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Tuesday, 21 March 1961

Mr ASTON (Phillip) .- I wish, first, to congratulate the two honorable members who made their maiden speeches in this Parliament recently. I refer to the honorable member for Higinbotham (Mr. Chipp) and the honorable member for Calare (Mr. England). I feel that all members of this Parliament must have been impressed by the standard of their speeches, and I am sure we all wish them well in their parliamentary careers. I should also like to be associated with the expressions of loyalty to Her Majesty Queen Elizabeth XI. which those honorable gentlemen so ably expressed.

Mr. Speaker,the want of confidence motion which was moved by the Opposition recently and which petered out so ignominiously last week showed quite clearly just how different axe the policies of the various political parties. I hope that the honorable member for Eden-Monaro (Mr. Allan Fraser) will take heed of what I say. On the one hand, Sir, we have an experienced Government which has given unwavering support to private enterprise and freedom from controls. On the other side, we have an Opposition which is pledged to a theory of democratic socialism of which we hear very little these days but which, nevertheless, is still in the platform of the Australian Labour Party. When the honorable member for Eden-Monaro was asked by the Minister for Primary Industry (Mr. Adermann) whether he supported bank nationalization he hedged by saying that he would deal with that later in his speech, but he failed to do so. Is not bank nationalization still in the platform of the Australian Labour Party? Of course it is!

The honorable member talked about controls. There is a big difference between controlling credit and the banking system generally, and bank nationalization. At least the people still have a choice, but under the blanket control policy of the Labour Opposition the people would not have a choice at all. In fact, they would be shackled by controls. There are one or two aspects of the speech of the honorable member for Eden-Monaro to which I shall refer later on and I shall not hedge, as he did.

The honorable member admitted that the Labour Party seeks federal control of prices, capital issues and other things. Here we have a man who professes to be against controls, but would control even the brand of toothpaste that a person buys, the kind of cosmetics used by women, and the type of arthritic cure that people can use! If this is not a reflection of the Labour Party's policy of control and of taking freedom of choice from the people I do not know what is. At the same time, the honorable member built up a great case for his brother who is quite an able member of this House. Goodness gracious me! Why does the honorable member for Eden-Monaro have to try to make his brother's seat safe? I feel that hrs brother is quite able to take care of that himself.

The other interesting thing about which the honorable member for Eden-Monaro spoke was tourist hotels and hotels for the people. In this respect he seemed to differ from some other members of his party. For instance, the honorable member for Reid (Mr. Uren) has raised one of the loudest voices in this Parliament for the erection of luxury hotels in Sydney where there are already a number of them. Here again, we find the Labour Party divided. The honorable member for Eden-Monaro asked why we did not do something about interest rates charged by hire-purchase companies. He knows that these come within the administration of State governments. This shows the lengths to which he will go to usurp State sovereign rights. If he would take over control of hire- purchase activity from the State governments, why not take over transport, education and other State functions as well? This is the man who, as an executive of the Labour Party, would undoubtedly be in a Labour government if we were unfortunate enough to have one elected. This is the kind of balderdash that he is trying to sell to the Australian people.

The Leader of the Opposition (Mr. Calwell) has supported further taxes and controls. He has said, quite frankly, that he is in favour of the federal control of interest rates and capital issues. Honorable members will remember his action in relation to the press of this country when he was a member of a previous government. If that was not the kind of control which usurps the freedom of the individual I do not know what is. In their endeavour to take a short-cut to socialism, members of the Labour Party want to burden the people with the cost of socialism. How they would do that was plainly stated in a recent television broadcast by the Leader of the Opposition. The honorable gentleman said that he would, first of all, restore the federal land tax. He also said that he would introduce a capital gains tax. We have heard very little about this capital gains tax from the Opposition. I should like to hear from honorable gentlemen opposite how it would be applied. I believe that it would apply to a man who sold his own home at a profit because he would have a capital gain.

The Leader of the Opposition also said that he would increase death duties and increase company taxation by between 1s. 9d. and 2s. in the £1. All this would be the cost of socialism which Opposition members are endeavouring to foist on the people. I do not want to say that the honorable member for Eden-Monaro is a prevaricator, but nowhere in the " Hansard " report of the speech of the Acting Prime Minister (Mr. McEwen) on the wantofconfidence motion can I or two other members on this side of the House find the word " slavery ". If the honorable member for Eden-Monaro. by interjection, can inform me on this point I feel sure that the House and the public would be pleased to know where that word appears in the speech of the Acting Prime Minister. This shows the depth to which he goes.

The Australian people, over the last ten or eleven years, have become accustomed to a Government of the Liberal and Australian Country Parties. They have become accustomed to freedom from controls. They have become accustomed to a way of life which is the envy of many millions of people in this world and I believe that they will not easily forego this freedom and prosperity. I believe that they will not stand for the type of control which has been advocated to-night and which is inevitable under socialism. Perhaps I might remind honorable members opposite that in 1957 the Federal President of the Australian Labour Party, Mr. Chamberlain, made a speech in which he said -

The target must not be parliamentary seats at any price, but parliamentary seats to be occupied by members of this party, who will go fearlessly into the electorates of this country and expound the cause of democratic socialism.

In this election year, not one member opposite has mentioned the words " socialism " or " democratic socialism " in his speech. Why are they not honest with the people and admit where they stand in this regard? If socialism is in the platform

Of the Labour Party, why are they ashamed of it? I do not think that this Labour Party - this rabble which sits opposite - has the nous or the responsibility to be honest with the people, or, in good Australian parlance, to be fair dinkum with them. Opposition members, each and every one of them, subscribe to socialism, but they carry on as if it did not exist.

During the debate on the censure motion it became more and more evident to the people of Australia that a deliberate attempt was being made by the Australian Labour Party to weaken the confidence of the people in this Government by unwarranted predictions of depression and economic chaos. The Labour Party which so often has attempted to spread gloom has made so many predictions of unemployment that its members are now like the little boy who cried wolf. I think the workers themselves, whom the Labour Party wrongly claims to represent, should take particular cognizance of its attitude during this debate. However, I do not want to deal further with this matter. I believe the Australian people will be the judges.

I want to turn to what I believe "are .constructive suggestions to the Government in relation to its economic policy. During the second half of 1959 when boom conditions began to gather strength, it became apparent to most thinking persons that these conditions could not go on ad infinitum. Some people trimmed their cloth accordingly, but others continued to take risks. It became quite clear that the Government would soon have to take additional economic measures as neither businessmen, buyers nor hirepurchase companies could prudently continue to take as many risks as they were taking. Retailers and distributors became involved in a spree of selling. Goods were being sold indiscriminately and consumers were becoming heavily over-committed. This was not in the best interests of either party, and if it had not been stopped, many more people would have found themselves in financial difficulties. The building industry began to expand far too quickly. Prices for homes were rising and labour and materials were at a premium. The price of land was already high. All these conditions made it most difficult for young people to acquire a home.

For these reasons, I think that the economic measures adopted by the Government were sound. However, I feel that some of the measures took effect more quickly than we expected; but if action had not been taken, undoubtedly there would have been widespread hardship. It is inevitable, too, that some temporary hardship should occur as we regain stability; but the continuing low rate of unemployment under the administration of this Government is the envy of the world, and I am confident that it .will continue that way. There is a growing awareness that the Government acted correctly. Possibly, if its measures had been taken earlier - say in the middle of 1959 and in February, 1960 - they could have been a little less drastic in their application and the period for re-adjustment and recuperation could have been a little longer. Honorable members might say fairly that it is easy to be wise after the event, but the course I have suggested would have had two other effects. In the transition period, we could have more easily made up our minds when the measures had gone far enough and decided what was necessary to prevent violent fluctuations. For the businessman, I think gradual changes are much to be preferred to violent ones. In my opinion, the economy is now soundly based and there is no reason why we should not have quiet confidence in the future.

It is regrettable that many critics have painted too black a picture of what was likely to happen. In so doing, they have created a temporary lack of confidence in the Government's economic measures. This has been most hurtful to the country and, m some cases, to the critics themselves, and has created an unnecessary psychology of gloom. One of the most important problems facing the Government at present is a matter of timing - when to release credit again. This must come. Although the Government's flexibility of thinking was demonstrated in the removal of the additional 10 per cent, sales tax on motor vehicles and we are assured that the subject of credit restraint is continually under review, I suggest to the Government that the time has come now when it should consider whether it would be wise to reverse the Reserve Bank directive to the trading banks that they reduce their overdraft limits. I think we should, rn fact, be permitting them to extend overdrafts.

I say this for two main reasons: First, while some manufacturers have good orders, retailers cannot get the credit to take deliveries. This is creating a build-up of stocks by the manufacturers who themselves are subject to the restraint on credit. They have to keep their factories open while, at the same time, retailers in some cases are refusing to take deliveries and are asking for goods to be forward-dated. This, in effect, means that the manufacturer is becoming a short-term banker to the retailer; and, of course, he cannot stand this arrangement for any lengthy period. A building-up of stocks is taking place in the manufacturing industry and a general SlOW.me1.1 D in activity is quite apparent, particularly in textiles. If this is allowed to continue, the consequences could be unpalatable.

The second reason is this: Rather than take unnecessary risks, manufacturers are temporarily retrenching their employees in order to get into a more secure financial position after two or three years of exuberance. In many cases, key employees are being lost to manufacturers. On the other hand, because of lack of banking accommodation and failure by retailers to take deliveries and pay on time, manufacturers are uncertain about their future. Consequently, I suggest to the Treasurer (Mr. Harold Holt) that the time is ripe for a firm statement as to when credit policy will be relaxed. I note that in his address in Queensland, the Treasurer said that, provided the banks acted reasonably in reducing overdrafts, not only would their liquid assets be maintained but also there would be an easing of credit restrictions, perhaps in June. As the effects of some policy measures have become apparent more quickly than was expected at the time of the statement, I should like the right honorable gentleman to consider permitting a slight easing of credit now. This would have enormous benefits psychologically and industrially. After all, this country has had unprecedented prosperity. We want to maintain it; and certainty is a basis of prosperity. It would be a big help now if manufacturers and allied businesses could get some idea of what is intended as, in many cases, they have to plan their activity months ahead.

I do not absolve retailers and manufacturers entirely from blame for the position in which they find themselves. Many have stock-piled goods from overseas in an attempt to be in a favorable position should import licensing be re-introduced. Retailers have acceded to public demands for overseas goods in preference to goods of Australian manufacture and have committed themselves heavily in advance. It must be remembered that the manufacturing industry is the greatest employer of workers in Australia. Retailers and manufacturers are interdependent and contribute to each other's prosperity as well as to the prosperity of the people. There has been far too much buying of goods from overseas when we manufacture in Australia many goods comparable in quality and price. It may be thought that if manufacturers and retailers were both to set an example and have a far greater component of Australian goods in their store-rooms, and if they encouraged the public to purchase Australianmade goods, they would contribute to their own stability by creating an increased demand for internal labour. Consumer spending would rise and, at the same time, they would assist our balanceofpayments problem.

Let me turn now to housing. We all know that during the last ten years .there has been magnificent development in Australia. One aspect of that development which deserves praise is the housing programme of the Commonwealth and State Governments. I believe that the housing and building construction industry overexpanded in 1960; in the September quarter, houses and flats were started at the rate of 100,000 a year. This rate was 16 per cent, higher than that for the previous year. Construction of commercial, industrial and public buildings was proceeding at an even greater rate with enormous demands on building resources. A large percentage of building was speculative in nature. Speculation was causing too many hazardous enterprises to be undertaken, with unpleasant consequences for far too many. However. I believe that the sudden slowing up in new building permits and commencements in 1961 has been too great. I should like to see between 75,000 and 80,000 homes commenced each year, and I urge the Acting Prime Minister (Mr. McEwen) to look at this problem carefully and endeavour to ensure that sufficient money is released from the special deposits of the trading banks and money obtained from other sources to permit these housing objectives which I have mentioned to be achieved. According to figures published recently in relation to building permits there has been a substantial ?nd unacceptable drop in the number of permits to build. The impetus of building going on in the September quarter and as late as December has begun to be overtaken, and we all know of the wide effects that the building industry has on our economy. The question is not just one of the building of a home and the timber used in its construction. Such things as linoleum, furnishing, sheets, blankets, towels and all the prime cost items enter into the problem. All these things are made in Australia and are equal in quality to any that we might import from overseas.

Mr Kearney - Are you admitting now that the Government has failed?

Mr ASTON - I advise you to read what the " Century " had to say about you to-day. I am sure that if action were taken now, not on a grand, but on a moderate scale, to make more money available for this key industry, it would pay handsome dividends in enhancing the Government's reputation and in solving one of our great social problems.

Finally, the Government has made it clear that its constant policy is to maintain full employment, to continue our national development and immigration programmes, and to keep the value of money sound. The financial measures which have been adopted are all designed to achieve these aims. It cannot be thought that the Government has rejoiced at having to bring down these measures, especially in an election year. I believe that the Government is to he congratulated on being prepared to take such measures as ?re necessary, even though they may be temporarily unpopular because, in the long run, they will prove most beneficial for the people of Australia.

The position is now the reverse of what it was in 1958, and quick and sensitive action now could save a lot of trouble in the future Action now might prevent the need for more drastic action later, and not a great deal needs to be done. I repeat that our economy is sound. I do not think there is much that needs to be done to keep us prosperous, but I do think that some slight changes in our economic measures are needed to achieve the things that we wish to achieve. I should like the assurance of the Acting Prime Minister that the question of credit will be looked at in the categories that I have mentioned and that credit will be made available to permit home building to proceed on the scale that is desired. I am sure that if the Government, did these two things, any residue of gloom that still exists would quickly abate, that the confidence of the people in the Government would be advanced and at the same time this Government would be clearly demonstrating that its thinking is flexible, that its policy is designed to maintain our aims of full employment and expansion.

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