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Thursday, 23 March 1961

Mr BARNES (Macpherson) .- I support this bill and I am confident that in doing so I have behind me at least the sixteen farmer members of the Country Party, despite what the Opposition says. I might add, too, that, being a religious group, we also have our own chaplain.

Mr Haylen - You also have your own race-courses.

Mr SPEAKER - Order! I ask honorable members not to interfere with the honorable member in the straight.

Mr BARNES - The honorable member for Melbourne Ports (Mr. Crean), in his usual thoughtful contribution, painted a very moving picture. But that is the traditional attitude of the Labour Party, which has condemned this Government on many occasions when it has introduced measures designed to put a brake on our economy. The Labour Party's criticism of what it termed the horror Budget of a few years ago was even more severe than its criticism of the present measures being put into operation by the Government. The honorable member for Melbourne Ports has admitted that to some degree the present measures are necessary, but he seeks to make the point that if we persevere in the present state of affairs we will have a continuing condition of stagnation. I believe, on the other hand, that there are signs that the economy is picking up and that it will regain its steadiness and progress to an outstanding degree in the future.

Here, I should like to quote from a publication which came into my hands only to-day. It is the " Empire Trust Letter ", issued by the Empire Trust Company of New York, a company which obviously has a large clientele that is interested in foreign investment. I think it may be taken as a summing-up by people in a neutral position of how overseas investors view the measures being taken with relation to our economy. It reads -

Recent indications suggest that the financial spiral in Australia has begun to abate, paving the way for continued strong growth under somewhat steadier conditions. The vigour and despatch with which the Australian authorities attacked the problem has not gone unnoticed in overseas financial centres.

That is a very heartening comment from overseas. The honorable member for Melbourne Ports went on to say that the productive capacity of the motor car industry in December, 1959, was 330,000 vehicles a year. T think it only reasonable to suggest that one never expects an industry to produce at full capacity, and the important factor here is that the expansion of the industry increased in rapidity as the year went on. Figures which we saw recently indicated that one of our largest motor car manufacturing firms was employing 41,500 persons as at 30th June last, and that by 31st October the number had increased to over 43,000. Through the dismissals that have taken place since, the number has now dropped back to what it was at 30th June last year. That indicates that there had been a spurt of expansion which could have been disastrous. I think that it conveyed to the Government the necessity for urgency.

In order to protect our precious overseas balances, which are so necessary to keep our industry functioning and employment at a high level, it was essential to make sure that the measures that were taken were successful. The motor industry was the greatest offender in the reduction of our overseas reserves. As honorable members know, we were spending about £200,000,000 a year on the importation of petroleum and its by-products, rubber, steel, and other commodities used in the motor industry. The Government was reluctant to adopt the measures that it did, but in view of the tremendous expansion of the motor industry in the latter half of last year, the Government obviously felt that it had to be sure that the measures it took would be successful. The Treasurer (Mr. Harold Holt) indicated at the time, that the increased sales tax on motor cars would be removed when the objective of the Government had been achieved. That has now been done.

We have heard some amazing statements from members of the Opposition. For instance, I heard an honorable member opposite say recently during a debate in this chamber that the Treasurer could have stated that the additional sales tax on motor cars would be removed in three months from the time it was first introduced. What a disastrous effect such a statement would have had on the motor industry! Every car dealer and salesman in Australia would have been ruined. No one would have bought a car until the three months period had elapsed.

Undoubtedly, the Government's objective was reached far sooner than most people thought it would be, due largely to extravagant statements published in the press. The press has joined the Opposition in criticizing the Government. Fortunately, not all the newspapers in Australia have done so; there are still a few that take a realistic view. Nevertheless, sections of the press have espoused the cause of the speculative elements of the community which are, of course, the best advertisers. These newspapers have shaken the confidence of the whole community and have affected employment to a great degree. Despite all that, the measures adopted by the Government are gradually having the desired effect, and there are indications that our position overseas is improving.

The Minister for Labour and National Service (Mr. McMahon) pointed out recently that in September there was a turnover iri the industrial work force of 6*6 per cent. If we multiply that percentage by the number of months in the year, we have a figure of nearly 80 per cent. Sd) Sir, it cannot be said that the Government's economic measures have had a disastrous effect on employment. The figures indicate that that is not the case. I have followed Up iri my own electorate many stories about unemployment because I am concerned for the welfare of people who are out of work. I went to a man who had had to put off a number of employees; and I asked, " Where are those men now? " 1 found that they had obtained other employment. I know that that has not been sO in all cases. Nevertheless, our record is a really good one in relation to the world employment position. On last month's figures, there is 1.9 per cent, of unemployment in Australia, but if we look at our newspapers, such as the " Sydney Morning Herald ", we see that there is still a tremendous number of employment vacancies. Unfortunately, most of them are for skilled workers. Queensland, with 3.3 per cent, of Unemployment, is Worst off. But there is seasonal employment in Queensland and few people realize that the awards for seasonal workers are loaded to carry them over the part of the year that they will be idle. In the prosperity which this Government Has ensured to the people of Australia, those seasonal workers have been in the habit of finding other employment as soon as their seasonal work has ended. Consequently, many such people are unemployed only temporarily, until such time as our meat industry begins to operate and the sugar industry commences operations in a month or so. When that time arrives, the position will right itself.

As has been announced, the Government's measures will result in the acquisition of funds for the construction of roads and the development of areas of Queensland where, it has been found by experiment, pastures can be grown to keep a continuous flow of fat cattle coming forward to the meat works, thus making for continual employment.

The motor industry, Mr. Speaker, has a habit of over-expanding. In America, every few years there is a tremendous surplus of production. At times, millions of cars are unsold in that country, with consequent unemployment in the industry. To*day, there are 1 ,000,000 unsold cars in America. In that country, 7.7 per cent, of the work force is unemployed. Those of us who are engaged in the grazing industry know that after a succession of good seasons some graziers are foolish enough to over-stock. When the inevitable dry time comes along, they have to suffer the consequences. I do not think that industry can expect to be immune from that kind of thing. No doubt many people purchased cars which were subject to the increased rate Of sales tax, only to find that the tax was reduced the next day. But that kind of thing is a part of our way of life. We have a system of free enterprise. We may purchase something before the market falls, or we may purchase something before the market rises. That is just something that happens.

I wish to make a particular plea for a Section of Our motor industry which I believe has been unfairly hit. In fact, I think that it is iri a position that could almost be described as anomalous. It certainly is at a disadvantage with its competitors. I refer to motor dealers who finance their own floor plan. Tn the motor industry, many dealers, particularly in the cities, where the turnover is large, have on display cars which are financed by hire-purchase companies; but in the country, where the turnover is smaller, many dealers finance their own floor plans. For sales tax purposes, those dealers are treated as the purchasers of the cars. They pay the sales tax. Honorable members will appreciate that when the rate of sales tax was reduced by 10 per cent., they lost money, and of course they are unable to obtain refunds. On a Holden car, the increased sales tax amounted to about £80. The competitors of those dealers, in the same towns, who had floor plans financed by hire-purchase companies were at no disadvantage. I make an urgent plea that something be done for dealers in that position because many of them had no choice but to finance their own floor plans.

I know that when the Government's economic measures were introduced it gave- hire-purchase companies in remote areas a great excuse to remove their interests. Because of the cost of repossessions, the outlying areas were not as profitable as were other areas. The dealers had no choice but to finance their own floor plans if they were to stay in business. I am pleased to say that most of the hire-purchase companies are now returning to country areas in a limited way. They do not finance the whole of the floor plan. A dealer may have four cars on display. The hire-purchase company provides finance for two or three cars and the dealer is left to finance the remaining one or two. In most instances, the dealer is not in a position to make a choice. In a sense, these smaller men have followed the Government's idea of living within their means. They have financed their plans without seeking money on the public market, and I believe that they have a very good case for some consideration.

I ask the Treasurer to consider seriously granting some relief to these people. I know it has been said that if the price rose they would have an advantage over their competitors. But in a country town they would not be in a position to enjoy that benefit and, in any event, I believe it is against the law to take advantage of increased sales tax. In a small country town, people know what cars are available and even if the dealers were permitted to take advantage of the increase, they would not have a competitive advantage over other dealers. Of course, when the sales tax dropped, they were at a considerable disadvantage. I should like the Treasurer to consider all aspects of this matter.

The Opposition has been careful to raise another matter, and that is the effect of increased sales tax on country people, to whom a motor vehicle is a necessity. The Government showed that it realized this position when it exempted utility trucks from the increased tax. If a man was in a desperate position and needed a motor vehicle, he could buy a utility truck without paying the increased tax. This has not been mentioned. I know that the utility truck is not as favoured now as it was previously. The station wagon has taken its place to a large extent, but unfortunately more station wagons can be seen in the cities than in the country areas. However, the Government took into consideration the fact that country people need a motor vehicle.

I support this bill. I have full faith that the measures adopted by the Government will result in a continuation of the prosperity that Australia has enjoyed under this Government.

Debate (on motion by Mr. Daly) adjourned.

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