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Wednesday, 15 March 1961

Mr McMAHON (Lowe) (Minister for Labour and National Service) . - Mr. Speaker, as I understand it, the motion that we are debating was intended to be a wantofconfidence motion. In other words, if the House carried the motion and thereby expressed want of confidence in the Government's economic policies, the Government itself would be under a responsibility to go to the people and let them decide whom they wished to govern the country for the next three years. But I think it has become obvious to most people, as it became obvious to us here on the first day of this debate, that the Opposition really had little to say. Indeed, I venture to suggest to the House that the Opposition's attempt to establish want of confidence has been a complete failure.

Quite a number of metaphors have been floating about the House to-day, and if I may use a metaphor, I suggest that the Opposition intended this motion to be an intercontinental ballistic missile, but it never got off the launching pad. Reducing the metaphor further, I would say that this was a hunger that did not go off. That is my immediate reaction, and the reaction of my colleagues, to the debate that has been in progress over the last few days. This motion was intended to establish that the House had no confidence in the Government, but the Opposition has said little of substance, and I believe that it has given the Government a golden opportunity to state its point of view and win warm public support for its cause.

I do not want to become too heavily engaged in the politics of this debate, but one statement made on behalf of the Opposition struck me immediately as being evidence of a great deal of inconsistency. That was the statement made on behalf of the Opposition, particularly by the honorable member for Melbourne Ports (Mr. Crean), that the Opposition agreed with the Government's diagnosis of the problems. In effect, he said: " You have properly diagnosed the problems. You know what is wrong." But the Opposition differs from the Government about what ought to be done. First of all, the Leader of the Opposition (Mr. Calwell) said, " I think that what you have done is correct, but you have not gone far enough ". In other words, he said to the people, " Had Labour been in office, we would have done exactly the same' thing as the Government has done, but we would have gone much further ".

Mr Haylen - It is all very well to say that.

Mr McMAHON - The honorable member needs only to look at the words used by his leader. So there can be little comfort for those of our critics who have been making so much mischief when we say: " You are our critics. Would you be prepared to accept the alternative government?" The answer to that would be in the negative, of course. In the present circumstances, those critics could not for one moment think that there was an alternative to the present Government.

The honorable gentleman from Melbourne Ports violently disagreed with his leader. That sort of thing is not unusual in the ranks of the Opposition. The honorable member expressed his own personal view and said. " I disagree on quite fundamental grounds with what has been done ". He did not state what those grounds were, and we are left to guess at what would be his remedies other than the introduction of wholesale controls. But we find that difference of opinion between two very prominent Opposition members, Mr. Speaker.

Having said that, I should now like to consider the problem from the stand-point of my own portfolio of Labour and National Service. I administer a department which has wide associations with the working man, and particularly with the working man in industry. I think it is not untrue to say that when we in the Department of Labour and National Service, as a miniature of the Government, look at any problem, we look at it from the stand-point of the individual himself. I am never one who likes to mouth phrases such as, " You are against the worker", "You are for the worker ", " You are for somebody else " or " You are against somebody else ". I often think that those who use such phrases can usually be classified as hypocrites or humbugs. I do not put in that class the honorable gentleman from Melbourne Ports, who accused the Government of lacking humanity. But I do point out that the department and I think of these things solely in terms of the individual. I hope to be able to prove to the House later this evening that any action that we take is taken in the interests of the working man and in the interests of his family. So, in my opinion, assertions such as the one that we lack humanity are somewhat foolish.

May I now move on to define in my own way what I regard as the background against which the Government's . actions must be judged. Sir. I have heard used in this debate the phrase " balanced on a razor edge ". It is said that we are balanced on a razor edge. I do not like that metaphor. If we look at the Government's objectives, we find that there are four or five of them. They relate to the solution of the problem of full employment, the problem of our balance of payments and the problem of maintaining the value of our purchasing power, and to several other matters such as immigration and full-scale national development, each of which presents a problem in its own right. So we cannot define our problem as that of being balanced on a razor edge. Our problem is rather that of finding a series of balances each related to one of the objectives that the Government has before it. I emphasize that what we want is not one but a series of balances, each balance changing as our international position changes and as Australia develops internally. So I much prefer the metaphor of a series of balances.

The point that T want to make particularly with my own colleagues on this side of the House is this: When we find one or more of these problems, we always are up against the difficulty that there is not one remedy that is common to all of the problems that we meet. For instance, if your problem is a lack of demand and you try to pump money into the community, that action can well create another problem by boosting costs and so adding to balance of payments difficulties. I could go on and give further illustrations. I could go on explaining for some considerable time that we have not a remedy that is common to all our problems. There are many remedies, and the central problem of government arises from the fact that we have to use all the remedies that we have in order to achieve the best results by ensuring the best series of balances that we can achieve. I believe that the central problem of balances is this: How do we do our he:t? With the remedies that we have at our disposal, how do we get the best series of balances and the best results in the interests of the people? So. Sir, I do not like this idea of statins that we are balanced on a razor edge, because I believe that the metaphor is an unfortunate one.

We have these various objectives of policy. That is perfectly true. Some of them rank much more highly than do others, f personally place the objec tive of solving the problem of full employment in the highest rank. Full employment brings with it certain difficulties and attendant problems because, I believe, we have never yet learned to live comortably with it. We have never learned to live comfortably with it without allowing it to create attendant problems that this Government has always to watch as we reach the stage, first, of full employment and then of over-full employment.

The second important fact that I believe I should point out is that we have never learned to insulate ourselves completely against changes in our balance of payments unless we have reserves which are very much more than adequate to tide us over a difficult period. So, Sir, I put it that these are the real problems. They are difficult problems, and what they mean - and here I use the words of the Treasurer - is that if we are to toe successful in achieving the maximum of our goals then the means that we employ to attain our policy objectives must be extremely flexible, and we must be willing to change them whenever we see the red signal come up as an indication that some change in means must be adopted. I think, Sir, that the proof of the necessity for a change in means was brought home to us very fully during the latter part of 1959-60. It can be expressed perfectly plainly, and perfectly accurately, too, by saying that with over-full employment and with a strong tendency for costs to rise we had a very difficult and serious problem. When, added to that, there was a fall in our overseas balances, an explosive situation was created. That explosive situation made it necessary for the Government to act, and I believe that, in the light of what has happened, every action the Government took was correct. In the light of the difficult circumstances, and in the light of the known facts, the way in which the Government acted is correct, as events have proved.

I have said that there was a necessity for action. T have mentioned the fact that we believe that when we act we must act in the interests of the individual and we should relate this to the policy changes that were made in 1959-60. We must ask ourselves what changes have occurred in recent months that are to the benefit of the community.

What changes have occurred as a result of the economic measures we have taken which have strengthened our capacity for production and for future development?

I should like to put four different propositions. The first is that I believe that in 1958-59 people did not care about costs and prices. They just did not matter, and as a consequence costs and prices rose. The pensioner suffered. The person on a fixed income suffered. I do not want to dwell on this problem of inflation and what its effects might be, but I do want to mention strongly the fact that there was a carelessness about costs and prices which had to be stopped if our success was to be assured. So, the Government took action. I think it is not untrue to say that to-day there is a growing consciousnes of what prices mean, a growing consciousness of the value of money, and I believe that that will have a very beneficial effect for all of us in the future.

The second point to which I should like to direct attention is the transfer of labour that has occurred in recent months. 1 believe that many industries were affected, but the two that one would single out for particular attention are the building industry and the motor vehicle industry. They are important, but they were employing far too many people to permit us to have a proper balance between these sections of industry and other equally vital sections. Last week I was able to announce that there has been a transfer of about 40,000 people from one industry to another, and the month before there was a similar transfer. We in the department believe that this is creating a much more effective balance in terms of employment than we had previously. Industries such as the transport industry, shire councils and so on were, I believe, starved of labour. What the Government has done has been to bring about a transfer of labour from one industry to another, and I personally believe that this will be of benefit to all of us.

The third point I should like to make is that with over-full employment the value of a man's job lost its importance. Tt became of little importance to the employee, in many cases because he could so quickly move from one job to another and could be led away from one job to another by the incentive of a wage increase. I believe this to be socially important, because it leads to a social effect that is quite undesirable. Under these conditions a man has not a permanent working place. He can become forgetful of the fact that he should do a good day's work. He can become forgetful of the fact that it is good to have an occupation to which he can constantly return when necessary, and that can give him satisfaction.

A very important fact to which I wish to direct the attention of the House is that in September last year a review was made by my department which showed that the turnover in a very large section of industry was running at the rate of 72 per cent, per annum. That meant an enormous loss in efficiency. It meant an enormous loss in respect of the training given to a man in one occupation, when he goes to another and, though perhaps of secondary importance in its social consequences, a loss of production. We are reliably informed that the transfer of men from one job to another costs the new employer something like £30 a man. We believe that it will be found that, as a result of the Government's actions, the labour turnover will be enormously reduced. If it is reduced, in time the impact on production will be substantial. When added to by the changes in the other two factors I have mentioned - carelessness about prices and lack of consciousness of the value of a steady job - there will be an improvement over a time in productivity and in production generally.

The only other point I want to mention is that employment figures which were issued yesterday lead one to the conclusion - I have certainly come to this conclusion - that the number of people registered for employment, 73,000, is not unduly large, and that the increase in the number registered up to 24th February is, in the circumstances, probably as good a figure as we could have expected. I point out that even those figures over-emphasize what registration for employment means in terms of unemployment, because last year more than 100,000 extra people came into the work force, which was a number larger than natural increase would have produced. Married women and elderly people were coming into employment, and thus were masking the shortage of labour which existed in 1959-60. Similarly, the registration of married women and elderly people for employment would to-day overemphasize the significance of the number of people registered and, in fact, capable of being placed in permanent employment. So I personally accept the figure of 73,000 with some reservation, because I think that it overstates the true number of unemployed.

I turn now, Mr. Speaker, to two of the statements made by the Opposition. The first, to which I have referred already, was the statement made by the honorable member for Melbourne Ports that the Opposition's philosophical approach to this problem was based on humanity. Surely no such assertion is necessary. I believe that any government, whether Liberal or Labour, would always base its actions on the cause of the people themselves. But when the honorable member says that it is the working man who is asked to take the burden I feel that the time has come when his arguments should be confounded.

Before T came in here to-night I obtained figures relating to male earnings. Recently, average weekly earnings moved up to £23 15s. compared with about £8 when Labour was last in office. The minimum weekly wage rate has now moved up to £17 14s. Id. a week, whereas it was £8 8s. 8d. a week in 1949-50. So no decent person can argue from those facts that the wages of the working man are not rising and that the Government has left it to the wage-earner to carry the burden and pay the penalty.

Equally important is the fact that recently the Commonwealth Statistician issued a paper in which he pointed out that less than 2i per cent, of al! wage and salary earners in this country earned less than £1 above the basic wage. Many of them are in parttime employment. So we can draw the conclusion that there are very few basic wage earners and, much more importantly, that average wages and minimum wages are going up.

I come now to the second part of the Opposition's argument. The Deputy Leader of the Opposition said that it was the individual who had been made to pay the penalty. But let us look at what has been done to industry and commerce. The Government's economic measures have included import controls and increased company tax, both designed to affect commerce and industry because we realized that, in the long run, everybody would benefit. Consequently, I believe that this no-confidence motion is based on such flimsy grounds that, in effect, it is a hunger that will not go off.

Now, Sir, may I return to our policy objectives and the Government's means of achieving those objectives? I shall not repeat what the Treasurer has already said about the objectives. They are well known. They include full employment, national development, and stability of overseas balances. The thought that I want to leave with the House is this: Whilst our policy objectives remain constant, the means that we adopt in order to achieve them are flexible. In his Wayville speech, the Prime Minister said -

I will always regard myself . . . not only at liberty, but compelled to make whatever changes from time to time may be necessary in order to maintain the central policy that we stand for.

It is in exactly that way that the Government has acted whenever it has found or thought that one of its policy objectives was in jeopardy and that something had to be done. We look, not only at the figures for employment but at trends. In assessing housing trends we look, not only at the past, but also at the commencement of buildings and at building approvals. We look at all the facts from which we can draw conclusions as to trends. This applies, also, to textiles and other industries. We will change our means whenever we consider this to be desirable in order to achieve those glorious objectives of the Government. I do not know of any one who says that the objectives are wrong. We are proud of them and we will do our best to see that they are realized because we know that they will benefit the Australian people.

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