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Tuesday, 22 September 1942


Mr GUY (Wilmot) (4:40 AM) .This has been described as an austerity budget, but I contend that that term Ls a misnomer because from some aspects it implies the antithesis of austerity. Action taken bv some members of the Ministry has shown an unpardonable waste in propelling government motor cars by means of petrol over long journeys which could have been undertaken by rail. A waste of rubber also occurs. Such a practice may be said to indicate the opposite to austerity. The budget should be called a make-believe rather than an austerity instrument. The Government is playing the game of party politics, for it has failed to stand up to its financial responsibilities, and is prepared to follow an easy way out of its financial troubles, which in this case is the dangerous way. Party and political considerations are being placed before the interests of the nation. Are we to believe that the Government is afraid to do what it must know is right, because that would be unpopular? A government must risk momentary unpopularity in order to serve the country's needs.

The Treasurer (Mr. Chifley), in his budget, adopts the worn-out party tactics of using a few high-sounding and popular phrases in order to divert attention from the disastrous effect that the budget will have on the community. He plays with the words "freedom from fear " and " freedom from want ". I claim that this is the most alarming budget ever presented to this country, and, if the Government insists on adopting the inflationary methods outlined by the Treasurer, many people in Australia will be in want in the not too distant future. Undoubtedly, the budget contemplates a great measure of inflation, because, as it has already been said, a gap of £300,000,000 is to be bridged. The Government has no proposals for bridging it other than the proposal of the Treasurer, who airily says that the gap is to be bridged by loans, &c. I imagine that " &c." covers a mitititude of sins. The budget presented by the Fadden Government last year provided for borrowing £122,000,000. The members of the then Opposition, who now support the Government, stood aghast and shouted in horror. Yet some honorable members to-day are endeavouring to take the borrowing of £300,000,000 in their stride, and they are doing it unashamedly. The Attorney-General (Dr. Evatt), in discussing the Fadden budget last year, remarked -

A crushing burden of debt, which would be too great for Australia to bear, is threatened. I am not so optimistic as to think that a satisfactory economic structure can be erected on a foundation of public debt and interest. In making our financial proposals to the country we shall take care not to create a burden of debt which would crush our children and our children's children, but we shall do something to make Australia a great and prosperous nation.

Yet to-day the Government of which the Attorney-General is a member is increasing the burden threefold, and is providing from revenue only 46 per cent, of the money required for contemplated expenditure. This is most unsound, and it will produce all the dire effects of which the Attorney-General claimed twelve months ago to be afraid. Taking last year's financial activities as a guide, there is no foundation whatever for the optimistic forecast in the budget for raising £300,000,000. Instead of raising £300,000,000. we shall be very lucky if we raise one half of that amount, leaving a gap of £150,000,000 which, added to last year's shortage, will make £225,000,000 which must be found by inflationary methods within a period of two years. Inflation is a great menace to this or any other country. Indeed, our £1 note has already depreciated very considerably. It is impossible to purchase with £1 anything like as much to-day as one could even a few months ago. The AttorneyGeneral condemned the piling up of national indebtedness, yet to-day the Commonwealth and State debts are growing enormously. Last year, they increased by over £200,000,000, and the deficit this year, added to the existing debt, will bring the total debt of Australia to something approaching £2,000,000,000. Of a total war expenditure of £440,000,000, the Government proposes to find only £140,000,000 by taxation. I protest against this unsound financial policy, which will leave a gap of £300,000,000, for which practically no provision is made. The Government is endeavouring,to get a quart out of a pint pot. There is a great field of taxation practically untouched. This field, in. which the greater part of the national income is now distributed, and where most of the nation's spending power resides, the Treasurer is, however, afraid to touch. Every person in the community should contribute to the war effort to the limit of his capacity, and if this were done, the gap of £300,000,000 would be greatly reduced. If this is intended to be an austerity budget, it should provide for a full measure of austerity. The income group to which I have referred provides less than 4 per cent, of the direct taxation, although it receives 70 per cent, of the national income, or £590,000,000 out of a total of £850,000,000 ; yet the Government, rather than do the right thing, is apparently embarking on a policy of inflation. Inflation has been tried as an easy way out in many countries with disastrous results. Lofty sentiments on the subject of inflation were expressed by the right honorable member for Yarra (Mr. Scullin) when he was Prime Minister. While he was in England, he objected strenuously when some of his colleagues in Australia proposed to inflate the currency and to repudiate certain debts. This is what he said -

All this talk about creating credit and inflation is most dangerous. Depreciation in currency would decrease values of savings bank deposits, property would increase in price, and financial panic may result.

Those are the words of an ex-Prime Minister, who, to-day, is the financial adviser of the Government. Another financial idol of the Labour party, an ex-Treasurer, Mr. Theodore, when Premier of Queensland, had this to say on the subject of stable money -

Much confusion is caused by unstable money - trade is paralysed - commodity prices soar sky high - wages standards are lost and national bankruptcy ensues. By inflating the currency we get into a vicious circle and none suffers more than the worker.

I agree with him. No one suffers more than the worker from a policy of inflation, and those who work as primary producers suffer most of all.


Mr James - The honorable member supported the proposal to issue fiduciary notes.


Mr GUY - I voted against the proposal, as the honorable member can see if he consults Hansard. To-day, the Government is rushing headlong into the abyss of inflation. The present Treasurer, in last year's budget speech, made the following statement: -

No book entries by the Commonwealth Bank could reduce the calls on the real resources of the country.

Nevertheless, many more book entries by the Commonwealth Bank are to be made this year. In racing parlance, the Treasurer has shown a serious reversal of form. A meeting of the stewards should be called to compare the lofty sentiments expressed in last year's budget with the fantastic and farcial financial proposals contained in the present budget. I am inclined to think that the unanimous decision of the stewards would be disqualification for life. What is the remedy ? The Government appears to be politically afraid to do the right thing. The remedy is an all-party government. If ever there was a time in the history of Australia when the people should be united it is now. There is a definite call for a united effort by an all-party government. The present emergency demands that all sections of the community, and all parties in Parliament, should think nationally and act nationally. Honorable members who support the Government resolutely refused to be associated with an all-party or national government, and have failed to co-operate with the Opposition in the vital work that has to be done. At the last elections, the electors failed to give a mandate to either party to exclude the other from a share in the Government of the country, though it cannot be denied that an overwhelming majority expressed the desire for a Parliament pledged to the vigorous prosecution of the war. We cannot prosecute the war vigorously, and give our undivided attention to what should be a common cause, until we achieve some measure of unity among political parties.

I desire now to refer to the Department of War Organization of Industry, which most people describe as the " Department for War Disorganization of Industry". I recognize that many restrictions are essential, and we have no desire to escape them. On the other hand, some restrictions have been imposed which are not in any way necessary. In fact, if the department had set out to cause as much inconvenience as possible, it could not have been more successful in that direction than it is now. Notwithstanding the remarks of the honorable member for Cook (Mr. Sheehan), I maintain that the department was guilty of unpardonable bungling in connexion with clothes rationing. The Government appealed to the people not to engage in panic buying, stating that, when the coupon system was introduced, there would be plenty for everybody. Nevertheless, those who .did indulge in panic buying secured large stocks of goods. They got what they wanted, while those who were patriotic and did as the Government requested are denied many of their urgent needs. Moreover, no consideration has been given to varying climatic conditions and their effect upon the clothing needs of the people. There should be some differentiation between the warm and cold parts of Australia. For instance, a person living in Tasmania needs many more coupons than one living in Queensland. Probably, the Queenslander needs to wear his overcoat for only a few weeks in the year, while the Tasmanian needs his overcoat throughout the year.

I cannot understand why the Government imposed a ban on the delivery of meat, when the delivery of other commodities was not banned. Deliveries of bread and milk have been zoned, and there is no reason why meat deliveries should not also have been zoned. Whatever may be the position in the large centres, I suggest that there was no nee for this restriction in the smaller towns. The department could have attained its objective by issuing a regulation that petrol was not to be used in the delivery of meat, and that no one who was military fit should be employed on such work. A heavy fine could have been provided foi breaches of the regulation. In most of the smaller centres, no one of military age or, at any rate, no one who is fit foi military service, is engaged in the delivery of meat. The work is generally done by boys, or by those over military age. Moreover, petrol vehicles are very seldom used.

It is stated in the budget that it is necessary to devote attention to the development of primary industries, and with this I agree. A national plan foi the co-ordination of agricultural activities is needed. The Joint Parliamentary Committee on Rural Industries, after having considered the matter of the organization of primary industries, reported as follows on the 28th May last : -

Fully recognizing the urgency of the need for planned primary production, the Joint Committee on Rural Industries is unanimously of opinion that it is a war-time necessity foi the Commonwealth to have a definite directing and guiding hand in agricultural and pastoral policy.

For this purpose it is urged that a small but efficient federal secretariat should bs created under the strong leadership of a Commonwealth director of primary production to formulate and direct policy on a national basis. Such a director should be a forceful mau, of organizing ability and with a sound knowledge of Australian agricultural practice. He should be supported by a staff of practical technical and scientific men, including one well versed in agricultural economics. In consultation with federal departments and the Australian Food Council - of which he might well be a member - he should decide upon the requirements in the Commonwealth of the various primary products; he should devise and direct the policy that would lead to an adequate supply of such products, involving decisions as to expansion and restriction of crops and the guaranteeing of adequate prices. the director's functions should include consultation and co-operation with the State agricultural departments, and, through the State experts, to bring the policy to the farmer. State committees presided over by the Ministers of Agriculture should be established to implement the policy, and local committees should be formed to contact and direct the farmer, and, if necessary, help him to obtain essential plant, supplies and assistance.

I agree entirely with that recommendation. It is time that something was done to assist the primary industries of this country along the lines suggested by the committee. Nevertheless, I understand that the Commerce Department has entirely ignored the recommendation. That brings me to the subject of man-power tor rural industries. A recent survey showed that the number of men working on the farms of Tasmania was 2,500 below normal requirements, which are 8,000 regular workers and 15,000 casual workers at various periods of the year, ff the drain on the primary industries is allowed to continue, production must decline substantially. I appreciate the seriousness of the situation confronting us and it is for that reason that I am apprehensive, because, if an ill-balanced scheme is allowed to continue, I am afraid that we shall have a shortage of food. I agree that we must maintain our fighting forces, hut it is also true that food is essential to the successful prosecution of the war. Not only our fighting forces, but also our civilian population must be fed. If I were to make a rough guess, I should say that there are 1,000,000 more people in Aus tralia to-day than there were a few years ago. The American troops, evacuees and refugees from other countries, as well as prisoners of war, must be fed. At a time when our population is greater than ever, our production of food is below the normal output. We hear from time to time statements that labour will be supplied for primary production, but it is not supplied. Great difficulty is experienced in securing the release of men from the Army to carry out farming operations. There does not appear to be that degree of co-ordination between the Army and the man-power authorities which is so essential to success. I know of many instances of sole workers on farms, including owners of farms, having been called up. Many dairymen also have been called into camp, notwithstanding that they are engaged in the production of essential foods. It is true that in some cases men for whose release I have approached the man-power authorities have been released for rural work for short periods, but there are many such workers still in camp. As an instance of what is occurring, I shall read an extract from a letter which I received recently from a farmer -

Shortly, I will be milking 23 cows, but without my son's services, will be forced to leave the calves on them. I grow 1,000 to 1,500 bushels of barley each year, 40 tons of hay, a few hundred bushels of oats, which is all fed to the stock, as I am on a cold-winter place. I also grow turnips, mangels, potatoes, and am preparing the land for 35 acres of blue peas for this year.

I produce 100 lambs, and fatten an additional 100. I produce 500 pigs, and have made preparations to increase the number this year but nm unable to do so without my son's help, as he is my main butcher. T have two teams of horses, but one is practically idle at present, as it requires all my time caring for the stock. T have been doing my very best to carry on, but find it will be impossible to do so without my son's help, and without his rerelease I will be compelled to reduce the dairying and other essential foodstuffs which T am producing.

Many dairymen have been compelled to dispose of their milking cows because of lack of man-power on their farms. Others have left the calves with the cows. I know of instances in which potatoes have been left to rot in the ground because the Army would not release men from camp to harvest them. Many primary producers have been forced to delay the sowing of potatoes, peas, and other foodstuffs through lack of men to do the work. Another instance of lack of co-ordination between the various authorities was shown recently when the Army required a large number of bricks for some essential job. The employees of the brick kiln from which the bricks were ordered were in camp, but the Army authorities would not release them to burn bricks. Such examples of lack of co-ordination prove that the scheme now in operation is ill-balanced. Unless these defects are remedied the results will be disastrous. In a recent report the Bureau of Agricultural Economics of the United States of America stated -

Working both with the War Department and the Defence Commission, the bureau has helped to develop information about the availability of rural man-power for military as well as non-military purposes. Much was done to develop the relationship of rural unemployment to defence measures.

During the year studies have been made showing the number of men that can be released from farming and the number needed to operate the present farm plant; regional differences in the volume and rate of growth of farm youth not needed for agricultural production and numbers, characteristics and distribution of farm workers in the several parts of the country.

Studies have been made of farm labour requirements and means of adjusting the supply of farm labourers to the demand on the basis of information furnished by such studies, it is possible to develop plans for estimating the need for workers, for directing their movements inresponse to emergency changes in labour supply, and for expediting information and placement activities of the national employment service.

Had we such an organization in Australia the chaotic conditions which now exist in the agricultural sphere would not have occurred.

The budget speech contains a reference to the intention of the Government to establish a mortgage bank, but as no details are before us, the proposal cannot be discussed at this stage. I hope, however, that there will be no undue delay in introducing the bill, and that when it does come before us, it will contain pro visions which will prove to be of great assistance to the primary producers of this country. I shall have more to say on the subject when thebill is before us.

Whatever the merits or demerits of the Government's proposal to alter the Constitution may be - the details are not yet before us - I suggest that it is not a matter for discussion at this stage. It is not proper to rush forward such proposals whilst the nation is engaged in a life and death struggle. I agree with the ex-Premier of Queensland, Mr. Forgan Smith, that sweeping proposals, such as are indicated in the budget speech, require the cool, calm and peacetime consideration of the people and should not be decided in a period of emotional thinking. That gentleman also said that it is dishonest to use the war for political ends. I fear that some Ministers are using the war to give effect to their fanatical socialistic ideas.







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