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Tuesday, 29 November 1960

Mr POLLARD (Lalor) .- Before touching on the main theme of the debate, I think I should say to the honorable member for McPherson (Mr. Barnes) and to this Parliament that some people are becoming a little tired of these continual jibes about the shortage of petrol in 1949. Might I say that the shortage of petrol at that time arose from factors very similar to those which are operating now, except that the Labour Government was only three years out of a war and had on its hands over that period the responsibility of rehabilitating over 1.000,000 men and women in industry who had been engaged in munitions manufacture and in the Army. When that government insisted on a continuation of petrol rationing it was to help the hardpressed British Government. Honorable members on the Government side can interject, but they have had their little say. At the time of which I speak, the only petrol available to Britain was that which came from the Haifa refinery. It was sterling petrol, which did not involve Great Britain in the expenditure of dollars; but owing to the Arab war that refinery had to cease operations and Great Britain had immediately to buy petrol for dollars. Does that sink in? Great Britain had then to expend on petrol the dollars that were obtainable and that were wanted for other things besides petrol, such as agricultural machinery, which we did not produce here.

Al that time, fortuitously and fortunately, shortly after the present Government came to power - members on the Government side have had their mag and should listen to me for a moment - the position in Haifa improved and the refinery was opened. Simultaneously the United States of America entered into an agreement with Great Britain under which the United Kingdom would build for the United States of America two tankers to be paid for in dollars, and that eased the dollar position. When the present Government came into office that eased the position, and then it took credit for making petrol generously available and condemned the Labour Government for assisting the hard-pressed people of the United Kingdom.

The measure before the House is one of a number which the Government will introduce to rectify what it says is a very difficult economic position obtaining in Australia to-day.

The official figures prove that over the past seven years the international balance of payments position has deteriorated to such an extent that as at the end of June we were in debt to the tune of £1,032,000,000. The ordinary man and woman might ask, "How have we been floating along if we owe dollars and sterling currency amounting to £1,032,000,000?" The position is fantastic. The plain fact is that until recently, indeed right up to the present, because another bill was introduced to-night to enable us to borrow more dollars, we have been meeting our commitments - or failing to meet them, if you wish to put it that way - by borrowing money overseas and by regarding as credits the investments that have come to this country in the form of dollars and sterling currency. But the position continues to deteriorate. For the first three months of this year our international reserves have gone down the drain to the extent of something like £100,000,000.

Mr Beazley - And the Government calls this a marvellous economy!

Mr POLLARD - And the Government calls this a marvellous economy! Notwithstanding the fact that the Budget was introduced only three months ago, the time has now arisen when, to prevent a serious economic collapse in Australia, the Government has found it necessary to take certain measures.

Let us consider the basic problem that confronts us. Let us ask ourselves whether the bill that is now before us will play a part in remedying the position. Australia needs to earn more dollars, more sterling, more francs and, to a lesser extent, other foreign currency. If we do not earn additional credits, we cannot meet accruing international debits which this quarter have increased by £100,000,000. The question arises immediately whether the measure that is now before us will meet the situation. Will it earn Australia more dollars? Will it earn Australia more sterling currency? Will it earn Australia more French or Swiss francs?

Mr Anderson - And Japanese yen.

Mr POLLARD - And Japanese yen. With the exception of the extent to which this measure will affect the importation of cars and spare parts, it will not save for Australia one additional dollar, one British £1 or one French or Swiss franc. It cannot. The only way in which we can earn dollars, sterling currency, French or Swiss francs and other foreign currency is to export more wheat, more wool, more dairy produce and an increased proportion of the products of our secondary industries such as iron and steel. The ironical fact about the matter is that the more primary products you export the more money you lose because of the rapid increase in the cost of producing those commodities.

To make matters worse, the Government says that the position will be remedied if it adds £320 sales tax to the cost of a car which otherwise would be £800, or if it adds £480 to the cost of a car which otherwise would be £1,200. One might ask how that will remedy the position. On the one hand, the Government claims that its action will have very little, if any, effect on employment because plenty of jobs other than those in the motor car industry are available. On the other hand, the Government hopes that the people will be deterred from buying motor cars. If the people are deterred from buying imported motor cars or spare parts, that will be a small contribution to the balance of payments position, but the proposed sales tax imposition does not discriminate between imported or locally manufactured cars. The cars which are purchased by middle class and working class income-earners are, in the main, manufactured locally so the Government's proposal will not achieve anything other than perhaps to disrupt the motor car industry and the wide range of ancillary industries which manufacture parts for cars.

The Government claims that its proposal will deter people from buying cars and that the money will be diverted to other channels. It claims also, as I have said, that employment will not be affected. But let us have a look at the position and at the shocking discrimination that arises. Let me take, as an example, the district in which I live. I live in an outer suburb of Melbourne which comprises people in the middle and working classes - a fair cross section of the Australian community. In my street, in which there are about twenty homes, every home has a motor car. As far as I know, none of my neighbours is wealthy but they all have a motor car. But there is a substantial difference in the income and circumstances of the people living in that street. Some do not have a family and some, such as myself, have a higher income than others. Let us assume that every one in the street purchases a Holden car. To assist the economy of this country to be put on its feet, the basic wage earner has to pay £80 or £90 sales tax on that car, and I, with my somewhat higher income, and with no dependants other than a wife, have to pay only the same amount. Honorable members can see how the Government's proposal will bear harshly on people in the lower income groups. Why should my less fortunate fellow citizen who receives the basic wage or perhaps an artisan's wage be required to pay £80 or £90 sales tax on a car when I, with my somewhat higher income, <\m required to pay only the same amount? Can the economic position or the financial situation be retrieved in that way? The Government's rotten proposal has the strongest flavour of obnoxious class distinction.

I ask the Minister for Primary Industry (Mr. Adermann), who is at the table, or any one else, to tell me what will happen to the money that potential car buyers will save if they are deterred from buying a car. Sometimes a car is the sole means of getting the owner and perhaps some of his neighbours to the industries in which they work. It is an economic necessity. Sometimes the car is owned by a person who with his wife has made substantia] sacrifices over a long period. He may have refrained from buying beer and putting money on horses so that they could enjoy a little leisure at the week-end. Such people are good Australian citizens.

The Government's proposal is aimed at, and will be strongly felt by, the family in which the wife, as is common in Australian industry to-day, has gone out to work, in the first place, to help to buy the home and, in the second place, to provide some additional amenity. They want to enjoy the comfort of a car at the week-end or when they go on holidays. This sales tax, which will affect mainly the people to whom I have referred, has been proposed by the Government to offset our unfavorable international balance of payments which to-day amounts to £1,032,000,000.

Let us go a little further. I live in an area in close proximity to about 3,000 Housing Commission homes. 1 have noticed that many families in that Housing Commission area, by virtue of family co-operation and because of many wives working, are acquiring motor cars so that they may get away from the industrial smoke of Melbourne on week-ends. Within the last six months the Ford Motor Company of Australia Proprietary Limited, having invested between £11,000,000 and £13,000,000, completed within five miles of that district a plant to produce motor cars. It did so having in mind, no doubt, that the area was a great source of suitable labour. Shortly before the introduction of th? last Budget the Prime Minister (Mr. Menzies) appeared in all his glory to preside at the official opening of that great factory.

Mr Anderson - Were you there. Reg?

Mr POLLARD - I was. I was among the multitude, as the humble representative of the workers of Lalor, and of course I was duly impressed by the enthusiasm with which the Prime Minister opened that factory. I heard the magnificent speech he made, when he held forth on this wonderful example of private enterprise.

Mr Opperman - He did not speak there.

Mr POLLARD - Of course he spoke there. 1 could hear him talking to the manager. He was tremendously impressed.

Mr Opperman - He did not say a word. I was there, too.

Mr POLLARD - And I was there. He was tremendously impressed. You could see it in his face. You do not deny that he was most complimentary, and that he passed the word on to everybody he met in that charmed circle around him? Do you deny it? Of course you do not. He must have known then that we were moving slightly towards the rocks, as far as our economy was concerned. Did he give any warning in the Budget that was presented a few months ago, and before the recent economic statement was made? Not a word! Now we have the unfortunate position, if what the honorable member for Mcpherson (Mr. Barnes) said is true, that people will be deterred from buying cars. The people living in the suburbs adjacent to that factory will be in the gravest difficulty when it comes to getting jobs for their sons and daughters, many of whom were looking forward to obtaining employment in the Ford factory. I have no doubt that some of the people already employed there will be in danger.

But let me take the matter a little further. I r.ow come to an evil that the Government has not touched upon. Within a quarter of a mile of this great industrial district, an area of. I think, 77 acres of land was recently sold at £1,750 an acre. It was a very lucky sale for the farmer who owned that land. It was really out in the farming country, but it sold, as I say, at £1,750 an acre. An acre may, as honorable members know, be broken up into four building allotments, and building allotments in that vicinity to-day are bringing from £1,700 to £2,000 each.

What do we find now? The people who were contemplating purchasing blocks of land in this area are faced with the fear of unemployment if they are in that industry or if any members of their families were looking forward to obtaining employment in the industry. You cannot blame the individual who sold the land. Just imagine getting £1,750 an acre for farming land, on which you could fatten about two lambs an acre or grow about £2 worth of wool a year. I should say the land was worth at the most £100 an acre, and even then I would not like to pay £100 for twosheeptotheacre farming land. Is there any proposal by this Government to impose a capital gains tax, as perhaps it could do, on - I will not say ill-gotten gains - on such accretions of capital, in order, perhaps, to subsidize primary production and encourage farmers to export more, by allowing them to recoup some of the losses they have sustained under a system which means that the more they export the less they get, because they can sell at higher prices on the local market than on export markets?

I ask the Treasurer to consider again whether this measure will deter people from buying motor cars. His expressed hope, of course, is that it will deter them. I suggest that it will deter the poorest in the community, but it will not make any difference to the rich. The people who are buying land at £1,750 an acre, and the people who are receiving those prices, will not be greatly affected, but the other people, whom I mentioned earlier, will be very hard hit.

Mr Turnbull - What has all this to do with it?

Mr POLLARD - The honorable member wants to know what this has to do with it, and I will tell him something directly which should affect the matter from the view of the Country Party. Suppose that this measure does not have the effect of deterring purchasers of motor cars. If motor car sales are sustained at the present level, the Australian Treasury will be full of money. There will be vast sums available.

Mr Bandidt - There will be plenty of work for the people.

Mr POLLARD - The honorable member says there will be plenty of work. I say there will be plenty of money in the Treasury. When the Government gets an extra £80, or £100 or £150 on every motor car sold, there will be plenty of money in the Government's coffers. What will you do with it?

Mr Turnbull - Give it to the farmers.

Mr POLLARD - Give it to the farmers, he says! Let me say this to the honorable gentleman and his colleagues who talk about producing more, and about people being able to get jobs on farms: I would like to find a young Australian displaced from the motor industry who will be able, because of land aggregation and land settlement and all the land deals that have taken place, to get a job working on a farm. The farmers work with their own families. They have very few hired employees to-day, because farms are highly mechanized. The rural industry offers very poor employment opportunities in Australia to-day.

Mr Turnbull - That is right, run them down!

Mr POLLARD - I am not running them down. You are a fibber. You have a habit of misrepresenting people. I said that farming is one of the poorest employment activities to-day, and so it is. That is not a reflection on the farmers. It is a compliment to their capacity and to the way in which they have mechanized their farms. Employment is not freely available on farms to-day, and even the honorable member for Mallee (Mr. Turnbull) will not deny that. If you want to buy a farm you have not a hope of doing so if you have not £50,000. If you have not that amount of money and you wish to raise the necessary finance, I suggest that you take note of this information which was recently published in the " Stock and Station Agents " -

Owing to the increased cost of providing and servicing funds for advances required by clients, the pastoral companies in South Australia have found it necessary to increase the rate of interest to 6i per cent, per annum as from 1st November, 1960. This rate, which is based on present costs, including the bank lending rate in force at 31st October, 1960, is subject to alteration in accordance with any variation made from time to time in the bank lending rate.

Mr Harold Holt - What is the date of that?

Mr POLLARD - That was last week, since you delivered your economic statement. If you want to raise money to go on a farm, you will have to pay 6$ per sent, on first mortgage, and the Lord only know! what you will have to pay on second mortgage. If you want machinery on hire purchase, you will either not get it at all, or you will have to pay at the higher interest rates that the finance companies are now charging.

I suggest, therefore, that this increase of the sales tax to 40 per cent, will be of nc assistance whatsoever in helping the country to obtain the overseas balances that it se urgently needs. On the contrary, it wil probably create very serious economic stresses.

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