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Thursday, 25 July 1946

Mr SPEAKER - Order I I should like the right honorable gentleman t

Sir EARLE PAGE - I am replying to the statements by the Minister for Post-war Reconstruction, who said that the late Prime Minister, Mr. Curtin, was responsible for- getting the whole of our armed forces .ready, and that the Treasurer was responsible for stabilizing prices in Australia.

These Australian troops fought in various theatres of war with great distinction. After Japan entered the conflict, most of our troops were recalled to Australia. When the right honorable member for Darling Downs (Mr. Fadden) vacated office in 1941, the Royal Australian- Navy had in action two 8-in. cruisers, two 6-in. cruisers, and 90 other warships. Most of them had been constructed in Australia under a programme which had been commenced years before the outbreak of war. ..Some of those Australian warships made history. On the 10th July, 1940, H.M.A.S. Sydney brought to an untimely end the Bartolomeo Colleoni, the fastest cruiser then afloat. Other Australian warships had wonderful war records. Unfortunately, some of the ships were sunk in the Battle of the Java Sea and in the Solomons. Last week, the Ministry of Aircraft Production sent to me a brochure showing the expansion of the Australian aircraft industry after its establishment in 1935. In the following year, I discussed patents with the. Minister for Air, Lord Swinton, in London. When war with Japan, broke out Australia had constructed no fewer than 1,200 'aircraft, and they were being used for training purposes, not only in Austraila, but also in Great Britain and Canada. Therefore, the suggestion of the Minister that Australia was . left defenceless, when the truth is that for months we had been sending munitions to New Caledonia, the Dutch East Indies and India, is a deliberate falsehood. As early as September, 1941, the Americans were seeking the permission of the Commonwealth Government to build big aerodromes at Rockhampton, Townsville, Thursday Island and Rabaul so that the biggest bombers of the day could fight from Australian bases. That record of achievement was not established by the Labour Government.

The Minister claimed that the Curtin Government had stabilized the price structure in Australia. What is the history of price control in this country? ' Immediately war broke out, the Menzies Government appointed a Prices Commissioner, who' remained in. office through succeeding administrations until the end of the war. When. I returned from Great Britain in August, 1942, I continuously urged in Parliament the adoption of the principle of stabilization. On the 25th March, 1943,

I submitted an amendment to the financial agreement with a view to having the principle of stabilization adopted. On that occasion, the honorable member for Barker (Mr. Archie Cameron) asked the' then Minister for Supply (Mr. Beasley) whether the .Government would accept the amendment. The Minister replied that it would not. The House adjourned on the 30th March. On the 12th' April, the Government adopted, not my whole scheme of stabilization, which would have been very satisfactory, but a piecemeal scheme. Unfortunately, this structure . had so many ' weaknesses that glaring anomalies occurred. Blackmarketing has been extensive in Australia. It would not have occurred to such a degree if my proposal had been adopted. But now, the' Minister for Post-war Reconstruction has the audacity to declare that the Labour Government built up a wonderful system of price control. The truth is that it acted only after the Country party had, figuratively, held the pistol at its head for months.

I object strongly to the action of the Treasurer in presenting to the House a month before the. general elections this financial statement. Obviously, three or four months will elapse before the budget will be presented to the Parliament. The financial statement is vague, and, according to the figures of the Leader of the Australian Country party, misleading. A Treasurer is under an obligation to introduce bis budget as soon as possible after the commencement of the financial year, because the States cast their programmes on the intentions of the Com-' monwealth. When I was Treasurer, I made a point of introducing my budget in July. A few days ago, I had a conversation with a responsible State government official. He told me that one of their great * difficulties in providing full employment for the people and under taking reproductive works, which are so vital to the development of Australia, was the failure of the Commonwealth, Treasurer to bring down his budget at the beginning of a new financial year, thus causing a late presentation of the State budget. Because of that delay, the works programmes of the States could not be .commenced until eight or ten months of the financial year had passed. Often those works had to be postponed until the following financial year. As the next opportunity to introduce the Federal budget will not occur until late October or early November, the Treasurer should have introduced his budget before the House adjourned. Surely the right honorable gentleman is not keeping up his sleeve a surprise for the electors after the Parliament has prorogued. It would ill become the Treasurer so to deceive the country, which has been racked by war and disaster during the last six years.

The key to Australia's recovery may be found in an immediate and substantial reduction of taxation in. order to encourage the production of civilian goods. Increased . production, is the certain way of stimulating employment and 'restoring prosperity. In the last six years, the Commonwealth Government has been the biggest purchaser of all goods. The Commonwealth Government was probably buying 50 per cent, of our total production during the war. In Great Britain that was the exact proportion of Government purchases. The Government is still buying a substantial proportion of our production, but it is necessary now to stimulate secondary production for certain uses in this country in order .that there shall be no unemployment and a maximum output at the earliest possible date to lessen overhead. We must make certain,therefore, that our production output is achieved on a competitive basis, so ' that employers will be able to provide continuous work for the men and women of this country. We. must also take every possible step to ensure that our customers at home and abroad, of whom I trust there will be more and more, get goods of the highest quality. The war has involved Australia in tremendous financial commitments. It would be difficult, even to-day, to estimate our total war debt, because it is obvious from figures which the Treasurer has presented that the debt is still mounting. Certain additional charges could also be justly debited against the war which, so far, do not seem to be taken into consideration in that regard. I refer, for example, to the expense that will be involved in repairing our main country roads which were so seriously damaged by the exceptionally heavy traffic they had to carry during the war. It would pay the Government to put- these roads into good order at once. The cost that would be incurred would very quickly be recouped through the reduced transport costs which would follow. In order to meet our commitments we' must ensure maximum production. All our resources must be exploited and we must win a position from which we can meet overseas competition. We must encourage consumers to purchase our output, and we must keep overhead costs down ' to the lowest possible figure. To this end our looms, factories, farms and general industrial and agricultural equipment must be kept working at full capacity. We must also provide every possible kind of labour-saving equipment so that that the best use may -be made of our man-power. If these measures are applied we shall do a good job of work.

During the war the Government was the main purchaser of goods. Now wc must encourage civilians to become our main purchasers. But civilians will be able to purchase goods freely only if as much of their earnings as possible be left in their pockets for their own use, and if prices be kept down to .the lowest possible level and stabilized. Taxation must be at minimum rates, especially in respect of people on- the lower income ranges, if private citizens are to become the chief purchasers of goods. When I was Treasurer I took special pains to lift the- statutory income tax exemption. In 1924 the statutory exemption was fixed at £300. The figure was £100 when the previous Labour Government was in office. I lifted the exemption to £300 because I realized that it was necessary to help people in the lower income range. Conditions were liberalized year by year until,- in 1928, .a man receiving £14 a week, and having a wife and four dependant children, paid no income tax at all. I realized that the indirect taxation levied upon him, which must be paid by all citizens and which none can escape, was .a sufficient impost, and that income tax should be paid by people in the higher income ranges and by people without dependants.. Presently I shall make a comparison of the rates of income tax levied by the Government of which I was Treasurer, with those that will now be levied by this Government. I am convinced that we must reduce taxation in certain directions if we are to avoid inflation. I do not believe that by leaving people with more money to spend on foodstuffs, fruit and fruit juices, milk, and clothing we shall incur any risk of inflation. We all know that it is almost impossible for a man to buy a good suit of clothes to-day. I do not consider that there is any risk in giving people the opportunity to transfer their money from one hand to the other, as it were, by the purchase of essential goods. Inflation will come if goods continue to be in short supply. But if production be stepped up and supplies be made available in abundance at stable and controlled prices, there will be no inflation. We must apply two methods to achieve this end. We must use our resources to increase production. It will be possible for us, under proper conditions, ' to increase the consumption of goods without in any way causing inflation. But first it is essential that income tax rates shall be reduced. Taxation has both a physical and psychological effect. A great deal of the industrial unrest in this country is undoubtedly caused by the incidence of taxation on low incomes. This same cause is the seed-bed from which so many communistic agitators develop. I am sure that if we reduce taxation we shall remove a great deal of the trouble from which we are suffering, and counteract many of the insidious influences which are causing industrial strife. We must reduce taxation on low incomes to an absolute minimum. There must also be a substantial reduction in respect of incomes in the middle ranges. We must make it possible for the family man to buy his home, and feed and clothe his children. Secondly, we must control prices. That procedure goes with reduction of taxation. If a man has more money and if his wages are stabilized, he can confidently buy the commodities that are necessary to keep himself' and his1 family in comfort. In the last few months I have witnessed the pathetic sight of young couples striving to settle in their own homes and having to buy a bed here and a chair there. Rarely are people able to buy either a dining or a .lounge suite in these days, and very often they are forced to buy their furniture piece by piece in second-hand shops and elsewhere. Most of the furniture is of poor quality. Children are poorly clothed. The quality of textiles is such that a boy may easily wear the seat through his trousers within two or three weeks. The " old man's " left-off clothes have been cut down, made up and worn out long ago.

The two processes of reduction of taxation and control of prices must be employed concurrently. That this is the right procedure was shown in the nineteen-twenties, when, as Treasurer, I steadily reduced taxes, especially on low incomes. These are historic facts which can be verified by reference to the YearBook. The effect of this policy was shown in the steady rise of employment in the factories of this country. The highest levels of employment were reached in the years between 1926 and 1928, during which records were achieved. In that period between the two world wars there was an enormous increase in the number . of " new factories established and in the purchase of factory equipment; and there was also a tremendous expansion in employment in rural pursuits and in the total value and volume of rural production. .

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