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Friday, 18 September 1942

Mr ABBOTT (New England) . - Never 'before in our history has the Parliament had to discuss a budget while such dark war clouds hung over Australia. I shall briefly direct the attention of honorable members to the deterioration of the war situation since last September, particularly in Russia. Despite the heroic resistance of .the Soviet armies to the armoured might of Germany, backed by the whole industry of Europe, we have seen the Russians driven farther and farther back, until to-day they are being called upon to hold, at Stalingrad, one of the most important barriers to the severance of the arteries of the Russian nation. If the Germans are able to take Stalingrad, cross the Volga, and crash through to Astrachan on the Caspian Sea, the position of Russia, and in fact of the United Nations as a. whole, will become most difficult.

In the eastern theatre of war, since the attack of the Japanese on Pearl Harbour, we have seen their conquests spread far and wide. The achievements of Japan have been colossal. From the regions covered by the Great Bear to those of the Southern Cross, Japan has driven its enemies far from its own shores. It has broken through the barriers of resistance planned hy the allied commanders, and seized the Pacific outposts from which attacks might have been launched against it. In addition, Japan has conquered huge areas of country rich in natural resources of which Japan previously suffered a serious deficiency. Our defensive ring in the South-west Pacific, the Malayan barrier, the Netherlands East Indies and New Guinea, and the whole ABDA command have disappeared. The area we hold has shrunk to the western outposts of India and to the south-east portion of New Guinea, and even this is gravely threatened. In the Middle East the enemy stands poised at the entrance to the richest valley in the world, which it hopes to make a steppingstone to the great Irakian and Iranian oil-fields. Finally, in what we might call the decisive battle of sea transport, we have not been able to halt the enemy, though we have slowed down- his effort. But not even yet do I believe that we can claim that our losses of ships are less than our new building.

I have put before honorable members the blacker side of the picture. Turning to the other side, one of the most encouraging features is that sea-power, with ancillary air-power, is increasing very much in favour of the United Nations. The influence of seapower in this war will probably be as great as it has ever been in history. The nation which can control the seas, and put up an umbrella of air-power over its fleet, will, in the long run, secure victory for its armies. I believe that the United Nations will ultimately have this great advantage over the Axis powers. Another hopeful sign is that the industrial resources of the United States of America, which include the finest industrial plant in the world, are rapidly being geared higher and higher, so that more and more munitions and tools of war are being produced. This must lead, eventually, to the defeat of the Axis powers. In addition, the manpower of the United States of America is being mobilized for the purposes of fighting, and its armies are being rapidly recruited. "Within the last few days an announcement has appeared in the press to the effect that the American nation expected shortly to have about 4,500,000 men under arms. I believe that if we, as democracies, are to win the war, we must put forth every effort of which we are capable, and do it unitedly, as the Axis powers are doing. It is difficult not to admire the bravery, and fanaticism of our enemies, who fight to the death and do not question what they are fighting for. They consider that every nation against them that is an enemy must be destroyed. Contrasted with that outlook, the quibbling criticism of our country's war effort that is indulged in by some honorable members makes our hearts sick and sore and causes us wonder whether, with our disunity, we shall ever be able to defeat our enemies and overthrow the dark forces of evil that are opposed to us. In my view it is the duty of the Government .to do everything in its power to unite the people so that they will fight as one man for the preservation of our institutions and the winning of the four freedoms set out in the Atlantic Charter.

The Prime Minister (Mr. Curtin) has made a clarion call to the nation for austerity. He has said that every man, woman and child must be prepared, for the next few years, until the conquest of our enemies has been achieved, to live Spartan lives. What he said, in effect, was that we must dedicate ourselves wholly to the service of the nation. With those sentiments every body will agree. It has been claimed that this is an austerity budget, but when I read it through, and studied the excellent sentiments expressed in the section headed "Review and Outlook", I wondered whether it was a sincerity budget.

As we are frequently reminded, the road to hell is paved with good intentions. It seems to me that this budget, too, is paved with good intentions, and unless we are careful, it will lead us along the road to hell. In his " Review and Outlook " the Treasurer (Mr. Chifley) outlined certain financial requirements. He told us what we should do and what we should not do. But I regret to say that I can find nothing in the budget to provide for the implementation of the honorable gentleman's commendable sentiments. The section on that point might have been written by the most orthodox economist in the world. In the absence of any proposals for giving effect to the views expressed therein, we may regard them as words, words, and more words, and mere pious sentiments. Tie Treasurer indicated that the problem that would have to be faced was to find ways and means to close a gap of £300,000,000. He said-

A3 we add more and more men and women to the large numbers engaged in war work, we subtract them from the already reduced numbers engaged in producing goods for civilian consumption. But if our financial and economic system is to be kept in balance we must transfer the spending of incomes from civil consumption to war expenditure in approximately the same proportion as we have transferred man-power from pursuits of peace to pursuits of war.

Owing to the great increase in employment and economic activity, incomes have expanded and spending power in the hands of the people is now at a rate greatly in excess of the flow of goods and services that the nation can spare for its civil needs.

I believe that every body will agree with that statement. The honorable gentleman proceeded -

The Government cannot allow this excess spending power to compete against the nation for the additional man-power and material? that are vital to our defence, or to bid up for the limited goods that are available for civil use, or to operate in " black " markets and so menace price stability. The Government is determined on this and will take such measures as may be necessary to impose its will.

But whatever direct controls are established for this purpose, the excess spending power must be transferred to the Government to pay the fighting forces and for the labour and materials used in producing munitions and war supplies. This is the financial price which must be paid. Whilst relying to a large extent on the voluntary efforts of the people the Government is resolved that its payment will not be evaded. Effort and sacrifice of comfort by civil population is the least part of the price. Many in the forces, many of the nation's sons, pay the supreme price of all. No financial price compares with that.

Unfortunately no effective proposals are made to subordinate the desires of individuals to the needs of the nation, and that moist be done if we are to win through. There are two classes of goods upon which purchasing power may be expended - capital goods and consumption goods. The play of purchasing power upon capital goods has been very largely curtailed by the restrictions imposed by this Government and previous governments. There is not free play to-day for investment in capital goods. On the other hand, the play of purchasing power in connexion with consumption goods has raged practically unrestricted. That purchasing power cannot be restrained or curtailed merely by the raising of prices. I direct attention to a paragraph in regard to beer that appeared in the Sunday Sun of the 6th September last. It was headed : "City's driest Saturday; beer supply ran out ", and read - " The Federal Government is perturbed over the amount of money spent on drink, but raising the price won't frighten people away from bars", said a prominent hotelkeeper. "The public has money to spend on beer. If people want a drink, they'll pay the extra pence ".

The Treasurer has stated that consume purchasing power must be immobilized and diverted to government use. There are several ways in which this consumer purchasing power may be restricted. In this regard, there is an excellent statement in the work entitled Australia Foots the Bill, published last year. It reads -

Money itself cannot fight- creating credit does not create soldiers, workmen, sloops or bullets; it merely increases the Government's power to command resources in general which already exist. If the types of resources that the Government wants are not available, then what is the use of creating new credit? If they are available, then their control must be transferred to the Government from private individuals: that is, the money which gives this control must be transferred either by borrowing it, taxing it away, or destroying its value by inflation. But if, in order to gain this wider command over resources, the Government chooses inflationary methods, repercussions on prices will lead to injustices and anomalies and in all likelihood more will be lost, than gained on balance.

The Treasurer's problem is to freeze this vast amount of consumer purchasing power that is in the community to-day. The honorable gentleman has pointed out. that twelve months a!ZO, 25 per cent, of the total man-power was engaged in the war effort, and that to-day 50 per cent. of it is so engaged. H.e has also stated that before the war there were 540.000 factory workers, mostly supplying civilian needs, whilst to-day there are 700,000, with only 200,000 of these in the factories, that are providing for the needs of the civilian portion of the community. In addition, there has been an enormous diminution of imports into this country, and the flow of them has been reduced to a mere trickle. This means that the available pool of consumption goods for 'the needs of the civil community not only has shrunk enormously in the last twelve months, but is still steadily shrinking. The result has been that, against a diminishing pool of consumption goods, there has been a rapidly increasing purchasing power in the most freely spending portion of the community. In 1940-41, the income distribution of the Commonwealth -was ?aid to be £800,000,000. The estimate for 1942-43 is £930,000,000. This means that in the hands of the income-earners of the Commonwealth, for expenditure by them, there should he approximately £930,000,000. That money is being expended upon a diminishing pool of goods. In addition, there is a considerable volume of purchasing power to which neither the Treasurer nor any other member of this chamber has so far referred. This is the large volume of money that is being spent by allied troops in Australia, particularly by our American allies. I calculate that this is approximately from £15,000,000 to £20.000,000. That money is not provided by the Australian Government, and that Government cannot exercise any control whatever over the expending of it. Citizens of the United States of America who are members of the American forces or administrative staffs are not liable to taxation in Australia. Consequently, the available spending power in the Australian community to-day is between £945,000,000 and £950,000^000. This has to be damped down and frozen in some way if Australia is not steadily to steer itself into a position fraught with pending disaster. I direct attention to the distribution of the £930,000,000 to which I have referred. The first point that one should note is that the income-earners have increased from 2.S40.000 in 1938-39 to 3,200,000 in 1942-43. an increase of 360,000 persons. During the same period, the aggregate income has increased by £185,000,000 and the taxation by £93,500,000. The number of factory workers producing for civilian needs nas fallen by 540,000, whilst taxable income increased by £105,000,000 between 1939-40 and 1941-412. The distribution of that increase is said to have been as follows: In the under £400 group, £70,000,000, of the increase is absorbed. In the £400 to £1,000 group, the amount was £25,000,000, and in the group over £1,000 it was £10,000,000. The above figures show - 1, that there has been a large increase of income-earners ; 2, that taxation has not kept, pace with the rate of increase of incomes; 3, that the civilian goods pool level has fallen and is steadily falling; 4, that there has been an increase of income which has been most largely distributed in the lower income groups; and 5, that there is the added problem which has been brought about by the vast amount of purchasing power loosed by the allied forces in Australia. Whereas in the days of the depression there was a state of poverty amid plenty - poverty of purchasing power in conjunction with a plenitude of goods and considerable unemployment - to-day there is poverty of goods with no unemployment and with plenty of purchasing power - the exact converse of the position that existed in the depression period. The purchasing power of the community to-day must be damped down and immobilized until victory has been achieved by the allied nations and men are returning to civil avocations from the war and from munitions production, converting a war-time into a peace-time economy. When that occurs, the greatest volume of purchasing power must be placed in the hands of the people, in order that the factories may resume the production of the civil goods that the community may need. Some persons may say that, rationing of supplies is a complete method of controlling purchasing power and ensuring the equitable distribution of all goods among the community. It cannot be either a complete or an incomplete method. One of the difficulties in connexion with rationing is that, if it be extended to cover a tremendous range of goods, the result is complicated administration and continual demands on man-power, which in existing circumstances could not be met. It is suitable for application only to goods of cer tain classes or kinds. Some goods do not lend themselves to rationing, and could not be controlled by its means. If the presentenormous purchasing power be permitted to rage as a turbulent stream through the economic structure of Australia, we shall have black markets, the forging of ration tickets, and, generally speaking, an enormous degree of social discontent and loss of control of the price structure. The Treasurer has said that the gap of £300,000,000 is to be bridged by means of loans, &c. That, expression "&c", covers a multitude of sins, and no one knows what goes on beneath it. Last year, net borrowings by all methods totalled £120,290,000.' Discussing certain aspects of those borrowings, the Treasurer said -

Sales of war savings certificates fell below those of the previous year. Sales of national savings bonds were somewhat disappointing.

The honorable gentleman did not say how much central bank credit had been provided in order to fill the loans. An examination of the statistics for the last twelve months reveals that government and other securities, including treasury - bills held by the Commonwealth Bank, rose by £103,200.000. and the note issue by £37,400,000, between August, 1941, and August, 1942. 1 am not suggesting that because the note issue rose there would necessarily be inflation. But I say to honorable members opposite that when practically the whole of the increased note issue is in the hands of the public instead of in the hands of the banks, the community at large is putting it not in a national safe deposit but, figuratively speaking, in a jampot under a cherry tree in the backyard. That is " hot " money, which is ready to flow from the jam-pot into the community, there to be used the moment the public believes that the monetary system is getting out of control ; because people then become anxious to transform it from notes - of which they are distrustful - into goods. That has been the history of all inflation. When a baby has a rising temperature and spots on its face, the parent says to it, " You are in for the measles ".

Mr Clark - Does not the same principle apply to war savings certificates?

Mr ABBOTT - It does. But in that respect it can he arrested. You cannot go into every backyard and seize the jam-pots. I maintain that the figures I have given disclose that at the present time considerable inflation is taking place in the community. The Treasurer (Mr. Chifley) said that he estimated that it would take £300,000,000 to bridge the gap - £179,710,000 more than was obtained last year. I say with all respect to the Treasurer and the Government that it is extremely improbable that they will be able to obtain this money by voluntary loans. The Treasurer has himself expressed disappointment regarding the amount of money raised by war savings certificates. The reason is that, in the lower income groups, the practice of saving has never existed. I do not say that in disparagement of those who belong to the lower income groups; probably they never had money to save. Now, however, the position is different. Huge amounts of money are being put into the pockets of people who, up to now, had very little. Only the other day I was talking to a munitions worker, a sub-contractor under the cost-plus system, which the Government, previous to assuming office, condemned so roundly but which it still retains - and I learned from him that he is making £3,500 a year. And he is a fitter and turner! These people, who are receiving higher incomes than they ever had before, will not invest in loans because, as I have said, they are unaccustomed to saving. At the present time, central bank credit is increasing very rapidly. Treasury-bills and government securities held by the Commonwealth Bank increased by £22,000,000 between the 1st May and the 17th August, and at the same time the note issue - which is " hot money " - increased by £30,000,000. I maintain that when such conditions are evident - a shortage of consumer goods, full employment, rising prices, and the note issue disappearing into the jam-pot, while treasurybills and government securities in the central bank are mounting rapidly - it means only one thing, and that is inflation pure and simple. If inflation gets out of control it will paralyse our war effort. It will cause discontent among the community, it will be an incipient cause of strikes, and it will be diabolically unjust to the primary producers, the prices of whose products have been pegged. They will find' that their products will buy only 50 per cent, as much as they did twelve months ago. Therefore, the Government should do everything to remove inflationary conditions as soon as possible, and it should also reduce consumer purchasing power. The Treasurer said that, while relying largely upon the voluntary efforts of the people, the Government was resolved that its demands should not be evaded. The Government appears unwilling to adopt compulsory measures, but the Treasurer's statement suggests that the Government is prepared,, if necessary, to adopt compulsion in order to get the money it wants. Our enemies move fast. If we were at peace, there might be time to put our house in order, but we are at war with an enemy who has shown his mettle in the Malayan jungles, and in the various theatres of war in the Pacific Ocean. He fights fast and he fights hard. If our war effort wilts, if we are not prepared to do what is necessary, our friends and allies overseas may he no longer willing to give us the aid of which we stand so much in need. In Melbourne last Easter, when delay was being experienced in the " turnround " of ships, I heard remarks from some of our allies which, if repeated in this House, would be severely frowned upon by you, Mr. Speaker. The only way to prevent inflation is to increase the amount of money raised by loans and taxation. The Government should compel people to contribute in proportion to their incomes. It has been argued that if people in the lower income groups were taxed it would tend to reduce output. There may be some truth in that. People might ask what was the use of working so hard if all that they earned was to be taken away from them in taxes. We know what many of the workers went through during the depression. I was a member of a committee which expended £600,000 on relief measures in New South Wales, and I saw something of the sufferings of the people at that time. Therefore, I believe it would be fair for the Government to say to the people of Australia, rich and poor alike, that, for the present, they must accept some of their income in the form of deferred pay. There is a precedent for this in the system of deferred pay to soldiers. Last year, the Government came into power after the defeat of the Fadden Government on the issue of compulsory loans. "Whether we call these enforced contributions compulsory Joans, or post-war credits, or deferred payments, is a matter of little consequence; the fact is that they are necessary, and the Government should be wise enough to admit that it made a mistake twelve months ago. Only the night bef ore last we listened to an exposition by 50 per cent, of the Government's majority on the subject of changing opinions. The honorable member for Henty (Mir. Coles) explained how he, like the chameleon, was able to change his opinions overnight. If 50 per cent, of the Government's majority is able to change its opinion so readily, surely the Government can admit the need to change its policy in the face of a national crisis.

If it is just to withhold a part of the soldier's pay, can it be unjust to ask the civil population to make a similar sacrifice? The pay of the single soldier is 45s. 6d. a week, added to which is 14s. a week deferred pay, making a total of 59s. 6d. a week. In addition, he has his keep, which would add at least another £1 a week to his pay, making a grand total of 79s. 6d. a week. From this total 14s. a week, or 17 per cent., is withheld from the man who goes out to defend his country, and, if necessary, to lay down his life in its defence. The estimated national income of Australians for the year 1942-43 was £930,000,000, as against £800,000,000 for the year 1940-41, when 88 per cent, of the total income went to groups in receipt of less than £1,000 a year. If the distribution were the same for this year - though probably, for the reasons I have stated, the proportion received by the lower income groups would be higher- a total of £837,000,000 would be distributed among groups in receipt of incomes of less than £1,000 a year. If 17 per cent, of that amount were withheld in the form of deferred pay, as the soldiers' pay is deferred, it would bring to the Treasury £142,290,000, and this amount would go a long way towards relieving the Treasurer's budgetary headaches. If 10 per cent, were withdrawn, it would yield £83,700,000, and if 5 per cent, were withdrawn the yield would be £41,850,000. Five per cent, represents ls. in the £1, which is the amount of the flat rate tax levied on every wage-earner by the Lang Government in New South Wales during the depression. It is the same as the NewZealand Government now takes from every member of the community for national security purposes.

Mr Anthony - In New Zealand, the total levy on incomes is 10 per cent.

Mr ABBOTT - Yes, and I suggest that the levy here should be 10 per cent.., also. Even if the levy were fixed at 5 per cent., it would be 12 per cent, less than is taken from the pay of the single soldier. I believe, however, that a graduated levy, equal to an all-round levy of 10 per cent, should be made, and this would yield a total of £93,000,000. Last year, voluntary savings yielded a net amount of £120,290,000. On the present national income of £930,000,000, the same rate of savings will produce an amount of £130,200,000. On Wednesday evening, the Prime Minister said that he thought that the amount which would be subscribed by voluntary loans would be approximately £200,000,000. The right honorable gentleman probably overestimated the figure and in the same way £130,200,000 is probably an underestimate of what will be collected from the community, owing to the closeness of the Japanese menace and the growing realization on the part of the people that unless they give everything to the war effort, they may lose their homes, country, nationality and even their lives. I suggest, therefore, that the amount of voluntary loans might be put at £160,000,000. Loans amounting to £160,000,000, together with £93,000,000 deferred from the distributable income, will yield £253,000,000. [Extension of time granted.]

Mr Curtin - Does not the honorable member consider that the deferment would considerably reduce the amount to be raised voluntarily?

Mr ABBOTT - It might; hut the plan is worth trying. The problem of the Government is to damp down this enormous amount of consumer purchasing power and to stop the competition of the civil population for goods now produced by man-power and resources that are needed to manufacture war materials.

If my plan were adopted, the deficit would be £47,000,000 ; but that gap might not be so difficult to bridge as one might imagine at first glance. Departmental officers should make a close examination of all State government activities. Although the States have resented interference with their sovereign rights, I contend that the right of the people to demand that everything shall be done to save the Commonwealth from destruction is of infinitely greater importance than the rights of the States. I shall help the Commonwealth Government to the best of my ability to put the States in their place, make them curtail their spending, and bow to the will of the National Parliament and the Rational Government in this hour of crisis. Any surpluses that may be discovered as the result of an inspection of State activities should be made available to the Commonwealth Government. The States, which are competitors for man-power and resources, represent consumer purchasing power, and are just as serious a menace to the war effort as is the massed purchasing power of the general community.

Another field of revenue which the Commonwealth should tap is the State transport systems. At present, the States are receiving unprecedented revenues from an increased volume of traffic due almost entirely to the enormous quantity of war materials that the Commonwealth Government is despatching over their systems.

Mr Bernard Corser - And paying for.

Mr ABBOTT - That is true. Is it not fair that the money should be diverted to the body responsible for the defence of the country? Again, the Commonwealth must assert its authority and interfere with the sovereign rights of the States. The railway systems still carry large number of people who travel purely for pleasure. The Commonwealth must check that. If people wish to travel for pleasure, they should pay increased fares, and the money should be diverted to Commonwealth revenue. Even though a most bloody and bitter war is now raging at our front door, the

States, whose sovereign rights must not be interfered with in any way, preserve competitive freight rates on their borders for the purpose of diverting goods hundreds of miles from their natural outlets so that they will travel over one State system and not assist the revenues of an adjoining State. The time has come for the Commonwealth to show the States plainly where they "get off", and take over the State transport systems for the duration of the war. Why should the Commonwealth fatten up the State railway systems with money that is badly needed for the war effort?

Since State governments were hit in the solar plexus by the decision of the High Court on the validity of the uniform income tax legislation, they have adopted the practice of entering into new fields of taxation. For example, the Government of New South Wales recently announced its intention to impose a steeply graduated super land tax on estates, the unimproved capital value of which exceeded £5,000. The principle may be right or wrong. I am not concerned with the justification or otherwise of the proposal. But I point out that it will be, not the owners of the large estates, but the Commonwealth Government, which will pay the super tax. This is a neat piece of bushranging. When a man has frustrated one attack by the bushranger, the assailant approaches from another direction, and holds the pistol at his head. The Commonwealth should, therefore, prevent the States from entering new fields of taxation. If my proposal be adopted, the Government will almost completely close the gap of £47,000,000 between expenditure and revenue during the current financial year. I warn the Government that failure on its part to act will jeopardize the security of the nation, if it be fair to compel men to serve in the Army and the labour corps, it is also fair to compel people to use their incomes in the interests of the nation as a whole. Whether the Government is bending to political pressure from the right o.r the left, it is entirely wrong. If the Government is so embarrassed by having to submit to pressure groups, the best course for it to adopt is that which it asks of the people, namely, to achieve unity. Let us have unity in Parliament, and one Australian government to fight this war against one Japanese government, one German government, and one Italian government, because in the Axis countries there is no disunity. Only by united efforts can we smash this menace to Christianity and everything else that we hold so dear.

It was with great pleasure that I read in the budget speech the proposal to establish a mortgage bank. As a similar proposal was contained in the Fadden budget, all parties are agreed as to the necessity for creating this institution. If we cannot be united in our Parliament, we can be united regarding the establishment of a mortgage bank. It is interesting to recall that this year is the 50th anniversary of a speech by the Austrian Consul-General before the Victorian 'Chamber of Commerce that led to the establishment in Victoria of the first mortgage bank in Australia, namely, the Credit Foncier branch of the State Savings Bank. I realize the difficulty in war-time of fully developing a mortgage hank. The Government may not he able to provide an adequate amount of capital for it, or there may be other obstacles, but I urge the Treasurer not to spoil the child at its birth. Its charter should be as wide as possible, so that the bank will in years to come play an important part in assisting primary producers. The bank should also be permitted to lend money, not only on broad acres, but also to home-builders, particularly those in rural Australia. In many country towns and small villages, housing conditions are just as bad as in the, slums of the large cities. The rural people who live under such conditions are the forgotten people of Australia. The mortgage hank should also be permitted to make loans to co-operative farming plants, irrigation trusts and similar organizations.

The possibility of making finance available to persons who wish to borrow small amounts should also be investigated. Some years ago, the Bank of Australasia established a department for small borrowers, and I understand that it has functioned to the mutual advantage of the institution and customers. How ever, this branch is conducted in a very small way. The Government should ascertain whether it is possible for the other tradings banks and the Commonwealth Bank to engage in this business. Whilst this may be a post-war matter, I hope that it will not ,be forgotten. The Royal Commission on the Banking and Monetary System found that small businesses experienced considerable difficulty in raising capital, and I consider that they should be assisted wherever possible.

Another important matter is the necessity to establish at the present time a Ministry of Primary Production and Food.

Mr Calwell - Does not the Minister for Commerce control that part of the national economy?

Mr ABBOTT - The importance of primary production requires no emphasis, but at present there is divided control in respect of primary production and the raw farm products. Apart from the Department of Commerce, the Department of Supply and Development and the " Oap-and-Gown " Department of War Organization of Industry are concerned in it.

Mr Calwell - That is a good deception of it.

Mr ABBOTT - These three departments control primary production and what is every body's business soon becomes nobody's business. The result is the extraordinary muddling that is taking place in the dairying industry, because dairy production is steadily declining and it is doubtful whether Australia will he able to discharge its obligations to Great Britain. A man who was growing beans for canning hypothecated his crop in return for an advance, but the Department of Supply and Development issued a "freezing" order which affected the person who offered the advance. The grower is now left high and dry, and the Government will not get the beans. Whilst no provision has been made for granting advances to primary producers, every assistance is extended to enterprises which desire to mine copper, or search for new lodes. To illustrate this discrimination, I quote the following extract from the

Sydney Morning Heraldof the 8th September : -

Government assistance is being given the New Occidental Gold Mines No Liability which will explore shafts of copper mines formerly closed in the Cobar district. Mr. J. J. Clark, M.P., and Mr. J. McNeil, secretary of the Australian Workers Union, have been appointed Government nominees on the board of the company. [Further extension of time granted.]

Sitting suspended from 12.J/7 to 2.15p.m.

Mr ABBOTT - At present there is in the Ministry some hydraheaded monster called the Production Executive which apparently has something to do with food and other primary production in Australia. Governmental control of primary prodution is divided between the Minister for Commerce (Mr. Scully) and the Minister for Supply and Development (Mr. Beasley) and the Minister for War Organization of Industry (Mr. Dedman).

Mr Archie Cameron - And the Minister for Transport (Mr. George Lawson).

Mr ABBOTT - He probably comes into it, but he has not shown himself so plainly as the others have. With unity of control we should not have seen the bungling that has taken place with regard to the dairying industry. The Government should seriously consider this matter, appoint some strong man as Minister for Primary Production and Food, to pull the threads together and reave them into one in the interests of primary production. The production of food should be controlled by one Minister in the same way as the Minister for Supply and Development controls the supply of materials needed by the munitions industry. Food and munitions are equally important, and what can be done in respect of one can be done in respect of the other.

I hope that the Government is sufficiently broad-minded to accept suggestions from this side of the committee and that it. will apply a policy which will not allow Australia to drift into the sea of inflation, but will enable it to grapple effectively with the war effort. . The Government must unite the military forces into one army, and there should be no distinction between the Australian Imperial Force and the Australian Military

Forces. We must not always be standing on the defensive. Our troops must turn the Japanese out of the northern islands, and when Australia is freed of the menace that now confronts it the day may eventually come when we shall be able to release ourselves for ever from the Japanese menace by destroying the Japanese nation.

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