Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Friday, 11 September 1942

Senator McLEAY (South Australia) (Leader of the Opposition) . - At the outset I express the thanks of the Opposition in this chamber to the Prime Minister (Mr. Curtin) for arranging the secret meeting of members and senators to enable Ministers to impart confidential information to us in connexion with the war. I also express our thanks to the Minister for External Affairs (Dr. Evatt), and the right honorable member for Cowper (Sir Earle Page), for the reports which they presented to that meeting on the important work on which they were engaged in the United States of America and the United Kingdom. Both of those gentlemen made hazardous trips and we fully appreciate their safe return. AH who had an opportunity to hear their speeches were impressed with the seriousness of the present war situation. It is now quite obvious that all sections of the community must be urged to do everything in their power to make a 100 per cent, war effort. Both those right honorable gentlemen returned to this country greatly impressed with the splendid performances of our Russian allies in the field, and the heroic stand made by the people of Great Britain. Bearing those facts in mind, it is fitting during this discussion that we who are charged with the responsibility of informing and leading our people should say plainly and bluntly what we deem to be necessary in order to improve our war effort.

We were also privileged to hear an informative address by Sir John Latham concerning Japan and the Japanese people.

Recently the Prime Minister (Mr. Curtin) made it clear that it was with the acquiescence of the Government that supplies originally destined for Australia were diverted to theatres of war where they were more urgently required. In effect, he told the people that the present Labour Government appreciates the fact that in this war Australia's interests are identical with those of Russia or any of our allies. Successes for Russia mean successes for Australia. It is most gratifying to find that the present Labour Government has now abandoned the ostrich-like attitude it adopted with respect to defence when it was in opposi tion in 1939, when the right honorable member for Kooyong (Mr. Menzies) who was then Prime Minister emphasized that if we were to pull our weight it was essential to send our troops to any part of the world where they were required. By so doing we would be rendering the greatest service in the defence of this country. In order to contrast the Government's present attitude with that which it adopted when in opposition I draw attention to the following statement which was made in the House of Representatives by" the present Minister for Social Services (Mr. Holloway) on the 29th November, 1939 -

I shall oppose, even to the point of stretching the law to breaking point, any proposal to send Australian soldiers to fight on foreign battlefields.

On the same day the Prime Minister, who was then Leader of the Opposition, declared -

To test the feeling of the House, I move - That all the words after "That" be omitted with a view to insert in lieu thereof thefollowing words " this House is of opinion that Australia's man-power is required for the defence and safety of the Commonwealth, and is opposed to the despatch of expeditionary forces ".

I am glad that the Government has had the courage to change its views on this subject. I sincerely hope that the opinion recently expressed by the Prime Minister is shared by his eighteen colleagues in the Cabinet.

Senator Collings - What does the honorable senator think?

Senator McLEAY - " Joy shall be in heaven over one sinner that repenteth more than over ninety and nine just persons, which need no repentance." I sincerely hope that the other eighteen members of the Cabinet have repented. However, when I read irresponsible statements made by some Ministers on this subject I doubt whether they have repented. Indeed, I doubt whether there would be much joy even if those particular Ministers did repent.

Before discussing the 1942-43 budget, I wish to take the opportunity of referring to one or two aspects of our effort in Australia, and to say that we exMinisters appreciate the difficult task that confronts all Ministers in war-time. Whilst some Ministers have done good work, it is quite evident in one or two cases that the Ministers are inexperienced and, in some connexions, are making a first-class muddle of their tasks.

Senator Collings - No names mentioned, I hope !

Senator McLEAY - If the Leader of the Senate (Senator Collings) would like me to mention a name, I shall say that the Minister for War Organization of Industry (Mr. Dedman) has a very difficult task, but I am quite satisfied that he is making a perfect muddle of his department. I quite agree with the statement made in the House of Representatives by one of his own supporters, that Mr. Dedman is the man who organizes nothing and disorganizes everything. In commenting on the work of that Minister and his department, I take the liberty of suggesting to other members of the Government that they might help him to save himself a lot of trouble, and avoid a great deal of confusion, by advising him to be prepared, in changing men from less essential to more essential industries, to confer with the experts or practical men in the industries concerned before he gets himself into a mess. I make that suggestion in the most friendly manner, but I know from practical experience that in the abolition of the vest in the "Victory" suit, or the organization of the wool or any other industry, Mr. Dedman has adopted an obstinate attitude.

Senator Collings - Does not the honorable senator like the "Victory" suit?

Senator McLEAY - No, I do not, and I say that when obstinacy is added to stupidity and inexperience it is about time that other members of the Cabinet took action to prevent the unnecessary trouble inflicted on a great number of people engaged in various industries.

In connexion with other departments, the attitude of some Ministers has not helped the war effort. I have noticed on occasions that Ministers have been in conflict with the Prime Minister. We as members of the Opposition object to the tactics adopted and party spirit displayed by one or two Ministers in particular, at this time when we should all pul together and do our best as a united people to put up a united war front.

Senator Collings - The Opposition pulled together so well that they got rid of two Prime Ministers in a few weeks.

Senator McLEAY - The pressure which our political opponents exercised on two men who " ratted " against us was the reason why the Prime Ministers referred to by the honorable senator were deposed from their high office. The people of the world are wondering why Australia, in its darkest hour, has a party Government. When this question was raised in the early stages of the war, the present Prime Minister had to submit it to the Australian Labour party caucus outside Parliament, and that body instructed him not to join in a national government but, if he could succeed in reaching the treasury bench, to do it at all costs, because what they wanted was not the policy of a national government but Labour's -policy, even in the nation's hour of crisis. Although the Advisory War Council has helped, I do not think that it goes quite" far enough. The members of the Opposition on that body have had considerable experience, and act in an advisory capacity. Surely the time has arrived when the Government should be prepared to take in men like Mr. Menzies, Mr. Fadden, Mr. Hughes and others, and give them executive authority, in order to give to the people of Australia a lead from a Government that was doing the best possible for Australia in these difficult days.

In dealing with the depressing aspects of Australia's war effort, I wish to mention one or two things that are causing the public very great concern. I do not propose to spend time in paying tributes to the great body of unionists, or the great bulk of the people of Australia, who are doing their best to help to win the war. So far as that is concerned, there are just as many loyal workers in the Labour .party as there are in our party, and I make no distinction, but I urge both parties to take action against any section of the community that tries to hinder and mar Australia's war effort. Nobody who follows the history of the E. J". Rice case in New South Wales could be other than depressed. There we had the sorry spectacle of two prominent Ministers interfering with the management of the important work of the Commonwealth Aircraft Corporation Proprietary Limited. As a man with some commercial experience, I believe that when Ministers interfere with managements there is no hope of maintaining discipline. Similarly, when Ministers interfere with the conduct of the Army, what hope is there of doing so ? I am pleased to see that one member of the present Government has seen the light and changed his views considerably in that direction. On the 18th August last the following paragraph appeared in the press under the headings of "Dismissed employee to be reinstated " ; " Conciliation officer on overlapping authority " : -

In a judgment delivered to-day Mr. A. Blakeley, Conciliation Commissioner, ordered the reinstatement of E. J. Rice to his former position at the factory of the Commonwealth Aircraft Corporation Proprietary Limited, Sydney, as from the 19th August, on two months' probation. Should the corporation at the end of that period desire a review of the conduct of Rice and apply for such review, he would arrange to hear it.

Mr. Blakeleyheld that Rice was irresponsible and interfering, and had not seriously applied himself to his important work. Neither had he as a shop steward and representative of his union set a good example to his fellows. He was not free from blame in some pin-pricking and vexatious incidents. He considered, however, that Rice should be given another opportunity to apply himself more seriously to his work.

Although warnings had been given Rice, continued Mr. Blakeley, and the corporation's executive had expressed dissatisfaction with him, it would appear that Rice would not have been suspended but for the intervention of the Deputy-Director of Security.

I offer an emphatic protest, first of all, against interference by two responsible Ministers in this matter, and add that, in my opinion, Mr. Blakeley, who had eighteen years' organizing experience with the Australian Workers Union, is not qualified to act in such a case. If any man acting in the capacity of a Conciliation Commissioner can make the findings I have quoted, and then recommend that the man in question be reinstated, it is about time the Government took a hand and insisted on the observation of discipline in so important a factory. On the other hand, this week we have heard the Prime Minister, in launching an austerity campaign, appeal to all to do their best for the war effort. We appreciate the seriousness of the position in New Guinea, the splendid work that our soldiers have been doing, and all that has been done by our allies in the Solomons. We appreciate also the difficulties we are up against in Egypt. We have had speeches from out leaders, and an excellent and highly appreciated address by Sir John Latham to the members of this Parliament. In spite of everything, however, we still read in the press that four coal-mines are idle, and that 2,000 men have held a stop-work meeting in Melbourne because the management will not reinstate a man. who the Conciliation Commissioner recomended should not be reinstated. We have had the experience in one State, where a shortage of coal existed, of ships being held up because the management would not pay the men for time during which they did not work. With these hold-ups in our shipping, knowing that we are up against it, it is time the Government took firm action against the offenders. I am afraid, however, that the Government, because it is a party Government and afraid to split the Labour party, finds it necessary to pander to these people, to avoid offending some of its political supporters.

Senator Collings - Does the honorable senator say we have been pandering? He knows better.

Senator McLEAY - I say most definitely that that is true of any government which, after urging the coal-miners, since January last, to work regularly, and threatening to call them up for military service if they refused, after months of talk and delay, hands over to theCoalminers Union the right to say whether a strike is or is not legal. I again urge the Government to take a firm stand. I recently had the opportunity to attend a welcome home to a returned soldier who had fought on the other side of the world. When he read in the papers about the strikes, and the incident of a coal ship being held up, he said : " One begins to wonder whether some of these chaps are worth fighting for." In the serious position that now exists, I appeal to the Government to apply a firm hand. If it is not prepared to form a national government, and to give able Opposition members executive authority, let it take a firm stand itself. If it does, the members of the Opposition will stand behind Ministers, and give them credit for doing the right thing in this time of crisis.

Senator Collings - The honorable senator will stand behind them, and stab them in the back.

Senator McLEAY - If the Leader of the Senate were stabbed there, perhaps it would be a good thing for Australia. In discussing the 1942-43 budget, I wish to make some reference to the history of the present Government. It is necessary to do that in order to appreciate the basis upon which this budget has been formulated. At the general elections of 1940, the then Leader of the Opposition (Mr. Curtin), in his policy speech, promised increases of various payments, including invalid and oldage pensions. On the other hand, the then Prime Minister (Mr. Menzies) told the people plainly that in time of war promises should not be made because probably they would not be fulfilled. At those elections, the people of five States returned to the Senate a majority of supporters of the Menzies Government. When the Labour party assumed office late last year, the Prime Minister was faced with the obligation to fulfil his earlier promises, and it is true that increases were made in certain directions. Action to improve the lot of members of our fighting forces who are taking their lives in their hands is favoured by members of all parties; but I draw attention to the fact that although this Government has increased certain payments, the recipients have derived little benefits from those increases owing to the substantial rise in the cost of living. During the first two years of the war, when the Menzies Government was in office, the cost of living in this country rose by 7.9 per cent. ; after the Labour party had been in power for six or seven months, the cost of living had increased by 10 per cent, and I understand that the latest figures taken out in July of this year show an increase of 17.9 per cent. Obviously if we take into consideration other figures which are not included in the cost of living series, the increase to-day will be found to be at least 25 per cent, or 30 per cent, above what it was before the outbreak of war. It is interesting to recall that although many protests were made in this chamber by honorable senators opposite against increases of indirect taxation, including sales tax, this budget provides for additional indirect taxation amounting to £14,400,000. Last year, additional indirect taxation imposed by the Labour Government amounted to £15,000,000, so that the total increase is £29,400,000. On what commodities have these high indirect taxes been imposed? They have been imposed upon such items as amusements, alcoholic beverages, and tobacco, which after all, are amenities which are enjoyed by the soldiers, and which they are entitled to enjoy. Whilst I am pleased to note that provision, is made for substantially increased payments to members of our fighting forces, and wider social services, as I have already pointed out, these increases do not mean very much in real money because of the increased cost of living. Therefore, although increased payments to members of our fighting forces amount to approximately £10,000,000, and increased social services amount to £5,500,000, indirect taxation has been increased by £29,400,000. Therefore, it seems that in fulfilling its promises to the electors, the Government has merely taken the money out of one pocket and put it into another.

Any one who analyses carefully the budget, now before the Senate cannot come to any conclusion other than that it is inflationary. Having regard to the possibility of a lengthy war, we are heading for disaster unless we face up to the financial position fairly and squarely. At this stage, I should like to refresh the memories of honorable senators by citing a few figures from the budget. Civilian expenditure for the current financial year is estimated at £109,000,000, and war expenditure at £440,000,000. The estimated yield from revenue is £249,000,000, leaving a deficiency of £300,000,000, and in the course of his budget speech, the Treasurer (Mr. Chifley) pointed out, quite reasonably, that expenditure might even be higher than the figure given. I remind honorable senators also that during the last financial year, bank credit to an amount of £84,000,000 was used. If" that be added to the gap that is likely to exist at the end of this financial year, basing an estimate on the advice of experts, one can only come to the conclusion that the use of bank credit is excessive, will lead" to inflation, and will impair the financial and economic structure of this country. Of the deficiency of £300,000,000, it is hoped to raise £240,000,000 by way of loan; but I understand from press reports that the Commonwealth Bank has intimated that if we raise £150,000,000 on the Australian market, we shall be doing very well indeed. If Ave use £150,000,000 in the form of bank credit this financial year, and add it to the £84,000,000 for the last financial year, we get a total of £234,000,000. At the present rate of increase - £84,000,000 last year and £150,000,000 this year - it is evident that we shall be in a bad position should the war last for another four or five years. That burden will affect,. not merely one particular section of the community, but all sections. I should like to make my position perfectly clear in this regard : I appreciate the Herculean task which confronts the Government in financing this war, and I realize that nothing must be done to impair our war effort. This is a matter of life and death, and I should not like it to be said that I, or members opposite were in opposition, am prepared to do anything to retard Australia's war effort; but I am quite satisfied that we are not doing as much as we should be doing. We are not doing as much as New Zealand and the United Kingdom are doing. Nevertheless, having regard to the immense problem of financing the war, it is wise that we should approach this question cautiously, sensibly and courageously. I doubt very much whether the present Government is doing that, because, when honorable members opposite were in opposition, they secured the support of two independent members to defeat the then Government on the Fadden budget, which, I contend, provided the most intelligent and sane approach to this problem that has yet been suggested, namely, post-war credits. Call them compulsory loans, if you wish, but the fact remains that the principle is the name as that involved in soldiers' deferred pay, and if that system can be applied fairly to soldiers, it can be applied also to munitions workers and others who are paid a great deal more. Obviously, the Government has not had the courage to take that action. It cannot be denied that these workers are enjoying greatly increased earnings. The Government should take a definite stand and compel that section of the community to pay its share of the money necessary to carry on the war, and so counteract the inflationary tendency which is now current throughout Australia.

The appointment of Professor Copland in the early days of the war to control prices was a very wise step. Our pricecontrol machinery has had a steadying influence upon the upward trend which is always apparent in war-time, and I should like to take this opportunity to say that Professor Copland and his staff have performed a difficult task. They are dealing with an economy which is changing from day to day. Obviously, they have not been able to please everybody, but I am satisfied from my own personal experience and association that these men are doing a good job for Australia by preventing inflation, or at least controlling it. I agree that price-control and rationing are essential in war-time, but we must not forget what happened in Germany and other countries whose financial structures were ruined after the last war. Not only are price-control and rationing necessary, .but also it is necessary to increase taxes on those incomes which represent the bulk of the purchasing power of this country, and which are substantially higher because of war conditions. Unfortunately, although the Government committed itself to certain responsibilities by defeating the Fadden Government, it has now shied off the task, and failed to face up to the position. I have no desire to weary the Senate with long quotations, but I consider that the question of inflation is so important that serious attention should be devoted to it. When reading through the Treasurer's budget speech, I was amazed to find that, although certain definite recommendations have been made, these nimble nineteen have failed to take courage in their hands, and do something which might not please some of their political supporters. On page 12 -of the budget speech the Treasurer said -

Owing to the great increase in employment and economic activity, incomes have expanded and spending power in the hands of the people ia now at a rate greatly in excess of the flow of goods and services that the nation can spare for its civil needs. The Government cannot allow this excess spending power to compete against the nation for the additional m an- power and materials that are vital to our defence, or to bid up for the limited goods thatare available for civil use, or to operate in " black " markets and so menace price stability. The Government is determined on this and will take such measures as may be necessary to impose its will.

Why has it not done so? The statement continues -

But whatever direct controls are established for this purpose the excess spending power must be transferred to the Government to pay the fighting forces and for the labour and materials used in producing munitions and war supplies. This is the financial price which must be paid. Whilst relying to a large extent on the voluntary efforts of the people, the Government is resolved that its payment will not be evaded. Effort and sacrifice of comfort by the civil population is the least part of the price. Many in the forces, many of the nation's sons, pay the supreme price of all. No financial price compares with that.

I quite agree; but thisGovernment does not practice what it preaches. I should imagine that the following reference to bank credit was inserted in the budget speech especially for the benefit of Senator Darcey: -

There are some people who think the war should he financed entirely by Central Bank credit. The Government is convinced that in that way lies grave danger.

That is a sound statement, but the Government lacks action. In view of the gap of £300,000,000 to be experienced this year, it is extraordinary to find that the Treasurer glosses over the financial problem in these words -

The amount of loans required this year is large, but its provision is not impossible. Last year we doubled the receipts from public loans and got £120,000,000. If we double them again we shall get £240,000,000, which will take us a long way on our journey.

The Government'sbest advisers say that it will be lucky if it gets £150,000,000.

Senator Collings - The honorable senator is not complimentary to the people of Australia, and the result of the loan will prove the correctness of my remark.

Senator McLEAY - I am prepared to assist the Government all I can in its austerity campaign, but I regard its proposed method of implementing that policy as political "bunk". What is required is compulsory loans. I refresh the memory of honorable senators regarding the way in which the people of New Zealand and the United Kingdom are standing up to the war effort. I shall also referbriefly to the personal incomes in Australia liable to direct taxation for the full assessment year 1942-43. The estimated distribution of income and taxes on income derived in 1941-42 are shown in the following table: -


Ninety per cent, of income earners whose incomes were under £400 a year receive £590,000,000, an increase of £30,000,000 on the previous year. On that class of income, New Zealand has levied a flat rate of 2s. 6d. in the £1. If the same courage were displayed by this Government, it would collect an additional £73,000,000 but it proposes to collect only £23,500,000 from that income group.

Senator Sampson - Does the income referred to in the table presented by the honorable senator include company income?

Senator McLEAY - No, but it includes the distribution of profits by companies.

To honorable senators who often suggest that the Opposition represents only the rich, I point out that the number of Australian incomes over £1,500 a year is only 24,000. There is no country of any importance where the wealth of the people is more evenly distributed than in Australia. It is not popular, of course, to tell a meeting of trade unionists that they will have to stand up to a flat rate of income tax and thus have their tax increased. If the group earning under £400 a year represents 90 per cent, of income earners, it is the main group from which income tax should be collected. If the Government had the courage to collect income tax from that, group by compulsion, a considerable sum could be raised for post-war credits. When we are faced with the problem of transferring from war to peace, our troubles will be quite as great as they were in turning from peace to war. It would be a godsend to 90 per cent, of the people of this country to find after the war that they had a certain sum of money in reserve. They would then fall within the same category as the returned soldier, whose post-war credit is termed deferred pay. I believe that this Parliament will soon be compelled to increase the income tax contributed by the people in the under £400 a year group. I direct -the attention of honorable senators to the fact that the number of incomes below £400 a year and the incomes received are distributed as follows : -

The amount of personal income open to direct taxation is shown in the fol lowing table: -


I now propose to show what the people of Great Britain and New Zealand are contributing to the war effort, and what their expert advisers are asking them


People outside who are whispering about how Great Britain has let us down should analyse the foregoing figures, and read the speech by the Minister for External Affairs on national security. Then they should compare Australia's effort with that of New Zealand and the United Kingdom. Until Australia measures up to what those countries are doing, we have no right to belittle their war efforts by which they are helping to save Australia. Somebody has suggested that if a flat rate of income tax were imposed it should apply to the members of all income groups. The Labour Government made a vicious attack on persons with incomes over £2,000 a year, out only a small proportion of the people have incomes ranging from £2,000 to £40,000 a year. These have been taxed by the Labour Government more heavily than persons in similar income groups in New Zealand and the United Kingdom. Having regard to our war-time economy and post-war problems, I suggest that this matter be re-examined to see if the burden of taxation can be spread more equitably amongst all sections. We shall have an opportunity to debate this matter in detail at a later stage.

Reference was made in the budget speech to the wheat industry. I regret that the Minister assisting the Minister for Commerce (Senator Fraser) is not in the chamber at the moment, because the Opposition has requested the Government to pay the farmers of Australia for the wheat delivered by them in 1939. I understand that lid. a bushel, or nearly £1,500,000, is owing to them, and I have repeatedly requested the Government to pay that sum. Reference has been made to an amount owing for wheat by the Japanese Government, and we have been advised that that money has been paid into a bank and is available. There is still a payment outstanding on the wheat delivered by the farmers in 1940. This sum represents lid. a bushel on a small crop. Those of us who had an opportunity to visit the wheat areas know what a difficult time the farmers are experiencing owing to lack of superphosphate, increased prices of commodities, and shortage of man-power. I shall deal now with the 1941-42 season which produced a crop of 13,000,000 bushels over the quantity of wheat to which the guaranteed price of 3s. lOd. a bushel was to apply. When this matter was discussed some time ago, the Minister assisting the Minister for Commerce said that the representatives of the Australian wheat-growers had agreed that, as the crop exceeded by 13,000,000 bushels the quantity to which that guarantee applied, the price to be paid for each bushel would be 3s. 6d., less charges, on the 153,000,000 bushels delivered. Since then representatives of Australian wheat-growers organizations have written to the - Minister for Commerce (Mr. Scully) and denied that they agreed to any such arrangement. Although in connexion with a previous pool the Government decided to pay an advance of 2s. a bushel in respect of " illegal " wheat grown on unlicensed areas in Western Australia, New South Wales and Victoria, when it comes to paying for the 13,000,000 bushels over the estimated total crop of 140,000,000 bushels the Government refuses to pay anything to the farmers.

Senator JAMES McLACHLAN (SOUTH AUSTRALIA) - What quantity of " illegal " wheat was there ?

Senator McLEAY - I think that the quantity was about 500,000 bushels. I shall show how unfairly the farmers have been treated with respect to the 1941-42 crop by comparing their treatment with that which they received during the years that the previous Government was in office. In 1940 the return to the farmer was 3s. 4d. a bushel at country sidings, and in 1941 it was 3s. 7d. a bushel. For the 1941-42 crop, however, the return to the farmer was only 2s. 7 Jd. a bushel. Those of us who have studied farming costs know that 2s. 7-Jd. a bushel is far below the cost of production. Since the war began, the cost of living has risen by 20 per cent, and other costs have increased also. I therefore ask the Government to reconsider this matter. I doubt whether any section of people engaged in rural industries will be in a more difficult position next season than the wheat-growers of this country. I am amazed at the attitude which the Government has adopted towards the wheat-growers of Australia, and can only attribute it to party political considerations. The Government proposes to pay 4s. a bushel at country sidings for the first one thousand bags of this year's crop delivered by a grower and for any quantity delivered iri excess of 1,000 bags it will make an advance of 2s. a bushel. I understand that about 70 per cent, of the farmers in Australia - mostly small growers - will be paid 4s. a bushel for their wheat, whilst sound and efficient farmers growing wheat in a big way-

Senator Collings - Does the honorable senator suggest that the only inefficient farmers are those engaged in farming in a small way?

Senator McLEAY - The Leader of the Senate may make that statement if he so desires. It is unfair that efficientfarmers, merely because they are farming in a large way, should be asked to accept the ridiculous price of 2s. a bushel for their wheat. Most of them have large commitments.

Senator Ashley - There is no need for them to grow it.

Senator McLEAY - A farmer who produces 3,000 bags or 9,000 bushels of wheat will, under the Government's scheme, be paid 4s. a bushel for the first 3,000 bushels and 2s. a bushel for the remainder. That means an average return of 2s. 8d. a bushel at country sidings. Wheat cannot be produced at that price.

Other important aspects of this subject are the reduction of the supplies of superphosphate to farmers and the shortage of man-power. That shortage will automatically reduce the area placed under crop. Under the Government's scheme there is power for the Government to control the acreage sown with wheat. T offer no objection to that control, particularly in war-time, because it is impossible to export the surplus production. Should the war last another three years, we shall be in an awkward position through lack of storage facilities. In all the circumstances, it would be better to reduce the acreage with a view to obtaining a total crop of 100,000,000 bushels, and then to pay 4s. a bushel at country sidings for all the wheat that is delivered. The payment for 100,000,000 bushels' of wheat at 4s. a bushel would be £20,000,000, compared with £21,000,000 for 140,000,000 bushels at 3s. a bushel.

Senator Courtice - 'What would happen if the crop reached 200,000,000 bushels ?

Senator McLEAY - With a proper system of acreage control in operation, the total production could bekept within reasonable limits.

SenatorCourtice. - There would be a big margin.

Senator McLEAY - Provision could be made to meet that contingency. [Extension of time granted] I ask the Government to reconsider this matter.

I wish now to refer to the reference in the budget speech to a proposal to alter the Constitution. I am convinced that the Constitution needs to be brought up to date, and that at the right time there should be a national convention consisting of the best intellects in Australia, free from party politics, at which the Constitution should be examined in the light of post-war problems. If, however, extreme proposals, framed in the wrong atmosphere, such as the abolition of State parliaments, are brought forward the chance of the referendum being carried will be slight. I should he sorry for any government which had to face the postwar period without some alteration of the Constitution, but, in my opinion, the present time is not opportune for the holding of a referendum.

SenatorCollings. - The time is never opportune for the introduction of any reform.

Senator McLEAY - Although the electors have been asked on a number of occasions to sanction certain constitutional alterations they have done so in respect of only a few matters. Honorable senators will remember that the last proposal of this kind was in respect of powers to control aviation, but even those powers were not entrusted solely to the Commonwealth. Unless the proposals to be submitted to the people be drafted in the right atmosphere and submitted to the people at an opportune time, I fear that they will be rejected. That would be a tragedy, because the post-war problems willbe difficult to meet under the best legislative conditions.

I have already referred to the pay of soldiers and shall not say more on that subject now. We shall have a further opportunity to discuss the proposals in connexion with taxation. I therefore pass on to repeat what I have said previously in this Senate, that at the earliest opportunity the Government should introduce legislation empowering it to send members of the Militia to places outside Australia and its territories. It is unfair to our allies not to do so. At present, members of the Australian Imperial Force and of the Militia are fighting side by side under different conditions. We are trying to build up two separate armies. The Government will probably say that any attempt in the direction indicated would split the Labour party.

Senator Collings - Has that been said?

Senator McLEAY - Yes, on several occasions. In the light of existing conditions, the Government would do well to remove the legislative restriction on full use being made of the Militia so that General MacArthur and those working with him may be able to regard all our fighting men as members of one army. In respect of pay, exemptions and privileges generally, the conditions are the same for both sections of the Army, and therefore I see no reason why their obligations should not be the same. I hope the Government will deal with this matter.

I am not carried away by the highsounding talk and the grand schemes which have been suggested by the Minister for Labour and National Service (Mr. Ward) for post-war reconstruction. References to " a new order ", or " Utopia ", and promises of work for every body at good wages do not impress me. There has also been the suggestion of the almost unlimited use of national credit.

Sitting suspended from 12.45 to 2.15 p.m.

Senator McLEAY - Our first objective should be to win the war. I agree that in planning to win the war we should, wherever possible, prepare to deal with post-war problems. On this subject, in his budget speech, the Treasurer declared : " Our aim must be expanded production and increased population ". Statements of policy by various Ministers will have a direct bearing on the problem of increasing our population after the war because, in addition to the natural increase, we shall be obliged to look to people from Britain, the United States of America and other countries. We must encourage people of the right type to come to this country. It is of the utmost importance that we invite people with capital to settle in Australia. On this point, I shall refer to statements madeby certain Ministers which, I submit, will do more than anything else to retard our progress in the post-war period. Making a plea for Labour's policy of socialization of industry, the Minister for Aircraft Production (Senator Cameron), on the 20th March, 1942, said-

Until the Commonwealth Government nationalizescontrol, Australia will not be doing a complete war effort.

Voicing a threat of repudiation of payment of interest on loans, the Minister for Labour and National Service (Mr. Ward), on the 2nd March, 1942, said-

We should not be asked to pay for the war afterwards by paying interest on any loans that are raised now.

That comment was supported by the Minister for Aircraft Production who on the 5th March, 1942, said-

I, for one, would never dream of criticizing Mr. Ward for expressing a view which has been voiced countless times by the Labour party.

The Minister for the Army (Mr. Forde) made a plea for nationalization of Australia's great iron and steel industry. The following extract appeared in the Argus of the 17th July, 1941 : - " Assumption by the Federal Government of control of the Broken Hill Proprietary Company Limited in the interests of the nation " was demanded by Mr. Forde at the close of the meeting of ' the Advisory War Council to-day. " I believe said Mr. Forde, speaking as principal Labour spokesman in Mr. Curtin's absence in Western Australia, "that strong action of this kind would allay a growing feeling of suspicion in the community that certain huge monopolistic key industries are growing affluent at the expense of the people." Mr. Forde said definitely that it was the considered opinion of Labour members that control of the Broken Hill Proprietary Company Limited should be taken.

That great enterprise has proved during the course of this war what private initiative can do in competition with bureaucratic control. I repeatthat statements by Ministers of the kind which I have just quoted on such subjects as socialization of industry, the appointment of political wages boards, compulsory unionism, vicious and inequitable taxation, and the release of excessivebank credit, will do more than anything else to prevent people of the right type coming to settle in Australia when the war is over. The Government should give a lead in this matter. I am opposed to socialism, and the extension of bureaucratic control for the purpose of peace-time reconstruction. The policy which has so far been pursued in this country of encouraging private enterprise and initiative has proved conclusively what can be done by private enterprise. I sincerely hope that the Government will continue along those lines, and that the Prime Minister will repudiate irresponsible statements on these matters by certain of his colleagues. The advocacy of free expansion of credit is the most dangerous feature of the budget; and the effect of that policy will be felt, not only during the war, hut also in the post-war period. I take the following quotation from Professor Copland's recent book, The Australian Economy : -

The creation of money is the simplest, and may be the least useful activity of the Government. It would be comparatively easy to grant credits to the Government through the banking system, and it might be interesting to pause for a moment to consider the effects of a free expansion of credit. The Government would be able to draw cheques on the Commonwealth Bank quite freely, and as soon as it had brought into employment all idle labour and resources, it would be competing with normal enterprise for the resources available. The result of this competition would clearly be a rise in prices, a rise that would continue as long as the Government was obtaining funds without drawing on the current incomes of the people by loans and taxation. Nothing would be added to the war effort by such a method of financing the war. On the contrary, acute competition between the Government and normal enterprise for resources would lead to confusion and would, in fact, impair the war effort. Moreover, there would be the great disturbance caused to the whole economic structure by an inflationary rise in prices. This would alsobring social unrest. We can, therefore, on all counts, dismiss the alluring prospect of unbridled credit expansion as damaging rather than helpful to a country engaged in the burdensome task of preparing for war on the modern plan of totalitarian warfare.

Senator Collings - Do not forget the word " unbridled ".

Senator McLEAY - I am afraid that when the Treasurer was drawing up his budget he did not appreciate the meaning of that word in relation to the expansion of credit.

The voluntary system and the austerity campaign are the results of political funk at a time when a total war effort is urgently essential. It is compulsory for men to fight ; it should be compulsory for people to lend. The Government is pandering to its political supporters, and the extremists are biting the hand that feeds them. The budget displays evidence of the excessive use of bank credit which is liable to produce an inflation that will destroy a sound financial structure. The Government should drop the party political game and play the national game. This can be done only by a government representing the most capable men from all sections of the Parliament. During eleven months of office, the Curtin Government has spoken with two voices. If lofty sentiments, expressed in glowing terms could win pitched battles, then, indeed, we should now be celebrating victory. The Government has failed to practice what it preaches. In this, our darkest, hour, deeds and not words will bring the victory for which we pray with one voice.

Suggest corrections