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Thursday, 23 March 1961


Mr DEPUTY SPEAKER (Mr Lucock - Order! I remind the honorable member that his remarks are directed to the Chair. The Speaker of this House has not done any of the things to which the honorable member has referred. I ask him to bear that in mind, and to direct his speech to the Chair.


Mr REYNOLDS - I am sorry, Mr. Deputy Speaker, I did not intend to identify the Chair with my charges. The Government is responsible for these things. We are discussing the application of the sales tax to the motor industry. For some years, the Government has identified itself with the enormous increase in the production of motor cars, refrigerators, television sets and other consumer goods. The election propaganda of the Government mentions these things. The Government has encouraged the people to invest their savings in these goods. Now the time has come when the Government describes these goods as unessential, and has introduced financial measures which are strangling out of existence the ventures that it encouraged.

Only recently, the Government applauded the introduction to Australia of yet another product of the motor car industry, the Ford Falcon. The Prime Minister was present at the opening of the works, although the Government was then on the eve of declaring that the production of cars in Australia was out of all proportion. Only a few weeks earlier, the Government applauded the fact that one person in four in Australia had a motor car. The Government cannot have it both ways. The Government encouraged people to go into nonessential industries at the cost of other urgently needed amenities such as homes, schools, hospitals, water conservation and sewerage. If the Government encourages luxury ventures, it has only itself to blame for the present position in which it finds itself. The people of Australia see a socalled free enterprise Government imposing vicious credit restrictions on industrial entrepreneurs whom only a few weeks ago it was encouraging to go full tilt into production. I have such people in my electorate and so also have other honorable members.

A person in my electorate was encouraged to set up a freezing works in which he was processing goods, some of them for export. He came to me because he had been hit by the credit restrictions.


Mr Duthie - His funds were frozen!


Mr REYNOLDS - That is so. He had been encouraged to build and to set up killing works in country areas. All the work was supervised. The person concerned had approached me previously to get assistance from the Government to build. Now he has come to me because the bank overdraft he had raised to conduct the business in which he invested his life savings has been reduced to £150. It is not just a matter of the disemployment of people in the community. The Government has hit the business section. The smaller businessman, who has not the resources of share capital that the larger businesses have, has been hit very hard indeed, as have his employees. The Government encouraged him to engage in industry. It encouraged him to invest his savings in his business and then, in the next breath, it tells him that the productive effort in which he is engaged is unessential and that the resources it is using must be diverted to other productive efforts. Then the Government has the temerity to chide the Australian Labour Party with being a control party.


Mr Turnbull - With being a socialist party.


Mr REYNOLDS - If the difference between the Government's control and socialist control is the difference between this, on-and-off sort of thing - these unplanned, unsystematic controls introduced as stop-gaps - and a systematic, overall plan under which the Australian people, businessmen and employees alike have a clear direction on where the country is going, then I am all for socialism. If honorable members opposite want any assurance, I assure them that the 50,000 to 60,000 people who were inveigled into purchasing motor cars at an inordinately high rate of sales tax resent that measure very much, and think that the Government has a moral duty to refund that money.

The Government promised that it would not hurt anybody unduly. It has hurt people unduly. Apparently there was no need, as it transpired, for the imposition of the extra sales tax. Credit restriction policies of their own accord would have done what the Government wanted to do. The Government professed that it wanted to reduce employment in the motor industry by about one-quarter. Between November, when the increased sales tax was imposed, and February, when it was lifted, the number of motor vehicles registered dropped from 31,865 to 16,754. There was a fall of 49 per cent, in the number of cars registered in that three months, as against a fall of 29 per cent, in the equivalent period of the previous year. The Prime Minister said that the measure had acted in a more vigorous way than the Government had anticipated and therefore it was prepared to remove this increase. The Prime Minister, as- I understood him, felt that the increased sales tax was unnecessary, or was largely unnecessary, and a lot of other observers in the community also believe that to be so.

The purpose of the Government's action was to divert materials and men to more essential industries. lust pausing there, if I may, for a moment, let me say that if a Labour government had talked about ten years ago of diverting goods, resources and labour from what it called unessential industries to essential industries, there would have been a loud outcry in the community. As a matter of fact, I remember that there was an occasion when Labour talked about there being a priority of essentialities as far as production was concerned, and there was a scream from the supporters of this Government about the Labour Governmentsetting out in a dictatorial manner to decide what was essential and what was not essential for the Australian community. We were told that the ordinary market operations in the community should decide this. Consumer sovereignty was supposed to be the be-all. Now the Government finds that this does not work.

After all, consumers are only individual people, making decisions in the dark, not knowing what economic drain they are making on Australia's total resources, and not knowing the international implications of their own spending. Of course it is necessary for a government, armed with the facts and armed with the advice of the experts in the field, to give some sort of consideration to the general picture and act for the general welfare of the Australian people. In the same way, producers cannot know all of the implications of their business decisions. Therefore, it is necessary for governments to act on behalf of the Australian people and of the continued welfare of individual businesses by deciding the broad economic policies within which those businesses are to operate.

The Government talks about day-to-day changes of policy and day-to-day changes in its plans. Does it not recognize that business also has to plan? Deos it recognize the great problems created for business when the Government goes before the people and says, " These are our plans to-day, but they may not be our plans to-morrow "? Is that the context in which a healthy Australian enterprise can flourish? Of course it is not. Is it any wonder that a conservative organ such as the " Taxpayers' Bulletin " should come out and write of a " time of uncertainty "? An article in the issue of this bulletin dated 4th March, 1961, reads -

The days that have elapsed since Mr. Menzies' dramatic eve-of-departure announcement of the reversal of the Government's November emergency financial measures - themselves a complete reversal of professed Government views up to that time - have brought no calming down of the disquiet and uncertainty induced in the community by a series of unpredictable economic moves dictated, many feel, as often by expediency as by carefully weighed considerations.

That is putting it, I think, quite fairly. There is this parade of economic virtue and of the high aims of the Government when, in fact, the Government has not any clearly defined aims. It certainly has no clearly defined, integrated and co-ordinated plans for the Australian people. It is only now starting to recognize that it must bring into consideration the north of Australia. We have members of the Country Party, as well as members of the Labour Party, referring to the lack of a decentralization policy in Australia. These are things that Government supporters and Opposition supporters alike are referring to after twelve years of this Government's supposedly planning a coordinated policy of national development for Australia.

We have reached the position, where the Government says, " Right! We have reduced the level of motor car production in Australia to what we regard as a desirable level." If the Government, believing that to be so, abolishes the increased sales tax, on what is it going to rely? On the continuance of credit restrictions? If the Government lifts credit restrictions, what will happen to those resources that have been compulsorily diverted to what the Government regards as more essential avenues of production? What will happen when the protective umbrella of credit restrictions i; removed? What will happen if those resources start to come back into the field of motor car production and other kinds of production that the Government now regards as unessential? Does this mean that the Government can maintain its policy of keeping resources where it requires them only by a continuance of credit restrictions indefinitely? Is that the Government's proposition? What other plans has it put before the Australian people to maintain what it now regards as an ideal situation? The Government is maintaining this situation only while credit restrictions exist. What will be the position in the future? Will the Government continue these credit restrictions permanently? How does the Government intend to ensure that these resources are maintained in what it regards as desirable production? There is tlo indication of that.

What indication has the Government given to the motor industry of the level of development that it desires to be maintained? The motor industry has no indication of that. The Government gave no indication previously to the motor industry of what it regarded as a suitable level of production. In fact, it applauded every increase in production. Now it says that that Was bad, but it does not give any kind of indication to the motor industry or to all the ancillary industries connected With the motor industry of what is a desirable level of production in that sphere for the healthy development of Australia and the provision of the kind of amenities required by the Australian people. These matters are just left in the air, as indefinite as any other item of the Government's policies. It is no wonder that the Government has to make these stop-gap adjustments day by day to the Australian economy. There is no co-ordinated, farseeing plan. There is no such thing as a five-year development plan for Australia. There is no indication of co-operation with private industry about what the Government wants for Australia in the next five years and what private industry thinks the Australian people ought to have. There is no getting together about these things. Private industry is left to go on more or less in the dark hoping that it is not increasing its production to the point at which one day, arbitrarily, and out of a clear blue sky, the Government will come along and say, "That is taboo. You have to get out of that. You have to reduce your production despite what it might mean to individual firms."

Of course, I have said nothing about the unhappiness of the thousands of employees. I have been talking about the business entrepreneurs themselves. The welfare of the business entrepreneur is, of course, tied up, intimately, with the Government, and vice versa. The Government says that the employees can transfer to other industries, in a flash as it were. There is no problem, in its view, about the immobility of housing. To the Government, there is no problem about carrying over specific skills, which the employees have acquired in a particular industry, to another industry where the skills they have acquired have no current use. That is the kind of context in which the Government glibly talks about transferring people from one industry to another.

I conclude by saying that the community at large resents the half-baked, ill-prepared, injurious and constantly changing economic experiments of this Government. The people resent the way in which the Government arbitrarily extracted vicious increases in sales tax from an unhappy and unlucky group of motorists over a period of about 92 days. They resent the way in which the Government encouraged entrepreneurs to invest their savings in businesses, even taking credit for the increased production they created, ana then, in the next breath, declared the businesses to be unessential and proceeded to slaughter them with financial strangulation, through credit restrictions and unfair competition from low-wage countries. Finally, the Government's hopeless economic policies are likewise resented by the thousands of people whom the Government has already forced out of work, or whose continued employment it has placed in serious jeopardy.







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