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Wednesday, 31 July 1946


Mr HOLT (Fawkner) . - I warmly support the proposal of the honorable member for Darwin (Dame Enid Lyons), which I believe represents a desirable extension of the child endowment. That reform would meet the needs of the. scheme that we who now sit on the Opposition side of the chamber introduced in 1941. At that time, we made provision by way of a family endowment scheme for each child in the family under sixteen years of age, other than the first child. "We did not include the first child because the Arbitration Court, having investigated the basic wage, had come to the conclusion that it was adequate for a man, his wife and one child. The judges of the court said that it would provide a bare allowance for a man, wife and two children, and that hardship would be caused to a family of more than two children. Therefore, we provided for the needs of a family consisting of more than one child. There is good reason to believe that to-day the need exists for an extension of that scheme, if the requirements of those families in which there are several children, or even only one child, are to be met. That is particularly so when the head of the family is receiving the basic wage, or very little more. As the honorable member for Bourke (Mr. Bryson)' pointed out, it is not unusual to have violent dislocations of purchasing power after a war. Indeed, after World War I. a royal commission was set up to go fully into what should be the basic wage, and it recommended a figure so much higher than the then basic wage that the Arbitration Court did not accept the recommendation lest weakened capacity for successful competition might lead to unemployment. Since World War II., similar factors have been' operating. Most honorable members must have reached the conclusion that the method of computing the basic wage is to-day divorced from reality. It is difficult to believe that the basic wage represents a real assessment of the needs of a working man and his family. The official Government view is that the purchasing power of the pound has declined by only 19 per cent., but we all know that the decline is much more than that. A little while ago, I read a newspaper article written by an investigator whom the paper had sent around the shops to price articles.' The examples cited in the article are not extreme, and most honor- able members will be able to recall others of a similar kind. The investigator examined the position in regard to the needs of himself and his wife in the matter of clothing. He could make no comparison in regard to children's clothing from . first-hand knowledge, but a neighbour had handed . over to him the invoices for the purchase of clothing for a boy six years older than his own. Here is the result of his investigations -

He added the costs for himself, his wife and his boy. The costs in 1946 were £12 11§. -6d., compared with £6 10s. 3d. in 1940. Then he had a look at some of the .items to which reference was made to-day by the honorable member for Darwin (Dame Enid Lyons), including fruit and vegetables. It has been impressed upon us that these foods are important as a protection against sickness, but to all intents and purposes they are omitted from the basic wage regimen. For these, items the figures were found to be as follows : -

In addition, the scarcity of some of the commodities has frequently caused the housewife to. pay more than the prices mentioned. Although, so far as needs are concerned, we are concerned mostly with persons on the basic wage, we must remember that in Australia few persons are-on the basic wage. In most industries there is a loading for skill, however little skill may be required. This is an additional reason why wages should be reviewed. For instance, in the metal trades, while the basic wage itself has fluctuated according to variation -of the cost of living, margins for skill have remained steady. Consequently, the benefit which the skilled worker formerly enjoyed . as a recompense for his skill has diminished.

Let us consider the matter from the point of view of the ex-serviceman. The Army, instead of following the civil practice in regard to child endowment, paid endowment for all children, including . the first. A certain payment was fixed for a single- soldier. Then the married soldier received so much more and if there were children, there was a special . loading for each child. In my opinion, there should be -a basic payment for a man and his wife, and a substantial loading for all children, including the first.


Mr Calwell - But that would involve a reduction of the basic wage.


Mr HOLT - Not at all. The loadings already given have not resulted in any reduction. The basic wage in Australia will rise, probably sharply, in the next few years, and this will be an opportunity for the Government or the1 Arbitration Court to work out a new arrangement under which a man and his wife will be regarded as the unit, in assessing the basic wage. Even a single man is usually putting money aside for the time when he will marry, or he may have already assumed responsibility for the maintenance of some members of his family. In the Army, a married private was required to allot 3s. 6d. a day to his wife, making fi 4s. 6d. a week. In addition, his wife was paid fi lis. 6d. for herself, fi ls. for the first child, 14s. for the second, and 10s. 6d. for the third. Thus, apart from what her husband received, a soldier's wife with three children had £5 ls. 6d. a week coming into the home. For his part, the husband, in addition to the pay he retained, received food, clothing and shelter, a certain amount of medical attention, and concessions on certain purchases. It 'was worked out by a parliamentary committee which considered gratuities to servicemen that a private in the Army, with one child, was on a financial basis comparable with that of an industrial worker receiving £8 a week. Today, hundreds of thousands of servicemen are back in civil life. Their families had become accustomed during the war to an income equivalent to £8 a week, which is a comparatively high rate of pay for industrial workers. In fact, the average wage worked out by Government authorities is £5 19s. 8d. for adult male employees engaged in factory employment. The wife of an ex-servicemen, if present rates continue, and if no provision be made for family needs, will be much worse off now than when her husband was in the forces. . What .applies to the wife of a private, applies with greater force to the wife of a non-commissioned officer or to the wife of an officer. It is' obvious that if the living standards which existed' during the war - and they were not regarded as high - are to be maintained 'there must be a general increase' of wages.


The CHAIRMAN - The honorable member's time has expired.


Mr HOLT - As no. other honorable member has risen, I shall take my second period. I have no wish to labour the point, because I am sure that honorable members of all parties will give serious thought to this matter. Parliament must examine the problem carefully, although honorable members may well ask what role Parliament can usefully play. Its capacity to do something practical is limited by various considerations, some of them constitutional and some associated with policy. At the present time, there is a limit under the Constitution to the power of Parliament to deal directly with industrial matters. I am one of those who do not desire to see any extension of the industrial power of the Commonwealth if such extension would take away powers which rightly belong to the States and destroy the need for co-operation between the Commonwealth and the States. If we are to look to the Arbitration Court to remedy this position entirely we shall find that its hands are tied. The court may deal with the question of the basic wage, lt may provide loadings for skill; but it is not competent to make a special family loading according to family needs. In my view the problem calls for solution by both the Arbitration Court and the Parliament, and the role of the Parliament should most properly be exercised along the lines indicated by the honorable member for Darwin (Dame Enid Lyons). We should examine what is the proper family loading to be provided in respect of all children including the first child, and having done that, the court, knowing what provision has been made on the needs basis for the child and the family, can assess as the basic wage what in its view is the highest wage which industry and the community can afford to pay. The Court would have to consider what effect its decision would have on our internal economy, and whether it would prejudice our prospects of competing with other countries in the export markets of the world. That is a matter of the utmost complexity and difficulty. The Parliament should, however, take its measure of responsibility by legislating on that aspect of family allowance. Honorable members opposite have asked how could this be done. The honorable member for Bourke (Mr. Bryson) pointed out that a considerable sum of money would be required to give effect to the proposal of the honorable member for Darwin. I believe he estimated the amount to be £18,000,000. On that point I wish to make one or two comments. During the war, with all the exigencies of war finance, governments were able to increase social services to such extent that expenditure under that heading has risen from £17,000,000 to an estimate of £70,000,000, which was the figure cited by the honorable member for Bourke as the total estimated cost of social services that the Government has in mind for the present financial year. All increases of social service benefits were not brought into effect by the present Government. As a matter of fact, the first child endowment scheme was introduced by a government of which I was a member. In the aggregate, however, there has been that large extension during a period in which there has been imposed the highest taxation this country has ever known, and at a time when all the requirements of war finance have had to be met. As to the question of priority, I am of opinion that the provision of this additional £18,000,000 should rank highest among social service priorities. .We have already been. able to find the funds necessary to implement the social service legislation which this Government has already placed on the statute-book, and I1 am confident that we will he able to find the additional money necessary for the extension of the child endowment benefits proposed by the honorable member for Darwin. The additional benefit would not render impracticable the substantial reduction of income tax which we on this side of the chamber have indicated we would put into effect if we were returned to office.


Mr Conelan - From what source would the honorable gentleman derive the additional £18,000,000?


Mr HOLT - If I had the time at my disposal I would be glad to analyse the Treasurer's Financial Statement, and point out the sources from which the additional moneys could be obtained. The Prime Minister has told us that the number of those engaged in gainful employment has increased by 400,000 since the 30th June, 1945. At that date some 2,600,000 persons were so employed; at the 30th June, 1946, the number had increased to slightly in excess of 3,000,000. Obviously, that increase is represented, in the main, by discharged service personnel who have returned to civilian occupations. There has been some movement of women from industry, but they have been replaced by discharged service personnel. Those additional 400,000 persons, however, did not contribute very much towards last year's revenue collections, as most of them were not discharged from the forces until towards the end of last year or the beginning of this year. Most of' our ex-service personnel have taken the leave to which they were entitled, and many have not yet gone back into civil employment. They preferred to take their time about it. Others have been in civil employment for only a few months. So, the income tax received from that group of persons during the last financial year was not a very large amount. However, most of them will come into the taxable field during the current financial year, and their number will be added to as discharges from the forces continue. The Government has reduced income tax this year by a total amount which represents approximately 8 per cent. over the whole income tax field. I emphasize that percentage because it has been represented that the reductions range from 20 per cent. to more than 41 per cent.


Mr Chifley - The total reduction for the full year since the war ended amounts to £37,000,000.


Mr HOLT - The concessions announced by the Prime Minister in relation to income tax collections last year represent an over-all reduction of 8 per cent. If they are related solely to income tax derived from personal incomes they represent a reduction of only 11 per cent. The point I make is that even with the minor reductions already announced there have been consequential increases in volume derived under certain other headings. For example, the revenue from excise, which covers luxury items such as beer, tobacco, cigarettes and the like, has been increased, and as more purchas-, ingpower becomes available, as the result of income tax reductions, receipts from that source will grow considerably. Although there has been a considerable decrease of the rates of sales tax, the yield from that impost has increased until, for the year just ended, it was almost £6,000,000 more than the budget estimate. As more goods become available for consumption, and thereductions of income tax become effective, we can. expect purchases to increase with resultant accretions to the revenue from sales tax. Last year governmental expenditure was reduced by £84,000,000 in respect of defence and war services alone, and we can, I believe, con- fidently envisage a very much greater reduction under that heading this year. It is not possible to give a complete financial picture because of the absence of details. I have yet to meet a Treasurer who will even allow the members of his own party to know exactly what is happening with his finances - and I am sure the present Treasurer is no exception. If such reticence is displayed towards the Treasurer's own colleagues what chance have we to learn the facts of the financial position of the Government? We are able to glean sufficient information, however, to enable us to form the conclusion that not only would taxation reductions on the scale we have suggested be possible but also that the social reforms sponsored by the honorable member for Darwin should be within our. reach in the near future. I hope that the committee will not decide this matter on a party basis, and that honorable members generally will support the proposal which the honorable member for Darwin has so ably presented for their consideration.







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