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Thursday, 16 March 1961

Mr HALBERT (Moore) .- I have listened very carefully to the honorable member for Kennedy (Mr. Riordan) and had no difficulty in hearing him, but I found that he threw more noise than light on the subject. For every mumble, there was a grumble and a jumble. The theme of the honorable member's speech was that there was seasonal unemployment in Queensland which, I understand, has been experienced each year for many years. I believe it recurred for many years under a Labour Government in Queensland. I understand, moreover, that special provision is made for that seasonal unemployment. All I could gather from the honorable member's speech was a brief summary of seasonal conditions in Queensland.

The Acting Prime Minister (Mr. McEwen) and the Treasurer (Mr. Harold Holt) have given a very full, careful and detailed analysis of the Government's economic measures. Therefore, it would be wrong for me to repeat them in detail. I do commend the speeches of those right honorable gentlemen to the people who had the opportunity to hear them. Unfortunately, only those who subscribe to " Hansard " will have an opportunity to read their speeches in full. In the existing conditions, it is a great pity that, with vital issues at stake, the leaders of our Government are not reported fully by any leading newspaper. The clear and concise statements of the leaders of the Government have been reported, sometimes in a biased way, with only brief extracts from their speeches. I am sure that thousands of people would like to read their statements.

I intend to devote my time to the psychological aspects of the Government's measures and its future plans and what I believe is the real danger we have to face. Let me explain my point in this way: No one will deny that in 1960 we had boom conditions of prosperity. This was indicated particularly in over-employment and overaward payments in those prosperous industries which could pass on the costs to the detriment of labour in less prosperous but just as essential industries. These conditions were very apparent to our watchful Government, and at the beginning of 1960 the Government asked the banks to exercise restraint in their lending. This mild request was received with adverse criticism to the extent that every person who could not borrow to the maximum of his securities blamed the Government. Unfortunately, many of the institutions used the Government as an excuse to refuse advances. As a matter of fact, the banks increased advances in various quarters by £150,000,000 in that period. Nevertheless, the psychological effect of the Government's request for restraint created great public resentment. Again many forms of fringe finance were available. The use of fringe finance and hire purchase was again blamed on the Government by those who wanted to obtain cheap finance.

The point I am making is that these psychological reactions of the people were such that those who had never borrowed before wanted to borrow and take the risk, and those who had never invested before, except in low-interest investments, were prepared to lend their money at high risk and high interest. Even small investors were putting their money into equity shares and housewives were gambling their savings on the stock market. In other words, every one was enjoying the boom of inflation caused by demand exceeding supply, except, of course, the poor old fixed income groups and the primary producers who were nailed to the cross of overseas prices.

I am sure every one will agree that no responsible government could allow those conditions to continue and to snowball with such great rapidity, but unfortunately every one wants the Government to take action that will not affect them individually. What an impossible situation that is, when the anomalies are considered. Just look at the thousands of newspaper editorials and feature articles which appeared in magazines and trade journals. All of them said that the nation must develop rapidly and we must have roads, railways, water supply, housing, hospitals and so on. I could go on for an hour citing a list as long as my arm. But the cry was that all these things must not be done by taxation. It was said that the Government was undertaking too much development with money obtained from taxation and that taxation should be reduced as an incentive. I agree that that is a reasonably sound suggestion. But then we must ask how we shall do it. We do it, of course, with borrowed money - the savings of the people invested in government loans and securities. The critics then say, " But not from us; we must be free to lend where we like at high interest rates. Get it from the other fellow." Publicity is causing this anomaly, and the Government must face that fact. Every one says, " You must not an any account affect my spending rate. I must be allowed to spend at the same rate." These people agree that the goods necessary for development must be produced, but they still want to buy their new motor car.

All this unbalanced criticism has a tremendous psychlogical effect on the public.

The public begins to believe that the impossible can be done. There is no doubt that what may now be called the mild restriction on purchasing power introduced in January and August of 1960 would not have been so mild and would have had a much greater effect except for the enormous overconfidence of the people who completely disregarded all the warnings. This was a confidence that completely overran the financial holding operations of the Government. It was like the driver of a modern luxury car overlooking the large corrugations and bumps in the road. This made necessary a much more severe financial holding operation in November. Then what happened? The flood of irresponsible critics started the reverse psychology of gloom and this was materially kicked along by those most affected - the interested parties - and the Australian Labour Party, whose very existence depends on a troubled nation. Opposition members want a depression. They would love thousands of people to be out of work. Their policy is so negative that they can only live and breathe in a troubled world and will go to the length, quite deliberately, of fomenting trouble merely to obtain power.

Mr Cairns - Do you believe that?

Mr HALBERT - I do. I cannot believe anything else after I have listened to the speeches delivered by Opposition members in the last two days.

This policy of gloom creates a tremendous impression on the public mind and makes necessary financial measures that are more severe than they need be.

Mr Daly - Put a bit of life into it.

Mr HALBERT - I cannot compete with the honorable member for Grayndler. The controversial increase of sales tax is an example of what is in the public mind. I do not think there is any doubt that the addition to the price caused by the extra 10 per cent, tax was not the real basic cause for the huge drop in motor car sales. I think every manufacturer and motor car salesman would agree with that statement. Manufacturers could, and did on many occasions, increase their prices by a similar amount without making a dent in their sales. The decline is sales was caused purely by the enormous amount of publicity and criticism, particularly of the temporary nature of the additional tax. This caused a fall that much greater than would normally be expected.

Perhaps the most recent example of adverse criticism and its psychological effect came surprisingly enough from Sir Douglas Copland who predicted that unemployment would reach 150,000 to 200,000 next year. This is an amazing statement from a man with his knowledge of economics. He must know that it would have a tremendous effect on the public mind. Even if he believed it - with his knowledge of the Government's policy, I very much doubt that he did - he could have approached the matter in such a way as not to create panic, depression and gloom, which leads to the outlook that we want to avoid. Any responsible person should know the dangers of financial panic, which can upset the most carefully planned economy. Sound and constructive criticism is always necessary and welcome; but thi irresponsible, extravagant language used by the Leader of the Opposition (Mr. Calwell) when he moved this motion of no confidence was amazing to hear. Let us look at some of his statements as recorded in " Hansard ". He said that the country is in a desperate position, that from the Government's bungling will come the misery of depression, and that the tragic conditions of unemployment are unbelievable. These impressions exist only in the minds of Opposition members and such statements, I regret to say, are an expression of their hopes. This country has never been so prosperous. I believe that it will continue to be prosperous unless the Labour Party and other self-interested critics succeed in their tactics of panic and gloom. They have been successful in forcing the Government to change its economic policy more often than otherwise would have been necessary. To obtain a more balanced view would be a tremendous help.

Undoubtedly inflation is the great enemy of our economy. Last year, when it was so clear, it was the main topic of conversation of leader writers and all thoughtful people. Members of the Liberal Party were continually referring to its dangers and the critics wanted to know what the Government was doing about it. Actually it was doing something at that time. As soon as the Government takes any direct action - in fact, any action whatever - to correct inflation it is bitterly attacked. There has never been a truer statement than that the Labour Party's policy in relation to inflation is like Satan rebuking sin. Labour wants disruption. Members of the Labour Party want the people to be dissatisfied so that Labour will be provided with an opportunity to attain its own ambitions. But Labour will have a colossal task in trying to convince the people that this country is being ruined.

I recently drove from Adelaide and through Melbourne to Sydney and Canberra on week-days. What did I find? I found that the roads were crowded with motor cars and that motels dotted all over the country were full by 5 o'clock in the afternoon. In every town and village at which I called the shops were full of goods and hundreds of shoppers were buying those goods. In spite of the magnitude of the problem associated with our balance of payments, great quantities of goods are being imported and people have plenty of money with which to buy those goods. But if we were to believe the Labour Party, we would regard the country as being ruined.

I was interested a few days ago to see in a Sydney newspaper an article headed, I think, " Give us this day our daily water ". That article contained statistics which showed that the daily consumption of water in New South Wales was 19 gallons per capita - 19 gallons for every man, woman and child in the State. The statistics revealed also the interesting fact that the people of that State drink 24 gallons of beer per capita per annum. I am not too sure whether the statistics covering the consumption of beer were included in those relating to the consumption of water, because beer is 95 per cent, water, but clearly there is nothing wrong with a country which can produce luxury commodities to that degree. Such articles can be read in the press daily. I repeat that the Labour Party will have a hard job trying to convince the people that we do not enjoy high standards of living.

Unfortunately, in the process of trying to convince the people Labour spokesmen scare them a little. That has a tremendous effect on our finances, which depend substantially on the confidence of the people.

As any one with a small knowledge of economics knows, our whole economic structure is built upon confidence - confidence in the belief .that we can put our money in the bank and draw a cheque when we want to. Whether we save or live up to our income, our financial affairs are based upon confidence. It is the task of the Government to maintain that confidence in the face of the predictions of the Labour Party and, unfortunately, of our great newspapers and interested group organizations which are producing publicity that confuses members of the public who have time to read only the headlines.

I believe that is why the Government is accused of being a stop-go government. The basis of such accusations is the psychological effect of the stop-go publicity that is directed against the Government. Therefore, any counter-action that is taken by the Government must be of a stop-go nature. I believe that it must be, and always will be, the task of the Government to counter undesirable economic movements as they become apparent. The Government has nothing to be ashamed of in having altered its policy in accordance with changing circumstances. The Government can be proud of what it has done, it can fully justify its actions, and the people of Australia will learn the wisdom of what has been done.

Let us face another fundamental fact. We cannot have it both ways; we cannot have boom conditions and at the same time curb inflation without controls. Nor can we have depressed conditions and control deflation without controls. To suggest otherwise would be just as stupid as saying that if we had some eggs we could have some bacon and eggs if we had the bacon. I believe that the controls that the Government has imposed are not contrary to Liberal-Country Party policy. Moreover, they are not the kind of controls that a socialist government would impose. So, I appeal not to members of the Labour Party - that would be a waste of time - 'but to the responsible people and to the newspapers to remember the great responsibility they have to assist in maintaining a stable economy. Let them take note of the tremendous psychological effects of biased and selfish publicity, which could undermine their very existence.

Let me give another example of what can happen. Just recently, I met a few men at an hotel at about half-past five in 'the afternoon. They were all talking about bank credit. One fellow said, " By Heavens, things are bad with this restriction of credit. My friend has only £30 left in his bank account and they will not let him draw a cheque for £10." That is an example of the psychological reaction that is caused by biased publicity. It illustrates the danger of irresponsible criticism of credit restrictions such as we have heard to-night.

Mr Curtin - How did he manage to have £30 in the bank?

Mr HALBERT - He was more thrifty than you are. The newspapers know the real value of advertising and its effect on the minds of the people. Newspaper proprietors continually see the value of advertising to their customers, but there must be truth in advertising for the customer to continue to prosper.

The Labour Party endeavoured to make a point from the statement of the Minister for Labour and National Service that it was difficult to maintain full employment. Any fool should know that it is difficult to maintain full employment. Most other countries have found it impossible to do so. This is the one Government that has been able to maintain full employment, in spite of all the difficulties with which it has been confronted. The maintenance of full employment is so difficult that the Labour Party would find it impossible; but we can, and will, continue to maintain full employment no matter how difficult it is.

Strangely enough, I have found myself in agreement with a small part of an otherwise particularly biased leading article in to-day's " Sydney Morning Herald " in relation to a statement by the Treasurer. It was stated in the article that the Government could not claim full credit for Australia's wonderful prosperity. As 1 have indicated, I agree with that statement, because the greatest part of the credit must go to our primary industries, which have provided the real wealth for our high standard of living. But this Government has provided the political climate in which those industries have been enabled to provide that wealth. The average Australian is inclined to regard prosperity as being the greatest amount of money he can obtain for the smallest amount of work he can do. The prosperity that is enjoyed by the average Australian is derived largely from the huge wealth that has been created by our primary industries. But rising costs and falling overseas prices can kill, and nearly have killed, the goose that is laying the golden egg. Whatever else the Government may do, never let us forget that our standards can be maintained only by our basic primary industries.

Every Australian must think in terms of the long-range advantages and not allow himself to be obsessed with the short-term disadvantages. This Government is not prepared to allow a repetition of the booms and depressions of the past. Our critics exhibit a remarkable capacity to allow the past to become a bygone and not a lesson to be learned. They allow the past to become a memory and not a piece of useful evidence.

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