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Tuesday, 1 October 1935

Mr HOLLOWAY (Melbourne Ports) . - I support the amendment. The appeals from this side of the House on behalf of our invalid and old-age pensioners are becoming painful, but we must continue with our demands or requests until some justice is done to this most deserving section of the community. The Leader of the Opposition (Mr. Curtin) has made it dear that when the Financial Emergency legislation was passed there was a definite understanding that immediately the finances of the country improved sufficiently there would be a complete restoration of pension payments. I have made that statement on Many occasions, and I have not heard any honorable members supporting the Government deny that such an undertaking was given. The Financial Emergency Act authorizing the reductions of public servants' salaries and payments to pensioners, was carried by a large majority, but against the wishes of some members on this side. In spite of repeated promises that pensioners would receive first consideration when the financial position improved, the Government has remitted taxation to the wealthy sections of the community, and there has been no suggestion, so far, of a restoration of pension payments. There is nothing wrong with the proposal to restore some portion of the salaries of the higher officers of the Public Service. That also was part of the understanding when the Financial Emergency Act was passed. But it is paradoxical that the poorest people in the community are always the first to be called upon to make sacrifices, and the last to be given relief, the reason being that in the aggregate - the working classes constitute 80 per cent, of the total population - the Government obtains, by way of indirect taxation, more revenue from them than from the minority of direct taxpayers. I know it was impossible, except by spreading the sacrifice over all departments and sections of taxpayers, for the Government of the day to reduce its expenditure by the millions of pounds demanded by the Commonwealth Bank at the onset of the depression. I saw the figures worked out at the time, and did what I could to influence those who were drafting the Financial Emergency legislation to ease the burden on the poorer section of the community; but always the answer was that if the Government was to achieve its purpose every person in the community, including even girls and boys earning 7s. 6d. or 10s. a week, had to make his or her contribution. But, as has been stated so repeatedly, there was a distinct promise that the poorest people would be the first to receive consideration when the finances of the country improved. That promise has not been honoured. Certain classes of taxpayers who were not affected by the financial emergency legislation have been relieved of taxes to the amount of many millions of pounds, but so far there has been no indication by the Government that justice is to be done to our pensioners. The Government seems to be becoming more callous with the progress of the years. It was not until after millions of pounds of taxes had been remitted to the wealthier classes of the community that Parliament was called upon to consider proposals to restore in part the salaries or wages of the lower paid public servants. More recently there has been a further restoration of members' salaries, as well as further remissions of taxation to large city landowners, banking, insurance and shipping companies, and this year the Government is making provision to restore a further percentage of the salaries of the higher paid officers in the public service. Long ago I emphasized the fact that normal business activity could not be restored by reduction of the income of the poorer sections of the community. The only logical way to give an impetus to trade is to place spending power in the hands of the workers. Every economist agrees that thrift, far from being a blessing, has become a curse. One of the great troubles of the world to-day is that spending power is restricted. The loss of world trade has caused a collapse in this and other countries. The great majority of the people have had their living standards reduced, and it is tragic to find the Government seeking to re- habilitate industry by adopting cheeseparing proposals. When it reduces the taxes of the wealthy, the beneficiaries probably invest their extra money in government loans rather than in industrial enterprises. The demand for the products of industry has so decreased that if prosperity is to be brought about the standards of living of the people must be restored to the 1929 level. The Government has been advised by Professor Giblin, as it was by Mr. Wickens in 1930, to restore the 1929 standards of living, but action has been taken which will prevent that restoration. The partial restoration of salaries to Ministers, members of Parliament, and the higher-paid public servants will have no effect whatever in rehabilitating industry, because the recipients are already enjoying the standards of living to which they are accustomed. It is essential to make a restoration of income to those who are not now in a position to buy the goods they need. We should give an increase to the invalid and old-age pensioners, and to the widows of ex-soldiers, who would spend the additional income immediately they received it. The present proposals of the Government, apart from being inhumane, and involving failure to keep a promise to do justice to the poorer sections, are economically unsound.

I have no doubt that the Assistant Treasurer (Mr. Casey) will tell us that the invalid and old-age pension has already been increased from 17s. 6d. to 18s. a week. The automatic adjustment of the pension in accordance with the cost of living is most cruel in its operation, and it eliminates the possibility of the pensioners ever getting back the 2s. 6d. a week by which their income has been reduced. No doubt the pension will eventually be raised to fi a. week, but this will be due entirely to the increased cost of living. Prices must rise by reason of an increased demand for goods and services if prosperity is to return; they must not be raised artificially. When prices begin to ascend every one will begin to buy, anticipating further rises, and when that time comes, we shall emerge from the depression. When the pension was reduced from £1 to 17s. 6d. a week the cost of living index figure was about 1810; but, if the figure increases to 2000, the pensioner will be actually worse off than he was in 1931, because the act provides that the automatic adjustment shall not carry the pension above £1.

Mr McClelland - How can we obtain increased prices for our exports?

Mr HOLLOWAY - When 30,000,000 white people who are unemployed are put back to work there will be a greater demand throughout the world for goods and services. The loss of world trade, through unemployment, amounts to £400,000,000, and only when this position is rectified can improved prices be obtained. Agreements such as those made at Ottawa cannot solve the problem; that agreement merely means that the representatives of six dominions sat round a table as though playing poker. A certain amount of money was in their possession, and at the end of a long game, the sum was neither greater nor less, but the money had changed hands. If the Government will not accept the amendment, I urge it, as a compromise, at least to grant to the pensioner a percentage restoration equal to that to be given to members of Parliament and the higher-paid public servants. Were the pensioners not more numerous than those whose salaries are to be partially restored, no doubt they would be given back the 2s. 6d. a week which they lost, but because they are so numerous the Government contends that a restoration to £1 a week would be too costly. I ask the Minister not to oppose the amendment, but to recast the bill.

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