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Tuesday, 29 November 1960

Mr MAKIN (Bonython) . - The time is long overdue to consider the subjectmatter of this debate. The economy of this country calls for some corrective in order to meet a definite deterioration in our position. This is not a circumstance unknown in this Parliament, because Liberal governments in the past have been responsible for unwelcome situations of this kind in the life of this nation. We are therefore again required to-- consider the effects of the false policies that have been followed by the present Government and must decide how to ensure better prospects for the future.. But the way. in. which the Government, proposes to remedy the present position is totally fallacious and must lead only to. further difficulties.

I was in my home State, South Australia, during the week-end and ascertained local feeling about the Government's proposed increased sales tax on passenger motor vehicles as well as the restriction of credit and the increase in interest rates. I found that already one motor building firm in Adelaide has retrenched at least 200 of its operatives whilst there are prospects of further retrenchments taking place in the motor manufacturing industry in South Australia as the days go by. In my own electorate of Bonython is one of the principal motor manufacturing establishments, that of General Motors-Holden's Limited. It would be of serious concern to the people of the new satellite community of Elizabeth if they felt that ahead lay the prospect of retrenchment and general insecurity for those who rely on this industry for their employment. That is the position which faces so many of those people who to-day are employed in what is one of the most important manufacturing industries in this country.

Whilst some honorable members opposite have ridiculed the need for this kind of facility in the Australian community, let me offer the comment that this is a continent of great distances and isolated areas. People who require to go great distances inland or to the farthermost parts of our coastline must rely on the motor car for that purpose and to maintain communication with more settled areas of the Commonwealth. Why should they be denied this means by which transit can be made from point to point in reasonable comfort and with expedition? I ask that question particularly of members of the Country Party who are prepared to support the proposals now made by the Government. Their attitude astounds me when I realize how these proposals might disadvantage many people who require motor transport if they are to remain in the areas where they reside and work to-day.

Motor vehicles are a necessity for such people if they are to enjoy some of the amenities which many honorable gentlemen sitting in this chamber and representing country interests enjoy. Unfortunately those honorable members do not appreciate the. fact that the circumstances and difficulties of the people to whom I have referred require and deserve the consideration of this Parliament. The Government's proposals in relation, to the motor car manufacturing industry have come as a serious shock to the nation. Australia cannot afford to deny to its economy the continued operation of this major industry at its full capacity. This legislation proposes to levy an additional 10 per cent, sales tax on motor cars and station wagons by raising the rate from 30 per cent, to 40 per cent. The remarkable thing is that the motor vehicle industry has been singled out to bear the brunt of the Government's anti-inflationary campaign to correct the downward trend in our economy. But the Government proposals are causing grave concern to business people because they do not know the extent to which they may be affected, particularly in relation to higher interest rates and the limitation of credit, which are two important factors in the policy being dictated by this Government.

It is difficult to understand why the Government, while allowing such luxury items as silverware and pewter to carry a lower sales tax, is proposing this additional levy upon an industry which is serving Australia with great advantage and is employing possibly a greater number of operatives than is any other industry in this country. A motor car is an important feature of our community life and, in imposing this levy, the Government is taking advantage of the psychological effect upon the public mind of the very high profits that have been made by the industry. Perhaps the people feel that the industry itself will be required to carry the burden of this impost, but that is not so. The individual who buys a new car or a new station wagon will be carrying it. Knowing this, he may decide to wait for another year before changing his car. The Government claims that by more or less compelling a potential new car buyer to defer his purchase for twelve months or so the economy will benefit because the money that otherwise would have been expended on a new car will be channelled into other avenues. The people should be told of the true position. If the number of orders for new cars falls there will be less work for the people who are engaged in the industry. Those people who would have had full employment if the economy had been running at its proper level will suffer because they will lose their employment. The Government's proposal will have a snowballing effect. Not only the motor car industry, but also the other industries will suffer.

Surely the Government has not realized the full significance and the effect of its proposal. It is strangling the motor car industry and demanding that money that would be used to buy new cars be diverted to a hungry Treasurer to assist him to overcome the present inflationary trend. The people of this country need no persuasion that we are in the midst of an inflationary spiral. They feel considerable alarm at the ever-increasing costs that they have to bear. They feel also that some corrective measure is essential if this problem is to be overcome. But the Government's proposals will not relieve the burden on the average man and woman in the community. In fact, it will add to their difficulties because they will be the victims of unemployment.

Of all our industries, the motor car industry possibly is the last one that should have been interfered with in this way because it is an essential and integral part of our defence system. When I was Minister for Munitions in a former Labour government I learned the importance of industries of this kind to our security. During the last war no industry played a better part than did the automotive industry in our war effort. It helped to manufacture the munitions which were so essential at that time. The Government's proposal is a poor reward to the people in the industry who now face uncertainty of employment. A large amount of money has been invested in the automotive industry. Surely another way could have been found to solve the problem of our rundown economy and to bolster our overseas balances which have been seriously depleted by injudicious spending on non-essential lines. This has added to our difficulties.

I am gravely concerned at the threat of unemployment which exists in Australia and possibly in the town of Elizabeth, which is in the constituency that I represent. Immigrants from the United Kingdom and Europe have settled in this new area and have accepted certain commitments. Those people surely have a right to whatever protection this Parliament can give them. They are entitled to expect that we should conserve for them the employment that is offered

For these reasons 1 suggest that the Treasurer should give further consideration to the measures he has told us the Government intends to adopt. He should seek a more equitable way of making any changes that he believes necessary to solve the problems facing our economy. Sales tax is not an equitable tax. It was first introduced during the depression, in about 1950 or 1931, as an emergency measure. It was never envisaged that it would remain as a permanent form of taxation in normal times. That it has remained is another proof that once a tax has been introduced it is very difficult to remove it. Governments have continued to use this form of indirect taxation, and the rates have been progressively increased. The motor vehicle industry has had to bear an especially heavy burden. The impost now to be applied is, I believe, a savage one. I suggest that some other form of taxation, if one were needed, would have been more equitable, and would have been more satisfactory in securing equilibrium in our financial affairs.

The House would do well to consider the comments made by Opposition speakers, and the thoughtful statements that have been put forward by them, analysing carefully and accurately the possible results of the present proposal. The economy in general, and the Australian people, will not receive the benefit suggested by the Government. The Government should give some assurance to the motor car industry, first, that employees in the industry will not be made to suffer hardship, and secondly, that there is no intention to single out that industry for special treatment. It should bear the same burden as other industries in the endeavour that must be made to rehabilitate our economy and provide opportunities for our people to enjoy Australia's rich resources. It should be allowed to continue to contribute to the well-being and security of our people. It should be allowed to play its part in showing that Australia can give a lead to other countries. It should be allowed to play its part in shaping the destiny of Australia in the community of nations.

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