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Thursday, 13 November 1941


Senator BROWN (Queensland) . - I am pleased that Senator James McLachlan, who has just .resumed his seat, concluded on a high note, which was in striking contrast to many of the remarks uttered by him. I realize that honorable senators opposite are anxious that everything possible should be done to organize the resources of Australia fully, so that we may be able to produce the munitions, guns, aeroplanes and other equipment needed by our fighting forces in order that Australia may continue as a modern democracy. Although honorable senators opposite have referred to the necessity for a national government, and for all of us to pilli together against Hitlerism, they enter into party disquisitions which do not carry us very far. I do not blame them for criticizing the Government, because it is essentia], under our parliamentary system, that there should be an element of criticism. That the present Labour Government has agreed to expend this year a few million pounds more than its predecessor intended to expend shows that it is prepared to organize this country on a war basis so that victory shall be won. Even when the Labour party was in opposition, it did not cavil at the expenditure of money for the safety of Australia. A former Prime Minister (Mr. Menzies) freely admitted that he could not have dealt with a fairer man than the present Prime Minister (Mr. Curtin) when that honorable gentleman was Leader of the Opposition. He did not seek by devious methods to gain office Some honorable senators now in opposition have accused the Labour party of assassinating the Government which it superseded, hut they know in their hearts that that Government was destroyed from within. There was more underground engineering among its alleged supporters than has existed in this country for many years. Subterranean tactics destroyed the Menzies Government and then Mr. Fadden took control, but he held the reins of office for only a few weeks. In my opinion, Mr. Menzies was an outstanding .figure in the parliamentary life of this country. If comparisons were not odious, I should say that he stood head and shoulders above the other members of the parties which constituted the Government of which he was the Prime Minister. So far as I am aware, he was at all times fair to the Labour party; and whenever he gave his word that certain ,action w ould be taken, that word could be relied upon. Those in opposition to him could trust him. Although he was a political opponent of the Labour party, and a con servative of conservatives, he was undoubtedly a big figure in Australian, politics, and he at all times played the game. 'Unfortunately, he did not have those powers of leadership which other Prime Ministers in this country possessed. That was his misfortune.


Senator E B Johnston - Do not spoil a good speech.


Senator BROWN - I speak the truth. I am honestly of the opinion that Mr. Menzies lacked those powers of leadership which are essential in a Prime Minister, especially in time of war. In saying that, I do not wish to detract from his character, or to say anything against him. Rather do I express my disgust at the way in which he was treated by some members of his own party.

The present budget was introduced by the Treasurer (Mr. Chifley) after consultation with the Prime Minister (Mr. Curtin), the right honorable member for Yarra (Mr. Scullin) and others. There was not much time to recast the proposals of the previous Treasurer (Mr. Fadden). The new Government had promised to meet the Parliament on a certain date, and it did so. Soon afterwards, the present budget was presented, and the public has accepted it as a genuine attempt to overcome the difficulties that confront Australia. It is an interim budget which follows orthodox lines. It is true that the Government proposes to take certain action in order to control the private hanks in the interests of the people - action which, a few years ago, would have been called revolutionary. The private banks themselves have practically accepted the dictum of the Government. Surely there is nothing wrong in those institutions being controlled in the interests of the nation! Germany took action in that direction years ago, and to-day the banking institutions of that country are the servants of the nation. The entire financial and economic forces of Germany are so controlled that they give the greatest possible return to the nation. In Germany, finance has been made the agent of the people. The history of private banking institutions shows that the interests of their shareholders have been paramount, whilst the interests of the people have been secondary. The result has been that millions of people have been forced to the brink of starvation in order to suit the interests of the financiers. We have now reached the stage in our development when the private hanking institutions will become the servants of the nation. That is a step in the right direction. Long before Senator Darcey became a member of the Senate, I spoke in this strain. On other occasions I have quoted from a speech made by the right honorable member for Grafton (Sir Earle Page) in the House of Representatives in 1924. He then showed clearly the activities of the private bunking institutions of Australia during the war of 1914-1S, and following years. He told the people how the private banks had benefited by means of unearned increments. I have said before that the action of the banks in those days was a " ramp " unequalled in the history of the world. In Great Britain the banks used their powers in order to fill the pockets of their shareholders. It is possible, as Senator Darcey has frequently pointed out, for the private banking institutions of this country, if uncontrolled, to take charge of the credit issue and to " pyramid " it in such a way as to increase their holdings many times, to the detriment of the people. If they hold any government stock, they oan issue credit to an amount six, seven or eight times the amount of that stock, whether it be in the form of bonds, notes, or treasury-hills. Should a government in time of war issue bonds, stocks or notes, and should those securities get into the hands of the banks, hose institutions are then able to issue credit to an amount several times that of the face value of the securities that they hold. That should not be possible because it means that the banks make excess profits at the expense of the nation even when it is in the throes of war. Surely we have reached that stage in our political and economic development when the Government should control the finances of the country in. the interests of the nation.

I listened very carefully to Senator Spicer when he spoke yesterday, and I admit that he put forward a very good argument on behalf of the bankers. As was to he expected, he advocated orthodox methods of finance. I agree with the honorable senator that a tax on incomes is the fairest form of taxation. All of us who have studied the subject agree that it is fairer to tax the incomes of individuals than to tax them indirectly by devious means through lack of sufficient courage to tax them directly. If we were idealists and could put our ideals into practice, we should agree with Senator Darcey that the best way to finance the country's war effort and its other activities would be by the complete control of the banking system by the people. If we had a unified system of banking and if we financed all governmental undertakings by the issue of money controlled by the Government or by the use of social credit, that would be an ideal system. In such an event, in order that too much money should not be held by individuals or placed in circulation, the Government could use its powers of taxing in order to extract the surplus money from the people. By that means, governments would be able to utilize to the fullest possible extent all the economic powers in their hands, as lias been done in Germany. That would make possible the financing of all essential productive powers in the community, and there would be no need for any man to be unemployed. What I have advocated has the endorsement of a prominent tory financier in this country. I refer to Sir Walter Massy-Greene, who said, I believe, in the House of Representatives that our financial problems could be solved if we had in existence a unified system of banking.


Senator Leckie - I should like to see the speech in. which he said that.


Senator BROWN - I shall have great pleasure in looking up the speech at an early date. Such a statement by an outstanding tory was remarkable, for, in essence, he said that our problems could be solved if we had one bank controlled by the people of this country. The day when that vision will become a reality is approaching. Honorable senators opposite ave as little able to check the advance of monetary reform as was King Canute to keep back the incoming tide. Our friends opposite have criticized the budget. The Leader of the Opposition (Senator McLeay) was very much concerned about the increase of the invalid and old-age pension rate. Senator James McLachlan went so far as to say that the Government should not, increase it. Senator Spicer said that, if necessary, he would take money in the form of taxes, even from the basic wage-earners. After all was it not only fair to increase the pension rate considering the increase of the cost of living? I have not heard much criticism expressed about the increase of soldiers'' pay. It is admitted by our political enemies that the soldier earns his money. As f matter of fact, if we acted rightly the soldier would be receiving much move than he is to-day. Those who are prepared to lay down their lives for their country and their dependants, should be given first consideration. We have been told by every speaker from the opposite side of the chamber that the revised budget is unfair and inequitable.


Senator Cameron - That it is a cowardly budget.


Senator BROWN - Yes, a vicious and dishonest budget. I must confess that I am rather thick in the hide and that these criticisms pass me by ; I have no personal objection to them. Honorable senators opposite say that, whilst we are "soaking" the rich, we are pandering to the voting strength of the great masses of the workers. They would have us believe that they have never pandered to any section of the community. They place themselves on a pedestal and claim a high standard of political ethics. We have been told by honorable senators opposite that this budget proposed to " soak " the .rich and place an unfair burden on a minority section of the community, whilst, at the same time, it will leave untouched the great mass of the people who receive an aggregate income of £560,000,000 per annum. Later, in the same speeches, the same honorable senators have said that as time goes on the budget proposals will bring about an increase of the taxes to be paid by every body and will result in increased commodity prices. It has been said in the House of Representatives by several speakers that, as the result of the operation of the present monetary system, the workers will have to pay more in the future by way of increased taxes, despite the steps taken by the Government to safeguard their interests. If the workers will have to pay, why do we hear these squeals from honorable senators opposite? We know very well that when taxes are imposed, there is a time limit during which the burden of the imposts may be lifted from the shoulders of the workers. The time limit during which the worker is protected has been dealt with on many occasions by honorable senators on thi3 side of the chamber. We all know that, the workers will have to pay in the long run. From one point of view, the workers pay for everything. In reply to the suggestion that the workers are not called upon to pay income tax, I remind our friends, the critics on the other side of the chamber, that the Government has left undisturbed the income tax imposed by the Fadden Government on persons whose incomes do not exceed £1,500 per annum. Listening to our friends of the Opposition, one would imagine that, people in receipt of annual incomes of £1,500 and under paid no income tax at all.


Senator Gibson - No additional income tax has been imposed by this Government on such taxpayers.


Senator BROWN - We all know that no increased direct taxation has been imposed on those whose incomes are £.1.500 per annum and under; but reading the newspapers and the speeches of honorable senators opposite gives one the impression that those who receive incomes of £1,500 per annum and under pay no income tax at all. It is my purpose to disabuse the minds of the people in regard to that erroneous impression. As a matter of fact we have been informed by the Leader of the Senate that, in 1041-42, the direct, taxation imposed on people with incomes of £400 per annum and under yielded to the federal e>.chequer no less than £3,300,000, and to the State governments in State taxation an amount, of £7,000,000, making a total of £10.300,000.


Senator Gibson - According to the honorable senator's calculations of the total collections of direct taxation, 70 per cent, of the people paid' £3,300,000, and the other 30 per cent, paid the balance.


Senator BROWN - I have endeavoured to make my submission in perfectly plain language. I have not endeavoured to camouflage the issue; I have spoken straight from the shoulder so that anybody may understand the purport of my remarks. We know that, as the result of the imposition of increased customs and excise duties, the prices of commodities have risen, and the national exchequer has benefited considerably. It is computed that those in receipt of incomes of £400 per annum and under paid to the Commonwealth in sales tax and customs and excise duties no less than £50,000,000, which, added to their direct contribution of £10,300,000, makes a total contribution of £60,300,000 to Commonwealth and State governments by way of tax. Yet our friends opposite say that those in receipt of £8 a week or less are escaping taxation. It is only right that those who receive large incomes should make greater contributions towards the expenses of the Government, especially during the war period, because they have the most to lose. Looking at this question from the point of view of the people and not from the angle of the financiers and exploiters, we consider that the Chifley budget is fair because it places the burden upon the shoulders of those best able to bear it. That people accept our point qf view is demonstrated by the fact that it Kas been welcomed in many quarters. Certainly, it has not been welcomed by the English Financial News, nor by the mortgage houses and banking institutions; but the people generally have approved of it because they realize that the Labour Government is doing its best to distribute the burden on an equitable basis. It should he borne in mind by all the people of Australia that it is a fundamental fact that the real cost of the war must be borne now. We cannot saddle posterity with the cost of the war. The people of this country and the other belligerent countries must realize that they have to accept the cost of waging the war. It is admitted by economists that governments can do no more than shift the burden of financing the war from one section of the people to another. It is impossible to carry the burden into the future ; it must be dealt with now. Some people have certain financial claims on society. For a consideration they give up these claims for the time being. The Government says, "If you will not exercise these claims on the community for go'ods and services of every description, we shall pay you in return a certain rate of interest. If you place your money in the savings bank, we shall pay you 2$ per cent, interest for it. If you put it into the war loan, we shall give you 3 per cent, or 3J per cent." '-Chey are surrendering certain claims on society. That is all that is being done; and by such means we shall make it possible for the lower-paid workers to continue to receive the same amount in wages as they have received in the past. Of course, the present money problem disguises these facts. It disguises the real truth that the burden of the war is being carried by the people of to-day. I know that there are two extreme points of view of the monetary system. We have the extreme tory view that would sacrifice everything and anything in order to conserve the interests of the financial exploiter. Our present financial system is a system of financial exploitation. It has developed economically from an industrial system of exploitation, which developed from the feudal system of exploitation; and the last-named system developed from slavery. But we cannot stay the march of progress. Just as financial capitalism developed out of industrial capitalism so there will be some form of socialism, national socialism or communism. We have followed developments in Germany, Italy and Russia. We have noted the regimentation of the people in Fascist Italy and Nazi Germany, and also in Communistic Russia. The Government of Germany has become all-powerful. It enters into every walk of economic life. By means of regimentation it gained complete power, and built up a powerful military machine. Some people in this country would have us follow in that direction. Whilst we recognize the power that is inherent in regimentation, at the same time we must recognize that regimentation has a bad effect upon the character of the people and destroys individuality. As Australians and democrats, we believe in the parliamentary democratic system of government; whilst we should take the be3t from the systems overseas, at the same time we should endeavour to preserve all that is best in our economic and parliamentary democracy. ' I am entirely opposed to those weak-minded persons - those who cannot weigh up a situation completely - who would institute in this country a form of Nazi-ism, or Fascism, simply because, temporarily, those two systems enjoy a military advantage over the democratic system. I also realize that because of regimentation, Communism enjoys an advantage when compared with political democracy. But the Parliamentary Labour party has not overestimated that advantage; it has not fallen down on its job and declared that we must destroy our parliamentary democracy and accept some form of national socialism, Nazi-ism or Fascism. We contend that by the exercise of our powers as a parliamentary government we can organize democracy in Australia to the end that we shall get the best results possible from the employment of the whole of our people. It is a good thing that honorable senators on both sides of the chamber should exercise their powers of educational propaganda in order to point out to our people the possibilities of our democracy, and to show to them that if only we develop it to the full we shall beat Hitler, Mussolini or any other dictators who have descended to some form of governmental regimentation. We should do that in order to lift our nation on to a higher plane so far as our economic production and military activities are concerned. T want to see regimentation avoided. We can avoid it only by controlling the financial system of this country. We can retain all of the elements of freedom inherent in economic democracy, and, at the same time, utilize all of the powers at our command to gain the best results. In the past, simply because we have not controlled the financial system in this country, we have witnessed the spectacle of at least 400,000 men being out of work. Even to-day thousands of men in. this country are not being employed in the best interests of peace, and victory over Nazi-ism and Fascism. A good deal of this trouble has arisen because the private banking system constitutes a powerful force in this country in its own interests, and not in the interests of the people, and also because we have not de-centralized industry. Sydney has a population of over 1,000,000 people. Roughly, there are nearly as many people in Sydney as in the remainder of New South Wales. In Queensland we have to some degree avoided that tendency by planning our railway systems on a proper basis. The railway systems in that State do not converge on Brisbane. One system ends at Rockhampton and another at Townsville. We have done good service in Queensland in that respect because we have not followed in tie footsteps of Victoria and New South Wales ; and we are now hoping that with further de-centralization of industry we shall render a greater service to Australia. There has been too much centralization in Sydney and Melbourne. The two preceding governments acted unfairly towards Queensland in many respects by centralizing war industries in Victoria and New South Wales, leaving Queensland to its own devices. However, as we now have a government in power which believes in decentralization, we hope that in the next few months, when the Government really gets into harness, it will give effect to that principle.

The only other matter to which I wish to refer is the Ministry of Information. I believe that that ministry is the most important of our minor ministries. I admit, of course, the greater importance of such departments as the Treasury and the service ministries generally; but of the minor ministries, it is the most important. A Labour government particularly should endeavour to utilize the greatest and the best brains in this community for the purpose of getting the best results from that Ministry. In Germany, the Ministry' of Information has reduced its work to a fine art. At the head of the German Ministry of Information - or misinformation - is Dr. Goebbels; and Litovsky, in Russia, runs a close second. Those men realize the power of the spoken and the printed word. One reason why the fighting spirit and understanding that were so much in evidence during the last war are not so apparent in Australia to-day is because we have not utilized to the full the powers that should be vested in the Ministry of Information. Through that ministry the people should be told the whole truth. As I have stated on previous occasions in this chamber, no one wishes, for one moment, that military secrets should be disclosed to the people. "We have no desire to know the disposition of our naval or military forces. However, there has been gross mishandling of the Ministry of Information in the past, as the result of which the people of this country are not yet fully awake to the dangers that beset them. Any one who reads The Rape of the Masses, which has just been published - I think the author is a Russian, judging by his nam'e, hut he spent much of his life in Germany - will realize the power possessed by Hitler through his Ministry of Information. The Germans have been able to accomplish what, in many instances, army corps could not have accomplished. Their propaganda has percolated into other countries and undermined the opposition of people who would seek to destroy Nazi-ism and Fascism. They recognize, and we must recognize, that only a small percentage of people really think out a problem for themselves. It has been computed that less than 10 per cent, of people are capable of analysing a problem and coming to a definite conclusion. That is because, under our capitalistic financial system, the workers, and the people generally, have not been properly educated. Our educational systems have made the brains of our boys and girls mere repositories of a certain number of facts and data. They have developed the memory of our boys and girls, but not their power of analysis, or the power to think and come to a definite conclusion on any problem. The result of such a system of education is that venal politicians, " shrewdies " of every description and military larrikins, such as exist in Germany have been able by their mass propaganda to mould the minds of the people and lead them in the way they desire. There is no greater illustration of the fact that the mass-mind can be moulded by men who understand this work than the results achieved by the Ministry of Information in Germany. In that country, the great mass of the people have given up their individual freedom. They have had their individuality destroyed, and have become mere cogs in a great machine that is being used to-day by unscrupulous and bloody-minded men for the purpose of imposing their will upon the entire world, let us recognize the weaknesses of our people in that respect, and let us try to overcome those weaknesses by adopting a more effective system of education. Whilst recognizing those weaknesses, let us mould the minds of the people, not for the purpose of destroying individuality, or making of them mere cogs in a machine to be utilized for mass murder, but in order to build up in Australia a fighting force for the development of a real economic and parliamentary democracy. A man who understands the power of propaganda, whether he be called the Minister for Information or the Minister for Propaganda - if he really understands how to "put it over", 'and really knows the mass mind - will organize his department in order to enable the people of Australia to understand completely the terrific problems that confront them. It is useless for us to moan because our people are not fully alive to the dreadful possibilities of the near future. We must understand that they are willing to shed their last drop of blood in order to defend this nation. I do not think that there is a single man in- the community, even a Communist, who is not prepared to give his best in order to safeguard our Australian democracy. Yet we are told repeatedly by honorable senators opposite and by some of our military leaders that our people are unresponsive to the appeals that are being made to the mass mind. Why? The Fadden and the Menzies Governments failed lamentably to understand the proper method of approach to the people.


Senator Gibson - The honorable senator gave Mr. Menzies great praise at the commencement of his speech ; why condemn him now?


Senator BROWN - That is an inane aud stupid remark, and I am surprised that it should be made by some one of the calibre and ability of the honorable senator who has just interjected. I praised Mr. Menzies because of bis character and his integrity; that does not mean, that I must blind my eyes to the truth. The truth about the Menzies Government is that it failed completely to do its jab.

I regret that expenditure of the Department of Information is to be reduced by £80,000. I should like more money to be expended on the department, but expended more wisely than has been the case in the past, so that the people of Australia might be awakened to a fuller understanding of what is necessary in order to achieve victory. Thousands of pounds have in effect been thrown down the sink. Large sums have been paid to newspaper proprietors for advertisements which have been worth absolutely nothing so far as the education of the people is concerned. The Minister for Information has under his control one of our most important war departments, and I hope that as time progresses, there will be a complete appreciation of the powers of propaganda. People of this country must be made to realize the dire consequences of a failure to defeat the enemy with whom we are now at grips.







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