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Tuesday, 30 October 1956

Sir ARTHUR FADDEN (McPhersonTreasurer) (Treasurer) . - I rise, not to defend the Government against the censure motion but, La the light of speeches that have been delivered, to give some information to the House and to the people. The Government's financial record and its ^uncial position to-day do not require any elaboration or defence. The evidence of the effectiveness of its policy is to be seen all around us. Consequently, I shall take the points raised in the motion of the Leader of the Opposition (Dr. Evatt) and deal with them, as far as lies within my power, on a factual basis.

The Leader of the Opposition said that we have failed to ensure full and continuous employment. I shall take that as the first of his objections to the policy of the Government. Time and time again, members of the Opposition have predicted depression and unemployment and have been disappointed when neither has eventuated. There is no doubt about that. In season and out of season they have ranged up and down the country predicting depression and, as a consequence of depression, unemployment. They have been very sadly disillusioned and disappointed because of the effectiveness of this Government's proposals. At no stage in the past seven years has unemployment reached 1 per cent, of the labour force and during most of that time unemployment has been virtually nonexistent.

Mr Cairns - Not so!

Sir ARTHUR FADDEN - That fact -cannot be denied in any unbiased criticism or after any examination.

I shall pass from that point. The employment situation is the basic ground for the censure motion. Year after year, the level of employment generally has continued to rise. Our population has grown by well over 1,000,000 people in the seven years this Government has been in office. Yet virtually everybody seeking a job has been able to find one.

Mr Cairns - No.

Sir ARTHUR FADDEN - To-day, the number of people in civilian employment, excluding the defence forces, is approximately 300.000 more than it was when we came into office, despite the .increase in population and the vigorous immigration programme that we Iia ve carried out very effectively.

The tempo of business and industrial activity has necessarily fluctuated, but a strong and continuous development has prevailed, in line with the requirements of a balanced economy. Population has increased, industrial output has increased and rural production is rising quite remarkably. The provision of basic facilities has vastly improved. We have made great headway in housing and in the enlargement of hospitals, schools and similar facilities. Thai assertion can be proved by facts. In brief, we .have provided a guarantee of full employment by our efforts and our policy to keep the economy expanding at a reasonable rate in all the circumstances. Had we not pursued this steady aim, we .would never have been able to absorb all the people who have come to this country as a result of our encouragement, nor would we have been able to provide continuous full employment for the people who were already here. The fact is that we have succeeded in doing these things. Much as we dislike it, we have had to do unpleasant things, but the Opposition, in all the circumstances, must admit that we .have succeeded in our policy.

I come now to another factor in the right honorable gentleman's motion. He said that we have failed to prevent -profiteering, that we have refused to obtain power either from the people or from the States to regulate prices, interest rates and capital issues'. Let us consider prices control and its history. The Leader of the Opposition keeps urging that the Commonwealth should seek powers to control prices and, having obtained them, apply price controls, presumably on the same all-embracing standard that existed during the war. That is the only overall method of which Australia has had any experience. He proposed this despite all the experience we have had in recent years of the ineffectiveness of price control as a means to deal with inflation, particularly under peace-time conditions. We came out of the war with a full-scale system of prices control established, and it was continued until the Labour Government abandoned it in 1948.

Dr Evatt - ;It was defeated at ,1 referendum.

Sir ARTHUR FADDEN - By that time, the :great majority of people were heartily sick of it and were -glad to see the end 'of it. That is why it was defeated at a referendum. The people were sick of the constant arbitrary interference with business which the system entailed and with the general bungling and muddling that are inherent in the system. Having had that experience - and experience is not a bad guide - the people refused the request of the then government for constitutional authority to continue prices control under war-time conditions in a peace-time era. The people were also sick of paying large administrative costs. The Opposition would return to the humbug of prices control although, in spite of everything that the system was supposed to do, it did not restrain prices. Those aTe the facts for every one to see. lt was bad, it was cumbersome, it was expensive, and it was interfering. Between June, 1945, and June, 1948, the approximate date of the abandonment of the system, retail prices rose by 14 per cent, and wholesale prices by 18 per cent. The people realized that the system was nothing but a mostly piece of humbug, interference and nonsense, and they expressed that opinion at referendums, first in 1944 and again in 1948, when they rejected the request of the government for constitutional power to control prices.

That leads me to recall what the Labour government of that time did in this matter . "If Labour had the faith in that system then, that it is asking us to have now, why did it do what it did? To-day, the Labour party in opposition is asking the Government to seek constitutional power to control prices, and to establish a Commonwealth prices control system. But what did it do when it was in office, when it had the opportunity to do the same thing and when, according to what honorable members opposite -say now, it believed in the effectiveness of prices control? We know that the Labour government tried to get constitutional power to control prices, and failed. But although it failed constitutionally, honorable members opposite know - and nobody "knows better than does the Leader of the Opposition (Dr. Evatt), who was then Attorney-General - that Labour had every opportunity to test the effectiveness of what it had failed to do constitutionally by continuing prices control under the defence power. But what did it do? As the House knows, it could not hand over the control of prices to the States quickly enough, i: did not try to retain control in the Commonwealth sphere, or even to test the power resident - I admit, doubtfully resident - in the Commonwealth; instead, it could noi get rid of prices control quickly enough, once the people of Australia had rejected the referendum. That leads us to believe that the members of the Labour party were " running dead " when they asked the people of Australia to give them power to control prices. They did not really want thai power because they knew how ineffective such control really was. "Now, they are asking us to go to the States and request the transfer of powers for which they themselves did not ask when they had the opportunity to do so. I make that point emphatically, and I repeat thai if they are sincere to-day, on the basis of their past experience, and having regard to the conditions that existed at the time thai they handed the control of prices to the States, why did they not ask the Stales to do exactly what they suggest that we should ask them to do? The answer, of course, is that they knew that prices control was a failure. They wanted the people of Australia to turn down control by the Commonwealth. They wanted to pass the buck to the States and to be able to make the excuse to those who were not discerning that, although they had tried to get power to control prices, the people of Australia would not give them the constitutional power to do so, and, that being so. they had no alternative but to hand the matter to the States. As I have said, if they had been sincere and had really believed in the effectiveness of prices control, as they pretend to believe in it to-day, they could have asked the States to transfer the necessary power to the Commonwealth, and had they done so I have little doubt that the States would have agreed, because they did not want the prices control baby placed on their knees. Thai is the position, and it cannot be denied.

The Labour government abandoned prices control at a time when prices were rising at the rate of 9 per cent, per annum, a very much higher rate of increase than that of recent years. In other words, if ever there was a time when every effective means should have been used to control prices, it was at the time that these people who profess to believe in the effectiveness of the control handed it over to the States. We, of course, have discussed this matter with the States, and we know that they are not in favour of looking after this very ugly infant. They realize that unless prices control is handled on an Australia-wide basis it is ineffective. I suggest that sufficient answer to the claim that we have failed to deal with control of prices lies in the evidence that I have given of the actions of Labour when it was in office and had the opportunity to do what it suggests we should do now.

Mr Cairns Mr. Cairnsinterjecting,

Sir ARTHUR FADDEN - I should like to know, Mr. Speaker, whether I am making this speech or whether the honorable member for Yarra (Mr. Cairns) is doing so. 1 take it that he will have an opportunity to speak in due course. Living standards and rising prices are, of course, the concern of all of us. We are asked to believe that this Government is responsible for reduced living standards and increased prices, and that it has done nothing to arrest those trends. Let us look at the facts. Prices, it is true, have risen to some extent-

Mr Daly - Ha, ha!

Sir ARTHUR FADDEN - Yes, but wages and salaries have risen still more. During 1955-56, retail prices rose, on the average, by 5 per cent. During the same period, wages and salaries rose by 9 per cent. That is an effective answer to the allegation that rising prices have meant declining standards for wage and salary earners. But of course attention cannot be limited to wages and salaries; there are other supplements to income which have to be considered in the overall picture of living standards and living costs. Cash social benefits paid by Australian governments increased between 1954-55 and 1955-56 by nearly £30,000,000, or by 11 per cent. These benefits have operated very significantly to improve the real living standards of wage and salary earners.

It is not true that people who depend wholly or partly on fixed incomes have suffered a net loss from rising prices. Total payments by the Commonwealth to age and invalid pensioners increased during 1955-56 by £13,600,000, or by 15 per cent., although the average number receiving such pensions was only 6 per cent, greater than it was in the year before. In point of fact, these processes have continued all the time that the present Government has held office. Social services benefits provided by the Commonwealth are approximately two and a half times greater to-day than they were in the year that the Government was returned to office. That is to say, they are two and a half times greater than they were under the previous Labour government, although the supporters of that government claim to be the only people who are vigilant on behalf of pensioners.

In 1949-50, expenditure from the National Welfare Fund was £101,000,000. Provision for such expenditure in the current financial year amounts to £226,000,000, or more than twice as much as it was then. Increased expenditure is necessary to meet very large increases in the rates of benefits compared with those that existed previously, in addition to expenditure in respect of services, such as the medical benefits scheme, which simply did not exist when this Government took office.

We do not, of course, defend rising prices. We believe, on the contrary, that they must, in the long run, operate against the best interests of the wage and salary earners and of persons whose incomes are limited. However, the fact is undeniable that the position of such people has been more than safeguarded, either by the increased rate of their earnings, or by increases of pensions and other Commonwealth benefits. In other words, those who are most directly affected have "received the greatest degree of consideration, in the way of social services benefits, from this Government.

Mr Cairns - That is quite the opposite of the truth.

Sir ARTHUR FADDEN - I do not know how conversant the honorable member is with the truth, but if he looks at the facts he must see that my contention is correct.

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