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Thursday, 10 September 1942


Mr BARNARD (Bass) .- I congratulate the Treasurer (Mr. Chifley) on his budget and his speech in presenting it. In the circumstances the budget is an excellent production. I do not say for one moment that it is all that we should wish it to be. We would prefer that circumstances made possible a budget that provided only for the peace-time needs of the country, but wo have to face the realities of the situation. We are living in days of war, a war forced upon us, but none the less a. war in which we must continue until victory is achieved.


Mr Archie Cameron - A war which a lot of the honorable member's colleagues said was not coming.


Mr BARNARD - The honorable member for Barker (Mr. Archie Cameron) was one of those who criticized the policy of the Labour party in regard to having this country protected from the air. He pooh-poohed the idea of a sky black with aircraft; it was sheer nonsense to talk about having aircraft for the defence of this country. But what have the years produced and what are the lessons we have learned from this war?

I do not propose to worry any further about interjections from the honorable member for Barker. I propose, instead, to deal with the contention by the Leader of the Opposition (Mr. Fadden) that the cure for all the ills of the Australian people is a national government. It seemed that that part of the right honorable gentleman's speech fitted very badly into the main body. As far as he was concerned there was nothing good in the budget. It was all wrong. It was based on wrong premises. It provided for inflation. It did not provide for the raising of sufficient money by taxation, post-war credits and so on. Then, in conclusion, he said " Although we do not agree with your monetary policy, at the same time we think we ought to have a part in the government of the country". Oil will not mix with water, and I believe a national government composed of members from both sides of this chamber would be quite hopeless when matters of policy arose. I think that the present set-up is the nearest to the ideal set-up that we can get in this country at the present time.


Mr Beck - Do you think that the people are so divided as all that?


Mr BARNARD - I do not think that the people are divided at all. The present set-up provides for an Advisory War Council. So successful has that council been, if we can accept the words of the Opposition, that it was strengthened by the inclusion of the right honorable member for Cowper (Sir Earle Page) on his return from abroad. Evidently, the Opposition agrees that the council has done good work and that it is functioning smoothly. In spite of that, we have the Leader of the Opposition saying that the whole set-up is wrong and that we ought to have a national government.


Mr Beck - Half of the honorable gentleman's party did not want the right honorable member for Cowper to be included in the council.


Mr BARNARD - Our party accepted his inclusion. I do not. propose to use very much time on criticizing the Leader of the Opposition. He has his own views and I assume that he speaks for the Opposition on this matter. Nevertheless, I insist that the present system is the best that can be produced in the circumstances.


Mr Beck - By the present Government.


Mr BARNARD - That may be. The honorable member for Adelaide (Mr. Stacey) talked of inflation to the amount of £200,000.000. We have always had this talk about inflation and the use of currency and so on. It takes my mind back to the depression when we did not have a shilling in this country to expend on anything. We had thousands of people out of work, including good tradesmen who had never been out of work before. We had all the material and resources needed to give work to them - work which would have been reproductive. But no, we were told by the then Government, which was composed of many honorable members who now sit in the Opposition that we had no money. We could not build homes for the workers. We could not undertake the clearance of the slums which are a blot on this young country. We could not do anything except pay a dole to people. But, when war came, we could find £1,000,000 a day to spend on it. The two sets of facts cannot be reconciled. The plain truth is that the whole situation is governed by the productive capacity of the people. That is the only factor that is preventing a greater war effort in this country to-day. That is the only reason why we have to ration commodities and clothes,do without vests, and wear "victory suits". There is a. shortage, and so that every body, whether rich or poor, shall get a share there must be rationing. In war-time no other policy can be applied. I do not say that everything is perfect. Many mistakes have been made. The Prime Minister frankly admitted that last night, but he went on to say that , when the tempo increases as it has increased in the last two years, it is inevitable that waste will take place, and that we shall not get the full value for every pound that we spend. It is all very well to be critical because we have not hada full twenty-shillings worth for every pound that has been spent, but honorable members knowthat we shall not be able to get full worth in the future if the pace continues as it has done during recent years.

The Leader of the Opposition (Mr. Fadden) this afternoon quoted a broadcast statement by Mr. J. M. Keynes, the noted English economist, and the Minister for Health and Social Service (Mr. Holloway) made an off-hand reply without any notes or documents before him. I obtained for the Minister the report of what Mr. Keynes had said, but he did not have an opportunity to quote from it during his speech. I therefore propose to read the whole report in order to show what Mr. Keynes actually did say. This extract is from The Listener of the 2nd April, 1942.

HOW MUCH DOES FINANCE MATTER ?

What Can We Afford to Spend?

Now letme turn buck to the other interpretation of what my friend may have had at the hack of his head - the adequacy of our resources in general, evenassuming good employment, to allow us to devote a large body of labour to capital works which would bring in no immediate return. Here is a real problem, fundamental yet essentially simple, which it is important for all of us to try to understand. The first task is to make sure that there is enough demand to provide employment for every one. The second task is to prevent a demand in excess of the physical possibilities of supply, which is the propel meaning of inflation. For the physical possibilities of supply are very far from unlimited. Our building programme must be properly proportioned to the resources which are left after we have met our daily needs and have produced enough exports to pay for what we require to import from overseas. Immediately after the war the export industries must have the first claim on our attention. 1 cannot emphasize that too much. Until wo have rebuilt our export trade to its former dimensions we must be prepared for any reasonable sacrifice in the interests of exports. Success in that field is the clue to success all along the line. After meeting our daily needs by production and by export, we shall find ourselves with a certain surplus of resources and of labour available for capital works of improvement. If there is insufficient outlet for this surplus, we have unemployment. If, on the other hand there is an excess demand, we have inflation.

To make sure of good employment we must have ready an ample programme of re-stocking and of development over a wide field, industrial, engineering, transport and agricultural - not merely building. Having prepared our blue-prints, covering the whole field of our requirements and not building alone - and these can be as ambitious and glorious as the minds of our engineers and architects and social planners can conceive - those in charge must then concentrate on the vital task of central management, the pace at which the programme is put into operation, neither so slow as to cause unemployment nor so rapid as to cause inflation. The proportion of this surplus which can be allocated to building must depend on the order of our preference between different types of project.

With that analysis in our minds, let us come back to the building and constructional plans. It is extremely difficult to predict accurately in advance the scale and pace on which they can be carried out.

Nowthis is the important point: -

In the long run almost anything is possible. Therefore do not be afraid of large and bold schemes. Let our plans be big, significant, but not hasty. Rome was not built in a day. The building of the great architectural monuments of the past was carried out slowly, gradually, over many years, and they drew much of their virtue from being the fruit of slow cogitation ripening under the hand and before the eyes of the designer. The problem of pace can be determined rightly only in the light of the competing programmes in all other directions.

Mr. Keynessays that our capacity is limited only by our resources. I agree with this, and agree also that the first thing to do is to concentrate on winning the war. The next most important thing is to prepare for post-war reconstruction.

I presume that I, as chairman of the Social Security Committee, am expected to say something on this subject, in which I have been interested for some time. I was one of (lie members elected to the committee established by the right honorable member for Kooyong (Mr. Menzies) when lie was Prime Minister. The subject is most interesting and absorbing. The committee has presented four reports, and I am pleased to see that the Treasurer has embodied in his budget a fair slice of the recommendations in the first of them. The whole of the recommendations of the committee, despite the fact that it is composed of members from both sides and from both Houses, have been unanimous. It is gratifying to see that the Government is not prepared to wait until the conclusion of the war to improve our social services. Unlike the honorable member for Adelaide (Mr. Stacey) I would not be a party to robbing the poor to pay for the war. I agree with the honorable member for Parramatta (Sir Frederick Stewart), who said, in reply to an interjection by somebody on his own side of the House, e: You would deprive the widows to pay for the war ". I am glad to know that those unfortunate sections of the community are being catered for to a greater extent than formerly. I believe our postwar reconstruction will need to be attended to in a much greater degree than has been attempted in the past. I am reminded of what President Roosevelt said to the International Labour Conference held in Washington in 1941. There he used these words -

We are planning not to provide temporary remedies for the ills of a stricken world; wc arc planning to achieve permanent cures - to help establish a sounder life . . . We have learned too well that social problems and economic problems are not separate watertight compartments in the international field, any more than in the national sphere. In international, as in national affairs, economic policy can no longer be an end unto itself alone. It is merely a means for achieving social objectives.

A realistic approach suggests that the whole of our planning, both social and economic, should be centralized in a ministry of social security. In that passage President. Roosevelt clearly demonstrated

What he had in his mind for the conclusion of the war. I believe, as many in other countries believe, that we must undertake some of these social reforms now. We cannot wait until the war is concluded before we start to implement them. That brings me to the question of what we are going to do now with regard to post-war planning. I believe that we cannot set about this too soon. I realize that we cannot actually make plans for some of the tilings we should like to undertake, but at least we can prepare now for such planning, so that later we shall be able to see in clearer perspective some of the problems that will confront us.

The winning of the war is not the only problem that should be visualized by honorable members. After all, are we not seeking a higher average standard of living than has been experienced in the past? At present some have too much and others too little. I agree entirely with Mr. Keynes that what we do for the community should be limited only by our capacity to produce and distribute the good things of life among the people. All such ideas as the belief that we have not the necessary money to give these benefits to the people will have to go overboard after the war if our democratic civilization is to endure. If we do not tackle these social problems successfully, the democratic system will not withstand the acid test to which it is being put. We cannot approach the problem of post-war reconstruction too soon. I do not agree with the honorable member for Adelaide that parliamentary committees that have been investigating certain problems should be abolished. He said that the reports of some of the committees had been pigeonholed, but that is not so. He resigned from a committee because he had a dispute with the Prime Minister of the day.


Dr PRICE (BOOTHBY, SOUTH AUSTRALIA) - He thought that the committees were too costly.


Mr BARNARD - A committee becomes expensive only if the work that it does is not worth while. If it presents useful reports, its work is helpful to the Government. Would any honorable member suggest that the work carried out by the Joint Committees on Rural Industries and Broadcasting has not been justified? A bill recently passed by this Parliament, dealing with broadcasting, embodied almost the whole of the recommendations of the Joint Committee on Broadcasting, and the proposals in the measure were approved by both branches of the legislature.


Mr Scullin - That is also true of uniform taxation.


Mr BARNARD - I am grateful for that interjection. Uniform taxation is now a feature of the Australian economy, and I hope that it will be a permanent feature of it, for I am certain that it is welcomed by the people generally. Under the scheme, some citizens will pay more tax than in the past, but at least they will not be subjected to the .irksome method of having their incomes assessed and taxed by both Commonwealth and State governments.

I hope that the Government will soon take up the subject of ,post-war planning. Next to' the winning of the war, it is the most important problem. With my friend, the honorable member1 for Flinders (Mr. Ryan) and others, I am frequently considering this problem. The Treasurer (Mr. Chifley) informed me only last weekend that he had read and studied all of the reports of the Joint Committee on Social Security. I hope that some of the proposals recommended by that committee will be implemented. I desire to see a post-war planning committee appointed, and composed in such a way that it will keep ever before its mind the objective of post-war planning, namely, the social benefit of the community as a whole. In our approach to post-war reconstruction, we must have men directing the campaign who are realists - men with both feet on the ground. The committee's reports should be carefully prepared, and not filled with meaningless words. Article 7 of the Atlantic Charter cuts almost entirely across the policy that Australia has adopted for many years with regard to tariffs, but we must lay the foundations now for post-war reconstruction and enlist the services of men with a sympathetic approach to the problem. We must have men who will plan this work so that we may absorb people rapidly into reproductive works nt the conclusion of the war.

The fourth report of the Joint 'Committee on Social Security is of greatvalue, and I believe that it is the committee's best report, because it suggests practical ways of approaching one aspectof the problem, namely, housing. Evidence has been submitted to the committee that a proper housing scheme would absorb 25 per cent, of the unemployed in the early post-war years; but I do not desire housing to be considered merely from the point of view of its employment value. It should be considered because of its social value. It would provide homes that would be owned by the occupants. The money required to build the houses would be provided at a moderate rate of interest, so that the dwellings could be purchased within a reasonably short period. Such houses should provide all modern conveniences. One of the problems to be solved will be the clearance of slums, and financial provision will have to be made in that regard. I hope that the Government will soon accept the recommendations of the committee and appoint a housing planning authority that could draw up a scheme suitable for this vast continent, so that when peace comes the labour and materials will be available, and localities selected so that a start may bc made immediately.

I trust that ere the next budget is presented we shall have achieved a just peace, based on the true doctrine of the Lowly Nazarene, justice and righteousness.

Mr. PATERSON(Gippsland) 13,51].- There are some things in the budget and in the budget speech of the Treasurer (Mr. Chifley) which one must commend; there ave, however, omissions., particularly in regard to taxation, which one must condemn. So far as the new heavy taxes on entertainment, tobacco, alcohol, &c, are concerned, I can find no fault, nor could any reasonable mail find fault at a time such as this, but while such taxes lend a certain amount of colour to the Government's austerity recommendations, the equally conspicuous omissions from the budget lead one to the conclusion that it is as much a timidity budget as an austerity budget - timidity, which, if persisted in, will inevitably lead this country along the road to inflation. For some people, the war means sacrificial service. This applies particularly to our young men of the Army, the Navy and the Air Force, who are serving in the front line. For some others, it means greatly diminished net incomes, and, for the man on the land, particularly, it very often means long, laborious hours of toil, with insufficient assistance, to carry on the essential work of food production. Then for some others, the war means much higher incomes and far greater spending power than they have ever had. Admittedly it is not easy to achieve a general condition even remotely approaching real equality of sacrifice, but surely a greater effort in that direction could have been made in this budget. I am not one of those people who go so far as to say that no one should be better off because of war conditions, because we all know that there are some people who have had such a lean time for such a long time that some improvement of their economic circumstances is most desirable. No rightthinking man or woman begrudges that improvement, but surely there are many people not in that category who are better off because of war conditions. It is difficult to obtain exact figures relating to the national income and its composition, but I do not think one would be far wrong in assessing Australia's national income for the current financial year at £1,000,000,000 in round figures. I do not consider that to be an overestimate, in view of the tremendous war expenditure which must be reflected in almost every avenue of life. .Of that £1,000,000,000, probably £700,000,000 will be in the hands of people earning £400 per annum or less, and the remaining £300,000,000 will be in the hands of the more fortunate individuals whose incomes exceed £400 per annum. " Hit the big man " is a popular cry, and it is only right, that the "big man " should be very heavily taxed under present conditions: but even if two-thirds of all incomes exceeding £400 per annum were confiscated by the Government - it will be admitted that that would be a drastic step - the yield would amount to little more than one-third of the amount required by the Treasury to provide for war and ordinary services. Therefore, what is called in popular parlance, " socking the big man " is hopelessly inadequate as a means of providing for the needs of the Treasury. Some fairly substantial contribution must be obtained from people in receipt of incomes of £400 per annum or less if the war is to be financed on a basis which will enable us to escape the worst effects of inflation. In that £700,000,000 which I estimate will go into the pockets of people on incomes of up to £400 per annum this year, there is an immense reservoir of spending power. Judged by war-time austerity standards, probably £100,000,000 of that sum represents surplus spending power, and unless that money or much of it is diverted to the war effort, we can never hope to wage what is called " total war ". There are some well-meaning souls, who say, " Why tax at all?", or "Why borrow at all?" There are some individuals who say that the Commonwealth Bank could make hundreds of millions of pounds available without charge, to pay for the conduct of the war, and that every one could live comfortably in possession of his full income to use as he pleased. Of course, the Commonwealth Bank could do that; it could make available £100,000,000 tomorrow, but what the advocates of this course fail to realize is that the creation of £100,000,000 of new money would not of itself provide one more ship, plane, gun, tank or shell. Such war-time essentials can be provided only by human skill and human labour. We shall not have secured the nation's maximum concentration on war production so long a3 that £100,000,000, which I estimate as surplus spending power, is left in the hands of the people to purchase nonessential goods and services which keep too many workers employed in nonessential industries.

Sitting suspended from 6 to 8 p.m.







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