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Wednesday, 16 September 1942

Senator FOLL (QUEENSLAND) - An honorable senator can hardly be said to be facing facts when on this subject he quotes extracts only from writings which are detrimental to British rule in India, Apparently, Senator Lamp was not endeavouring to analyze the present situation in India; he merely sought to secure from somebody's scrap-book all of the evidence he could obtain in order to show the alleged failure of British rule in that country. Honorable senators on this side of the chamber, of course, had no idea that Senator Lamp intended to speak on this subject and, therefore, we are not prepared at this juncture to reply to his remarks. However, given the time, we could present just as many quotations from much more reputable people and journals than those quoted hy the honorable senator to show that British rule has not brought about the results in India which he suggested. The amazing feature of his remarks was his suggestion that instead of a measure of freedom and self-government being, granted to India - for which India has been struggling, and which the British Government has been gradually extending to the country, and will further extend when the war situation improves - India should be placed under the control of an international tribunal. The purpose of such a tribunal would be, to use the honorable senator's own words - and they are surprising words from a Labour senator - " to exploit the riches of India ". He used the word " exploitation " over and over again. He said that India's iron ore resources had not been fully developed ; and he quoted statements to show that India could become one of the greatest iron ore producing countries in the world.

Senator Ashley - What is wrong with that?

Senator FOLL - Nothing; but I venture to say that the people of India are just as desirous of exploiting and developing their own iron ore resources as are the people of any other country. They would not thank the honorable senator for suggesting that their country should be placed under an international tribunal whose members would include representatives of- countries which are not part of the British Empire. I should think that Indians would be as resentful of such a suggestion as we ourselves would resent any suggestion that Australia be placed under the control of an international tribunal. We have many things to answer for in relation to the development of our own resources. One of them - and it is proving one of our greatest drawbacks at present - is the fact that we have a population of only 7,000,000. Honorable senators on this side, when they were members of the Government, realized how great a handicap our small population is. I have no doubt that members of the present Government know how much easier the defence of this country would be if we had many more millions of people. I repeat that, in handling this matter, Senator Lamp was most unfair in selecting only statements opposed to British interests. Apparently, they were taken from some Leftist magazine. Let any one who wants to know the real feelings of Indians towards the rest of the Empire analyse the part that India is playing in this war. Hundreds of thousands of gallant Indian soldiers are fighting side by side with soldiers from other parts of the Empire. Thousands of Indians are working in munitions factories and industries which supply goods to this country which are essential to our war effort and which we cannot now obtain from any other source. We know that India has now established its own navy. Many of us have had the privilege of seeing members of that navy, who are now loyally playing their part in this war as Britain's allies. Therefore, I say, let India get, as I hope it does very soon, that home rule and status for which it has been struggling, which has been promised, and which we know will be given to it by the British Government.

Senator Cameron - Years too late.

Senator Leckie - Anything to disparage the British Government.

Senator FOLL - That is exactly the position taken up by honorable senators opposite. Senator Lamp knows that there are in India internal problems which do not exist in any other part of the British Empire. He made reference to the limits of what he called the untouchables of India; but we know that the conditions of those people have not been brought about by anything that the British Government or the British Empire have done. They are the result of certain caste restrictions which operate and have operated in India for centuries. British rule has always endeavoured to break down the distinctions of caste and class existing in thatgreat country. If there is One section in the community that has done more to break it down than any other, and to give the untouchable section of the Indian population some hope for the future, it has been the Christian missionaries. If anything has had a level- ling effect there, it has been the teaching of Christianity. Senator Lamp's speech was untimely and unwise, and he showed a great lack of real knowledge of the internal conditions of India. Every one of us hopes that, just as we go ahead with our own development as part of the British Empire, we shall see India, too, develop its resources, and not have to hand them over to some international commission for exploitation, as the honorable senator suggested.

I wish particularly to emphasize a point made by the Leader of the Opposition (Senator McLeay), when speaking on the budget, in regard to the dangerous condition into which our finances are drifting, owing to the fact that the Government will not stand up to its obligations in its method of financing the war. Senator McLeay made reference to the dangers of inflation, and I think at least one honorable senator opposite suggested that inflation was some old bogy that was always being raised on this side, although there was no real danger of inflation here.

Senator Cameron - It was the Government of which the honorable senator was a member that launched a policy of inflation.

Senator FOLL - Since the budget debate began, we have heard a number of appeals by the Prime Minister (Mr. Curtin) emphasizing the real danger of inflation unless certain types of easy spending are either stopped or considerably curtailed. There is no need to suggest that the danger of inflation is a bogy being raised on this side of the chamber, seeing that the Prime Minister on numerous occasions in the last fortnight has emphasized the existence of a very real danger in that direction. No worse tragedy can overtake a country than the inflation of its currency.

Senator Collings - The budget is framed to help overcome the danger.

Senator FOLL - This budget is not framed for the purpose of overcoming the difficulty at all. The Government is shirking its responsibility by its unlimited use of bank credit in the endeavour to bridge the big gap of something like £300,000,000 in this year's finances.

Senator Ashley - How does the honorable senator arrive at a gap of £300,000,000?

Senator FOLL - If the PostmasterGeneral will read the budget he will see that there is a gap of £300,000,000 which has to be raised partly by loan and partly by bank credit. I .tell the Government quite frankly that either it is ignoring the advice of its economic advisers, or those economic advisers are not giving it the same sound advice as they gave t.n the previous Government, because, in connexion with the last budget brought down by the Fadden Government - the budget on which the Government ultimately crashed - we were distinctly told by our economic advisers what was considered to be the safety margin so far as the use of bank credit was concerned. We abided by the economic advice then given to us, but now a change has come over the scene and this Government has increased by over 100 per cent, the amount of bank credit being pumped into our financial structure, over and above what we were told twelve months ago was the safety margin. This Government is ignoring sound economics. That is what is wrong with it. It will not stand up to its obligation in bridging the gap, but Senator Lamp showed the way in which the difficulty could be partly overcome by the Government.

Senator Gibson - Do not economists ever change their opinions ?

Senator FOLL - They may change them with a change of government, but the bulk of the men who acted as economic advisers to the Government of which I was a member would not, I am certain, be swayed by the political colour of the government, and I believe they would give the same honest advice to any government regarding the financial structure of the country irrespective of what political faith it professed. Senator Lamp made reference to the question of rationing. I believe a great deal of the danger of inflation can be overcome by rationing, but not the type of rationing the Government is indulging in at present, because what the Government is really doing in relation to direct rationing at the present time is to ration the necessaries of life and leave a greater margin of unnecessary spending available in the pockets of the people. If the Government is to carry on rationing to avoid unnecessary expenditure, there is no sense in telling a man, " You shall have only one suit of clothes, two shirts, a couple of ties and handkerchiefs, and two pairs of socks, but all the rest of thi money you have you can spend in any sort of delightful orgy you may like to indulge in ". That is what is going on at the present time. If the Government really wants to save the community from the perils of inflation by means of rationing, then ration every thing from top to bottom. If it i3 necessary to have ration tickets for beer, have them. If it is necessary to ration the pleasures of life, do not be afraid to stand up to your obligations but do not pretend that you are taking away the spending power of the people and avoiding inflation, merely because Mr. Dedman takes away your waistcoat, and the cuffs from the bottom of your trousers, or a couple of buttons off your coat sleeve.

Senator Gibson - Or even a couple '*t inches off the tail of your shirt.

Senator FOLL - Yes, even a couple of inches taken off in that direction will not be sufficient. That is only rationing the necessaries of life and leaving a still greater proportion of expenditure in lb". hands of the public. Surplus expenditure can be made to revert to war loans only by instituting a system of post-war credits or compulsory loans, such as that brought forward by the Government of which I was a member a year ago, and by taxing incomes in the lower ranges as was advocated by the Leader of the Opposition in his budget speech.

Senator Cameron - What about a wealth levy?

Senator FOLL - We have one now, and if the honorable senator asks me whether I believe in compulsory loans, or any other proposal which would make every section of the community contribute a fair proportion to war funds, I say that I do. No one should escape his obligations. A large number of men who have money are not facing up to their obligations in connexion with war loans. That is one reason why I believe in compulsory loans. When I advocate compulsory loans and the taxing of low incomes, I do not suggest for one minute that anything should be done to throw an unfair burden upon the shoulders of one particular section of the community. I contend that that would not be the case. ' I know for a fact that because the return from war loans ait present is comparatively low, some individuals are not subscribing to them although they are quite able to do so. I would like to see every one compelled to invest money in war loans. A large percentage of the people of Australia are loyal and are prepared to do the fair thing. In fairness to that overwhelming majority, compulsion should be used ito obtain money from other people who are not so patriotic. Until the Government is prepared to stand up to its obligations and see that every one in the community, from the top 10 the bottom, faces up to his responsibilities in connexion with our war effort, we shall not avoid the dangers of inflation which are facing us at present. There could be nothing more pitiful than the plea made by the Prime Minister to the State Premiers a few weeks ago in connexion with the curtailment of horse-racing. It is ridiculous that the Prime Minister of this nation, who is faced with" the heavy responsibilities of government, should have to say to the Premiers of the States, " Sirs, would you be good enough to curtail racing in your State ". If racing is harming the national war effort, the Commonwealth Government should take action into its own hands; if money is going into racing or other pleasures, when it should be going into the national exchequer to save this country from the who, after all, are only a few miles away from our northern coast, it should not be necessary for the Prime Minister to plead with the State Premiers.

Silting suspended from 6.15 to 8 p.m.

Senator FOLL - The Government has started at the wrong end by rationing the necessaries of life and leaving luxuries more or less unrationed. The far more commonsense method would be to ration luxuries first. Many people, owing to the occupations in which they are engaged, are greatly inconvenienced by the rationing of necessities. Certain proposals have, of course, been submitted to the Government, which has agreed to the granting of extra coupons to persons whose work is particularly severe on their clothing. I am entirely in sympathy with the principle of rationing, but the budget does not make adequate provision for the raising of the money needed to meet the contemplated expenditure.

At the risk of repetition I shall refer again to post-war credits. I consider that the Government has been unwise in not adopting a system of deferred pay in respect of those engaged in private occupations in the same way as in the case of members of the fighting forces. Sailors, soldiers and airmen will receive a certain proportion of their pay on their discharge from the forces, and this will prove of great value to them at the end of their service. If the war proves lengthy men with long periods of service will become unaccustomed to their usual methods of earning a livelihood, and their accumulated pay will no doubt prove of inestimable value to them during the process of their re-absorption in civil life. Opportunities are presented to people in almost every walk of life to earn higher wages and salaries than they have been in the habit of receiving. I do not begrudge them that money, if they are giving fair value for the remuneration received; but a day of reckoning will come when excessive overtime in many industries and the carrying out by women of work normally done by men will cease. At the end of the war. many persons will be looking for employment, or will give up work altogether, and if they had deferred pay to draw they would have every reason to be grateful. More important still, the building up of post-war credits would result in a steady flow of money into the Treasury for the financing of the war effort. Honorable senators opposite challenged my statement that there is a gap of £300.000,000 in the budget. Portion of this amount is to be provided by loan, and the other part by bank credit, but the money to come from loan is not yet in the hands of the Government. Although approximately one half of the gap is proposed to be bridged by loan money, the Government cannot say that it has the necessary money in hand until the loans have been subscribed. Honorable senators on the Opposition side have never done anything to hinder the financing of the measures necessary for the carrying on of the war; their desire is merely to indicate to the Government their opinion that sound methods of finance should be adopted. lt is of the utmost importance that the Government should look to persons in some of the lower-income groups for greater revenue in the form of income tax than has been gathered from them in the past. If members of the Opposition were viewing this subject from a party political angle, they would imitate honorable senators opposite and say that they would not touch by direct taxation the huge group of income-earners who constitute about 80 per cent, of the people; but the Opposition contends that the war effort cannot be financed unless income tax is imposed on persons in the lower-income groups. Before the war is won it will be necessary for even greater burdens to be borne by all sections of the community than have been carried in the past.

Senator Collings - Does the honorable senator know that, or does he merely hope it will be so?

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