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Friday, 21 November 1941

Senator McLEAY (South AustraliaLeader of the Opposition) . - I do not propose to make a long secondreading speech on this bill because I have had something to say in regard to the proposals' contained in it during my speech on the motion for the printing of the revised estimates and. budget papers. In this time of war it is deplorable that the subject of invalid and old-age pensions should become the plaything of party politics. Prior to the last federal elections, the present Prime Minister (Mr. Curtin) in a policy speech delivered in August, 1940, promised that if his party were returned to office he would increase the rate of invalid and old-age pensions to 25s. a week. On that occasion, Senator Amour, then leader of the famous Australian Labour party (non-Communist) in this chamber, realizing the number of votes that could bo won by airy promises to the pensioners in New South Wales, outbid Mr. Curtin and promised the invalid and old-age pensioners that if the party which he represented were returned to office, the pension rate wouldbe increased to 30s. a week. History relates what has happened since. When the Treasurer (Mr. Chifley) was considering his record budget, providing for no less than £325,000,000, if press reports are correct - and my friends opposite may deny them if they are not - he decided that, in spite of the airy promises made by Mr. Curtin, and in view of the heavy commitments which the Government had to meet, the pension rate should be increased to 23s. 6d. a week and remain subject to adjustment according to the variations of the cost of living. He regarded that as a reasonable rate. The caucus met on the following Tuesday and I can well imagine my friend, Senator Amour, and the other "A" men in the Senate reminding the Prime Minister of the airy promises which he made in 1940. In spite of the fact that the former members of the Australian Labour party (non-Communist) are not over-represented in the Cabinet, they apparently wield sufficient power in the caucus to demonstrate to the people of Australia that the caucus tail still wags the cabinet dog. When the supplementary budget is brought down early in the new year they expect the pension rate to be increased to 25s. a week, subject to cost of living adjustments. At present, proposals such as that now beforeus which make such a heavy demand on the finances of the Commonwealth, and which are of such far-reaching importance, should be debated on their merits on. non-party lines. The. figures relating to the increased cost of the invalid and old-age pensions scheme since its inception are alarming. The increase of the rate of pension and the further concessions proposed in this bill will involve an extra charge on the budget amounting to £2,499,000 for this financial year. We know that the additional cost will increase in the years to come as the result of the normal increase of the number of pensioners and because of the increased cost of living which must be anticipated during the continuance of the war. It is interesting to find that, in 1917, only 25 years ago, the number of invalid and. old-age pensioners was 120,453. During this financial year it is anticipated that the number of pensioners will be 340,000, an increase of almost 300 percent. over the 1917 figures. In 1917 the rate of pension was 12s.6d. a week; the rate this year is 23s. 6d. a week. The charge on the budget in 1917 was £3,500,000; this year it will be no less than £20,000,000. Some people seem to have no conception of the ability of the Australian community to withstand these ever-increasing annual charges without excessive borrowing, without relying on that mythical bank credit about which we have heard so much and which may lead to inflation and disaster. Notwithstanding the fact that the recent loan was successful, the Government still has to raise before the end of June, 1942. no less than £137,000,000. It is suggested in the budget that portion of that amount, will be raised by loan. We know what the Government's taxation proposals will mean to people in receipt of incomes in excess of £2,000 a year. The financial policy of the Government will cause worry and confusion to future Treasurers. I repeat that pensions should notbe made the plaything of party politics.

Senator Cameron - Would the honorable senator give to the old people any pension at all?

Sena tor McLEAY. - I gave my entire support to the national insurance legislation introduced into this Parliament by the Lyons Government, the object of which was fo place pensions on a contributory basis. We shall render the greatest service to our people by divorcing this matter entirely from party politics and by taking the first opportunity to place pensions on a contributory basis. Our old people could then claim their pension;- not as a dole 'but as a right. In 'season and out of season, honorable senators on this side of the chamber have always supported the principle of old-age pensions. Our predecessors originated this legislation. Today, however, the annual cost of pensions has reached a figure out of all proportion to the Government's other commitments. The fir.-t £100,000,000 of the budget is for civil requirements. Out of that amount a sum of £20,000,000 is provided for invalid and old-age pensions, £20,000,000 for repatriation, and £13,000,000 to meet the cost of child endowment. These three social service.* now absorb over £50,000,000 annually. That contribution is disproportionately high. It is out of all proportion to the provision which the present Government proposes to make in the interests of other sections of the community which are suffering great hardships. I refer particularly to the primary producers. A comparison on these lines should make us ask ourselves calmly whether we are handling the problem of pensions and social services generally on a fair basis. An annual payment of £20,000,000 in respect of invalid and oldage pensions is economically unsound, having regard to our other. disbursements. Recently my colleague, Senator James McLachlan, referred to the plight of the wheat- farmers. Let us examine the treatment they are to receive at the hands of the Government. The number of registered wheat-farmers based on applications for licences to grow wheat this year is 68,000. The Government proposes to guarantee a price for wheat of 3s. lOd. a bushel f.o.b., on an estimated crop of 140,000,000 bushels. Out of that figure, the farmer will be obliged to meet charges amounting to ls. Id. a bushel as follows: - Freight, 4-kl., storage, Id., handling charges 3£d., and cornsacks 4d. Thus the farmer, on the basis of' a guaranteed price of 3s. lOd. a bushel f.o.b., will receive a net amount of only 2s. 9d. a bushel at country sidings. The total cheque which will be paid on this basis for an estimated crop of 140,000,000 bushels will be £750,000 less than the sum of £20,000,000 to be provided for invalid and old-age pensions. We must also remember that in these difficult days the wheat-farmers are unable to ship the bulk of their wheat. Consequently, they must face considerable losses owing to deterioration as well as increased storage charges. At the same time, the Government states airily that farmers on marginal areas will be transferred to land suitable for wheat-growing, and those in financial difficulty will be . assisted under the rural debt adjustment scheme. But so far it has made no provision to do any more for these people than was done by the Menzies Government. The Government should weigh carefully the serious problem that will confront our rural industries in the next few years. We shall be unable to ship the. bulk of our primary produce; and when the war is over, owing to increased costs of production, we shall not be able to compete on the world's markets. We must cut our suit according to our cloth. The bulk of the increases of indirect taxes imposed by the present Government amounting to £9,000,000 will be borne by the primary producers. At the same time, the rate of invalid and old-age pensions is to be increased next year to £1 5s. a week. Having regard to probable further increases of the cost of living during the war, the rate may reach as much as £1 1.0s. a week.

Senator KEANE - The rate of pension in New Zealand is.£l 10s. a week.

Senator McLEAY - If this Government were prepared to follow New Zealand's example, and place a direct tax of 10 per cent, on incomes as low as £100, we too might be able to be so generous to our pensioners. However, honorable senators opposite are prepared to-day to eat the words they uttered in criticizing the principle of indirect taxation eleven months ago. They now intend to rely on indirect taxes. The rate of sales tax will be increased generally by 100 per cent., bringing the rate to the exorbitant figure of 20 per cent. Increases of indirect taxes to be imposed by this Government during the next, year amount to £9,000,000, made up as -follows: Sale3 tax £3,500,000, postal charges £2,000,000, customs and excise duties £3,500,000. At the same time the Minister for Trade and Customs (Senator Keane) talks about the old-age pensioner enjoying his smoke, and, I presume, also his beer. Does he not realize that the pensioners must also purchase soap, toothpaste and other articles on. which the rate of sales tax is to be increased by over 300 per cent.? I can imagine "Eather Christinas ", during the coming vacation, attending a meeting of old-age pensioners and explaining to them what this Government has done for them. But, is he prepared to tell the truth to the pensioners and the housewives? Is he prepared to say to them, " Yes we have increased the rate of pension. You can put, the increase in one pocket, but by indirect taxes, we shall take it out of another pocket? "

Senator Gibson - And a , bit more with it.

Senator McLEAY - Yes. I have already criticized, the Government's proposal to increase the sales tax on building materials by 100 per cent. I again remind honorable senators opposite that the only houses which will be constructed during the war will be those required by people on the lower levels of income. What has the Prices Commissioner to say on these matters? In a statement, prepared by him which was read by the Minister for Trade and Customs last, night, he differed entirely from the Minister. The latter says that whilst the duty on tobacco should be increased, the retail traders should sell it at a loss. The Prices Commissioner is not a politician.. He is not given, to making airy promises. He approaches these problems intelligently. He says, "Yes, we shall increase the sales tax on these items; but we shall allow the retail traders to increase prices accordingly". It is obvious that owing to increased prices generally, the pensioners will lose the benefit of their extra pension. This increase will be entirely fictitious. During the approaching Christmas vacation Ministers should place these facts before their masters.

The Minister for Aircraft Production (Senator Cameron) appears to be dumbfounded. When he makes his next oration to the Australasian Council of Trade Unions I ask him to be fair and tell his masters exactly what the Government's financial proposals really mean. He might very well say to them " Twelve months ago I told you that I opposed the increase of the rate of sales "tax by the dreadful Menzies Government, but to-day I am sorry to .say, I must tell you that we have increased that rate on numerous commodities by 100 per cent,.". I urge the Minister to place the facts before the trade unionists in order that public opinion may be enabled to view these matters intelligently. The Government, must bridge a gap of £137,000,000 before the end of June. I urge all senators opposite, including the extremist element in the Government party, when, they are next tempted to commit this country airily to huge expenditure of this kind which it cannot afford, to bear in mind the facts I have given. It is simply fooling the pensioners to give this rise to them and then deprive them of it by increasing indirect taxes.

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