 people, and when I was there 18,321 applications had been received for telephone services. A shipment of 1,200 telephones had just arrived and an advertisement appeared in the press that a public drawing would be conducted in the stadium among the applicants for telephone installations. The authorities would not tolerate any action to which could be attached any sign of suspicion or graft. The public drawing was held and next day the names of the lucky drawers were published in the press. As members of Parliament, we are fairly competent observers, and we should take notice of this sort of thing. The Government of Formosa had had some trouble with timber, lt is amazing how timber at some time or other always produces government scandals. When that occurred in Formosa, the Government suspended the responsible Minister and practically the whole of the staff of the department which handled timber supplies and a full investigation was begun. While that investigation is proceeding, all timber is being sold by public auction. This is the sort of action that that government takes in order to ensure that the affairs of the island shall be administered on a level that is above suspicion, and as a consequence it has the full confidence of the entire population of Formosa - 10,000,000 persons. The island is about half the size of Tasmania, but every square inch of it is under cultivation. The results have been so good that half its sugar crops and also large quantities of rice have been exported. A magnificent job has been done in primary production there. Perhaps one of the greatest achievements of the Government of Formosa has been its enactment and implementation of the Land to the Tiller Act, which has overcome the age-old scourge in Asia of rapacious landlords and money lenders. An attempt was made to implement this legislation on the mainland of China when the present regime was in government there, but because men of lesser breed were out to wreck China, it did not succeed. The act has operated in Formosa with amazing success, lt prescribes the size of any area of land in. the island which may be owned. The first step in implementing this act was to divide crown land and to take from the landlords all land exceeding a certain small area. All this land so divided was given to those who were tillers of the soil, and they have the opportunity to purchase their farms within a period of twenty years. For centuries the landlords and money lenders of Asia had mercilessly bled the peasants, but now these farmers have the opportunity not only to work their farms but also to own them. As we went among the farmers and talked to them I was interested to see how this legislation was working out. I noticed that many farmers had built new brick houses. There was an immense increase in primary production, and in the farmers themselves a new spirit had been generated. I was strongly convinced that this was legislation which could well be copied throughout Asia. I was interested to hear that the Government of Burma had attempted to implement similar legislation but that when it was first introduced trouble was caused on the borders of that country by the Communists. I was profoundly impressed by the fact that for the first time in Asia, in Formosa the law is above politics. No one can be arrested except on a warrant signed by a public authority, and the officer presenting the warrant must identify himself. That is a procedure completely new to Asia and it sets a pattern which might well be followed throughout all South-East Asian countries. I conclude by saying that I support the budget and oppose the amendment moved by the Leader of the Opposition (Senator McKenna). I have listened to the moanings about this budget from honorable senators opposite and I am confident that if they continue with their pessimistic complainings, it is certain that Senator McKenna will establish an all-time record in this House as Leader of the Opposition. 252 JY6 South Australia 0 0 NICHOLLS, Theophilus Senator NICHOLLS . - In rising to participate in this debate may I say that I oppose the budget and support the amendment moved by thu Leader of the Opposition (Senator McKenna). I expected that the budget would contain proposals for a substantial increase in age and invalid pensions as well as other pension rates, also substantial reductions in sales tax and income tax and other long-overdue concessions. The budget is negative in its approach to the problem of inflation and the ever-increasing prices which are intensifying the inflationary spiral. Apparently, I was misled in my interpretation of a statement made by Senator Spooner during the last sittings of this Senate when he said, in effect, that any disabilities or problems from which the country was then suffering were associated only with prosperity. If that was the position then and the country's economy was really on a stable basis, I was justified in expecting the concessions in the budget which I have mentioned. But instead we got what Paddy shot at - nothing! What is to be done to get the economy back on a stable basis? Not one proposal is made to deal with the problem of inflation, and for that reason the motion of censure against the Government, moved by Senator McKenna by v/ay of an amendment to the motion for the printing of the budget and associated papers, is fully justified. lt is very difficult for the ordinary member of the community to understand the reasoning of this Government when it claims that, during a period of unprecedented prosperity, it is faced with financial and economic difficulties. What the average man understands only too well is that, although to-day he is supposed to be enjoying a standard of living far in advance of that which he previously enjoyed, he is denied the advantages associated with higher wages, because of the rapid increase in the cost of living. The .position is even worse for a man with a large family. In those circumstances, it is very difficult to convince me that we are enjoying a period of unprecedented prosperity, as Senator Spooner would nave us believe. I might say that since the freezing of the basic wage and the suspension of the quarterly cost of living adjustments the workers generally throughout Australia have suffered a very grave injustice because, although wages are pegged, nothing has been done in connexion with prices. Manufacturers and others are more or less-, unbridled in imposing higher prices upon the community, and the "unfortunate consumer is in a position where it is impossible for him to pass on these additional chargesto any one. In the circumstances, one can readily understand why it is difficult for him to swallow the theory advanced by the Minister for National Development (Senator Spooner) that these are only problems associated with prosperity. Obviously, these problems did not developovernight, and it is difficult to understand why this Government did not make some explanation concerning them to the peopleof this country during the general election, in December last. Apparently, when, things are different they are not the same. No explanation was forthcoming. The theme song at that particular time was that Australia was enjoying a period of unprecedented prosperity under the Menzies-Fadden Administration. The Government said to the people, " Return us to power and these conditions will continue ". I am sorry to say that the people took the Government'sword and returned it to power; but 1 submit that if a factual statement and an adequate explanation concerning these problems had been made during the election campaign the results of the election might have been entirely different so far as the set-up in this Parliament is concerned. No one knew that better than did the Government, and for that reason no explanation was forthcoming. As to inflation, we remember how the Chifley Labour Government faced up to the problem during its term of office by distributing as widely as possible the prosperity which then existed by applying a graduated scale of direct taxation, compelling the wealthier section of the community to pull its full weight in accordance with itsability to pay.. The Chifley Labour Government also stabilized price levels by paying subsidies on the production of essential commodities and, so far as the powers of the Commonwealth permitted it, restricting the prices of those commoditieswhich are more or less part and parcel of our everyday existence. As soon as the Government supported by honora'ble senators opposite took office, it proceeded' forthwith to undo all those things. Subsidies were withdrawn and restrictions were removed from prices and profits. Further, since then, indirect taxation has become the order of the day from the point of view of revenue raising. As a result of this policy, the burden which rightly belongs to the wealthier section of the community has been moved to the shoulders of those on the lower rung of the ladder, the workers in industry, the poorer section of the community, who are least able to carry this burden. Further, because wages are pegged and the quarterly cost of living adjustments suspended, these people are more or less doubly penalized. To make matters worse, the value of the Australian £1 has deteriorated seriously, so much so that it is down 7s. or 8s. on what it was when the present Government took office. And this was the Government that said in 1949 that if it was returned to office it would arrest inflation! This was the Government that promised to keep prices down and to put value back into the £1! As to indirect taxation, I might say that the Chifley Labour Government realized that sales tax was most unfair in its incidence, and for that reason its policy included progressive reductions year by year, leading ultimately to the complete abolition of this form of. taxation. I remember only too well that the supporters of the present Government, who were then in opposition in the Senate, decried sales tax as an iniquitous and vicious form of taxation. They said further that immediately a Liberal government was returned to power this form of taxation would be completely abolished. Why, the pages of " Hansard " are literally studded with such declarations of policy by supporters of this Government who were then in opposition in the Senate. During the last six years, they have become staunch supporters of higher and higher rates of sales tax. Sales tax, like many other matters, was intended originally -to be an emergency measure but, under the maladministration of this Government, it has become a permanent source of revenue. Sales tax fails to meet the requirements of equitable taxation based on the principle of ability to pay, because it involves the spending of a proportion of a worker's total wages and a decrease in the proportion saved. In other words, it is much easier for a person on a large income to meet the imposition of sales tax than it is for a worker in industry because the worker has to pay a far greater percentage of his income in living costs, and no account is taken of the purchaser's ecc* nomic position. Notwithstanding this, the Government endeavours to bolster up an indefensible position by claiming that these increases in sales tax and other forms of of indirect taxation are absolutely essential to drain off a portion of the community's spending power for the purpose of offsetting inflation. We know that the wealthier persons and the workers in industry pay the same amount in sales tax on a packet of razor blades or any of the other numerous things which are part and parcel of out everyday existence. It has nothing at all to do with inflation. If this Government is really sincere in its desire to tackle the problem of inflation, it should get down to fundamentals and forget proposals which are of no value other than to create widespread resentment and, to a certain extent, unemployment in certain industries. The Government tells us that heavy taxation is imposed for the purpose of offsetting inflation but, paradoxically, the immediate anil ultimate result is to accelerate the very evil which it is supposed to reduce. Sitting suspended from 5.45 to 8 p.m. 253 JY6 0 0 NICHOLLS, Theophilus Senator NICHOLLS - Prior to the suspension of the sitting for dinner, I was dealing with taxation, and pointing out that we have been told by the Government that heavy taxation is imposed for the purpose of curbing inflation. Paradoxically, the immediate and ultimate result is to aggravate the very evil which it is supposed to remedy. Up to date, the Government has not advanced one concrete or positive proposal to stabilize the price level, yet it must be only too obvious to all concerned that, if we are to win the battle against inflation, the first essential is a stable and permanent price level. The Government does not appear to understand the position. Everything that it has done so far has only forced prices higher; figuratively speaking, prices are going up in the elevator, while Wages are climbing up the stairs. In these circumstances, it is very difficult to understand the approach of the Government to the problem of inflation. Both this budget and the supplementary budget have only intensified inflation. To my way of thinking, the supplementary. budget singled out the motor industry for unfair discrimination. The increase of sales tax on motor vehicles certainly placed a most unfair impost on what can no longer be regarded as a luxury industry, because to-day Australia has more commercial motor vehicles per head of the population than any other country. In 1953-54, £790,000,000, or one-fifth of our national income, was spent on motor transport. Indeed, motor transport accounted for 63 per cent, of all passenger-miles, 26 per cent, of all freight-ton miles, and 76 per cent, of all freights carried in Australia. These figures prove conclusively that this industry is absolutely essential to Australia's economy; yet for some reason known only to itself, the Government has singled it out for treatment which, to say the least, is just the reverse of what should be accorded to it. The increase of sales tax on motor cars raised the price of cars from £100 to £200 according to their class. How. this will assist the battle against inflation is certainly beyond my comprehension. The increase of the petrol tax, for which the supplementary budget provided, has also increased the price of everything consumed in Australia, because of the additional cost of transport. There is no doubt that the policy of this Government in regard to inflation has gone completely hay-wire. The additional yield from this tax is estimated to be approximately £12,000,000 a year, of which £4,000,000 will be used for roads. I should like to know why the whole amount of £12,000,000 could not be used for that purpose. According to the budget, £32,500,000 will be allocated for roads in this financial year, which is £5,500,000 more than was made available for roads last year. I should like to know why the whole of the estimated yield of £50,000,000 from the petrol tax cannot be expended on roads. Why should £17,500,000 of the proceeds of the petrol tax be paid into Consolidated Revenue for general purposes? I believe that this money should be expended on the roads and highways of this country - and many more millions of pounds also! What we really require in Australia to-day is a national outlook, and a national plan for roads, but that will not materialize while this Government is in power. I always travel by motor car from Adelaide to Canberra in order to attend sittings of the Senate. I have done so for a considerable period of time. My colleague, Senator O'Flaherty, likewise travels to and from Canberra by car. 1 should like to say that I have never seen the roads in a worse condition than they are in at the present time. The well-nigh impossible situation that recently occurred on the Hume Highway makes a farce of the Government's repeated calls for greater efficiency and a lowering of costs in industry, to say nothing of the expenditure of about £200,000,000 a year on defence in Australia. Exactly how much the Holbrook-Tarcutta hold-up actually cost, in terms of immobilized transport, wages and ruined produce, can probably never be assessed, but the amount, if known, would be spectacular. Even then, it must be only the merest fraction of the amount that a hopelessly inadequate, ill-built road system is costing this country every year. From a defence point of view, the situation that was thrown into relief by the breakdown was more or less ludicrous. Millions and millions of pounds are being expended every year by the Government on defence establishments. We have been told that the purpose of expending £30,000,000 on the St. Mary's ammunitionfilling factory is to enable the services to be armed in the event of war. There is only one thing certain: Should hostilities break out supplies will not be needed where they are produced, but at rendezvous probably hundreds of miles distant from the point of production. In their present state, our road and railway systems would not stand up for one year, or even for one month, given the best of weather conditions, to the demands that would be made upon them in the event of war. 1 know that some responsible authorities are attempting to blame the hauliers - the heavy transport people - for the bad state of the roads to-day, but I cannot agree with that approach to the problem. Surely it is the obligation Qf State governments, working in co-operation with the Commonwealth, to maintain the roads in good repair. The Commonwealth should provide the necessary money out of the defence vote. That is the logical approach to this problem. Surely it is the obligation of the States to ensure that our roads and highways are capable of carrying the most modern transport of the age in order to meet the needs of our people in times of peace, and to assist in the defence of the country in the event of war. 1 leave the matter there. In conclusion, I repeat that I cannot accept the proposals of the Government for a number of reasons. First, they are negative in their approach to the problem of inflation, and with continually rising prices they will further intensify the inflationary spiral. Secondly, the Government's proposal in regard to taxation will result in retarding production at a time when increased production is absolutely essential. My third reason is that the Government's proposals mean that the greatest burden will fall on the backs of the working class- - the people on the lower rungs of the ladder; those engaged in industry who constitute the poorer sections of the community, who are least able to carry the burden. Last, but not least, I oppose them because this Government has failed miserably to keep the promise it made to the people in 1949 - that it would arrest inflation, keep prices down, and put value back into the £1. Those are some of the reasons why I am opposed to the budget and support the amendment moved by the Leader of the Opposition (Senator McKenna). 255 KNU Victoria 0 0 HANNAN, George Senator HANNAN .- I rise to support the budget papers which have been placed before the Senate. As the Treasurer (Sir Arthur Fadden) has said, it is a hold-the-line budget, a stand fast budget. Spectacular taxation concessions which would have been so popular with the people are conspicuous by their absence. The budget is marked by sober and restraining influences designed to enable this nation to weather its economic difficulties. No one would allege that those difficulties do not exist, but to suggest, as honorable senators opposite do, that the economy is being dissolved in cataclysmic chaos is sheer nonsense. Their pessimistic utterances remind me of the war correspondent in Evelyn Waugh's " Scoop " who brought about a fisrt-class revolution by reporting incorrectly that one had begun. In the hotel room which I occupied last Wednesday I found a Bible which had been left open by the previous occupant of the room. I noticed that the book was open at the Lamentations of Jeremiah, and as I looked at the page my eyes fell on these writings by the prophet - For these things I weep; mine eye, mine eye runneth down with water . . . I came here to Canberra that evening and listened to the Leader of the Opposition (Senator McKenna) attack the budget. I listened to his catalogue of misery, woe, and lamentation, which was amplified and expanded by other honorable senators opposite. As they spoke, I was waiting for some of them to say, " Mine eye runneth down with water ". In my opinion, that doleful outlook indicates a wrong mental approach to the problems facing us. Let us look at the picture fairly. The Minister for National Development (Senator Spooner) pointed out that there was a mild boom in the building industry in Australia. He told us that the Government had made- available £30,000,000 to the States for home building. Except for the size of the amount, that is not remarkable. What is remarkable is that the Government has insisted that 20 per cent, of the money allocated to the States shall be made available to co-operative housing societies. Victoria is to receive £10,000,000, which means an additional £2,000,000 for those societies in that State. It is only natural that a Liberal government, which believes in private enterprise, should do all it can to stimulate the growth of co-operative housing societies, because such societies are composed of bands of people who have initiative, courage and enterprise, and are prepared to tackle the problems with which they are confronted. The Government will provide the economic tools and they themselves will get on with the job. These societies provide their own directors, and attend to their own administrative affairs. They function efficiently and more economically than any government housing commission can possibly do. I should like to see the percentages reversed, so that the housing societies would get 80 per cent, of the money to be made available rather than 20 per cent. That is, perhaps, something for which we may look in the not too distant future. I believe that increased housing accommodation is vital to our national well-being. Unless adequate accommodation is made available, parents cannot give their children the proper home life and upbringing which is necessary for their spiritual and material welfare. If we want to know how strong a nation is, we have only to look at its homes. We can learn a lesson in this field by going back to early Greek history. Why is it that Rome fell? I know that we have to provide the States with money for gaols, mental asylums, houses of correction, police forces, and so on; but we could save millions of pounds in those directions if we were prepared to spend thousands of pounds on prevention. If the home life of the community reached the level that it should reach, we could almost forget about juvenile delinquency. As a lawyer practising in Victoria, 1 know that four out of every five juvenile delinquents come from broken homes, or no homes at all. The Government should take every step within its fiscal power to encourage the people to set up their own private castles. I should like to see sales tax removed from every article directly or indirectly connected with homes. I know that building materials are largely free from sales tax, but fixtures, fittings and many laboursaving devices used in homes are not free. If any honorable senator thinks that a washing machine, or a refrigerator, is a luxury I suggest that he should tell that to the mother of four or five children. If he does so, he will find that her reaction to his suggestion will not be good. In my opinion, sales tax at any time is an unfair tax, because it is not based on ability to pay, and is not graduated according to income. It strikes the poverty-stricken family man as harshly as it does the wealthy bachelor. I hope the time will come when we shall be able to congratulate the Treasurer on the total abolition of sales tax. That cannot be now, but any relaxation would be welcome. Several honorable senators opposite have made passing references to our economic situation. They have predicted that we shall be ruined before the end of the year unless effective control of prices is reintroduced. I do not impugn their sincerity when they trot out this economic panacea, but it is somewhat odd that they should advocate control of prices now, when in 1939, at a time when the enemy was almost at our gates, and prices control was introduced, every member of the Labour party voted against it. What has happened since then? No one can accuse the Labour party of having made any progress in economic thinking. Those who think that the party has made any progress should ask Professor Arndt what he thinks about it. If prices control is to be effective it must be accompanied by wage pegging, rationing and a plethora of other controls as essential concomitants. I do not know what it is that makes honorable senators opposite believe that we can bring about the millennium by reverting in peace-time to the economic barbarism of prices control, wages control and rationing. Do not say that we can have the first two controls without the third, because we cannot. If honorable senators believe that we can, they should read the late Mr. Chifley's speeches on rationing and subsidies which were delivered at the time the prices referendum was rejected by the people. Imagine a voluntary reversion to a method which simply registered increased costs and made them legal - to an era of planned shortages, blackmarkets, racketeers and frustrating controls. Prices control failed the ancient Romans, and it would fail us. I believe that Professor John Jewkes in his book, " Ordeal by Planning " has dealt the coup de grace to this style of economic thought. In that book Professor Jewkes speaks of England under a socialist regime in 1947, but the same principles apply to this country. This gentleman was a planner for the British Government during World War II., and he continued his activities under the socialists. More in sorrow than in anger, and in a series of masterly understatements, he has destroyed the fortress of the socialists, the central economic planners, plank by plank and shibboleth by shibboleth. Dealing with some of the absurdities of the central economic planners involved in prices control and rationing, at page 217 of his book he gives these examples - A market gardener requires a new shaft for a wheelbarrow, a piece of wood costing perhaps ninepence. A licence must be applied for from the surveyor of the district council on the appropriate form. The licence has to be registered and filed by the district* surveyor and then presented to, registered and filed by the timber merchant. A local authority for roads wishes to improve visibility at a dangerous junction by substituting some twenty yards of iron fence for the existing hedge. To obtain permission to do this five enormous forms and nine maps, some of them coloured, have to be prepared and submitted. The despatch of a small shipment of six drums of lubricating oil involves the filling in of forty-six forms, requiring forty-two signatures, not including the customer's invoice or delivery notes. A local authority cannot increase the pocket-money of a child under its care without first obtaining sanction from the Home Office. Newspapers are fined for exceeding more than 55 per cent, of advertising matter. A firm is fined for making 60,000 frying-pans for the home market, although it is established by evidence that the firm had done this only because of long delays by the Board of Trade in providing an export licence, a licence which in fact had been received after the fine had been imposed. Four Lincolnshire farmers are fined £1,200 for growing canary seed. Mrs. Shenton, aged 79, is fined £10 for growing too few potatoes; she said she had responded to a Ministry broadcast appeal to grow more wheat. Producers struggle to work through a coil of regulations that must defeat all but' the hardiest or the most unscrupulous. That is the type of economic jungle to which the Labour party would have us step backwards. It is, of course, pointless simply to say that our opponents' principles are wrong. It behoves us to say what we should do in a positive fashion to correct the position. I turn now to the free economy remedy. This is what I believe to be a key feature in a free economy, the necessary machinery to preserve a free economy in the world of to-day. Like all supporters of this Government I believe in the virtue of free enterprise, but one of our difficulties at the moment is that while the industrial economy is largely private, it is in many cases not enterprising. The reason for that is the absence of real competition due to monopolies and restrictive trade practices. In order to overcome this position and to make a positive attack on the inflationary spiral by restoring reality to competition in commerce, I urge the Government to introduce legislation along the lines of the Sherman anti-trust, anti-monopoly legislation of the United States of America. It is of course natural that a government which believes in private ownership of the means of production should do all things necessary to curb monopolies. It was a Liberal government which introduced the Australian Industries Preservation Act of 1911, which does something, but is hopelessly inadequate in 1956. It might be argued that the constitutional powers of the Commonwealth would not support legislation of this type, but I believe that view to be wrong because the very first placitum of Section 51 of the Constitution gives this power to the Commonwealth. At all events it is much more likely that the Commonwealth has power to introduce legislation of (his type than it had to nationalize the banks. There is little doubt that if a referendum for the purpose is necessary, it would be successful if supported by the major political parties. I suggest that in a matter of this kind the support of all parties would be forthcoming in an attempt to solve the nation's economic difficulties. This power might even be referred by the States. The progressive Bolte Government in Victoria is already preparing State legislation to curb certain restrictive trade practices, and perhaps other States will fall into line. May I now say something of the type of legislation that was introduced into the United States in 1890. This type of antimonopoly legislation was first introduced in 1890 to deal with certain activities of the Rockefeller empire, and was amended by Clayton in 1914 and Robinson in 1936 to improve its procedure. The act is administered by a federal trade commission, and is aimed at horizontal and vertical monopolies, trade cartels and unfair or restrictive trade practices. Another important but less dominating section, deals with the control of advertising and attempts to put truth in advertising. The act is admittedly clumsy in operation, but it has a wonderful deterrent effect on the would-be commercial buccaneer in the United States. For every one person convicted under the act a thousand must be deterred. Du Pont Industries, Standard Oil, Stetson Hats, Kodak and Judson Rivets are some of the well-known names which have been effectively dealt with in the United States. Under the legislation a manufacturer is not allowed to own an enterprise in the field in which his product is used. For example, an aircraft manufacturer cannot own an airline, and a company producing film is not allowed to own a chain of theatres. All action is taken to make competition a reality. I do not attribute the sole success of the American economy to this legislation, but we must remember that from 1945 until about 1952 the free enterprise economy of the United States carried the free world on its back. In Australia one of our difficulties arises from the fact that a number of manufacturers who make particular goods, instead of competing for markets, get together and zone the market out. Instead of the keen prices that we might reasonably expect from competition we get an inflated price due to the absence of competition. The manufacturer is secure in the knowledge that the other manufacturers or members of (he cartel will not undercut him. If we make competition a reality, 1 believe that while we shall not completely solve our economic difficulties, we shall at least be on the right track, lt is infinitely better for the economy to have a large number of small independent businesses rather than the one monopoly, whether it be a private or a State monopoly. Perhaps I might give an example which explains my point better than a reference to the sections. There was a derelict salmon-canning company which had a poor quality salmon that was just off-white or a little pink. As a result, it was difficult to make sales. The company began to advertise that its salmon did not turn pink in the tins. Housewives in America, who read the advertisements, began to believe that all the good pink salmon that was canned by other manufacturers was tainted, or would make them candidates for ptomaine poisoning. There was a rush on the inferior article. The Federal Trade Commissioner stepped in and, by appropriate action, restrained the lying advertiser from pursuing that course of conduct, and restored the trade in canned salmon to its proper perspective. A large proportion of the revenue raised by the Commonwealth is lent to the States for public works. The Commonwealth collects the taxes and the odium. On the other hand, the States cannot act as truly sovereign bodies if they are not responsible for raising their own revenue. Victoria, under a progressive government, has bolted to the forefront of industrial development. It does not object to the Commonwealth Government assisting the smaller States, but it does believe that the present uniform taxation formula discriminates unfairly against Victoria. The sooner uniform taxation goes, whether by court decision or by legislative action, the better. It would still be open to the financially weak States to receive special grants as provided by the Constitution. This budget supports a sensible foreign policy. Australia has never stood higher in the councils of the nations than it does under the present Government. Australia has been singularly honoured in the choice of its Prime Minister (Mr. Menzies) to handle the delicate negotiations with the Egyptians over the Suez Canal. From press reports, the negotiations have been conducted ably and without threats. At all events, although there has been no immediate success on a delegation level, the discussions were amicable and friendly.. Perhaps' I might quote from the Labour party's favourite prophet, Jeremiah, who in Chapter 5, verse 6, declared - We have given the hand to the Egyptians. . . to be satisfied with bread. We are no longer rude and insulting to our friends or obsequious to our enemies. The Moscow crawl is a dance that went out of fashion in Australia in 1949 and, despite many attempts to introduce it, we have banned the Peking shuffle. Australia has not forgotten how the Minister for External Affairs in the previous Labour Government evicted the Americans from Manus Island. How much more soundly could we sleep in our beds if we knew that this great ally had a major defence base athwart the route from Asia. The eviction of the Americans was the type of political lunacy for which the perpetrator would have been impeached in earlier and more robust days. This Government will not allow Communistcontrolled trade unions or any one else to dictate its foreign policy. The way in which Comrade Healy was able to impose his will on the Labour Government in connexion with Dutch shipping at the close of World War II. was an alarming lesson. 1 remind honorable senators of the case of the Dutch cruiser " Piet Hien ". This vessel was supporting the landings of Australian troops in the Indies at the end of the war. When hostilities ceased, the ship needed repairs and limped south to Fremantle. Its commander thought he was going to a friendly port, but the Communistcontrolled unions decided that Dutch vessels were black. The gallant ship went to Melbourne as it was not believed that any government worthy of the name would tamely surrender to such blackmail. The reception in Melbourne was disappointing, and the ship went on to Sydney. The black ban held there also, and because the Minister for External Affairs of the day had a gelatinous compound where spinal vertebrae should have been, our ally's ship was forced by a Communist ban to go to New Zealand. That sort of conduct in our foreign relations will never be repeated while this Government is in office. For the reasons I have given, I support the budget. According to the press, there have been broad hints of a challenge to the Government on the budget by honorable senators opposite. Senator Hendrickson challenged the Government to resign and fight. At the risk of wearying him, and other honorable senators on the Opposition side, I refer them again to their prophet, Jeremiah, who made a comment which is remarkably relevant to the treatment given by the electors to the Australian Labour party candidates at the last general election. These are the words of Jeremiah, at chapter 5, verse 22 of the Lamentations - But thou hast utterly rejected us; thou art very wroth against us. 259 KUD Victoria 0 0 MCMANUS, Francis Senator McMANUS . - I wish to offer my congratulations to Senator Hannan, who has just resumed his seat, on the eloquence and sincerity with which he delivered his maiden speech to the Senate. While, naturally, I disagree with many of the political arguments he advanced, I believe it might be said with confidence that he has shown that he will be a valuable unit in this chamber to assist the party which he is privileged to represent. Before proceeding to consideration of the budget, I might be pardoned some brief reference to the general election for the Commonwealth Parliament which took place on 10th December last. On that occasion, the Anti-Communist Labour party, of which I am a member, received the votes of 300,000 electors of Australia. Although it contested seats in only four States, it was unable to put forward its maximum effort because of the short notice of the campaign. I wish to thank all those who gave their support to our party, and to say to them that I hope that support will continue, because we have embarked upon a struggle which we know will be a long one. We know also that, in that struggle, staying power will count, and I assure those who supported us and others that we will see that struggle through to the finish. In Victoria, where our party has the support of more than 200 of the Australian Labour party branches, we polled one-sixth of the total vote and received the support of one-third of the Labour votes. As 33 members of the House of Representatives and five senators were elected, and we obtained one-sixth of the votes, we might have expected to obtain one-sixth of the number of members elected for Victoria, that is, six or seven. Owing to the nature of the electoral system, however, we had one elected, and I have heard rumours that the election of that one candidate has not been received with joy in some quarters. A publication of the Evatt Labour party known as " Tocsin " - a name with a not altogether pleasing sound, and I hasten to add. that it is spelt " Tocsin " and not " Toxin " - suggested that the election of one senator for Victoria from the AntiCommunist Labour party was' an accident because we drew No. 1 place on the ballot-paper. I can only say that I have referred the votes cast in the election to two eminent authorities on statistical method. Both of them say that it was not an accident and that, on the votes, we would have elected a senator even if we had not obtained the first position on the ballot-paper. Nevertheless, it continued to be said, and has been said even in this chamber, that the election of one senator representing our party was an accident. I was unable to understand the reason for that, until on reference to my dictionary I discovered that the definition of " accident " is a " happening as a result of which somebody feels hurt ". 1 propose now to deal with the budget. I am in entire agreement with my leader - our party is unanimous - in believing that the budget is unimaginative because it contains no overall plan to safeguard the economic future of Australia. It is depressing because the burdens in it fall too heavily on the underprivileged and lower income groups. It is ineffective because strong measures have not been taken to protect our economy against the undesirable activities of vested interests. Those are general charges; but specifically, as a matter of principle, we cannot and will not accept that portion of the budget which provides that a big part of the burden of salving the economy of this country shall be placed upon the pensioners and widows. Our stand upon that is a matter of principle. It has been represented in some quarters as a threat, but I deny that it is a threat. I have not been long in this place but it would surprise me if it can be interpreted as a threat when any party, on the basis of principle, declares that it is not prepared to accept a particular provision in a particular measure. Dealing with the budget, I say at the outset that any measure of importance which comes before this House has to be looked at from two main points of view. The first is that of external security, and the second that of internal prosperity. The two subjects I should like to deal with first are those which affect our external security - defence and immigration. In my opinion, the events of the last five years have, shown that in this country the one problem that transcends all others is that of our external security. We have been used to imagine in this country that we live in a kind of international vacuum, and many of us appear to assume that in ten or fifteen years' time the system of government in this country will be the same as it is to-day. That is an assumption which, in view of the character of world affairs, no man is entitled to make. When, five years ago, 500,000,000 Chinese people came under Communist rule nothing could ever be the same again for the people of this country. Therefore, in spite of the suggestions of the starry-eyed peace-lovers who assembled in Sydney last week-end under the impression that they were working for peace, when actually they were being manipulated by the Communist party in order to reach decisions which were purely propaganda for the foreign policy of the Soviet Union, the party which I represent will continue to say that the greatest issue that we must consider in this Parliament and in Australia to-day is that of external security. I am glad, therefore, that the Government resisted pressure from influential quarters to reduce the defence vote. It is true that the vote is substantially the same as last year, and under rising costs that means to some extent a cut, but I say that these are not times in which risks can be taken on defence. I am pleased, therefore, that the Government has determined to give defence a high priority in its expenditure. I am pleased also with suggestions that the air will receive some preference, because the late John Curtin was the first man in this Parliament to advocate that stress should be laid upon our air defences. I regret that at the same time as we are told that it is necessary, in view of international difficulties, to keep our defences at a high state of efficiency, we should hear talk of dismissals and the dispersal of staff from our aircraft factories and naval dockyards. Personnel engaged in these factories and dockyards, in some cases, due to the exceptional nature of the tolerances they must observe in the processes of manufacture, take twelve months to train. So, it fills me with alarm to think that in the near future the skilled staff in some of these establishments may be dispersed. I hope that suggestions which have appeared in the press that the Government is exploring the possibility of retaining this staff by allowing these establishments to contract for outside work will bear fruit. The second matter to which I turn is immigration. I regret the cut that has been made by the Government in immigration, although I realize that tremendous pressure has been put upon it, both from sections that support it as well as from sections that oppose it. I regret that the cut was made in association with a statement that implied a slur upon a section of the immigrants. The statement was that cuts would be made in regard to southern European immigrants. That was entirely unnecessary. I do not know who was to blame. I do not think it would be the Immigration Department, because under Mr. Calwell, when he was Minister for Immigration, and under the present Minister, it has been meticulously careful to see that nothing is done to give offence to the national susceptibilities of any people. I regret that that should have been said because there is a smack in it of the doctrine of Nordic superiority against which we were supposed to have fought in the recent war. We have been told that to some extent the cuts will be for the welfare of the immigrants, that some of them are living under overcrowded conditions - as though our own fathers when they came to this country left the boat and moved into luxuriously furnished flats. It is true that if we are to bring immigrants here the conditions under which they will have to live at times will not be all that we would desire; but what we have to realize is that we are fighting against time to populate this country. We have to realize that we are told by our military advisers that we should be in a position to defend ourselves within, not 50, but ten years. In those circumstances we should be prepared, if necessary, to take risks in order to populate our country. I refer the Senate in its consideration of what attitude we should adopt upon immigration to a statement which was made at the immigration convention held early this year. It is a statement by Mr. Albert Monk, of the Australian Council of Trades Unions, a statement which I consider to be so adequate to the point that I propose to read it. Mr. Monk said - lt takes years of good administration and public relations work to build up the goodwill upon which really successful immigration rests. If we are to 'attract the best migrants, in these days of -European prosperity, we must be able to show them and their governments that Australia is con- sistently sincere in its desire to receive them as permanent settlers and that there are, and will continue to be opportunities for them to improve their position by adopting this country as a new homeland. If however at the first chilly blast of a temporary unfavourable economic situation we make drastic reductions in the immigration programme, the usually garbled and exaggerated impressions created by embellished press stories abroad appear to be confirmed, and the confidence built up by painstaking years of work can be shattered overnight. In speaking against any tinkering with migration, Mr. Monk concluded by saying that we have to remember this lesson - The flow of migrants cannot be turned on and -off like a tap. Turning now to the essentials of the budget, it has been criticized by our party as unimaginative. I support that view because, to my way of thinking, the principles upon which it is based appear to be the principles of orthodoxy carried to excess. I am one of those who suffered to some extent, but not as much as others, in the last depression. Since that date, I have listened to speakers of all schools of political thought suggesting that we learned a great deal from that depression, and that there will not be any further depressions because we have learned how to deal with them. I have had plans outlined to me by speakers of both the conservative and the radical type, pointing out that when a recession occurs - which is supposed to be the half-way house to depression - it can be dealt with by wise governmental measures. Credit is not tightened unnecessarily. The Government uses money for public works and endeavours to foster employment, and so on. I regret to say that I find in this budget none of those expedients which we were supposed to have learned from the last depression. On the contrary, it appears to me that to a large extent it is based upon the same principles that preceded the budgets of the pre-1930 period. What is happening in this community to-day, as a result? There is the same tightening of credit as was evident in 1929, except in the case of the hire-purchase companies, which seem to be able to get plenty of money because they are reaping 18 per cent, profit from thentransactions. But there is the same cry for economies - as though any government was not called upon to carry out economies at all times, and not merely in periods of recession. The same uneasy feeling is developing in the community that was evident in former years, that the form that the economies might take will be the dismissal of the lower-paid employees. I regret that no attempt has been made in the budget to branch out and investigate or try out new ideas. The directions in which I should have liked to see the Government experiment with new ideas are particularly those in regard to indirect taxation. If we consider the pay-roll tax and the sales tax, we find that although these are two sources from which the Government reaps large sums in taxation, by their nature and because of the method by which they are applied, they conduce to and promote inflation. When the manufacturer manufactures his goods, he adds the payroll tax to his costs and then determines his percentage of profit. He sells the article to the middleman, who does the same thing. Although the pay-roll tax is there all the time, because of it the amount of profit is increased; consequently, the retail price is increased and inflation is promoted. Within recent weeks, an eminent accountant suggested to me. that in the case of payroll tax, in particular, just as much is added to profit because of the tax as it yields to the Treasury. It would be an excellent thing if the Government could investigate the possibility of reefing off an amount equal to the pay-roll tax yield at some point in a particular transaction. If that cannot be done, 1 suggest that the eminent economists who are advising the Government might be called upon to examine the situation to find whether, after all, it would not be possible to utilize some other system of taxation which would not, by its very nature, conduce to inflation. I regret that the Government has done nothing with regard to capital issues, and bonus shares in particular. We have heard a great deal of eloquence in regard to the quarterly adjustment of wages, and we have repeatedly read in the" press reports of the issue of bonus shares to lucky shareholders. I suggest that, although there may be constitutional or other difficulties in the way of dealing with capital issues, some investigation might be made into measures which are being taken by other governments with a view to discouraging at least these issues of bonus shares. In Canada, for example, in the case of new issues of such capital, the firms concerned are informed that they will receive no allowance for depreciation for some years to come. I come now to the matter which we, as a party, regard as fundamental - the question of the pensioners. I suppose that, within the last few days, every honorable senator has received from pensioners, and from people who have intense sympathy with pensioners, letters asking that we should do all that we can to obtain some reconsideration of the Government's decision in regard to pensions. I feel that honorable senators on both sides of the House will have read those letters with sympathy and with concern, and I hope that even at this late stage it may be possible for the Government to give fresh consideration to this particular matter upon which all sections of the community feel deeply. The Government's decision has received the unanimous, condemnation of the press of this country, but it could still be re-examined and brought before this Parliament in a form that would merit the approbation of all parties. f do not wish to be unpleasant, but is it not a fact that in the mind of the pensioner to-day is the fact that a decision was made by parliamentarians, all of whom recently received a. large increase of salary, and by public servants, all of whom received large increases of salary, that the economic salvation of this country could be brought about by not increasing the admittedly small pension now received by the pensioner? No one in this House would suggest for a moment that he could live on £4 a week, and in the- circumstances I suggest that the Government should look at the matter again and treat it, not upon the basis of figures in books pf account, but upon the basis of human values. If nothing can be done in regard to the matter at least we owe this to the pensioner, that we should erect in this capital a national shrine inscribed, " To the unknown pensioner ", in memory of those thousands of pensioners who, if this is persisted with, will lay down their lives for the economic salvation of their country. In regard to child endowment, our party supports the policy of the Australian Council of Trades Unions which has already been set out by 0Jr leader, Senator Cole. I know that it will be suggested that if we are going to do all these things, if we are going to give money to the pensioners, if we are going to increase child endowment, extra taxation will be required. I know also that in another place a challenge was issued to anybody who was prepared to support extra taxation for these purposes; and I want to say now that if the only way in which we can give justice to the pensioner and to the family man is by increasing taxation, then let us do it. I believe, however, that we ought to utilize some of the £109,000,000 or £110,000,000 surplus which we are told will be available, or which we hope will be available at the conclusion of the financial year. We have also been told that a large proportion of that money will be required in case loans which come up for redemption next year are not adequately redeemed. I suppose one of the reasons why there may be difficulty in redeeming the loans next year is the fact that hire-purchase companies are able to offer more attractive terms to investors and, in those circumstances, investors are inclined to place their money with hire-purchase companies instead of in loans. I suggest, therefore, that the proper measure to adopt would be one calculated to do something about hire purchase, and I suggest also that something be done about that matter when the State Premiers and representatives of the Commonwealth Government next meet in conference. Let me say in conclusion that I listened with considerable interest, and with some sympathy to the final plea made by the Leader of the Government in the Senate (Senator O'sullivan) in the course of his remarks last week when he suggested that it was desirable in the interests of this country that there be co-operation between the Government and the trade unions. That is desirable at all times, but if such cooperation is to exist it is necessary, first of all, that something be done to dispel the feeling of trade unionists that their wages are being attacked and that they are to be among the principal victims who are to be forced to salve the economy of the country. Again, if there is to be co-operation, it is necessary that the trade unions be in good hands. At another time, I hope to have something to say on that final point. I close my remarks by repeating that there are many features of this budget with which I and my colleague, Senator Cole, do not agree, and that have have made up our minds on one point of principle, lt is that we cannot and will not support that section of the budget which suggests that the pensioners of this country, both age and widows, shall bear a major part in salving the economic destinies of Australia. 263 KAF Victoria 0 0 WADE, Harrie Senator WADE . - As a new member of the Senate, I have listened with a great deal of interest to this, the debate on the 1956 budget. At the outset, 1 should like to congratulate the two preceding speakers, Senator Hannan and Senator McManus, upon their very fine contributions. I frankly admit that they have set a standard which 1 find it most difficult to emulate. It is true that speakers on both sides of the chamber, in the course of their utterances, have propounded a policy of defence and development of Australia. It is also true that without exception they have admitted that the greatest single factor mitigating against our development to-day is inflation; but there is the widest possible divergence in their opinions as to what steps should be- taken to remedy the position. Unlike so many of my colleagues, 1 am not competent to analyse the cause and effects of inflation. I shall, therefore, confine my remarks to basic principles which, although they may be called elementary, are nevertheless fundamental. It is on that basis that I propose to make my short contribution, and what I have to say will hinge upon consolidating what we have with a developmental policy that will rid us of this monster. Australia is a young country. In the last two decades we have' passed through most difficult times. During the war years, we suffered shortages and restrictions and shouldered all sorts of responsibilities cheerfully because ours was an all-in effort. During the last decade we have had some difficulty in readjusting our mode of life. It is true that we have had most bountiful seasons and high prices for our primary products during the last ten years, and this, together with other factors, has created an inflationary tendency. I suggest that to go on expanding in inflationary circumstances with costs spiralling must ultimately defeat our efforts to expand. In those circumstances, we have no alternative but to give some consideration to consolidation, and that is where this budget has a most steadying effect upon our economy. The first reactions of any individual to any budget are partisan, or personal. If. we read in our local press that our rates have gone up 1 s., our first comment is, " What for? 1 have not seen a council vehicle in my street for the last ten years ". If we read in our morning press that the State budget has been presented, the first thing we do is to scan through the contents in order to see how it is going to affect us personally, how it will affect our way of life, our businesses, OU wages or our profits. That is only natural. If that is true of municipal and State budgets, it is no under-statement to say it is true of federal budgets because the Commonwealth Government is charged with the responsibility of defending and developing Australia. I, therefore, suggest that for the time being we forget our personal reactions and have a quick look at the effect that this budget will have upon the economy of Australia. Australia is basically a primary-producing country. We rely upon our primary products for our overseas markets. We should, therefore, consider how some of those primary industries can affect our future. It is true that the wool industry is enjoying a marked measure of prosperity lo-day; but there is no room for complacency on thai score because ever-increasing costs can have a detrimental effect upon the economy of the producer. ! invite honorable senators to give some thought to the tremendous effort being made by overseas interests to develop synthetics to compete with wool. It would be a sad day for this country if we found that our market had disappeared overnight because we as a people did nol realize that we had to be up ,and doing. For thai reason, the time has come when a great dead more -talent and finance must be made available fox the technical expansion of the wool industry.. Oar second largest primary industry, wheat, as not 'in such a happy position. Unlike wool, wheat has to meet fierce competition on overseas -markets. Huge surpluses have been built -up, and to-day we find it increasingly difficult to sell our products, with unfortunate results on our overseas balances. To-day, it costs 7s. 6d. to send a bushel of wheat from Australia to the United Kingdom. The first time that I got 5s. a bushel for growing wheat, I thought that I was a millionaire. But there are factors outside the control of the Government that are having a most adverse effect on the wheat industry to-day. The eastern States, as never before, have suffered from flood and deluge and saturation to such a point that many growers are today faced with a most unhappy prospect. It is not uncommon, in the affected three States, to hear farmers say, " I have prepared 1,000 acres of fallow, but I have not sown the seed, and it is now too late to do so ". That is a rather melancholy picture, when we realize that, ordinarily, they make a valuable contribution to our overseas balance, lt is also a melancholy picture for the poor individual who has expended his money and time in good husbandry, and does not get the chance of a return because he cannot even sow his crop. I suggest to you, Mr. President, in all seriousness, that a great need of the wheat grower and, to some extent, of the driedfruit grower to-day is a relaxation of credit restrictions. I want to make it perfectly clear that it is not Government policy to put a blanket on credit for the developmental and seasonal advances required by primary industry. Therefore, it cannot be laid at the door of the Government that it has put a blanket on all credit, and is thus responsible for the position that has arisen. It is true that to-day there is more money in this country than we have ever seen, but, unfortunately, it is not being channelled into the right directions. The grower who goes to a financial institution for an advance is invariably told by the manager: " I am awfully sorry. I should like to help you, but we have no money available for that purpose ". Yet considerable amounts of money are being channelled into hire purchase companies, which are paying fantastic # rates of interest. The point that I want to make is this: As a people, we must put first things first. A product that makes possible our overseas payments should take priority over other things that have no Teal value on that score. Therefore, I say to the Government, which has declared that it expects normal seasonal advances to "be made, that it should watch this position very closely, because it could deteriorate rapidly and the effects could be disastrous. I want to congratulate the Government on the splendid relief that it gave to the dried fruit-growers in Victoria. They, too, have suffered hardship through wet seasons. The Government made available to them £300,000 - a very considerable amount - and I want to say that the growers are very grateful. I desire now to make a brief comment about the tobacco industry, which can be developed and expanded tremendously. Both the growers and the manufacturers have stated that Australia can produce leaf equivalent to any in the world. To-day, this country is expending 40,000,000 dollars a year on the importation of tobacco leaf. There is no need for me to remind the Senate that that is a considerable sum of money, and the Government will, I feel sure, do all that it possibly can to develop this industry, for the very good reason that it is vital to Australia as a dollar saver. But we cannot consolidate our industries unless we have an efficient transport system - life lines that are effective. I should like to direct attention to a matter which, in my opinion, demands the closest and most urgent co-operation between the States and the Commonwealth. I refer to the interstate highways. It is true that the propounders of the Constitution could never have foreseen the day that heavy road transports would pound our interstate highways to pieces. Therefore, they cannot be charged with negligence when they framed the Constitution. But what do we see to-day? We have the farcical position of State Parliaments passing legislation to try to make the interstate road haulier pay just charges, and the hauliers, in turn, challenging the legislation in the highest court in the land, where it has been negatived. The interstate road hauliers are snapping their fingers at State legislation, and they will continue to pound our roads until there is nothing left to pound. But I am speaking, not in the interest of the hauliers, but in the interests of the development and defence of this country. Unless we can evolve a Commonwealth plan to make these people pay their just contribution, and produce a road plan that will be permanent and effective we, as a government, are running a very grave risk of being charged with not doing our national duty. Therefore, I suggest, with great respect, that the Government take the initiative in calling together the representatives of the States on this very important matter. They should even be kept in Canberra at government expense until a worth-while and workable plan is produced. Before I leave the subject of roads, I want to make one more suggestion. I know from experience the difficulties that confront the country municipalities in this connexion. From one year to another, the country municipalities do not know what will be the amount of government grants for roads. I am not criticizing the Government in this matter, because even its most caustic critics must admit that it has made increasingly greater grants for road works and maintenance. The amount now made available annually by the Commonwealth^ for this purpose is an all-time record. There is no quarrel on that account. But because grants are made only yearly, the municipalities are in the unhappy position of themselves having to decide whether to expend, say, from £7,000 to £8,000 on a grader to carry out certain work this yea:-, when they might have to shed it next year if the work cannot be continued. This is an aspect of the matter that should be considered. I know that it bristles with difficulties. There must be estimates, and some guesswork, but I am not convinced that we cannot produce a means of giving the municipalities stability. I have time now to make only a very brief reference to secondary industry. I know that what I have to say will not be popular; it could even be dynamite. Still and all, let us have a look at it. We have made tremendous strides with our secondary industries in the last few years, and I deplore the fact that certain people are inclined to decry their value in the economy. Critics say, " As we can never become an exporter of secondary products, why persevere with them? " But, if we stop for a moment to reflect on the situation, we must frankly admit that secondary products are playing an ever-increasing role in our economy. Secondary industriesare employing increasing numbers of workers. In a world of tight economies, it is necessary for us to expand all our industries. But what is the position to-day? From the point of view of secondary industry, Australia is trying to compete on world markets against the products of countries whose standards of living have little or no relation to the methods of production. We have priced ourselves out of markets, even those that are close to us. Our first objective must be to maintain the standard of living that is inherently British and our own. What is the solution? I shall give it in a few words: From management to office boy we must all make a greater effort. The Australian workman has proved that he can produce goods in quantities and of quality second to none in the world, and, therefore, I suggest that the only solution which will enable us to maintain our standard of living is that we, as a people, shall accept the challenge of other nations, and say that we will produce a little more, work a little harder, and so retain for ourselves those markets that rightfully should be ours. I do not wish to cast a silent vote on the vexed question of pensions. Critics of the Government are most caustic in their remarks concerning taxation, which they claim has reached astronomical proportions. They cry aloud for a reduction of taxes. At the same time, they accuse the Government of being niggardly and parsimonious in its attitude towards social services. They cannot have it both ways; they must make up their minds what they want. If they want more to be paid by way of pensions, and are prepared to pay the taxes which would make that possible, let them say so. Some play is made on the fact that the Government is budgeting for a surplus of £108,000,000; but have those people who criticize the Government for making that provision forgotten that during this financial year the Government is obliged to take up loans that were raised to enable Australia to make its war effort? Have they forgotten that we must be prepared to meet the urgent and unprecedented needs of the States faced with disaster? Where else can the States go for help other than to the Commonwealth, where they have always gone? They have never been refused help in time of need. Having said that, I add that I do not think that any member of this chamber would do other than try to make the lot of the aged people and invalids in our country a little easier. From my own observations, I can say truthfully that certain sections of those in receipt of pensions have greater needs than others have. I refer to the aged and infirm, and those who are incapable of earning anything to add to their income, and are unable to look after themselves. I should like the Government to give special consideration to their needs, and I have every reason to believe that action along those lines will be taken at the first opportunity. Before I conclude, I wish to refer to the disastrous floods which have occurred in Victoria during recent weeks, but I have no desire to traverse the ground so eloquently covered by other speakers on both sides of the chamber. I wish, however, to mention one place in Victoria, which is typical of many other places, At Redcliffs, which is situated on a bend of the river Murray, there is one of the most modern pumping and generating plants in the southern hemisphere. It is worth £1,500,000. As honorable senators know, heavy rain caused old man Murray to come down as he had not done for years, with the result that the pumping plant was threatened. A cry went out for help. What was the result? Labourers downed their tools, traders shut the doors of their shops, professional men left their offices, and went as one man to do a job, counting not the cost to themselves. They worked with almost fanatical zeal, and they have left their monument in levee banks that will be seen for years to come. Mention of men who worked as fanatics reminds me that no less a person than Sir Winston Churchill once described a fanatic as a man who cannot change his mind and will not change the subject. If this Parliament can help to instil into the people of this country some of the spirit shown by the men to whom I have referred, then the future of this nation is assured. I do not believe that a depression is just around the corner to overwhelm us, but I do believe that no government, acting on its own, can destroy the monster of inflation. Governments may guide and counsel, but in the long run the solution is in the hands of the people, who must make a supreme effort, as they have always done in Australia in times of crisis. If we face our responsibilities in the right spirit, the future of this great land is assured. 266 KPK Victoria 0 0 KENNELLY, Patrick Senator KENNELLY .- At the outset of my remarks I compliment the three preceding speakers who have delivered their maiden speeches here to-night. At some time or other, each of us has gone through a similar ordeal. The speeches to which we have listened this evening have been most interesting. I desire to refer to some statements made during this debate by the Minister for the Navy (Senator O'sullivan) and by Senator Wright. I am amazed that the former honorable senator, who is the Leader of the Government in this chamber, should have referred as he did to certain restrictions that were in force in 1949, and prior to that year. It is true that, during the period referred to, certain restrictions were in operation, but as honorable senators know, Australia had then just emerged from a war in which the whole strength of the nation had been mobilized. There was a lot of money in the hands of the men and women who were being discharged from the fighting services, and, because of the concentration on the war effort, there were few goods available. One might expect statements of the kind made by the Minister from people without experience, but it ill-became the Leader of the Government in this chamber to speak as he did, because surely he knew the reason for the restrictions that were in force. The second point that he made would have been amusing had it not been so tragic. He referred to the amount of money spent on defence in 1949 by the Chifley Government, and contrasted it with the amount that will be spent by the Government under the budget that has just been presented to the Parliament. He qualified his contentions with remarks such as " Never in the history of Australia in peacetime has our country been in a better defence position ". Well, all that I need say in answer to that is contained in reported statements by Sir Frederick Shedden published in the " Sydney Morning Herald ", which is a journal that supports the present Administration. That newspaper reported that Sir Frederick Shedden had said - Australia is not ready for mobilization . . . the services have not been able to achieve the permanent forces targets provided in the estimates . . . the Government has not made any decision upon the re-equipping of the R.A.A.F. although a mission has been abroad 18 months ago to examine new types of aircraft. I say, with great respect, that if any person is in a position to speak about the state of our defence services, it is surely Sir Frederick Shedden. 267 KSS 0 0 MATTNER, Edward Senator Mattner - If anything is amiss with our defence services he is the man to blame. 267 KPK 0 0 KENNELLY, Patrick Senator KENNELLY - Is that so? Surely if any persons are to be blamed, they are the persons who, as the responsible Ministers, are answerable to the Senate, and to the people. Certainly, there are quite enough of them administering the defence services. Sir Eric Harrison and Sir Philip McBride each have a finger in the defence pie, and then there are the Minister for the Army (Mr. Cramer), the Minister for the Navy (Senator O'sullivan) and the Minister for Air (Mr. Townley). In view of the fact that there are five Ministers administering the defence departments, and that an immense amount of money has been expended on defence since the present Government assumed office, there should not have been any opportunity for the ex-secretary of the Defence Department to utter the words that 1 have mentioned. The Attorney - General (Senator O'sullivan), in answer to the address of the Leader of the Opposition (Senator McKenna), said that the Labour party believes that a system of prices control will, solve all our problems. The Labour party has never said that. We have said that with a system of controls such as would be found in a planned economy we should never have been in the inflationary position that we are in at the present time. Irrespective of how the Government and its spokesmen have decried controls, it is rather interesting to find in this present year of grace that the Government is agreeing to impose what it considers to be selective controls. The Government apparently knows what selective controls are, and no doubt will explain them in due course. Labour has always known where it stands on these matters, and a remark such as that to which I have referred ill becomes the Attorney-General who also holds the position of Leader of the Government in the Senate. The Attorney-General also said that in the past some honorable senators of the Labour party have stated that we should not go short of money, and have advocated that we should go to the printing presses and turn out currency, and also issue bank credit. I want to know where a speech made by any honorable senators on this side of the chamber in which such views are stated are to be found. It ill becomes the Leader of the Government in the Senate to answer the constructive arguments of the Opposition - which have been put forward for years and which were summed up in Senator McKenna's speech - in the way in which he did answer them. One is led to the opinion that the Attorney-General has been using the old political dodge of putting up aunt sallys and then knocking them down. Senator Wright seemed to stress his membership of the Liberal party rather than of the Liberal party-Country party coalition, so let us consider some of the statements that he made. He was much concerned with the volume of taxes that will be collected by this Government during the present financial year. He was at variance with Government policy, and suggested that capital works should be financed out of revenue in these times of inflation. He was not concerned with the fact that all such finance has to be raised by taxation, simply because the Government which he supports is not able to obtain the loan money necessary to meet maturing loan commitments and to finance State works. He also complained about death duties which he considered so harsh, and advocated the abolition of the gift duty which he also considered onerous. Of course he believed that by the abolition of death duty and gift duty we should get out of our economic troubles. I agree with him on one point, and that is the tariff protection given to Australian industries. I believe that we have been prone to hand out tariff protection without being certain in our own minds that the industry warranted such help. I cannot place my finger on any particular example, but I have known cases where tariffs were not used for the purpose for which they were granted. Senator Wright condemned the recent legislation to revise the measures relating to industrial arbitration. Although he. condemned the Conciliation and Arbitration Act 1956, he suggested that the Arbitration Court should deal with the periodical reviews of wages and conditions. Those reviews, in his opinion, should replace the normal cost of living adjustments that the workers have been accustomed to have for many years. Senator Wright also condemned the transport policy of the Government, and no doubt he had in mind the amendments to the legislation on stevedoring. Senator Wright should be the last person to say anything about the transport policy of this Government or any other government if his remarks are connected with the Stevedoring Industry Act 1956, because I have never seen another man with a sense of responsibility do what Senator Wright did when that measure was before the Senate. When a man declares that he is prepared to follow his words with his vote, one expects him to do so. I wonder whether we can place too much credence in Senator Wright in future if he states that action will follow his words. He referred last night to the decline in the income of primary producers in recent years. His figures were correct, and I asked him to state the reason for the decline. The first reason was the fall in wool prices. I am pleased to note that there has been a slight recovery, but there were other factors in the decline of farm incomes by £105,000,000 in recent years. The fact is that costs have got out of hand. The Australian Labour party has been saying that for years. We did not want controls. When land prices were pegged, supporters of this Government and its counterparts in the States were urging the abolition of controls. Is it any wonder that, even at this late hour, the Minister for Immigration (Mr. Harold Holt) and the Acting Prime Minister (Sir Arthur Fadden) told the State Premiers at a conference held in Canberra recently that we were pricing ourselves out of world markets? Every one knew that prices would rise when controls were lifted. I will not say that every one knew that they would go as high as they have gone, but a rise was inevitable. The responsibility lies with Senator Wright and other supporters of this Government because it removed the pegs that held prices. Is it not a fact that, in 1949, when the economy was handed over to this Government- 268 KSS 0 0 MATTNER, Edward Senator Mattner - It was never worse. 268 KPK 0 0 KENNELLY, Patrick Senator KENNELLY - I did not believe that any responsible member of a political party would say that. Senator Mattner knows it is not true. 268 KSS 0 0 MATTNER, Edward Senator Mattner - It is true. 268 KPK 0 0 KENNELLY, Patrick Senator KENNELLY - Senator Mattner knows that the economy of Australia at that time was second to only one in the British Commonwealth of Nations, and that was in the sister dominion of Canada. From 1941 to 1949, the Labour government proved its efficiency in administration, including the conduct of a war. History and the statisticians have recorded that. 268 KSS 0 0 MATTNER, Edward Senator Mattner - The majority of the people did not think so. 268 KPK 0 0 KENNELLY, Patrick Senator KENNELLY - The majority of the people did not believe in the proposal of the Labour government to nationalize banking. They had a perfect right to record their votes. They knew that it was a drastic step to take, but the fact is that the Labour government was not defeated on the score that it had left the national economy in a bad state. 268 KSS 0 0 MATTNER, Edward Senator Mattner - Why was it defeated, then? 268 KPK 0 0 KENNELLY, Patrick Senator KENNELLY - The people did not believe in the Labour government's policy of. bank nationalization. Let me return to Senator Wright. I recall that famous night when he made his valiant speech. I remember that he said what he would do, and how he stopped outside when the vote was taken. It was not even a retreat because he did not come into the chamber to retreat. He has complained that the interest bill of the farming community has risen by £12,000,000 in the last four years. I agree, but does not Senator Wright believe that the Administration has something to answer for in that connexion? It has had power over interest rates. Between 1941 and 1949, the Labour government could get loans over-subscribed at interest rates of 3i per cent, and 3i per cent. Interest rates are rising, and the burden is falling on the backs of the primary producers. Senator Wright must bear his responsibility for some portion of it. By supporting the Government, he and others are responsible. May I finish with Senator Wright by saying that it seems to me he is willing to wound but he will not strike. I thought I had some responsibility at least to answer Senator Wright. I do not think people should come into this chamber and attempt- to make heroes of themselves by criticizing, and then, when the acid is turned on them to support their criticisms by their vote, absent themselves from the division. Dealing with the question before us, I have yet to read a budget speech which, to my mind, is colder or more callous. The Government is only reaping the whirlwind. It said, " Put us into office and you need have no fears ". 269 KNR 0 0 HANNAFORD, Douglas Senator Hannaford - No wonder the words of Jeremiah were quoted to-night. 269 KPK 0 0 KENNELLY, Patrick Senator KENNELLY - What I say is true, and honorable senators opposite cannot get away from it. At least, they ought to be big enough to admit their mistake. I am no Jeremiah at all; I am concerned in the main about people on the lower incomes. It has been said, in effect, by the Government that the present economic position is due chiefly to two causes, namely, that we are expanding too rapidly and that with such an expansion we are achieving too high a consumption of goods. 269 KPI 0 0 KENDALL, Roy Senator Kendall - That is just about right. 269 KPK 0 0 KENNELLY, Patrick Senator KENNELLY - The honorable -senator admits that that is just about right. Let us have a look at the first cause. Taking the Government's own figures from the budget speech, the national income has risen by £265,000,000 or 6.5 per cent. If one reads the Treasury's information bulletin for July one finds that the overall rise in prices over the same period - since the last budget until to-day - has been 6.5 per cent. As far as money values are concerned, one wants to know whence the huge increase has come. The increase of 6.5 per cent, in national income, I say, and I defy contradiction, - should automatically cancel out when prices rise by 6.5 per cent. When one reads : further from the information that is so readily at one's hand, one finds that in countries like "Argentina, Austria, Finland, France, West Germany, Italy and Norway there has been an increase of income in real terms. I turn to the second cause of our difficult economic position, namely, that we desire a much too high standard of living. I ask honorable senators: Have the workers under federal awards, which have been stationary since 1953, caused this rise in living standards? They have had no cost of living increases. On the figures available they constitute about half of the working population of this country. Have they enjoyed too high a standard of living? Have the people on fixed incomes, let alone the pensioners, enjoyed too high a standard of living during the last year? 269 KSS 0 0 MATTNER, Edward Senator Mattner - Who have? 269 KPK 0 0 KENNELLY, Patrick Senator KENNELLY - I ask the honorable senator. The only people who seem to have enjoyed a high standard of living, if my memory serves me correctly, are the 22 per cent, of the people who enjoy 40 per cent, of the national income of this country. The figures I have quoted are taken in the main from the United Nations publication dated May, 1956, giving statistics of national income and expenditure. I should have liked to have spent some time considering the subject of the balance of payments. It is true that owing to our cost structure we. are finding it rather embarrassing to sell some of our primary products overseas. Unless we can export more goods, this crazy system of " on and off " import restrictions seemingly will have to go on for quite a long time. If import restrictions were technically applied, one could not find much objection to them; but the Government imposes restrictions, rights the position, and then takes some of the restrictions off, or at least takes some of the favoured imports out of the ordinary category, as it did in the case of newsprint. That is done in order to help the bosses of the men upstairs because it is they who keep the Government in office. The importation of newsprint was taken out of the normal processes and put under the control of the Minister. I ask honorable senators: Is that done in order to make certain that newsprint imports will be cut as are other articles in the same category? If it is, why single newsprint out in that way? Is it done in order that newsprint may get favoured treatment? That vis all I ask. Why the need for this? If the officers who handle import restrictions are regarded by the Minister as fit to deal with the vast majority of other items coming within that category, what is wrong with letting them deal with newsprint? Why put it under the administration of the Minister? If it is not to get favoured treatment, it seems to me that there is no trust in the officers. 270 KNR 0 0 HANNAFORD, Douglas Senator Hannaford - The honorable senator has a suspicious mind. 270 KPK 0 0 KENNELLY, Patrick Senator KENNELLY - I have not a suspicious mind at all. 270 KNR 0 0 HANNAFORD, Douglas Senator Hannaford - Many other items are administered by the Minister also. 270 KPK 0 0 KENNELLY, Patrick Senator KENNELLY - No doubt the honorable senator has means of obtaining information which is not available to honorable senators on this side, and before he makes his speech I ask him to find what is the number of articles that come. within the import restriction range, also the number that are dealt with in the normal way and the number that receive special treatment. I will not call the honorable senator suspicious, and if he can prove to me that my contention is wrong, I will be the first to admit it. But I do not think that he will be able to produce either the numbers or the lists for which I have asked, because they will not weigh in his favour. Other items will be discussed when the Estimates are dealt with, and at this stage I only wish to add that I am inclined to believe that the time will come when pensions will have to be dealt with in another sphere. It is fantastic that if it cost £4 a week to keep one pensioner last year, he should be expected to live on the same amount now that prices have risen by at least 6.5 per cent, ls he to eat less because prices have risen? I agree with the honorable senator who said that the position of a single pensioner is perhaps harder than that of a married pensioner couple - however hard that may be. But surely we arc humane enough to say that the pensioners deserve financial assistance so that they may have the same quantity to eat, the same amount of clothes to wear and be able to live a normal life as they did last year, and it is up to this Government to provide the means for them to do it. In a budget involving' £1,200,000,000, the allocation of £10,500,000 or £11,000,000 would have given an increase of 7s. 6d. a week to every pensioner. In asking for that, surely one is not asking much. This Government has largely failed by not providing for those who are in greatest need of help. But if it is courageous enough, even after this budget is passed, to bring down a bill to lighten the burden of the pensioners, it will have the approbation of all sections of the people. 270 KT8 New South Wales 0 0 MCCALLUM, John Senator MCCALLUM . - First of all, I wish to congratulate the three new senators who spoke to-night. The Senate is fortunate in having three men who will so greatly add to its debating strength, and to the wit and humour without which the debate becomes dogmatic, polemic and partisan. I wish, also, to congratulate the Treasurer on having brought down his ninth budget. I propose to trace the development that has taken place under this Government, lt is true that the budget is largely concerned with the stresses and strains in the economy, and with efforts that are necessary to meet them. That is inevitable, and it has happened with every budget. But behind the story of this budget is the story of a nation that has progressed marvellously within the last six years. In 1941, 1 doubt whether any of us believed that Australia would have achieved such rapid development as is apparent to-day. There is one chapter, however, which is not as satisfactory as it should be, and that is the falling-off in farm income. This subject was ably dealt with last night by Senator Wright, and 1 merely add that it is not sufficient to develop our secondary industries, a larger population and greater national income if primary production, which is the basis of all our prosperity, is falling off. The most promising feature which 1 saw in my travels through the Commonwealth during the last recess is the great prospect for the mining industry. Mining is one of our great primary industries, and I am happy to feel that the future for it is brighter than it has ever been. We are in the dawn of a very great era, and I put my hope for the building up of our export income largely in the extractive industries. The budget sets forth the ways and means by which the Government proposes to relieve the stresses and strains in our economy. Inflation is the effect of so many causes that it would be impossible in one speech to sort them out- and deal with them effectively. Consequently, I can select only one or two matters, haphazardly. One is the irresponsible attitude of the States since uniform taxation was introduced. This is a well-worn theme, and I know that people outside Parliament, as well as honorable senators in this chamber, will say that it is not much good talking about it. The question is, when is something going to be done? I emphasize the point, however, that it is not fair to throw the whole responsibility on the present Government. The Commonwealth Government has expressed its willingness to hand taxing powers back to the States, and it is the unwillingness of some of the States and the half-hearted negative attitude of others that has caused the position to remain at a standstill. It is my emphatic opinion that the State governments will never develop a feeling of responsibility until they are compelled to raise the greater part of their revenue for themselves and until they are forced to accept the responsibility for the expenditure they inflict upon the community. In my view, one of the major causes of inflation is the fact that we are compelled, because of the state of the loan market, to finance the greater part of State works out of revenue while having no say in just what work should be proceeded with first. I think the most important thing that has assisted inflation has been our immigration policy. I know that in the long run it will have a deflationary effect, and I know that immigration is necessary if we are to build up a proper economy. I also know that the whole matter has not been sorted out properly yet and, therefore, people may throw figures at me to prove, in a debating sense, that what I am saying is wrong. But if we look at what our immigrants are costing in the way of schools, housing and other amenities until they become producers, I think it will be agreed that immigration has a great inflationary force. I realize that to some extent that is cancelled by the contribution the immigrants make, but I do not know the extent to which it is offset by those circumstances. Some of our industries, our building industry in particular, depend largely on the efforts of our immigrants, but nobody has been able to cast up the accounts and show how far immigration has been either inflationary or deflationary in its effect. The fact is that it entails enormous expenditure; and we have to pay some attention to the number of immigrants we can absorb. I am fully in favour of our admitting the greatest number that can be absorbed in the economy, but I feel that we are looking at it in the wrong way if we look upon our immigration policy as being merely one of putting up money solely to attract immigrants by advertising for them, by having officers overseas to encourage them, and so on. In my view, the most important part of our immigration policy should be the building up of those parts of the economy which are necessary for the proper functioning of all the activities of the community. I shall deal with that aspect in more detail when 1 am discussing the question of transport later. In reply to Senator McManus, I should say that the reduction in the number of immigrants from southern Europe was not made because the Government, or anybody else, looked upon those people as inferior migrants. The plain fact is that it is easier at present to get immigrants from certain southern European countries than it is to get them from other places. I know that there is a long waiting list, because 1 have been trying for four years to get permission for an immigrant to enter Australia from a southern European country, purely on compassionate grounds. The other members of his family have come out here and are good citizens. He does not happen to have the physical standard we require, but 1 have at last obtained from the immigration authorities permission for this man to enter. If immigrants prove to be good citizens, I do not think we should deny them the right to bring out another member of the family, particularly when they are ready to guarantee that this" other member of the family will not be a charge upon the community. All that the Immigration Department has done up to the present has been to attempt to secure a proper balance. It is unfortunate that the number of British immigrants has been reduced because of the lack of shipping resulting from the Suez crisis and from other causes. While we welcome immigrants from the whole of western Europe, as well as from southern Europe, we do not wish any particular nationality to predominate, but we certainly wish to preserve a balance in favour of the inhabitants of the British Isles. If we are to maintain our immigration stream at the present level, or at any high level, it is essential that we import capital. It is impossible to finance our immigration programme solely out of our own savings. We are hard put to it to finance the ordinary development of the country, and even if our population were increasing only at the slow rate that it was in the 1930's, we should still find ' it hard to finance the increase out of our own savings. If we are to add to our population a stream of hundreds of thousands of immigrants a year we must get capital from overseas.' That capital can be obtained only by borrowing, and the borrowing should be both public and private. I know that there is a false idea abroad about borrowing. People look upon it as putting ourselves in pawn, as giving somebody overseas the right to draw on us in the future. It is quite true that we do that, but it is necessary to do so because there is no other way of securing capital goods. The important thing to remember is that when we get a loan abroad, whether it is made to the Government or through company investment, it means bringing capital goods such as plant, machinery and so on into the country. No country has developed without the importation of capital in great measure. In a society such as the one in which we live, it is necessary to be, a debtor country during the period of development. The standard of living of a debtor country can be very high, and the people of a debtor country can be very happy. During the whole of the nineteenth century, and indeed, right up to the end of World War I., the United States of America was a debtor country. The greater part of the capital goods in the country had come from overseas. Millions of pounds poured in to the United States, and America's development enriched people in Great Britain, France and other European countries. We must follow along those lines. The only other way of colonising a new country of which I am aware is the way in which Russia has colonised and is colonising Siberia. Some people may prefer that way, but 1 am sure the Australian people as a whole do not. That being so, it iswrong that every time a loan is raised we should have the sneer that we are putting, the country in pawn. What we are actually doing is bringing capital goods to the country. One of my most interesting, experiences was to visit Leigh Creek and see there the enormous amount of machinery that had been imported from overseas on. borrowed money. That machinery was. being used to lift coal, and I had never seen anything like it before. We have only totravel through the country and see the modern earth-moving machinery and new methods of extraction being put into operation in mines to appreciate what capital can do. The Snowy Mountains hydroelectric scheme is an excellent example of what capital can do. It has shown that it is good to have private capital brought in by overseas companies which bring in not only their money but also their equipment and skilled technicians. As the great Snowy Mountains hydro-electric scheme goes forward to fruition we see the benefit of having American, Swedish, French, British and other capital here. Sir Earle Page, in a very interesting speech delivered in another place, propounded a, scheme which I think would be well worth while our examining. It was a scheme calculated to persuade companies to come here with capital and equipment. He proposed giving such companies what he called a self-liquidating franchise to do certain things. The system has been adopted in European and other countries. Companies, were given land cheaply, and allowed various other concessions to build railways, or embark upon other undertakings on the condition that at the end of a certain period the whole capital enterprise would revert to the nation concerned. The nation could then operate the system or, if it liked, sell; it. That would not put the country in pawn* and, in the long run, the scheme would bearconsiderable fruit. I should like to emphasize that J. believe-' in the maintenance of a steady stream of immigrants to this country. I should likethe intake to be as high as possible, but I do not think that it is right for peopleto pluck a figure out of the air, or for an' intake figure to be determined arbitrarily, as we did for one or two years. Because- of the. great strains that immigration imposes on the economy,, the intake should be a matter for careful consideration, lest the cost involved ruin the entire scheme. Perhaps the worst enemies of our immigration policy are those uncritical admirers who regard as unpatriotic any person who attempts to introduce a rational element into it. We have heard a great deal to-night about the burden of the budget falling on those least able to bear it. Who are they? They are the people with fixed incomes, the business people who can only sell in a completely competitive market, and those whom we regard as a separate class, the exporters, whose prices are fixed overseas. As far as the people on fixed incomes are concerned, one class - the pensioners - is directly affected. I think that there should be a good deal of re-thinking about Government policy in this connexion. As honorable senators, know, when age pensions were first introduced;, they were intended to relieve the indigent. They were :not intended to be a form of superannuation for the great bulk of the population, but, as a result of a steadily developing process, that has come about, and I think most of us accept it. However, that was never intended, and' we cannot hope to provide for everybody in this country who attains a certain age because, if we select a relatively low age - as we do now - an undue burden is placed, not on the rich, whether idle or active, but on the working members of the community. Since the system of age pensions was inaugurated, the average duration of life has extended enormously. I believe that - I am quoting from far back reading and not from any immediate figures - the average duration of life has increased by at least fifteen years within the last 50 years. It is no longer right to regard three score and ten years as the span of the normal life. A person of strong constitution, who has led a reasonable life, has a very good prospect of living at least ten years, or fifteen years longer than the psalmists who lived 2,000 or 3,000 years ago regarded as the normal span. I regard it as completely wrong for any man in normal health to have to cease work on attaining 65 years of age. It may be necessary to prescribe retiring ages for certain sections of the community, such as the Public Service, but that does not necessarily mean that a person who retires, at the prescribed age must cease to lead an active life. For myself, I should regard the rest of my life as an earthly purgatory if I were condemned to idleness in a few years' time. I certainly believe in the philosophy of the man Kipling mentions who, at a great congress, said to Kaiser Wilhelm II., " I guess I shall work until I drop ". I think that that is a sounder philosophy than the belief that a person should cease all activity in the community when he reaches the age of 65 years. But there is a real problem involved. It is the problem of the indigent - the people who are really in need. I do not know exactly how we can single them out, but 1 am convinced that they are much fewer in number than the people who are at present entitled to draw the age pension. I know perfectly well that many people who are drawing age pensions are quite well to do. They are people who have worked, and are working. Under our generous social service laws, they may have a house and certain sources of income. 273 JSB 0 0 CRITCHLEY, John Senator Critchley - Not too generous! 273 KT8 0 0 MCCALLUM, John Senator MCCALLUM - As Senator Critchley does not like the term " generous ", I shall say that, under our just laws, those people are entitled to draw a certain amount of money from the public revenue. But they are not indigent if they own a house, and have other sources of income and may, in addition, earn money. The real problem is not one that can be solved by shedding crocodile tears, and saying things merely because they are popular and will gain votes. The real problem is to identify those who are indigent and in need of monetary assistance. We must find some way of doing that. One step that this Government has taken has been to subsidize the provision of homes for indigent people. I regard that as a major contribution to social welfare. I shall now deal briefly with the subject of taxation, to which reference has been -made by honorable senators on both sides. I agree with those who see in various forms of indirect taxation a great deal that is undesirable. There was a time when I was completely opposed to sales tax. I am reconciled now to certain aspects of sales tax because, due to the strains on our economy, it is necessary to dampen down expenditure in various directions. However, I think that we should scrutinize carefully every year the lists of articles subject u> sales tax, and we should suggest to the Treasurer items that ought to be freed from sales tax. There is one tax that I, myself, regard as completely wrong and iniquitous. I refer to the pay-roll tax. I can find nothing to justify it except that it is easy to collect and brings in revenue of about £45,000,000 a year. For that reason, it might be difficult for the Treasury to abandon it. 274 KBW 0 0 WRIGHT, Reginald Senator Wright - It was imposed to enable the payment of child endowment. 274 KT8 0 0 MCCALLUM, John Senator MCCALLUM - That is so, but nevertheless I believe that it is inflationary in its effect. It is a hindrance to business, and I think that it should be abolished. The leeway in revenue could be made up by the adjustment of other forms of taxation. I believe that there is justification for certain forms of indirect taxation, particularly excise and customs duty, because it is necessary to leave to the people, whether their income be large or small, sufficient money to encourage them to save, and thus relieve the country of a burden in their old age. I could have dealt with a number of other matters, but this is a subject to which I have given a great deal of thought. I hope that my remarks have not been without value. Despite its few defects, I regard the budget as a sound one and reasonably suited to our times. 274 K6P 0 0 BROWN, Gordon Senator BROWN - I rise with great diffidence at this hour to address the Senate and the few people who may be listening over the radio. 274 K3I 0 0 RYAN, John Senator Ryan - There are thousands of them. 274 K6P 0 0 BROWN, Gordon Senator BROWN - I hope that the honorable senator is right, because it is somewhat distressing to speak to so few honorable senators in this chamber. One is met with circumstances which give a feeling of frustration. Sometimes I wonder whether it is worth while speaking at all and whether the most excellent speeches made in this chamber have any real effect. To-night we have heard some excellent speeches from new senators, and I take this opportunity to compliment them on their utterances. At the same time, I inform them, after having been in this Senate for 25 years, that their remarks will not go very far; they will have practically no effect on the Treasurer (Sir Arthur Fadden) and his colleagues, and will not alter in the slightest degree the policy which the Government has laid down and to which it is committed. Many other honorable senators believe, as I do, that the Parliament has lost its power over the Executive, which consists of a few members of the Ministry who decide what shall be done; and the Senate and the House of Representatives are left without control. However, I have been asked to speak, and I must do my job, which means that I must do my best to interest honorable senators and myself. I believe that in the multitude of counsellors there is wisdom, and certainly I am convinced that much wisdom resides in the Senate. There is also a lot of mental obfuscation. 274 KOU 0 0 HENDRICKSON, Albion Senator Hendrickson - There are some Jeremiahs, too. 274 K6P 0 0 BROWN, Gordon Senator BROWN - Like Senator Hannan, I could quote from the Bible, but I shall not do so to-night. I was somewhat amazed at the honorable senator's quotation from the Book of Jeremiah, but I remember that honorable senators opposite have the habit of digging into ancient records and using the remarks of people of past ages in support of some argument applying to modern times. The present Government is moribund and unable to cope with the situation confronting this country in the way that it should and would act if it were fully aware of modern ' trends and developments. Unfortunately, members of the Government are static in their approach to problems, and for that reason they are unable to overcome them. The trouble is that the Government has been in office too long. It has been in charge of the country for seven years, and now it is sitting back in the breeching. Some one has said that, like Micawber, the Government is waiting for something to turn up. The Treasurer has been the recipient of much criticism and advice, much of which has come from members of the Government parties. He has, of course, been eulogized by some, but, at the same time, members of the tory parties have criticized him a good deal during recent weeks. During this debate speeches delivered in this chamber have covered a wide range of subjects, including the extension of the powers of the Snowy Mountains Hydroelectric Authority. I commend Senator Buttfield for her interesting contribution to the debate. As one who sat for eight years in the presidential chair, I can appreciate the position when an honorable senator rises and deals with a subject as objectively and capably as Senator Buttfield did last night. I commend her not only for the manner in which she spoke, but also for the matter contained in her speech. Senator Maher, that genial senator from Queensland, would solve the problem of inflation by getting boys and girls to make compulsory savings. His suggestion sounds all right, but it reminds me of King Canute trying to keep back the incoming tide. Another honorable senator suggested that the main burden of taxes should be transferred from married taxpayers to single taxpayers, and I suppose he meant well. One of the proposals most popular with supporters of the Government is that the economy of Australia could be saved, and inflation arrested, by decreasing wages. They claim that in that way the ship of state could be put on an even keel. It is the policy of the Government to ask members of the working class in the community to tighten their belts, eat less porridge and fewer potatoes and half starve their wives and children. They claim that by lowering wages Australia could compete in the world markets with England and the United States of America, and that all would be well. 275 K3I 0 0 RYAN, John Senator Ryan - Senator Buttfield advocated that we should eat more rice. 275 K6P 0 0 BROWN, Gordon Senator BROWN - The honorable senator told us that the Chinese people averaged 600 lb. of rice a year according to the statistician's figures. I am reminded that the late Joseph Silver Collings, who was at one time a member of the Senate, said that there are three kinds of liars - liars, damned liars, and statisticians. According to statistics, there are between 600,000,000 and 1,000,000,000 Chinese in the world. If each of them eats 600 lb. of rice a year, they would consume more rice than the world produces. I leave it at that. 275 KPI 0 0 KENDALL, Roy Senator Kendall - The honorable senator should know that 600 lb. of rice a year is less than 2 lb. a day. 275 K6P 0 0 BROWN, Gordon Senator BROWN - I like rice, but I should not like to eat 2 lb. of it a day. 275 K3O 0 0 BUTTFIELD, Nancy Senator Buttfield - My figures were right. 275 K6P 0 0 BROWN, Gordon Senator BROWN - Of course. However, I was somewhat amused by the honorable senator's remarks, and I suppose I have a right to be amused. Another suggestion to meet the situation was made by Sir Earle Christmas Grafton Page, who made the astounding proposal that some of our public utilities should be handed over to private enterprise. I have no doubt that that suggestion found favour with our good friend the Minister for National Development (Senator Spooner), who, when he passes to the happy hunting ground, will have engraved on his heart the words " private enterprise ". Apparently, Sir Earle Page would pass over to private enterprise the Post Office and our railways. I say now that the Labour party is strongly opposed to anything of that kind being done, because we believe that if we are to solve our problems and avoid fluctuations in our economic processes, we must draw as much as possible from private capitalism and place it where it will be controlled by the people, through the government acting on their behalf. We do not say, with the Communists, that we shall take full and complete control of all industry, and of every little shop and paddock in the country. The Labour party is a party of realists, and we say to the people that if we are to avoid the ups and downs, fluctuations, unemployment and misery that occur as the result of private enterprise controlling the economy of the country, we must follow the line of control of industry by the people, and take control away from the gamblers of the stock exchange and from the exponents of private enterprise who would sacrifice the country in order to gain a little gold, lt is one of the fundamental principles of the Labour party that vital industries, when they are not being run properly by private enterprise, should be taken over by the State, and runin the interests of the community. I listened with great surprise and deep interest to our good friend Senator Henty who went to see Chiang Kai-Shek in Formosa, where there are no flies. In fact, Senator Henty gave what might be considered to be a Communist speech when he told us what is being done in Formosa, where they have actually liquidated the landlords. We do not advise the liquidation of landlords, but we do say that we should use the land of our country, not for the purpose of exploitation, but to feed the people. Senator Maher had a solution for our problems. I always enjoy listening to Senator Maher because he is such an old tory troglodyte - although I do not say that in an offensive manner. About 25 years ago in this chamber I called Senator Payne, from Tasmania, an old troglodyte. He was very upset about it, and rose with tears in his eyes and anger in his face and appealed to the then President of the Senate, colourful old Paddy Lynch. A week before, Paddy had beaten Senator Payne in the contest for the job of President, and was not too kindly disposed to the old troglodyte from Tasmania. Senator Payne asked for a withdrawal of the word " troglodyte ", which I had applied to him. Paddy looked up at me and I could see a glint in his eye. He said, " Possibly the honorable senator has a dictionary meaning for the term troglodyte ". I said, " Yes, during the course of my long historical reading I discovered that thousands of years ago men and women lived in caves. They were known as troglodytes. Senator Payne is not a cave-dweller, but mentally he is on the same level ". When I listen to some of the honorable senators on the Government side I must say - without being offensive because I have no anger or bitterness in my heart - and I think when they are discussing economics and international relationships their minds go back to the primaeval slime and they have not progressed at all. Senator Maher suggested that prices, wages and other charges should be reduced by 20 per cent. Some one interjected and said, " What about mortgages ", but Senator Maher jibbed at mortgages. Many, years ago, an old relative of mine told me that he could run the country, and one of the ways in which he would improve things would be to reduce all costs by 50 per cent. I asked him why they should not be cut out altogether, so that we could all. be happy. I will not say what he replied to that because I am on the air, but ideas similar to Senator Maher's have been put forward by different people for a long time. Such persons have no conception of the economic position in which this country now finds itself, nor of the world position as a whole. They think that they can counter inflation by some petty little method that has been evolved in a troglodytic mind. Inflationary problems such as we have are just as acute in England. They are the problems of modern financial monopoly capitalism, but I ask honorable senators not to think that I am a Communist because I have mentioned capitalism. We are still living in a capitalist era, and the sameproblems as we have arise also in other capitalist countries. I have before me a report in the " Christian Science Monitor '\ which is a very good American newspaper. The newspaper was provided free to me through the generosity of the management of the Hotel Kurrajong. Apparently, those papers are sent to the hotel for distribution among benighted and ignorant senators and other politicians. Being benighted andsomewhat ignorant, I accepted one. According to the article in this newspaper Sir Anthony Eden recently delivered a speech in an attempt to rouse the British workmen from their lethargy. In that speech he used arguments similar to the arguments that the Government uses when it is trying to explain how we should solve our problems. Sir Anthony said that the struggle against inflation was the battle which the few - referring to the few who won the Battle of Britain - could not win to-day, as they did against Hitler. He said that Britain was in mortal peril, not of immediate unemployment, but of dire poverty by stages. He also said that Britain must halt rising prices, produce more of better quality and sell it at competitive prices. I can almost hear Senator Spooner, brother Sir Arthur Fadden and comrade Bob Menzies saying the same thing- 276 10000 0 0 PRESIDENT, The The PRESIDENT - Order! The honorable senator must not refer to members in another place in that way. He must refer to them in the correct manner. 276 K6P 0 0 BROWN, Gordon Senator BROWN - I have heard the Prime Minister, Mr. Robert Menzies, Sir Arthur Fadden and other members of another place speak in a way similar to that of Sir Anthony Eden. Sir Anthony went further, and said that the English people must take steps to build up their gold and dollar reserves. I point out that this Government is saying the same sort of thing about our reserves in England. Sir Anthony also said that imports and home consumption in England were too high, and that England was importing too much and consuming too much. That has also been said about this great land of plenty. So that we will not get into a bog of economic disaster, the Liberal Government is refusing to give justice to age and invalid pensioners. It believes that, to keep the country on an even keel, we must not be fair and just and Christian in our actions towards them. Instead of giving them an extra £1 a week, we are refusing them anything. We are being told to work harder and longer, but the Government has not said a word about the usurers. I cannot find words to describe the persons who will use their power over finance to drag from people who want money 10 per cent., 15 per cent, and 20 per cent, by way of interest. How low they are, and yet they call themselves good Australians. The Government is not doing anything to stop this usury. Shylock was a Christian beside them. Has there been any increase in the labour time that is needed to produce goods? Why should commodity goods be dearer? I should like to refer to one item - refrigerators. Recently, in. a spirit of prodigality, I said to my wife, " My dear wife, we will buy a new refrigerator ". I went to inquire about the price of various refrigerators, and had a long conversation with the manager of one establishment We discussed hire purchase, and he said that if I wanted to buy a refrigerator on the hire-purchase system, they would have to charge me interest. I asked him what rate of interest. He said, " I suppose it will run out at about 12 per cent, at a flat rate, but if you go down the road you will find that, by the time you have paid for your refrigerator, you will have been charged 17± per cent." Those are the Christian gentlemen who are exploiting the workers. One refrigerator was priced at £225. There was another for £189. I began to make inquiries, and found that the labour costs to build the refrigerator I have in my home totalled £25. It is a cheap refrigerator that was in the house when I bought it. The price on the market was £130. The difference between £25 and £130 is swallowed up by usury, commission and advertising, because there is a cartel to keepprices up. One day my refrigerator broke down,, and I called in a man to mend it. He charged me a high price. He told me that he was doing refrigeration work for business people, and the companies added 50* per cent, on to his charges. When they discovered that he was doing the work at a. good profit at his own price, the companies got busy and he could get no more steel for his refrigeration business. 277 KMN 0 0 GRANT, Donald Senator Grant - This is. prosperity! 277 K6P 0 0 BROWN, Gordon Senator BROWN - Yes, and those are the rotten tactics of those who have a monopoly, even in the refrigerator business. There are monopolies everywhere, yet some pinheaded, mental featherweights say that they will burst the monopolies. The monopolies will burst them before they succumb. I wish to refer briefly to a matter that I spoke about in this chamber recently. I am afraid that I used words that I should not have used in relation to exploitation of persons who had suffered some disability, were rehabilitated and then were sacked from their jobs. I have had the best of help from the Deputy-Director of Social! Services in Brisbane. The men who have been in charge there have been most sympathetic, and will stretch the law, if possible, to do service to some poor person to whom nature has not been kind. A man I have in mind was crippled fifteen years ago with poliomyelitis. It is pitiful to see him getting about his house on his rear because he has no power in his legs. He was rehabilitated and obtained a job. He was in it for nine months before be was sacked. He speaks very highly of the firm, but there was a shortage of work. He was able to get _ the pension again, and then the firm sent for him. After two months, he was sacked again, and this time he could' not get the pension. He was given about half the pension by way of unemployment benefit. He was totally and permanently incapacitated, and he saved the nation hundreds of pounds by being rehabilitated! so that he could work. He could not find another job, and the Department of Social Services, working under the law, had to reduce him to half pay. I have referred this matter to the Minister for Social Services (Mr. Roberton) but have not had a reply. I hope that something will be done for the totally and permanently incapacitated cripples when they lose their jobs. They should be given a pension. I ask for leave to continue my remarks. Leave granted; debate adjourned. 278 23:00:00 Senate adjourned at 11 p.m.