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Thursday, 7 November 1946


Mr MENZIES (Kooyong) (Leader of the Opposition) . - I would like to begin by saying that whilst it was not to be expected that those of us who sit on this side of the House would agree with all that fell from the lips of the mover and the seconder of this motion, we congratulate them on the way in which they have acquitted themselves in their opening speeches. All honorable members who come newly into this House without parliamentary experience, on whatever side they sit, will find all of us more than willing to give them such help as we can out of such experience as we have.

In the necessarily limited time at my disposal I do not propose to endeavour to traverse the whole of the field covered by the Speech of His Royal Highness, but there are two or three aspects of it about which I propose to say a little. In the first place, I should like to follow up the remarks of the honorable member for Herbert (Mr.. Edmonds) with reference to the impending departure of his Royal Highness, the Governor-General. His Royal Highness and the Duchess have been in this country now for the better part of two years. It certainly does not seem so long as that since they came here. Upon their arrival they received a great welcome because it was felt on all sides that His Majesty had conferred a singular honour on Australia by appointing his brother to be the Governor-General of this great dominion, and that feeling has persisted throughout the period of office of His Royal Highness. The Duke of Gloucester and the Duchess have travelled around Australia and have shown a keen interest in the life of the people; they have become extraordinarily well-informed about Australia and Australian affairs. I should think that never before has any member of the Royal Family acquired for so long a time so intimate a knowledge of one of His Majesty's dominions. All of that, of course, is not only a great honour but also a great advantage to us. His Royal Highness carries with him from Australia the goodwill as well as the good wishes of all the Australian people, and that applies also, I need not say, to Her Royal Highness, the Duchess, whose gracious and charming personality has commended her to all sections of our people.

In th© course of the Speech which His Royal Highness read yesterday, some reference - not too much, but a good deal - was made to the problem of defence. I do not propose to discuss this matter in a controversial way. Much of what was said on the subject in the Speech will, I think, command the support, of all sections of the House. What I want to do rather is to establish, if I can, the outstanding importance of this subject, an importance which no doubt the Prime Minister fully realizes and which led the Government to attach a fair number of paragraphs of the Speech to it. Honorable members will observe that particular reference is made in paragraph 4 to the factors which govern defence policy. One of the factors stated is the force to he placed at the disposal of the United Nations for the maintenance of international peace and security. I merely use that as a text, because I want to address myself for a short period to the question of how far the defence problem of this country is affected by the existence of the United Nations and, in particular, by the powers and machinery of the Security Council. The Minister for External Affairs (Dr. Evatt) has been very prominently associated throughout the world in many discussions of this matter. I want to take up one of the aspects of it to which he has very properly devoted a great deal of time, and to establish, as I believe I can, that one result of the power of the veto is that we in Australia cannot regard the United Nations as in any way removing from us our normal obligations of defence. It certainly does not take away from us our obligation to co-operate fully with other British Empire countries along the lines that are mentioned in the Speech. I found, on going about Australia during the recent election campaign, that although there is somewhat more interest in external affairs than there was pre viously, there is still only a limited interest. I should imagine that of every 1,000 persons who hear or read some reference to the veto there may be well over 900 who have only the vaguest idea of what is involved in that expression. Therefore, not for the illumination of Ministers, who are familiar with this problem, but in a general way, I should like to say something about it. If honorable members and the people of Australia will look at the Charter of the United Nations they will see exactly how this problem of the veto arises. As we know, the heart of the organization is to be found in the Security Council, which was established under chapter 5 of the Charter.

The Security Council consists of eleven members, representing the member nations. Five of those nations have permanent membership. Taking them so to speak from left to right on the map - I am now thinking of the map in the terms of Mercator's projection - they are the United States of America, France, the United Kingdom, the Soviet Union and China. The five permanent members are, of course, among the great powers of the world. For this purpose, one eliminates Germany, though Germany at some future stage, and in some circumstances, must inevitably again become a great and important community in the world because of its population and resources. The same is true of Japan. At this time in the history of the world, however, the countries I have mentioned constitute the great powers. There are six others who are non-permanent members of the Council. I need not go into details of how they came to be appointed. The power of veto in the Security Council is established under article 27. Each member has one vote, and decisions on procedural matters are made by an affirmative vote of seven members, who may be any seven members. All other matters except two require the concurring votes of the permanent members. The only two matters excepted are, first, those set out in chapter 6. which deals with the pacific settlement of disputes - 'Settlement not by coercive action - and, secondly, those set out in article 52, which deals with regional arrangements and the approval which has to be given by the Council in respect of such arrangements. I have only to refer to these provisions to make it clear that when it comes to matters which possess a coercive quality - action which really requires force or the threat of force - the Security Council can make no decision except with the concurring votes of all permanent members, which means at this time of all the great powers. At a later stage in the Charter we find provisions which deal with the obligation which has to be met bv agreement, to place armed forces at the disposal of the Security Council under certain conditions. All those provisions were inserted in the Charter because it was contemplated that the United Nations was to have genuine military and material power to enforce decisions for the maintenance of order in the world. But the veto, as it has been summarized, means that no decision of that kind involving coercive action can be made against the will of the great powers, and as disputes which are likely to produce great wars in the world will almost inevitably be disputes to which at least one great power is a party, then it becomes clear that the Security Council, as the Charter now stands, cannot prevent great wars except by the process of friendly argument which happens to lead to ultimate agreement between all the parties concerned. When I say that, I say nothing that falls with novelty on the ears of the Minister for External Affairs, who has been discussing this matter in this place and in other places for a long time. But what has to be made clear to the people is that the existence of that state of affairs in the Charter means that at present, except by force of argument, the United Nations, acting through the Security Council, cannot take any steps against an aggressor nation. We have only to bear that in mind to realize that, so far from lifting the burden of arms from us, this Charter leaves the burden of arms upon us. Insofar as we need defence - defence forces and defence - provisions of one kind or another - then we must be prepared to continue to find it for ourselves, find it in collaboration with other British countries, and find it, as I hope we shall in Pacific matters, in collaboration with the United States of America. But if we fall into the error in 1946 that we fell into in 1935, 1936, 1937 and 193S of thinking that the existence of a world charter removes from us the obligation fo be ready for war, then this second great illusion can produce another war in the world just as certainly as the first one did. I have called it the "great illusion " because I have vivid memories of the enthusiasm with which people in Great Britain in 1935, 1936 and 1938 would refer to the League of Nations, the enthusiasm with which they would refer to the famous peace ballot that took place in Great Britain, and the enthusiasm with which they would say, " As well, we are behind the League of Nations, and the Covenant of the League of Nations has only to be put into operation and all will be well ". But a covenant, without the power to enforce it, is of all things most deceptive and unreliable. It is one of the historic ironies of our time that in the ten years before the recent war the people in the world who loved peace, and who wanted peace, rested upon this frail foundation of an unenforceable covenant, while those who did not want peace, those who sought aggression, those who were out to make war and mischief in the world, went on with the hard practical business of providing themselves -with guns, ships and aircraft so that they might put the world at risk and put the whole of our democratic freedoms into the balance. We shall do well to avoid a repetition of that disaster; and that is why I, for one, and I am sure that I speak for every member of this House on this matter, feel glad that there is in His Royal HighneSS S Speech an emphasis upon our problem of defence locally, and upon our problem of making a fuller contribution than in the past to the general structure of Empire defence. Of course, I realize that at the moment it is not possible for the Government to be very particular in its statements on these matters. As we know, the world has not yet recovered from the first shock of the atomic bomb. We do not know what developments may ensue from the examination of those problems that is now being conducted. I hope that at the earliest possible moment the Government will find itself in a position to tell us what the result of those investigations is, and what particular measure it proposes to take to carry out our local domestic defence obligations and our obligations in association with other British countries.

What I have sought to establish by that very brief examination of the problem is this: First of all, this problem of defence, even though the greatest of all wars has just been won, is still a problem of the first magnitude. That problem is one the basic character of which, for u.=.; is not really altered by the existence of the United Nations. There are still great burdens upon us; we still need concrete and realistic defence policies; and the Government should, at the earliest practical moment, inform the House regarding its proposals, so that on a suitable occasion, with definite plans before us, there may be a real debate in this House about what the nature of those defence burdens should he and how they should be borne.

I turn from that problem, the importance of which is really not to be estimated by the amount of time that it is possible to devote to" it in the course of one speech, to the next one in His Royal Highness's Speech. I desire to make particular reference to it. Paragraph 13 of the Speech states -

It is also a basic part of the Government's policy to take an active part in all measures aimed at international and economic welfare, full employment and a higher standard of living throughout the world and also at encouraging the political and economic development of dependent peoples.

Those are good words. With them, as words, I have no quarrel; but I believe that there should be associated with them some observations of a warning kind. No doubt it is a good thing that we should be interested in world problems, and that we should play our part in the settlement of international economic problems and in -the raising of the standards of backward peoples. But whilst all that is abundantly true, our best contribution must be the raising of the standard and availability of production in our own land. W e should find ourselves in rather a sorry position if, while we were busy about ambitious world schemes, our own production lagged and our own contribution to what the world needed was smaller than it would be when we all were really doing our job. That is why the problem of production in Australia in 1946 and in the years to come is one of such outstanding magnitude. The honorable member for Herbert had some wise words to say about it. Here is something which touches the standard of living of everybody in Australia; and the honorable member might have added "and which determines our real capacity to make a contribution to the material needs of the rest of the world ". Consequently, all domestic policies in Australia, to-day must be judged by how far they stimulate real production in Australia, and make that production available, not only to Australians but also to the people of the world. Of course, on that, two problems have an immediate bearing. The first of them is one about which we still fondly hope to hear something when the Budget is opened by the Treasurer.. That is the problem of tax reduction. I do not want to go into this unduly, because [ know that this is slightly controversial, although what the controversy was became more difficult to discover as the election campaign proceeded. This is one of my really humorous recollections of the election, because when I began, on behalf of my colleagues, by speaking of a reduction of taxation, I understood that the Prime Minister, forsaking his usual aplomb and reserve, accused me of bribery, and not only bribery but " unbridled bribery ", which I think was a very admirable phrase. But as the campaign proceeded, T began to wonder more and more whether the Labour party was not really promising tax reductions. I am still a little hazy about \t. I read with great joy a speech made by my old friend the Minister for Labour and National Service (Mr. Holloway). He delivered at Port Melbourne a very sensible speech, in which he said he thought that a. "40 per cent, reduction of tax over a period of three years was not too bad ". That was, of course, my own idea.


Mr Holloway - The trouble is that the right honorable gentleman let his cracker off too soon.


Mr MENZIES - Here is another version. According to the honorable gentleman, the trouble with my policy of tax reduction was that I announced it too soon; but that is a very far cry from saying that my policy was election bribery, or even unbridled bribery. However, I leave that to the Government ro work out, because until the budget is opened, we shall not know what bird is going to sing. I desire to take the opportunity to point out to the Prime Minister, if it is not too late, that a. reduction of taxation lias a great deal to do with the volume of production in Australia and the incentive to produce. Indeed, I was looking recently at the speech which the right honorable gentleman delivered on the 12th July last in lieu of a budget at that time. In the course of that Financial Statement, he said -

Most of our resources arc free once again for civil production and full employment of those, steadily maintained, can 'work wonder? in output.- Then as output and real income? rise, taxation can be reduced still further.

Insofar as that statement does associate production with taxation, I agree with it ; but ray real quarrel with it is that it puts the cart before the horse. The Prime Minister discloses his mind. He wants output to rise first, and taxation to be reduced second. That is all wrong, because if you want output to rise, then you must first reduce the tax burden. If you want output to rise in Australia, then problem No. 1 in point of time is the problem of removing some of the burden from the people, so that they shall be encouraged to strive for the ideal, namely, a good day's work for a good day's pay; and whether a good day's pay is a good day's pay or not depends, not upon its nominal terms but upon, first, how much of it is left after the tax gatherer has taken his share, and, secondly, what it will buy when it reaches the housewife's purse. Each of those matters, in turn, is affected by taxation, because it is the tax cut which determines the net sum of money left to the income earner, and a large volume of production in Australia will be the greatest possible guarantor that we shall not have inflation. When the Treasurer talks of inflation, I agree with him. I have yet to hear him pronounce a general view on this problem that is not entirely in line with my own beliefs. But in the long run, let. us remember that inflation comes about, because there is more money looking for goods than there are goods to be bought, and, consequently, if we want to preserve the value of money and stabilize the economy, we must concentrate every effort upon increasing the volume of production. If we are to raise the volume of production, I sincerely hope that the forthcoming budget will grant sufficient tax relief of a kind which will be calculated to encourage people to build more bouses, produce more materials and get on with those essential things that must be done if our standards cf living are to rise and if our capacity to contribute in real terms to a solution of the world's problems is to be established.

The third matter that I desire to mention is this. Paragraph 32 of His Royal Highness's Speech states -

It is my Government's intention to set up as early as possible a committee including representatives of both parties in industry, to inquire into and report upon aspects of the basic wage. The setting up of this committee will not preclude earlier consideration by the court of any application that may be made relating to the amount of the basic wage or the principles upon which it is determined or varied.

I should be reluctant to criticize with any force proposals for conferences between employers and employees in industry, because basically what we need in industry is a better mutual understanding, and an increasing realization by both sides that their interests are interests in common. The honorable member for Herbert (Mr. Edmonds) touched on that point in the course of his speech, but there are one or two aspects of this matter which I. think are worth considering. In the first place, the Commonwealth Court of Conciliation and Arbitration is the body which has fixed the basic wage for many years past; it has done so in the ordinary course of its arbitral functions. In 1942, just after the first impact of the Japanese move in this direction, the Government took various economic measures, one of which was the pegging of wages. As long as wages were pegged, a hand was put down on the wage .structure of Australia. It was associated inevitably with the price ceiling plan; obviously the two things were in a large measure interdependent. Earlier this year the Government took a step, which I approved, when it qualified its national security regulations by providing that the Arbitration Court could review the basic wage and also the standard hours of work. If it reviewed either or both of them, and substituted a new pronouncement, that new pronouncement was to have valid operation, notwithstanding the wage-pegging regulations. That was a sensible thing to do. That left the matter with the associated trade unions of Australia, in particular, the Australasian. Council of Trade Unions. That body had its choice; it could go to the Arbitration Court first for a reduction of the hours of work, or it could first approach that body for a review of the basic wage. I should1 have thought that, as between those twothings, a review of the basic wage wasof the first importance. There is a widely held belief in Australia - a belief which I share, and which others on this side share - that the basic wage has become out of touch with the realities of the true cost of living of the ordinary home. I should have thought that, being presented with that choice, the unions would first go to the court and ask that the basic wage be revised, and that later they would ask that the hours of work be dealt with. I have made that suggestion, or criticism, more than once in public. They decided to approach the court first on standard hours. Now there are complaints that this is a long business. I point out that until the last few days the whole of the time has been occupied by the witnesses for the applicants, namely, the trade unions. These matters are not to he got through in a great hurry. My friend, the honorable member for Herbert, has a belief which does great credit to him ; he believes that the Queensland system is perfect, and that if these matters can be approached in the right way, such a problem as fixing standard hours in industry can be settled in a week or two. That is not so; these things cannot be done in that way.


Mr Holloway - It did not take long to take 10 per cent. off.


Mr MENZIES - It took a long time to conduct the inquiry. The Minister for Labour and National Service should keep out of this argument. I very well remember that in, I think, 1926, when the 44-hours case was on, he and I were mixed up in the wretched thing a good deal. We were there for months. The Minister did most of the talking. I thought that he spoke very well, and said a lot of interesting things. He must not tell me now that lawyers protract such proceedings. For every word that I uttered I think the Minister uttered 25 words. My point is that if there is delay, as there has been, in the revision of the basic wage, it is a delay which arises from the deliberate choice of the organized trade unions of Australia. Having made their decision in favour of an inquiry into the hours of labour, they are now coming round on the other tack and saying, " What about the court dealing with the basic wage at the same time as it deals with the hours question?" In other words, the unions have begun to realize that they started off on the wrong foot, and that the sooner the basic wage is examined the better. I agree with their second view, because the sooner this authoritative body can determine the basic wage the better it will be for everybody. No committee, however interesting its deliberations, is any substitute for a decision by the one body that has power to give a decision.


Mr Holloway - That is not proposed.


Mr MENZIES - I do not know what is involved. I can only rely on the words. As the honorable member for Werriwa (Mr. Lazzarini) said in the last Parliament when he was a Minister, " These words mean what they say ". That was his favourite retort. These words read: "A committee ... to inquire into and report upon aspects of the basic wage ". Perhaps some Minister will be able to give us a better description of what the word " aspects " means than can be given by any wretched lawyer. I point out that the thing that counts to the basic wage earner is the net result - how much money he gets for his week's work. That, question will be answered by the Arbitration Court, and the sooner that body gets on with the job and concentrates its attention upon it the better. As between these two problems - the basic wage and the hours of work - there is no question as to which calls the more urgently for determination in Australia.

That is all that I desire to say on the matters which are raised in the Speech.

During the last month or two we have had a good opportunity to express ourselves on public questions - an opportunity which I must say in my own favour that I exhausted to the full, as well as exhausting myself. This debate is not an occasion for long speeches. That is why I have confined my remarks to the three matters to which I have referred, and that is why I have taken the opportunity, not so much to create an issue between the Government and myself, as to underline what I believe to be the true importance of some of these vastly significant problems.







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