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Thursday, 24 September 1942


Senator A J McLACHLAN (SOUTH AUSTRALIA) .- This debate enables honorable senators to express views on broad lines regarding the provisions of the budget. In view of the truce to which the Postmaster-General (Senator Ashley) has just referred, I feel that one should do one's chiding gently. The assistance which he and his colleagues rendered to the Fadden and Menzies Governments when they were in Opposition reached its climax when, with the aid of two independent members of the House of Representatives, they were enabled to defeat the Fadden Ministry and put themselves on the treasury bench. They must now expect us to chide them,because, as they rightly said themselves when in Opposition, it is the duty of an opposition to point out defects in an endeavour to remedy them. Parliament is the only forum where we can do so. We have not obstructed the Government. Members of the Government, when in Opposition, were not obstructive until they struck a fatal blow at the Fadden Government's financial proposals. We do not take exception to the broad principles enunciated in the Treasurer's budget speech, which, when it was cabled overseas, commended itself to the people of London. The Treasurer himself warned us against the financial dangers confronting this and many other countries to-day. Australia does not face only the physical danger of war; this other danger which has been referred to in language far too gentle as the " gap " in the budget, is almost as great. Unless we can fill that gap we shall bring the country to the brink of a yawning chasm. We shall be overtaken by a catastrophe from which it will take us a very long time to regain our present poise. The principles enunciated in this budget are not exceptional. Indeed, one could cull from it almost exactly the same language regarding sound principles of finance as were to be found in the Fadden budget. However, there is a fear - I hope that it is not well founded and I say that from the bottom of my heart - that we are incapable of filling this gap except by resorting to a method which has already been resorted to by, not only this, but also other governments. I refer to the use of bank credit. Whilst the Treasurer said that there was no reason to suppose that the Government would not get all of the loan money it required, a view supported by the Leader of the Senate (Senator Collings) in this debate, the Prime Minister (Mr. Curtin) himself expressed very grave doubts on the matter. However, the Prime Minister left us in the air. We do not know what the Government proposes to do should its huge loan programme remain unfilled. Every word uttered by my col league Senator Spicer in his very vigourous speech, with regard to the dangers that confront the Government, and which it is our duty as an Opposition to point out, was absolutely justified. There can be no doubt that those dangers exist. Should they overtake us, woe betide those who are responsible for them. They themselves will be overwhelmed not only politically but also economically by such a catastrophe. I pray that such a catastrophe shall not occur. Not only honorable senators on this side but also supporters of the Government should do all in their power to induce the people who are holding on to their money to place it at the disposal of the Government. At the same time, the Government should take care to see that no loose statements are made in respect to financial policy. During the last few days a statement was made by a prominent member of the Labour party, that these loans will not be repaid, and it was blazoned forth in the press. In view of the Government's loan requirements such a statement should never have been made. Certainly, it should never have been allowed to see the light of day, and, indeed, would not have done so had the censor been doing his duty. This afternoon, the Minister for Trade and Customs (Senator Keane), as the Minister representing the Treasurer, supplied a statement showing the tremendous increase of the value of notes held by the public. The sum has increased to £96,000,000. We know that the holding of the banks has remained steady between £14,000,000 and £16,000,000. What do those facts mean? A lack of confidence somewhere. Should not that money be in the hands of the Treasurer to-day? Who is holding it? The big man is not holding it. He is far too wise. Notes will be the first form of money to decrease in value should the Government be unable to carry out its loan programme in its entirety, or to a degree sufficient to make the position safe. In these circumstances, any suggestion that this country would repudiate its indebtedness, and loans which are to he raised because of the exigencies confronting the nation, is unworthy of any man holding a position in the legislative halls of this country. It is most detrimental to the efforts of the Government to secure its loan requirements. Such a statement calls for an immediate pronouncement by the Prime Minister. The principles enunciated in the budget speech are sound. Any Statement that cute across them in this way is most dangerous, and calls for something more than an ordinary rebuke. Those words should never have been allowed to appear in either Hansard or the press. They are not sentiments which the people of Australia, or Parliament, will approve. They are not the sentiments of the .British race. We stand by our obligations. Whatever the result may be, we shall pay back the last penny that we extract from any section of the people. What else could we do? Where is the bulk of this money coming from ? It is coming from the large insurance companies, and represents the premiums paid by policyholders. If a doubt be created in the public mind, and the doubt already exists-


Senator Collings - It looks as though the honorable senator is successfully creating a doubt of that kind. What is his idea?


Senator A J McLACHLAN (SOUTH AUSTRALIA) - I am discussing the matter because a report has appeared in the press that loans will never be repaid. Already, that psychology exists among the people. It is proven bv the fact that the people are withholding a gigantic sum of money. Recently, a friend of mine called on a station-owner at his holding. After a little conversation, the latter informed him that he had stowed away in a certain place beneath his home, £3,000 in bank-notes. Finance is a curious thing; it affects every man and woman in the community in a different way. What was at the back of that man's mind? Probably, he feared inflation. If he did, the most foolish thing he could have done was to keep bank-notes. I remind the Leader of the Senate that not so long ago after some inept words were broadcast over the air, a very large amount in notes was withdrawn from various trading banks in Melbourne and Sydney. I do not know what the exact language used in that pronouncement was; but the remarks of the Prime Minister were construed to mean that there was likely to be a freezing of bank balances, or something of that sort. As the result of that statement, one person, who recently came to this country and had had experience of these dangers, withdrew £3,000 or £4,000 in notes from his bank. He asked the teller whether he thought he had enough to live upon. 3 trust that the Minister representing the Treasurer will impress upon the Treasurer the significance of this tremendous holding of notes by the public of which he gave us details to-day. Our taxation is very severe; but in the main the system is sound. What I fear is that it may become destructive of the revenues of the Government. Already, the feeling is getting abroad that it is not good to earn more than a certain amount. We want every ounce of effort from the people at this moment. We want them to earn all they can, but human nature being what it is, when some persons realize that there is nothing to be gained by earning over a certain amount, they stop at a certain point. That is a matter which the Government should consider very carefully. The Fadden Government was defeated because it proposed to establish a system of post-war credits.


Senator Courtice - I think there were other reasons.


Senator A J McLACHLAN (SOUTH AUSTRALIA) - No doubt there were. The manipulations that take place in politics are not altogether outside my vision, but they are always so unworthy and despicable that one refrains from referring to them in the debate on such an important document as the budget. The Fadden Government was defeated, ostensibly at all events, because of its post-war credit proposals. This Government is endeavouring to get by voluntary effort what Mr. Fadden bluntly said that he was going to take, pay interest on, and convert into Commonwealth bonds. What is the underlying principle of the so-called austerity campaign, and of rationing? It is all very well for the honorable member for Henty (Mr. Coles) or some other supporter of the Government to say, " Oh, it is only to provide against too many goods being taken off the market, and avert a rush for them ". The austerity campaign can mean only that the individual is to have more money in his pock?*, and will not be allowed to spend it. The Treasurer and the Prime Minister hope, by voluntary effort to draw into the coffers. of the Treasury sufficient revenue to bridge this gap. My fervent wish is that they may succeed, but why not be frank about it all ? Why not do what Mr. Fadden proposed to do, hateful and all as it is to me to have to compel people to do anything of that sort? I like them to be free, but they must surrender some of their freedom when the nation is up against it, when their liberty is at stake, and they are fighting perhaps for more than liberty, because I shall presently show that this war means more to civilization than perhaps we at this distance from its centre ever imagine. The austerity campaign and the rationing of goods have all been designed for the purpose of forcing money to where it is needed. In their press and radio appeals the Government is trying to do exactly the same thing as Mr. Fadden was prepared to do, but is using a form of cajolery. It says to the citizen : " You must not spend money on this or that ". What then is he to do with it? That is why I again stress to the Minister representing the Treasurer in this chamber that the Government ought to ascertain where the tremendous portion of the note issue in the hands of the public is located. It is a menace, because it shows a lack of confidence on the part of the people who are holding it. There is no reason why we should not be confident of the future of this country, large as our indebtedness is, because our finance is 'based in the main on sound principles, including a. sinking fund, with which I am glad to say that no Commonwealth government, whatever its political colour, has ever tampered. In reading the budget speech of Mr. Chifley I was reminded of the budget speech of Mr. Fadden, because the same principles were enunciated. The only difference is that the Prime Minister hopes by the soothing tones of his Treasurer to induce the people to pay up by taking out war savings certificates and investing in loans. That is not, in my view, a safe or satisfactory way to budget, but the responsibility for the budget rests with the Government. I feel very strongly that it is our duty to do everything in our power to minimize the danger which not only those on this side of the Senate see so plainly but which the Prime Minister, the Treasurer, and the President of the United States of America see so plainly. It is a danger that is worrying the controllers of finance on the other side of the world, but there they have taken their courage in their hands and have started a post-war credit system. Some think that we should plan now for post-war activities. That would be quite right if we knew what the situation would be after the war, if we could measure up what we had and what the other fellow had, and if there were no Atlantic Charter, to which I understand that our Prime Minister's signature is attached. That charter will alter the whole fiscal system of the British Empire, the United States of America, and probably the whole of the southern states of America. It will open up. a new vista, which some people welcome with open arms, of free trade in all the raw materials of the world. With such a charter before us, knowing that it has had the acceptance of the whole of the dominions, the Mother Country, and the United States of America, we should be bold indeed to plan ahead. I appreciate to the full the wonderful work that I have seen done in factories by youths and women who have come off the land, but my heart sinks within me when I know that we have to provide for those people in some form when the war is over. If we are going to live in an armed world, well and good, and it may be that we shall have to do so. This struggle for supremacy may go on indefinitely. If it does, our outlook must be turned in one direction. We must organize and plan for a war economy extending perhaps over years.


Senator Lamp - Then let us open up the resources of India.


Senator A J McLACHLAN (SOUTH AUSTRALIA) - I shall mention that subject in a few moments, if the honorable Senator will possess his soul in patience. In the meantime, let us examine the problem. Imagine China, our great ally, coming into the industrial world, compared with Australia, which comparatively speaking, has only just started its secondary production. I look askance at what may happen. The basis of our economic life has been our primary production, and it may have to continue so for many years. Certain things we may be able to hold. We may be able to develop our resources in iron, steel and other minerals and retain the great cement industry. There are certain ways in which we are leading the world and we may continue to do so, but I fear that in respect of a number of others, representing what I might call mushroom growths of industry, will suffer. Without desiring to inflame the minds of Senator Gibson and Senator Aylett let me point to the position of the flax industry. We have embarked on the growing of flax, an excellent undertaking. But once let the position in Europe be restored, let Latvia, and the countries on the borders of Latvia, and also Russia, get into full production again and where will be the market for our flax product? If we subscribe to the Atlantic Charter we shall not be allowed to place prohibitive or any other tariffs upon it, and the producers of our flax, which is now essential to us as a war material, will, I fear, be overwhelmed. I say that although at present I am trying to get men -to grow it.


Senator Gibson - It can be made a post-war industry.


Senator A J McLACHLAN (SOUTH AUSTRALIA) - It will have to be produced at a very different cost from that which the producer of flax lias to face to-day, and on a parity with the Latvian or Russian cost of production. We shall have to give the Finns a chance, if we are going to subscribe wholeheartedly to the Atlantic Charter. That is what governs the position. If we are in an armed world, we may carry on as we are and develop certain industries, but the whole question turns on what our position will be when the war is over. I deprecate groping in the dark in an endeavour to make provision for our people, on the assumption that a certain set of conditions will prevail. I take a very serious view regarding some of the secondary industries of Australia. So far as the primary industries are concerned we appear to be in a much better position, and I do deprecate at this stage in the world's history and in the interests of civilization this urging of people to cease production. Our wheatgrowers have to receive government aid and I believe that they are getting it. Our meat, wool and other primary products must help to feed the starving millions of Europe. It is our duty to the Motherland, our sister Dominion of Canada and the United States of America to continue to produce. We must produce all the foodstuffs we can, preserve them as best we can and send them to our own kith and kin across the seas. I applaud the steps that the Government has taken for the dehydration of meat. The dehydration of butter is another important development. It may astonish some who are notwell versed in this process to know that pure milk is already so treated. A cube, which, when put into hot water, will give 26 gallons of pure milk is being produced. The Americans are using it extensively in their camps in Australia.. I understand that as the result of experiments carried out at Homebush, Sydney, it is now possible to dehydrate mutton, including the fat content. Dehydrated mutton is crumbly stuff resembling some of our breakfast foods and it can be compressed into an astonishingly 9ma'll space for shipment overseas. Concentrated foods of this kind are proving of immense value to many millions of our own people who have had to go short. No doubt the experiments will extend to many other foods. Shipping space means everything to-day, and food means everything to Great Britain. Our accomplishments in the science of dehydration is something for which I commend the Government, and I hope that this valuable work will continue to receive the closest attention of our scientists, chemists and business men in the future.

There is another matter with which we are perhaps a little hesitant in dealing, and that is the question of a second front. I do not know how many fronts the United Nations already have, but they are legion. They are fighting in Libya, Madagascar, Europe and on the high seas. In the Pacific theatre, our enemies are approaching Port Moresby, and are seeking to recapture the Solomons. All around us we have battle fronts, and to those who would ask iia to open a second front in Europe.

I say, let us trust our leaders. They are better able to judge than we are, unless I am very much mistaken. If they are not capable of leadership, then they should not be where they are. The responsibility is theirs. I can imagine no greater disaster than the failure of a second front. It would be appalling, and it might mean the end of us. It might also mean the end of our civilization as I shall show presently. I repeat that we must trust our leaders. There is an inclination to be disturbed by the frequent changes in our various commands, but we should not despair. We can rest assured that those who are appointed to responsible positions, are the best men available for the jobs. Recently, I read a passage in which the writer referred to " the awful solitude of leadership " as " the most desolate peak accessible to the human soul ". That description appeals to me. In addition to our military leaders, pinpricking attacks have been made upon all our war-time Prime Ministers. Nobody escapes these petty criticisms, and, after all, what are they? Are we not democrats? Are we not prepared to trust those whom we appoint to lead us? Surely the position is serious enough; surely we realize the danger, not only to ourselves, but also to the British Empire, the United Nations, and the even greater danger to civilization itself. This world convulsion may mean the end of our present civilization if certain forces are in the ascendant. It may mean that we shall revert to the dark ages which enveloped Europe after the fall of the Athenian democracy. Others may have to start all over again and work up to the high pitch of civilization that we have now reached. I am not a pessimist; I believe in the future and the spirit of our race, but we must keep together. We must stand behind our leaders; we must not indulge in these pin-pricking attacks to which I have referred. Let us look at the great service that is being rendered by the individualists of this country. I have heard honorable senators opposite declaim loudly against Mr. Essington Lewis, and then, after learning of the excellent work that he is doing, acclaim him as a man with the greatest organizing intellect in Australia. I have seen these individualists at work. We may call them "gun-boat" this, "battleship " that, or " red " something else, but they have character and driving force, and are giving to this country a service which probably could not be given by any one else. I take this opportunity to pay a tribute to them. I have had an opportunity to examine the work that they are doing, and I have no hesitation in saying that it is of extraordinary value. Wonderful service is being given by individuals like Mr. Nixon, Colonel Forbes, Sir Harry Brown, Mr. W. J. Smith, the Ruwolts, and many others. No doubt, on occasions they make mistakes and do things of which we do not approve; but it is on the individual effort, and on the individual character of these men that we must rely. It may be argued that I am speaking of men who are on my own side in politics, but I pay the same tribute to Mr. Theodore, with whom I have no politicalaffiliations. Mr. Theodore is subjected to constant pin-pricking in the course of the great work that has been entrusted to him. Perhaps, he also has made mistakes, hut after all who has not? We all make them; but at such a time as this, it is hardly in the interests of the nation to mispresent minor matters such as the allegedly luxurious accommodation with which these men are provided, or to claim that Mr. So and so, whose car is fitted with a producer-gas unit, always drives on motor spirit. Such petty attacks are unworthy of us. Mr. Nixon, for instance, is a man who could have been spending the rest of his days on what he has earned, without worrying about the war, and that applies to several others. In addition to the individuals whom I have mentioned, there are others whose work is more or less behind the scenes. For instance, there is a panel of accountants, who have placed their services at the disposal of the Minister for the Army (Mr. Forde) without fee or reward. They have offered their services willingly, and they are at the beck and call of the Minister and of various departmental officials, parliamentary committees, and other instrumentalities which are assisting the war effort. In times such as these, when not only our own safety, but also the future of civilization, is im- perilled, it is unworthy of us as democrats to be so mean-minded as to be constantly hurling brickbats at men who are giving their services in our war effort. We must have these men; we must have their drive, force of character and organizing ability. We must place ourselves in their hands, just as a cricket team or a football team places itself in the hands of the captain. It is true that mistakes have been made, but after all, war is the greatest mistake in the world. These men have been given the task of helping this nation, helping the old Empire, and helping civilization, so give them a chance.

Senator Lamp,for whom I have the greatest respect, made certain suggestions for the improvement of conditions in India. I am sure that the honorable senator will forgive me if I conclude by saying to bini that the interference of any dominion in this matter would savour very much of teaching one's grandmother to suck eggs. The backward nations of the world such as India and Egypt have been the particular care of the Mother Country. Britain has administered, ruled and governed these countries so far as possible with a gloved hand. It. has sought to advance, their peoples in every way. and to protect them against their own civil wars. Were it not. for Great. Britain's influence, those countries would have been in a constant turmoil. For centuries, Britain has been the greatest colonizing power in the world. The British people were the first to abandon slavery; they were prepared to fight for that principle which they knew was right. Great, Britain has wielded its influence in India for the good of the people. It. has protected them from disease, prevented famine, and, with the assistance of the Indian princes, kept peace. A large proportion of the people of India to-day remain loyal to the British Crown. I say these thing's to Senator Lamp because he has not the opportunity that I have had te see what has been done in some of those backward countries. It may interest him and other honorable senators to hear what happened on one occasion when I was travelling through Egypt. With me were two distinguished gentlemen from a country which is very friendly to us at the moment. After they had made a survey of what was being done, they said that the country was in a dreadful state. They pointed out that with machines and other equipment work could be done in a way which would seem incredible to people who were not familiar with modern methods. I asked them if they had ever thought what the result of such changes would he upon a backward people who throughout the ages had worked with their hands in their own way. Britain has placed a guiding hand on all of these backward countries. There is no suggestion that India may not some day be a self-governing dominion. Some Indians have attended universities in Great Britain, with dire results, sometimes to the Motherland, because they have gone back to their own country with rather inflamed minds. These countries must be nursed, and peace must be preserved in them. The people must have something to occupy their minds. They must earn their living in the oldfashioned ways that have been adopted for centuries. They must even have their little carts drawn by oxen, and must cultivate their small plots of land. These methods seem to us to be far behind the times, but heaven forbid that we should alter their customs too firmly, or let loose those forces which in some of these countries divide the people, as no other people have been divided. Religious fanaticism and zeal have cost more human, lives probably than great wars.

Britain has acted as it has in order to preserve the peace and contentment of the people of India. Nobody knows better than that long line of statesmen who have succeeded one another in Britain how to handle problems such as those of India. Certain promises have been made to that country and they will be kept. I do not think that those promises are needed in order to ensure the loyalty of the Indians. Their representatives have attended conferences at Geneva with an enthusiasm for peace which is remarkable. It is true that Lord Lytton led them, but their cultured outlook and reverence for the British form of government amazed me. Let us leave alone those things which do not concern us. The Mother Country has managed for centuries, to the advantage of the Indians, to protect them, and will manage to preserve the great Indian Empire as part of our Commonwealth of Nations. The King Emperor is still the Emperor of India, and will so remain. The people of India have a promise ratified by the British Parliament that selfgovernment will be granted to them at the proper time. This is not the time for us, or for the people of any other part of the Empire, or for India itself, to raise this difficult matter. India is threatened by a foe that would not treat Indians as the British have done. It would not treat them with those principles of kindness and help that have characterized British administration there. We may be reminded that -dive and Hastings have governed in India. We subdued India, and we had to do it in the interests of the people of that country. It may be remarked that we are taking similar action in Madagascar to-day for another reason, but dire necessity compels our forces to go to Madagascar, and it is dire necessity that compelled Britain to impose its administration on India for the benefit of that race which is divided in a manner that could lead only to dire consequences to India itself if the guiding hand of Britain were withdrawn.

Sometimes I feel a little sad to think of the direction in which we are heading. I commend to honorable senators a book that I read recently entitled When London Burns, written by an Englishwoman to an American confrere. We have not realized the brutality of this war, and the brutality of the people against whom we are fighting. Sir John Latham who has returned to Australia, and has been candid with us about what the war in the Pacific means to every Australian, has laid the position bare before various audiences in Australia. We must not preen ourselves that we can make peace. We have to win the war and subdue our enemies. If honorable senators read When London Burns. they will learn what has happened to infants, children, women, cripples, hospital nurses, and patients in hospitals. It makes, one's blood boil and. wish one were younger, so that one might set an example by going to his death in the interests of our civilization, rather than be the slave of those who possess such ele- ments of cruelty in their nature as do our enemies. They can be described only as- barbarians. We should realize the tremendous advance that we as a British, people have made. Having had. all the advantages of education and refinement, hatred of cruelty seems to have been bred in us as a race. These things are too precious to lose, and, therefore, we must fight for the retention of our civilization. Therefore,. I say to the Leader of the Senate, " Let us not be provocative ".







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