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Thursday, 2 June 1949


Mr McBRIDE (Wakefield) .- I do not propose to argue with the Minister for Works and Housing (Mr. Lemmon) about Darwin. However, I remind him that the war ended over four years ago. If the Government's intention is to make Darwin the front door of Australia, it has made a very poor effort in that direction, judging by what has actually been done in the reconstruction of the "town. I was interested in the approach which the Minister made to this debate. His approach was typical of that made by Ministers and honorable members opposite to debates of this kind. He commenced -by lauding the magnificent job which the Government has done in stabilizing Australia's economy. We have heard that phrase many times from honorable members opposite. Indeed, not long ago the Prime Minister (Mr. Chifley) improved considerably on that approach by describing the present as the "golden age ". He said that the Government was leading the people of Australia into the " golden age ". However, even in the eyes of the Prime Minister himself, the "golden age" is now receding in the distance. Consequently, honorable members opposite are forced into attempts to lead the people to believe that the Government is responsible for our present prosperous economic conditions. By economic conditions they mean the large volume of money that is in circulation in this country at present because if they examine our economic position closely they will find that it does not present anything like the rosy picture which they attempt to paint in order to mislead the people. Every honorable member opposite who has spoken in this debate has lauded the Government for its magnificent achievement in maintaining the economic stability of this country. I do not know just what they mean by economic stability. National income, after all, is the yardstick of the wealth of a country. Our national income has been increasing since the outbreak of the recent war, but that improvement has not been due to any action, or statesmanship, on the part of the Government. It has been due entirely to the rapid rises of prices which we have received for our primary products overseas. Primary products represent 90 per cent, of Australia's total exports, and that income is the basis of . our present prosperity. The national income has risen correspondingly with the increases of prices we have received for our primary products on overseas markets. I shall cite figures relating to the wool industry because it is a major Australian industry, providing probably 40 per cent, of the exports from this country. It is very interesting to consider how closely the national economy has kept step with the price level in the wool industry. In 1944-45 the national income was £1,274,000,000, and the amount received for our wool was £64,800,000. In 1945-46, the national income rose by only £10,000,000, and the return from our wool receded by approximately £6,000,000, showing that when prices in that major industry did not continue in an upward trend the effect on the national income was very marked. In 1946-47, thenational income increased by a further £80,000,000, and the return from our wool began to increase again, going up from £5S,000,000 to £96,000,000. In 1947-48, the national income was £1,635,000,000 and our wool cheque amounted to £155,000,000.. It is estimated that this year the national income will be approximately £2,000,0.00,000 and that the return from wool will amount to between £170,000,000 and £180,000,000. The much vaunted stability in the Australian economy, for which this Government takes such great credit, is due almost entirely to the rapidly rising prices of our export commodities. In these circumstances, it has been very easy for the Government to indulge in many plans, to introduce -many new benefits and to devise many new ways of expending money and still, with its ever-increasing revenues, to balance its budgets. I take no exception to the fact that on a number of occasions the Treasurer has underestimated his revenue and receipts. I realize that no person can forecast accurately the general trend of price levels and, as a consequence, the general trend of the national income. I believe that the Treasurer is following a prudent course in casting his estimates of revenue on a conservative basis. I have no complaints to make about that. But one of the things to which we must give thought is the fact that the Treasurer has underestimated not only revenue but also expenditure. It is well that the people should know of the rapid increase of expenditure in the civil field that has taken place since- the end of the war. It was expected, and with justification, that at the end of the war defence expenditure would be reduced; but it was never thought that the reduction of defence expenditure would be more than off-set by an increase in civil expenditure. In 1945-46, the first year after the war, defence and postwar charges accounted for £378,000,000 of a total expenditure for the year of £542,000,000. In other words, in that year civil expenditure amounted to £164,000,000. As the total collections from revenue amounted to £389,000,000 the gap of £153,000,000 had to be met by loans. In the following year defence expenditure dropped from £378,000,000 to £232,000,000, but civil expenditure began to take up the lag and increased from £.1.64,000,000 to £218,000,000. In 1947-48 defence expenditure was reduced to £1S0,000,000, but again civil expenditure took up the lag, and although the Treasurer was able to achieve a surplus, it increased to £276,000,000. This year, when the Treasurer has under-estimated both revenue and expenditure, defence and post-war charges were not reduced and are still expected to reach £180,000,000. Civil expenditure, however, continues to rise and is expected to amount to £343,000,000 this year. These figures should give the people some food for thought. In spite of his everincreasing expenditures the Treasurer flaunts before the country his proposals for the reduction of income tax. Accompanying the statement announcing the last tax reduction, which will not take effect until the 1st July next, the Treasurer circulated a table showing the benefits granted to the people by way of tax reductions. The right honorable gentleman even had the audacity to tell the people that the Government had refrained from collecting £176,000,000 in income tax when, in fact, the amount raised from that source has continued to rise very rapidly. Revenue from income tax amounted to £351,000,000 in 1945-46, to £374,000,000 in 1946-47, and to £414,000,000 in 1947-48. This year the estimated, yield from that source is £466,000,000.


Mr Archie Cameron - Those figures were issued by the Government?


Senator McBRIDE (WAKEFIELD, SOUTH AUSTRALIA) - Yes. I mention them because the Treasurer is one of the great prophets of recession who has recently come into the limelight. The "golden age" has completely disappeared and now we begin to see the gloomy prospects of recession. If we should experience such a recession - and although I am not a prophet in these matters I cannot' disregard the general indications of such a possibility - and it is accompanied by a fall in the prices of our export commodities, what will be the national income of this country? During the last two or three months there has been a drop of from 20 per cent, to 25 per cent, in the price of wool. If that fall in price applies over the whole range of export commodities, what will be the national income in 1949-50? I suggest that it will be considerably below the estimate of £2,000,000,000. Expenditure on defence and post-war charges in the coming year is estimated at £181,000,000. I should be the last to suggest a reduction of expenditure on defence, but I should like to see better value being received for the money that is being expended at present. If Australia is to play its part in the defence of the British Empire - as I still prefer to call it - we cannot for a. moment contemplate a reduction of defence expenditure. Civil expenditure, which increased by approximately £60,000,000 from 1947-48 to 1948-49 is estimated at £343,000,000 for the forthcoming year. That figure does not include pharmaceutical benefits, medical benefits, and every other kind of benefits under the sun that the Government is promising to the people of this country. The Government is making those promises without showing any sense of responsibility. How is all this money to be raised? The only comforting thought is that most of the Government's grandiose plans seem to remain a long way from fulfilment. Plans for a number of fantastic projects have been announced in this chamber. We have, for instance, the Snowy Mountains scheme which has been heralded by the Minister for Works and Housing. The conception of the scheme is magnificent. We are told that it will work wonders for this country; but honorable members will recall that not long ago we were told of the Government's magnificent plan to standardize the railway gauges in this country. That project was placed under the control of the Minister for Transport (Mr. Ward) who obviously took great pride in it, but I have yet to learn that the job has even been started. And so it will be with the Snowy Mountains scheme. Desirable though it may be, a long time will elapse before it is begun. Even ignoring the problem of finance, the manpower and materials required are not available, just as they 'are not available for the standardization of railway gauges or any of the other huge plans that the

Government lias presented to the House and to the country. The Government to-day is faced with a serious inflation problem. Costs are soaring. I was not at all surprised to hear the Minister for Works and Housing - or perhaps I should say no housing - admit that he is a planner. He said quite frankly that the Government has not the constitutional power to do anything more than prepare plans and provide money for the construction of homes. Yet, when housing is mentioned, the Minister boasts that- 47,000 houses were built last year. How does he reconcile that boast with his admission that the Commonwealth has not the constitutional power to do anything more than prepare plans, carry out research, and provide finance? He must realize as everybody else does that although the demand for houses is still substantial, it is diminishing, not because of the number of houses being built, but because of their cost. Many people who want houses of their own are not prepared to build at present-day prices, because it would mean tying a millstone around their necks for the rest of their lives. As I have said, the Government faces a serious inflation problem, but its first public admission of that fact was made only this week. Either by a deliberate announcement, or through what is called a Cabinet leakage, we have been informed that postal charges are to be substantially increased in spite of the fact that ever since the war, the Postmaster-General's Department has been amassing huge surpluses. I shall not discuss how the figures are arrived at although I have a good idea of how it is done, but the people of Australia are being told that whether they like it or not, postal charges are to be increased by 10 per cent., 15 per cent., 50 per cent., and, in some instances, as much as 100 per cent. That, as I have said, is the Government's first candid admission that costs are spiralling. In spite of all the flapdoodle that is talked by honorable members opposite and their supporters about the stability of the economy of this country, and the magnificent job that this Government is doing in providing the good things of life for the Australian people, the Government is beginning to sense the fact that the people of Australia doubt the ability of the country to provide these benefits. We hear a lot from the Government benches about increased savings bank deposits. That matter was dealt with most forcefully by the honorable member for Henty (Mr. Gullett) in this debate. The Government preens itself because savings bank deposits have increased from. £280,000,000 to £680,000,000.







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