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Tuesday, 14 September 1971
Page: 1274

Dr EVERINGHAM (Capricornia) - Replying briefly to a couple of points raised by the honourable member for Moreton (Mr Killen), 1 point out that he himself has said that the economy of this country is not just one of quantity for quantity's sake, but one of quality. If he reads the amendment moved by the Leader of the Opposition (Mr Whitlam) he will see that this is exactly what we are seeking. When he says that the Australian Labor Party is dedicated to the destruction of the federal system or of federation, obviously he has not read our policy, which provides for decentralised control and social control. To give him a small example in the field of health, we want regional administration of health services. We do not want the sort of thing that we have in repatriation, which is centralised control.

My main theme tonight is, firstly, on inflation and secondly, on the care of our space ship earth. Reference to these two matters is mostly sadly lacking in the Budget. Among those who have been blamed for inflation are consumers, wage earners, financiers, land developers and governments. I want to show why the major blame must be laid at the door of the Federal Government and the faceless financiers who direct it, and that the least blame should be laid at the door of the consumers and wage earners. Today's Australian Financial Review', which is a daily newspaper from the staid Fairfax stable, scotches the idea of scapegoating our arbitration system, which is still something admired by other countries. For example, wage arbitrators must take into account the productivity of the worker, the profitability of the industry and the paying capacity of the consumer. It is no good trying to lay blame on the arbitration system. Since he has been sitting down with Mr Robert Hawke and others besides his Cabinet colleagues, a remarkable change has come over the Minister for Labour and National Service (Mr Lynch) in this regard. Like the arbitration commissioners and unlike most honourable members opposite, he now realises that wage earners are not the sole agents of inflation. In fact, they are usually its victims because in general the arbitrators can award what they consider a just return for only one moment of time. They do not restore wage justice for the intervals between the setting of those awards.

I realise, of course, that pensioners, farmers and others who have no way of enforcing their demands or of appealing to arbitration, except through the ballot box, will not be very sympathetic with people who want to achieve awards and increases in their rates of pay by collective bargaining. In particular, rural employers will resent gains for those employed in rural industry. But the employees have suffered the same relative lowering of incomes, along with their employers, and they do not even now, and they will not in the foreseeable future, enjoy the benefits of a 40-hour week. I return then to the editorial in today's 'Financial Review', in which the editor dismisses the suggestion of a wage freeze as a curb to inflation because in Great Britain this measure turned out to be a trick. Although there was a freezing of company dividends, profits were still rising unchecked and were salted away in the form of tax free capital gains.

I therefore make my first specific criticism of the Budget. It fails to plan for Australia's economic strength by imposing a graduated selective capital gains tax. The example in Great Britain is one well worth following. For example, for administrative simplicity in that country no return on capital gains is required for investments under £500; they do not have to be declared. There are lots of ways in which this system can be streamlined and made effective. In fact, most developed and many of the developing countries now have a capital gains tax, and so should we. This would really be getting at one of the causes of inflation. Tt would not hurt anybody and it would not create hardship. In fact, it would do much to alleviate the hardship suffered by social service dependants, whose plight has been brought so much to the fore in this debate by honourable members on this side of the chamber.

As for a capital gains tax applied to land developing, there should be consultation with local and State authorities which wish to emulate Canberra by applying a community betterment land tax or by they themselves entering the land development industry, as the New South Wales Government now appears to be doing under pressure from its Labor Opposition. All of these matters should be considered in consultation between the 3 levels of Government. This would eliminate the nature of the major cause of inflation and the scandalously high price of land which has been caused by an artificially created scarcity of land and shameless exploitation by private enterprise under the laissez-faire policy, mainly again of the Federal Government. In fact, not only does the Federal Government fail to help the States and local authorities in this regard; it is even walking out on its obligation to posterity in the Australian Capital Territory by alienating public land here.

I turn my attention now from speculators to financiers. There is also the grossly inflating effect of crushing interest rates. It is true that the Government recently has made low interest loans available to farmers who have been rejected by the banks, but there have been precious few of these loans. Very often farmers are not considered to be viable. There is still a reluctance to use revenue grants for public works which are not carried out by the Commonwealth itself, lt is all very well to use revenue money for Commonwealth public works, but this cannot be done in the States. The States are made to pay the money back to the Commonwealth with interest. Local authorities also have to pay back to the Commonwealth, or to whoever lends money, the full amount of the loan plus interest. This is interest on investments which very often are not bringing an immediate profit but which are returning more revenue to the Federal Government. The Commonwealth charges the Queensland Government, for instance, 6 per cent interest on a loan to build a power house which will be responsible for much of our aluminium and other export earnings.

The Commonwealth charges the Snowy Mountains Hydro-electric Authority interest on revenue money which is spent to build up the Snowy Mountains scheme. The Authority must pay this back to the

Government with interest. Yet this is a scheme to ensure cheap power and more irrigated farm land in our most populous States and the Australian Capital Territory. We force the States and local authorities into the loan market for funds for health, houses and schools instead of realising that these are national assets which should be paid for out of national revenue when it is available. Eventually these projects must be paid for that way. Some orthodox economists protest that governments must be restrained in essential building by clamping these interest charges on top of the capital cost; otherwise, we are told, the Government will overspend and create shortages of labour and materials, building costs will skyrocket, and there will be increasing use of overtime, insufficiently skilled labour on this type of work and overaward payments. This argument can hold water only if there is competition with luxury building. Of course, if we allow luxury building to continue unchecked it will result in perfectly sound and valuable and roomy banks and insurance offices being pulled down so that buildings of greater prestige may be constructed. These new buildings are air conditioned and half empty.

Where did the money come from for these buildings? This is the cry that has been thrown across this House: Where will we get the money to rebuild the dilapidated and overcrowded schools and offices where kiddies sit on their ports in the lobbies or in an office because there is no school room available; where there are people in hospital beds in corridors with the head of one bed touching the foot of another because there is no money for hospital buildings? What about all the problems with housing young families and old people? The Government says: 'Where will we get the money?' I suggest there would be precious little doubt where we could get the money if we stopped building some of these empty skyscrapers, these prestige buildings, and pulling down good buildings with many years of life in them. The people who are struggling to pay off the interest on schools, houses and hospitals to governments are the same people who buy the insurance, the same people who have their homes and household effects in hock to the banks and the hire purchase firms owned by the banks and provide the money for them to build skyscrapers. It is the same struggling people who are providing the capital to build these useless, redundant and luxury buildings.

A government which cannot see this or which washes its hands of the situation when it is vitally involved in banking and interest policy, in homes and. hospitals, in schools and in the general infrastructure which depends on public finance is not fit to hold office in the 1970s. We should be placing tax, interest and lending restraints on the replacement of buildings which are demolished during their- useful life. We should require the custodians of the savings of our citizens to make a minimum percentage of those savings available at minimal rates for public works and in times of unemployment or when we are using excess resources - resources such as wool which is over supplied- or when there is an excess of production as there is at General MotorsHolden which is retrenching workers. There should be no cry that there would be inflation by the use of central government finance for public works to use up this excess capacity; these surplus resources.

The Commonwealth Bank should enter the field of hire purchase finance for approved types of investment in open and free competition with the private finance houses and with the trading banks but charging half the rate of interest that is now charged under hire purchase for essential goods such as household effects and the family car. The cost of the Labor Party's proposed national health and superannuation insurance scheme could be met by measures like this and no-one would object to the small compulsory premiums which would replace the very high premiums that are currently required for voluntary health insurance. Where there is a shortage of money and when the argument is used that we must use large interest rates because money is in short supply - and this is what we will be told in a few months when there is a recession - it is time to take notice of Milton Friedman of Chicago who suggests that we should start to issue money at the same rate as the growth of our national products so that we do not have these unrealistic and enormous interest rates. There is an almost total want of a government plan to shepherd Australia's scarce resources.

This is the second point 1 want to make: There is a shortage of resources on this planet which vitally affects Australia. This was tragically revealed in the Prime Minister's reply to the honourable member for Adelaide (Mr Hurford) when our first citizen spoke in this House of the fallacies of Thomas Malthus and Dr Ehrlich. This Dark Ages thinking has shocked leaders of thought throughout the nation. If they had only known the Prime Minister was thinking so far back in history would the Father of the Year award not have been kept for Sir Macfarlane Burnet who has agreed with Dr Ehrlich on the need to reverse our festival march towards universal squalor? If an award had to be given to the Prime Minister it should have been the order of the three witless monkeys. He sees no warning, hears no warning and speaks no warning of the evils we are creating. He is blind to the protein starvation in Bengal or treats it as a mirage. Sir Paul Hasluck in the more lowly job of Minister for External Affairs promptly sent 15 times as much money to India during the Bihar famine as this Government has sent in aid for the world's greatest disaster in Bengal. Our voluntary organisations have raised almost as much as the Government forwarded. New Zealand has done better.

Our Prime Minister cannot hear mothers weeping for the one infant in two who dies before school age; so he treats them as mere moving pictures - dramatic hallucinations. He does not read of the near half of the world's population which does not go to school or of the steady rise in world illiteracy; and as a result we still rely mainly on private schools in Papua New Guinea. Who will follow the imaginative lead of Kemal Ataturk who brought the alphabet to Turkey and made the people hold up their heads and say 'We can read a newspaper'. In his VIP aircraft jetting to the sprawling sores of Sydney he does not see the rape of the countryside by the affluent urbane minorities of the world. He is unaware that Americans who represent almost onesixteenth of the earth's people gobble up one-fourth of the earth's steel and fertilisers, two-fifths of its wood pulp, over a third of its fuel, a fifth of its cotton and a tenth of the farm land outside their own shores. As we exploit less and less rich mineral ores experts are predicting a ten-fold increase in the prices for at least 9 base metals in a few years.

The mushrooming greed for powerproducing fuel is creating a heat disposal problem. New York's power supply company has stopped its Sim a year urging of people to use more electricity and has switched to a 'save a watt' campaign. By 1980 it states that it will be running out of mainland cooling water and will have to build ocean floating nuclear stations. Some may say: 'Why worry if we can get one hundred times as much energy from fast breeder reactors or fusion plants burning sea water? We can support 10 billion people, desalinate the sea to get the water and mine low grade ore in granite.' This is true. We will probably be mad enough to do it. But this will most likely raise the earth's atmospheric temperature by 3.5 degrees centigrade. Most likely it will melt the polar ice caps. Most likely it will flood most of earth's cities. In less than a century dust bowl farming has doubled earth's wastelands. If honourable members think it cannot happen here they should ask the honourable member for Kennedy (Mr Katter) how the building trade is doing in the rural west of his electorate. If he looks at you blankly it is not because he is now a member of the Country Party; it is because there are not many buildings left to see out there in the dust bowl.

If all the arable land on earth were cultivated we would be able to feed 3.7 billion people at European standards. That is what the earth's population will be next year. From there on starvation will be inevitable. It will be increasingly the rule whatever we do short of reducing earth's population. If this is disproving Malthus, I would like to know what proof of his theories would be required. The vaunted green revolution has barely slowed the slide. The world needs a population policy. That is why I asked in my question on notice what this Government will do in response to the call from the International Planned Parenthood Federation. Will we join countries like Finland, Japan, the United Kingdom and the United States in massive aid to countries with their population planning?

I do not have time to discuss the backward thinking that has come from honourable members opposite, particularly the honourable member for Deakin (Mr Jarman), who can see in apartheid only a sort of brotherly love. I have not had time to go into a hundred and one other things in relation to the Budget because I think that this matter is more important and more urgent. The most disgusting thing that has come forward in this Budget session has been the answer given by the Prime Minister in question time when he said that he thought it would not be worth reading Dr Ehrlich's books because he had heard too many of these prophecies when he was a student 22 years ago.

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