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Budget debate - Senate notes for speech

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Senat e Hon. V. C. GA€R

Leader Democratic Labor Party Phones: Canberra, 705 Ext. 523 Brisbane, 310101 Ext. 436







The Budget brought down by the Treasurer last week contained some important nci1 provisior}s and changes, and some notable omissions.

I propose first to deal with what it did contain and later, with those areas which deserved and warranted attention but which have been ignored-.


The most notable and most alarming feature of the Budget was the 5% reduction in defence expenditure, which included- (a) an v87 million reduction in overseas defence expenditure, and (b) large reductions in Navy, Army and Air Equipment purchases:

Despite this big fall in the amount of money devoted ' to the defence of this country, the Treasurer had the hide and the audacity to say that it "does not amount to a reduction in our defence effort."

• '. Few people have been fooled by this statement for they recognise it for what it is - untrue and ridic.ulous..-In retrospect, the reduced expenditure can be seen as the logical extension of the Prime Minister's earlier, flirtation with the "Fortress Australia" approach to defence. However, the flirtation has now developed into a period of

intense infatuation. I trust that-the Prime Minister'will see the error of his wa y s before it is too. late.

What has made this reduced defence expenditure more alarming is that it comes only six weeks after the warning by the Minister for Defence (Mr. Fairhall) of Russia's growing influence in the Indian Ocean area.

It has also come at a time when we are only two years away from Britain's planned total withdrawal from South East Asia and there is growing talk of the United States' reduced involve-ment in the area.

These three factors - (1) growing Russian influence in the Indian Ocean area, (2) Britain's planned withdrawal after 1971, and (3) resurgence of U.S. isolationism, all point to increased defence expenditure not reduced defence expenditure.

The Government, through its reduced defence expenditure, has defied logic and good sense. It has moved in the direction of the isolationist A.L.P.

Yet, there is logic behind the A.L.P's isolationism: a wear Leader, communist influence through the trade unions. There is no logic behind the Government's change of position. The D.1,.P.;has retained its position on the political scene: it

is the Government which has moved.

Australia's defence forces are woefully weak.


2 i ti

They are not even self-sufficient. They do not have

the helicopters or artillery or planes to fight modern wir arid would be incapable of operating in Vietnam, for instanc'o; without American help. They need this equipment urgently so

they can stand'on their own feet, or at least in their own helicbpters.

The'I';ir Force lacks any modern ground support plane. The Navy sacks any Indian Ocean capdcity.

The strength of Austral±a's .armed forces . is much tao; weak given. botli the defence problem ire face and the capacity of the Australian economy.

Yet what does the Gorton Government do? It slashes defence spending.

It actually reduces he defence capacity of the country by cutting 60 million off the defence vote!

Naval construction is cut $10.2m, purchase of naval aircraft is cut 0.6m and the purchase of stores is slashed by '; 0. 5m .

The Army's allocation for arms and equipment is cut by 22.4m, expenditure on bases and accommodation by 1.5m.

The Air Force's purchases of planes is cut by ;73.5m and its expenditure on base facilities by 6.4m. In the Department'of Supply, research at the 11eapons Research Establishment and the Defence Research and Development Laborat-

ories is 'cut by v2.3rn.

The only significant increases are in wages and salar--ies =;. an,d even these have been kept much too low, given the servi,ces' grave shortages of manpower and poor morale due to lagging pay.

In absolute money terms the def'-ence vote is the lowest for three years. The amount spent in 1967-8 was ;11,115 million, in 1968-9 )1,165 million and this year a 1104 million •is budgeted.

The 1969-70 allocation for defence is the lowest proportion of the total Commonwealth budget for five years. In 1965-6 it was 15% of the Commonwealth budget, in 1966-7 17.3% in 1967-8 19.0%, in 1968-9 17.8% and this year defence is budgeted at a mere 15.8%.

The trend is very clear. The Gorton Government is just not serious about defence. It is even prepared to let the modest-enough defence buildup of its predecessors, the Menzies and Holt governments,f ade out through financial starvation.

The Government talks blithely of beginning "design studies" of replacements for the present destroyers as if there is no need to add to the strength of the fleet. It talks of replacements for the Mirage fighters in the late 70s as if there is no need for ground support and transport planes and helicopters.



And gr-eat news for the undefended West Australians: it is going to recondition some dockyards in Sydney Harbour!

Australia must have enough defence,., to make it worth' no one'Ts while to take us on. This country. could never have the strength to survive against all-out attack from every power which might want to put the pressure on us.

But it does have the potential strength to deter attack by deploying a defence force which could make it cost an aggressor very dearly. Australia can and must develop the strength to make bully-powers think twice.

At their present size and level of equipment, the Australian defence forces are quite inadequate. The Navy hardly has the strength to defend the Australian fishing waters let alone our shipping lanes.

The Australian three battalion force in Vietnam fights bravely but is too small to give Australia any say in the negotiations.

The one battalion force in Malaysia is enough to fly an Australian flag, but so small it is a wonder that the Malaysians really care whether it is there or not. And the fiasco over the F-ills are enough said about the problems of the Air Force.

Without adequate defence to provide security against potential threats from our unstable neighbours, everything else that the nation may do is in jeopardy.

;'T hat good are fine social welfare schemes if the country is liable to be threatened and coerced and even taken over. Within a generation it has happened in Czechoslovakia twice and no 'one has raised a finger to stop the aggressor. What good are the economic reforms and social progress in Czechoslovakia when the country`s defences were inadequateto resist a barbarian invader? It has happened elsewhere in the world and. it can happen here:

Australia faces no such immediate threat of course, though if Mr. Freeth had his way and got the countries of South-East itsza entangled in a "security arrangement" with the Russians, with Russian military forces all around, we would be very vulnerable.

But we do already have an increasing Chinese and Russian capacity for troublemaking and aggression Indo-China may become a unified and powerful Communist state.

Indonesia-stricken with economic difficulties and secessionist movements - may well turn left-extremist again or to a religious extremism of a nationalist or rightwing character. We have to start now and build the military forces in strength so that

should these outside powers become menacing, we could quickly develop the capacity for deterrence.

The fundamental weakness in the Gorton budget is its failure to put defence first. This Government is irresponsibly putting defence lower and lower on the list of priorities at a time



when it should be spending increasingly large proportions of the national budget on the nilitary forces. National weakness is an invitation to aggressors, an encouragement to covetous aggressor nations and troublemakers. National weakness discourages allies

like the Americans, especially at a time when they are so fed up with carrying a disproportionate burden of collective defence responsibilities. National weakness makes effective diplomacy impossible, because it indicates that in the important matter

of power, we do not count for much.

The Government is engaging in the most foolish wishful thinking in assuming that there will be no problems for Australia in the years ahead and that the defence effort can be allowed to run down. It is gambling recklessly with Australia'..s future.

From the time of our formation the D.L.P. has been calling for adequate defence expenditure. We will continue to press for defence expenditure which will make Australia self-reliant in this field.


It is just as well there are no copyright provisions in Federal Politics. In its new per capita grants to Independent Schools, the Government has almost copied exactly the same amounts, arguments and method of payment as advocated by myself and,the D.L.P. as far back as March, 1966.

It is a measure which was long overdue and had it been. adopted when I first proposed the policy, the Independent Schools would not be in the parlous position they are today.

I am not really concerned at the Government's copying of the D.L.P. proposals, for the need was for immediate assistance to the Independent Schools.

But I do say this: it has only been through D.L.F. advocacy and support for this policy - in a general form since 1957 and in a particular per capita form since 1966 -- that has led to the implementation of this proposal today and not five years hence, when it would have been too late.

The so-called "backlash" prophesised by the political commentators and others has not eventuated, nor will it, for the general population has grown to recognise the justness of the claims of the Independent Schools and the good economic sense of the measure.

I hope that this significant and historical breakthrough -at the Federal level will be the forerunner to a strengthening of the entire educational effort in Australia.


The increases in Aged, pensions are welcome even though Invalid, Widows and Repatriation they are inadequate.

The 1 increase in age pensions was not generous. They received a w1 increase in 1968 but in the past year something like



42c has been carved from that .;1 by the increase in consumer prides.

Under the existing rate of inflation pensioners require at least an extra 50c per year simply to maintain their position. The s1 increase in this Budget does not therefore radically improve the lot of the pensioner.


Ultimately there is no escaping the need for the introduction of a contributory national insurance scheme to cover such things as old age, invalidism and the death of a breadwinner.

The Means Test, despite the Budget changes, will continue to operate as a penalty on thrift. Twenty years ago, Six Robert Menzies stated in his Policy Speech for the 1949 Election:-"Australia still needs a contributory system of national

insurance against sickness, widowhood, unemployment, and old age. It is only under such a system that we can make all benefits a matter of right, and so get completely rid of the Means Test... To are deeply conscious of the frecuently unjust operation of the

Means Test, and the penalty it imposes in many cases upon thrift".

Sir Robert Menzies' words in 1949 are equally valid today in 1969.

D.L.P. policy is for the ultimate abolition of the Means Test and we suggest this could be done by progressively limiting its operation to various age classifications within the pensionable age group.

Immediately, however, pensions would have to be raised to at least half the basic wage for the pensioner to be able to enjoy the standard of living which he deserves.


The "tapered Means Test" will enable many to receive the pension who have, in the past, been disbarred but it will also introduce, for the first timo,an element of unfair discrimination.

I refer to the exclusion of the now pensioner group from the subsidiary fringe benefits. I see no rhyme or reason behind such discrimination. I sincerely hope that Local Government authorities and State Governments will not similarly discriminate between different pensioners but will offer to all pensioners the fringe benefits which operate in the services they provide, e.g., reduced Council rates, reduced public transport fares, etc.


I come now to those matters which have been ignored by the Government and paramount ' amongst these is the failure of the Government to assist the family man, especially the breadwinner with a large family but a low income. Two measures which the Government could have carried out, but did not, are (1) increases

in Child Endowment payments, and (2) increases in Maternity Allowances.



The policy of the D.L.P, on these matters is:-Child Endowment : A doubling of existing child endowment for all children after the second,

Maternity Allowances:Rostoration of the real value of these allowances by increasing the payments to an amount commensurate with the increases in wages since 1943, which is the year when the

allowances were first introduced.

I believe also that it is time the Government gave some serious thought to the introduction of a scheme for the capitalis-ation of child endowment payments so that parents can receive their child endowment payments in a lump sum and use the money for housing renovations, improvements and additions-..

This is a policy which has operated successfully in Now Zealand since 1959 and which -I and tie D.L.P. have advocated in recent years. It is a policy which would be welcomed by many thousands of couples and yet in the long run would not involve heavy additional outlays of public money.


The Budget bears all the imprints of the hand of the Prime Minister and whatever it might contain in the social welfare field all that is negated by the unnecessary and unwarranted reduction in defence exjenditure.

This reduction in defence expendituro has been quite scurrilous. It is the major feature of the Budget. It is contradictory of every argument the Government has used in the past ton years. If the Government wishes to act irresponsibly it, must be prepared to pay the penalty.






At end of motion add --"but the Senate is of the opinion that the Budget should be

withdrawn and redrafted because it:-(1) Proposes a decrease in defence expenditure at a time when

Australia's security is in grave doubt following Britain's

withdrawal, uncertainty over our alliances with South

East Asia and the United States, and the entry of th@

Soviet Union into the Indian Ocean,

(2) The Budget merely plugs holes in Social Services and makes

no provision for a comprehensive National Insurance Scheme

or for necessary aid for family life through better child

endowment payments, maternity allowances, housing and

health assistance,

(3) Fails to provide for the determination of Social Service

payments by an independent tribunal -of persons expert in

this field,

(4) Fails to ameliorate in any substantial way the restrictive

operation of the Means Test,

(5) Fails to stimulate National Development by increasing

and developing substantial comr.unities at the points of

recent discoveries and natural resource exploitation and

with the consequential reduction of the undesirable increase

of urban population, particularly in the capital cities.