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Thursday, 5 March 1942

Mr HOLT - It is quite understandable that what has for so long proved to be a popular story should be relinquished with reluctance by members of the present Government. As I have said, we learned that zinc concentrates could be obtained by Japan from several other countries, Burma being one of them. On the other hand, we found that we were getting from Japan articles which we could not get from any other country, articles which were essential for our defence preparations. These included machine tools, silk for parachutes, canvas tents, and khaki webbing for uniforms; there was also an offer of aeroplanes. 1 summoned representatives of the appropriate trade union and told them the story, and I am happy to say that the unionists showed a good deal more sense in regard to the matter than have some of those who claim to speak for them. That was the last we heard of it.

Mr Lazzarini - That is all boloney. There was a strike on the waterfront for three months on this issue.

Mr HOLT - I am referring to the episode which took place last year. To return to the subject before the House : It is quite clear that the Government found itself, after the extraordinary performance of one of its Ministers this afternoon, in a very unpleasant predicament. Although the Government is seeking authority under this bill to raise £75,,000,000, very grave doubts existed in all parts of the House after the Minister for Labour and National Service had spoken as to whether the Government was in favour of the bill. Accordingly, it arranged for its most astute debater to present, with such sophistry aB he could muster, a case which would attempt to resolve the dilemma in which the Government found itself. He declared that no positive declaration had been made on this side of the House in support of the bill. That is completely false. The Leader of the Opposition made it perfectly clear, in the opening sentences of his speech, that we were entirely in favour of the Loan Bill to raise £75,000,000. We recognized that it was for the purpose of conducting the war. Having made that declaration, the Leader of the Opposition proceeded to direct attention to what he regarded as some of the basic weaknesses in the financial policy of the Government. Not one member on this side of the chamber expressed any opposition to the bill; but, on the other hand, a responsible Minister endeavoured to explain to us a misrepresentation of certain remarks which he had made publicly, and he offered thecorrect version in its stead. Although we do not desire to question in detail the explanation which, was given by the Minister for Labour and National Service, I consider that it is appropriate to point out to the House that this alleged misrepresentation was not limited to the one newspaper from which he quoted. Such a respectable journal as the Brisbane Courier-Mail reported the Minister thus -

Wo should not be asked to pay for the war afterwards by paying interest on any loans that are raised now.

The Newcastle Morning Herald, which pays particular attention to industrial matters, reported on Monday, the 2nd March, that the Minister had said -

Industry was being concentrated and organized which meant that it got more and more into monopolistic hands. That was why he suggested that the Government take over basic war industries and organize them in the interests of the nation. Unfortunately, in Cabinet he was in the minority. The next best course in seeing that workers were being protected against exploitation was to give the workers themselves some say in the management of industry and some say in the production process.

In view of the fact that the Loan Bill has some bearing on the stability of our financial institutions, it is appropriate for me to quote from the Adelaide Advertiser a statement by the Minister upon the subject of the banks -

Mr. Wardsaid he had long held the opinion that we had too many banks and that the Commonwealth Bank was quite able to do the banking business. He had declared the Commonwealth Bank a protected industry. Private banks were on the same footing as

H, 1 V other undertaking.

So that if the Minister was misreported -and .1 remind the House that this is not the first time that embarrassing statements by the Minister have had to be announced to this House as misrepresentations of what he had actually said - apparently a number of newspapers fell into the same error after taking notes of the same speech. But we are prepared to meet him on entirely different ground and take the explanation which he offered to the House as being what he actually said. That explanation, in effect, is this: The Minister does not resist the proposition that we should pay interest on previous loans, or upon the £35,000,000 Liberty Loan, which is now being floated; but he is opposed to the payment of interest on any loans which may be raised in future.

There can be no misunderstanding on that point, because the honorable member for Dalley went to considerable pains to explain that this is a basic feature of the platform of the Labour party. The honorable member for Riverina (Mr. Langtry) will recall that a meeting in his electorate, the proceedings of which were reported in the press this morning, resolved that he should be asked to place before the Government, in an effective and determined manner, the opinion of that branch that interest should not be paid in future on moneys raised for war purposes. So there can be no doubt as to where the Minister stands, or where many members of the Government stand on this important proposal.

I asked earlier whether the Government was in favour of this bill which the Treasurer presented to the House, and I say that there is some point in my question, because the Minister for Labour and National Service said, " I am in favour of . paying interest on the £35,000,000 Liberty Loan, but on no future loans ". Yet the Government is now seeking authority to raise loans totalling £75,000,000. Can we assume that even if the Minister's colleagues are in favour of raising an additional £40,000,000 and paying interest on that sum, he is not in favour of it, and that once again he finds himself in the minority, as he was when he referred to the nationalization of industry.

In an attempt to justify the Minister's position, the honorable member for Dalley propounded what was for all of us a most original conception of ministerial responsibility. Apparently, the traditional theory of ministerial responsibility, which has been observed for many centuries, has been swept aside by this new doctrine that has been specially created to overcome the predicament of the Minister for Labour and National Service. The new theory is that if a Minister finds himself committed to a decision of Cabinet and he disapproves of that decision because it is not in conformity with the platform of the Labour party as laid down regularly at its conferences, it is his bounden duty to denounce that decision publicly and to advocate adherence to the platform. That was seriously put forward to the

House as a justification of the attitude of the Minister. If that be so, it will make a cabinet government a very difficult proposition in this country for a long time. It will make effective government in mar-time by Cabinet an outright impossibility. That is the really serious feature of the situation revealed by this performance to-day. We are fighting for our very existence. The enemy is attacking our shores. But we are not able to look with confidence to the Government for guidance. It is not able to reach agreement on basic matters of policy; and on that rests the whole future security of this Commonwealth. Honorable members opposite have a novel and revolutionary conception of the financing of the war. Even in Russia, to which so many honorable gentlemen opposite pledge their sentimental and personal attachment, a very handsome rate of interest is permitted on loans raised for the conduct of war. But in Australia we must be more extreme.

The statement which was made this afternoon will have damaging repercussions, for both in its implications and its consequences it is tragic for the security of this country. This Government has denounced the proposal for financing the war by compulsory loans, taking from each individual according to his capacity to contribute to the war effort. It put the previous Government out of office because it adopted that policy, and so it has decided that the system of voluntary loans is the one to which it will adhere. Whence will the contributions from this loan come? It has been suggested that they will come partly from the big companies, despite the heavy inroads of taxation upon their earnings. lt will not be seriously suggested that they will come from what we in normal times describe as the moderately welltodo and wealthy classes, because those sections are passing through a most painful period of adjustment. The fact that those people still have what on paper appears to be a very healthy income does not render the adjustment any the less painful for them, because over a period of years they have been accustomed to a certain living standard and are now compelled to adjust themselves in a matter of weeks to a drastically reduced living standard. While the voluntary principle remains, it will be extremely difficult to raise from this class substantial contributions for loans. Therefore, we must look to those elements in the community who to-day probably have more money, as the savings bank figures and the statistics relating to the purchase of consumer goods show, than they ever had before. On what basis will they make contributions to future loans? They are asked to do it voluntarily. It is perhaps the first time in their lives that they have had a little nest egg to which they look for their future economic security, and naturally they want to do the patriotic thing on behalf of the country. Accordingly, they decide to put their money into the loan. The interest might be only 3 per cent., but to them that is neither here nor there. It is a small return on their capital. But when these people are told that the Government is opposed to the payment of interest on loans, they feaT that the next step will be the confiscation of their money, and that the repayment of the principal will be repudiated. That will immediately destroy confidence and adversely affect the Government's prospects of securing substantial additional loan moneys. That is the accusation which we level against those members of the Government who talk in this loose and irresponsible manner at the present time. We say undeniably that they are destroying the confidence of the people in our financial institutions. All this talk about the private banks, interest from loans, confiscation of capital, and capital levies is having a most damaging and disastrous effect upon confidence. I ask the Treasurer to inform me whether it is a fact that there has been a significant " run " on some banks recently. People are showing a disposition to hoard their cash because of this fear of repudiation. The Minister for Labour and National Service and those who support him have done a great disservice to the country in raising this controversial issue at this juncture.

I pass from that subject to what I believe is a more serious attempt to sow discord in the community, namely, the proposal of the Minister for Labour and National Service that every member of the community should be reduced to what might be termed the "lowest common denominator standard Very good arguments; based on principles of social justice, might be adduced as to why every person should participate equally in the goods and services available in the community. That is a delightful academic proposal which one could usefully discuss in time of peace for hours. But when a responsible Minister, at a time when the country is battling for its existence, puts that forward seriously as a practical proposal to be put into operation, the result will be to create disunity, class hatred and class distrust. In the present crisis, the country should be pulling together in perfect unity. Does the honorable gentleman put forward that proposal seriously, believing it to be a practicable proposition or does he propound it because he knows that it will have a very popular appeal among some of the less informed sections of the community? I shall tackle him on both propositions. If he made the suggestion, not believing that it is practicable, he is deliberately provoking uncertainty, disunity and discord at a time when such, developments should be avoided. But if he seriously believes that the proposal will be given practical effect, does he speak as a member of the Government and enunciate government policy, or is he once again expressing a minority opinion from which his colleagues will openly dissociate themselves? In any event, he creates uncertainty and dissension, and so does a disservice to the community in this crisis. Whichever way one looks at it this Minister is able to do what he likes. He can publicly and privately disagree with the majority of his colleagues in a way which will appeal to certain elements of the community. I do not regard him as irresponsible or ignorant. I think he is playing a clever, shrewd game, from his own point of view, because he is obviously playing for the support of the militant industrial unions. We have got out of the habit of speaking of " Com " unions ; the honorable member for Dalley (Mr. Rosevear) and the Minister for Supply and Development (Mr. Beasley) at one stage organized to destroy those elements, but to-day we all are brothers and cannot use the expression " Com " since it may suggest disrespect for our ally overseas. The Minister for Labour and National Service is anxious to secure the support of the trade unions, and, to that end, is ready to go to the lengths of raising most controversial issues. The people of this country and the Opposition have given to the Government, from the time it took office almost up to the present moment, the most generous measure of support. In my experience no government had a better beginning than this Government had. The newspapers were behind it; they wanted to see it do well. The Opposition wanted to give it « fair trial. Hardly a member on this side has spoken publicly in the last few months.

Mr Menzies - Even the honorable member for Ballarat (Mr. Pollard) wanted to give a trial to it.

Mr HOLT - Yes, and the honorable member for Melbourne (Mr. Calwell), and the honorable member for Dalley (Mr. Rosevear), too. They all were prepared to give it a good start. No man could have given to the Prime Minister a fairer deal than was given by the Leader of the Opposition (Mr. Fadden).

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