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Thursday, 25 July 1946

Mr HAYLEN (Parkes) (12:10 PM) .The debate has taken some extraordinary turns. In spite of the lateness of the hour it will be useful to touch upon certain points raised by various honorable members in relation to the more important matters which have been raised. I do not feel equal to the task of maintaining the debate on the " high " level of jeeps and motor cars set by the honorable member who has just resumed his 'seat. T propose to deal with some of the arguments advanced by honorable members opposite who spoke earlier in the debate, particularly the " big guns " of the Opposition. Later, I shall address myself directly to the Financial Statement. The Leader of the Opposition' (Mr. Menzies) gave a remarkable performance. "We have seen him in various roles in this House. On this occasion, he appeared as a highminded poser. He soared above the hard facts of the Financial Statement itself into the rarified atmosphere of rhetoric and elocution leaving the hard facts exactly as he found them. When he returned temporarily to earth he made some interesting statements. After castigating the Financial Statement as a whole he referred in general terms to the lack of. sound finance behind it. Eather disdain- fully he threw all care to the winds, and said that the Government should adopt a bold policy. But what was the bold policy he advocated? It was nothing but one of financial brigandagethat we should " whack " it up while we have it. But the Treasurer, .in his careful way, has warned us of the danger of such a policy, having regard to the tasks which confront the Government in post-war reconstruction in this country. In keeping with the advocacy of the. old policy of financial brigandage, the Leader of the Opposition trotted out the same old ideas. We have heard or read about the proposal of the Opposi-' tion to reduce -taxes by 40 per -cent. Honorable members opposite do not deal in trifles in such matters. We were told also that social security should be undertaken upon a. vast scale, that the means test should be abolished. But financial brigandage inevitably involves holding the people to ransom. and it is clear how honorable members opposite would do so. Despite their devious verbiage, their proposition to reduce taxes by 40 per cent, would loosen things for the higher-ups, . but tighten them for those in the lower groups of income, whilst their social security legislation would undoubtedly usher in a contributory scheme. Thus, both of . those propositions are entirely phoney. The Leader of the Opposition skipped over those vital considerations lightly. Indeed, he danced very gracefully around the real problems, refusing to come to earth. He paid a tribute to the Leader of the Australian Country party (Mr. Fadden), and complimented the Treasurer in a sort of a way, andthen walked out of the chamber. When he returned' to earth for a few moments now and again he made some very remarkable statements, which call for some explanation. One of those statements wasin relation to lend-lease. It is rather surprising to find a man of his calibre- talk so loosely about lend-lease. He touched lightly upon the Atlantic Charter, and the agreement between the democratic countries to fight both the war and peace as allies, and suggested that that agreement was not now being honoured. He suggested that the bill of charges was presented immediately hostilities ceased. What actually happened, as the right honorable member for Yarra (Mr. Scullin) pointed out, was this: Lendlease was completely liquidated, and, under the terms of settlement, Australia retains goods of specific value to our people, whilst, at the same time, we agreed to purchase other goods for the' sum of £8,000,000. Lend-lease was not a completely hollow American gesture inasmuch as it was not supported by all of the American people. During the war, and even when the conflict was at its height, the Colonel McCormicks and Cissy Pattersons in America were protesting that America was fighting the war for England, that American blood and money were winning the war for. England, and that Australians were prepared to fight -Japan to the last American. While the American Government was fighting those factions, it had to contend also with divisions, which remained throughout the war, among the people in the midwestern states. Therefore, after hostilities have concluded it does not seem proper to speak of lend-lease as though it had been merely a happy arrangement, and to say that after the war had concluded the settling-up was a dramatically surprising development. It was nothing of the sort. It was a sound book-keeping arrangement, which was handled very competently by civil servants well equipped to deal with the. negotiations which were concluded most satisfactorily from Australia's point of view. In all this discussion about, the future there appears a tendency - favoured by members of the Opposition, by inference at any rate - to look for a return to the "good old days". Recent developments in the United States of America, particularly those of the last month or so, constitute a grave warning. Only the other day, a famous American magazine christened the United States of America " the United States of Chaos " because of the difficulties created by the abolition of price controls. There are many schools of economics in the United States of America, but one which seems to have obtained, the ascendancy for the moment, and 'which might be described as favouring the " atomic theory ", says, in effect, " Let's blast ourselves ' back to the depression, and do it quickly". The adherents of this school, the representatives of the big manufacturers and trading cartels, having been driven into granting an increase of 18 per cent, on the wages of their employees, conferred with their tame economists, and arrived at the conclusion that there was no such thing as a new order towards which they might work. They concluded that events \yould follow the pattern which has followed after all previous wars; that after a period of temporary war-time prosperity, there would be an inevitable recession. However, the people of -the United States of America were, on this occasion, too wide-awake, and they are now busy putting the lid back on the pot. In that experience there is strong vindication of the attitude of this Government to price control. Honorable members opposite have no choice but to applaud the admittedly fine work of our price-fixing authorities, but they express a niggling criticism of other aspects of economic control. The history of the Labour party for the last fifty 'years is largely a record of its attempts to prove to those represented by honorable members opposite that, in such matters, they are inevitably wrong.

Some time ago, we witnessed the debut of the honorable member for Warringah (Mr. Spender) as a wheat-farmer. He discussed wheat, cattle and soil erosion with the easy confidence of the lawyer who is prepared to accept any brief. He was more convincing in that role than in the one he attempted to fill to-night when, as a sort of Sherlock Holmes, he deduced that there was a lot of. money in the country, and he went about lifting the corner of the political linoleum in an attempt to find it. He seemed' to assume that the Treasurer. was a Midas, with the power of turning to gold everything he touched. ' He charged the Government with having vast reserves which it was trying to hide from the people, and that the Treasurer was grudgingly handing hack to thetaxpayers a little of the surplus that.he held. Having dealt 'with the financial situation in this whimsical manner, he said, "Let us be audacious ! ". And then he said that the first thing we ought to do was to cut down costs in public departments. That meant the salaries of civil servants - in other words, the spending power of a considerable section of the people, which' would be the first step towards bringing about an economic depression. This was an amazing exhibition from the man who proved himself so facile in argument when discussing wheat. It is a pity that "he was cut off in his prime by the closing down of the broadcast, because he was about to say something which might have proved to be an explanation of his jibe at the speech of the right honorable member for Yarra (Mr. Scullin), a speech which we all know to have been courageous, truthful and apt. He drew particular attention to that part of the speech in which the right honorable gentleman said that when the flags were flying on Victory Day the members of the Labour Government were behind closed doors working out plans for the reconstruction of the country in peacetime. It is extremely probable that the honorable member himself was at that rime at Palm Beach cheering the victory, and taking tea with the Australian section of the Cliveden set, which we know to exist. The speech of the right honorable member for Yarra might be compared with the masterly strokes of the old axeman cutting away the dead wood, and showingus once more Labour's policy as vigorous and as flourishing as over. He slashed through the sophistries of debate, and imparted to the discussion that eloquence and fire which raised it to a level worth listening to. The right honorable member is no longer a young man, but he is capable still of lighting the fires when the interests of his party demand it.

The right honorable member for Yarra also answered the charge brought by many honorable members opposite that the Government was blameworthy in not having collected outstanding income tax. He pointed out that, because of the lowering of the exemption figure, six times as many people were in the income tax field as before the war, while the number of officials in the Taxation D epartment had been reduced during the war. Thus, it was physically impossible to keep track of all potential taxpayers.

The Leader of the Australian Country party made an impassioned speech in which he at times made frantic efforts to get down to earth. In the course of his speech, he made some extraordinary accusations against the Treasurer, most ofthem being too silly to take seriously. His repeated charges of dishonesty in connexion with the collection of income tax. makesone wonder whether he, as Treasurer, ever indulged in the practice which he attributed to the present Treasurer. I can assure him that no such charge can lie against the present head of the Treasury.

The Financial Statement to the Trea surer is a cold, level-headed production on which will be based the future budget. It provides security for the ex-serviceman, and this is one of the main reasons for the towering expenditure which the statement discloses. During the last six years, what security did the serviceman have? His nearest approach to security was to have a Bren gun under his arm, and a Japanese in front of him. Even after his return the security available to him was a nebulous thing, and he mustbe treated with great consideration. The money now being poured out is being expended to provide for the reabsorption of exservicemen into the community, and it is being well spent.

At first blush it appeared to me that the Treasurer's statement might have been elaborated. It then became apparent to me that, like some of the great masterpieces of literature, its brevity was justifiable because it was packed with meat. Since the end of the war, more than 400,000 men have been returned to civil occupations. Except for the first two years, the country's war effort was financed without external borrowing. Indeed, overseas indebtedness has been reduced by £72,000,000, with a consequent saving of £4,000,000 in interest.

A sombre note was sounded by the right honorable member for Yarra when he- said that, included among our war liabilities, was an annual charge of £20,000,000 in interest which remained as a heritage from the last war. Since those debts were incurred, 25 years have passed. The bodies of the slain soldiers have rotted, and the inscriptions have weathered from their tomb-stones; yet the monster of interest is still devouring the resources of the country. In the interval £500,000,000 has been fed to the Moloch of interest, but the system of sane finance for which I stand will yet come even to thiscountry, which was for years the victim of wrong methods of administration.

The Financial Statement shows that war expenditure has been cut by £150,000,000, that £6,000,000 has been given to Unrra, and that it is proposed to give another £12,000,000. This is significant in view of recent debates in this House on the disposal of our primary products. It is not unlikely that the money which we are granting to Unrra may have the effect of stimulating purchases of our primary products, including wheat and meat. "We have also expended £20,000,000 on subsidizing farmers, and £30,000,000 on price subsidies. An amount of £72,000,000 has been devoted to deferred pay, and £14,000,000 expended on the reestablishment of ex-servicemen and pensions. The sum of £7,000,000 has been put into the ship construction scheme, and on items of an urgent and reproductive character a further £8,000,000 has been expended. Besides this, taxation has been reduced by 17½ per. cent., and old-age pensions increased by £4,500,000. This increase touches 145,000 additional persons, including those who now, for the first time, are brought into the pension field. All this represents no mean feat at a time when the Government is watching the situation carefully to prevent inflation, and while it is necessary, even when taxation is being reduced, to continue borrowing money.

People in other parts of the world, particularly economists, recognize the success which Australia has achieved in holding down prices. It has put an iron clamp on prices, and for that reason it deserves the thanks of the whole community and the approbation of the world.

That much dreaded thing, inflation, can be borne on the breeze of doubt. Commodities such as the food we ate were in fairly plentiful supply during the war years, but the controls placed upon the sale of other commodities by price-fixing regulations were of extreme value, and. were effective to a marked degree. By placing a firm hand on the throat of inflation, that scourge and its twin brother, black marketing, can be destroyed. With the removal of those evils, we shall experience stable finance, and reach the point at which this country can enter upon reconstruction. It can then plan to take the 20,000,000 people which I should like to see here eventually, in order to do with this country what our pioneers expected us to do, namely; to develop it to the full extent of its capacity. If we face the future in the knowledge that there are cycles of boom and bust, we may eventually postpone the bust period. When it does come along, it will not do so like a thief in the night, for we shall have planned to deal with it.

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