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Thursday, 5 March 1942

Mr FADDEN (Darling Downs) (Leader of the Opposition) . - The Opposition does not raise any objection to the Government being given authority to raise and expend the amount provided for in this measure. It recognizes that money is indispensable in the prosecution of the war, particularly having regard to the degree of gravity that has developed within the last few weeks. But it is in total disagreement with the general financial policy that is being pursued by the Government.

The Treasurer (Mr. Chifley) has asked the House to recognize the uncertainty of the amount of expenditure that will be necessary. What the honorable gentleman and the Government need to watch is the uncertainty of the ability of the Commonwealth to raise loan moneys, in view of the policy which the Government is pursuing. The present occasion is opportune to draw attention to what must be regarded as indisputable evidence of the trend of Commonwealth finances. The total of the short-term debt securities issued in Australia increased from £48,133,000 to £119,183,000 between the 31st July, 1941, and the 31st January, 1942. The increase of £71,000,000 was due to the dangerous methods of finance adopted by the Government. Is there any wonder that the Government now seeks authority to raise £75,000,000 by means of loans? It recognizes that its inflationary measures have carried it beyond what may be regarded as the safety point in the economic equilibrium of Australia. It has failed to measure up to the realities of the position by no less an amount than £71,000,000 between the 31stJuly, 1941, and the 31st January, 1942. When the budget was brought down. a gap of approximately £130,000,000 had to be bridged. The Government proposed to utilize the lending capacity of the community and to draw on bank credit. Loans have since been raised aggregating approximately £60,000,000, apart from the amount which had to pass to State Governments and semi-governmental bodies. Therefore, between now and the 30th June next an amount of £70,000,000 will have to be found. The estimate of expenditure made in the budget has been enormously exceeded, and it is ever-increasing. As the Treasurer has , stated, the actual amount is uncertain. Consequently, it itisnecessarytoobtainapprovaltoborrow a further £75,000,000.

The Government has not adopted correct: methods in order to keep our finances on a sound basis. I invite honorable members to compare the position of savings bank deposits with the results achieved by voluntary contributions to war savings certificates. The savings bank deposits reached the startling figure of £266,000,000 at the end of 1941, an increase for the year of £22,000,000. In that same period the purchases of war savings certificates aggregated only £8,082,000. The increase of £22,000,000 in the savings bank deposits was only £1,000,000 less than the increase for the whole of the preceding five years. Here is a quantum of finance which has been left untouched. It constitutes a very great danger, particularly having regard to the financial policy of the Government. The spending power that it represents is being ever increased by loan expenditure and expenditure upon all other war activities in the community. By its adherence to voluntary contributions, the

Government is neglecting a field that should be available to it, particularly in connexion with war savings certificates. Confidence is the basis of its policy. It would not agree to the adoption of the principle of compulsory loans, believing that it could obtain expeditiously the amount that it needed by handing round the hat, by appealing to the patriotic instincts of the people, by relying upon the people to devote their surplus earnings to war needs. The story of war savings certificates and bank deposits proves how futile has been the reliance it hasplaced in that particular form of contribution. The people upon whom it has to depend are those whose resources have been depleted by every financial measure that has been brought down. Regulations which arc at present before the House afford ample evidence of the unwisdom of the policy that has been adopted. The field which alone is available for voluntary contributions towards the huge volume of war expenditure is being eaten into by the limitation of profits, and the consequent reduction of commercial activity, as well as by ever-increasing taxation. The Government cannot have it every way. It cannot limit profits, fix prices and wages, thus reducing the incomes, and still expect to raise huge sums of money by voluntary loan. The Government's policy is based on confidence in the capacity of the people to contribute to loans, apart from the purchase of war savings certificates. Those investors who are being invited to contribute £75,000,000 to this war loan must have confidence in the policy of the Government. This brings me to the recent utterances of the Minister for Labour and National Service (Mr. Ward). How can the Government appeal with confidence to the investing public if a responsible Minister makes statements of the kind which he made recently? There was nothing novel in what he said during the weekend; it was consistent with what he has been saying since he first became a member of this Parliament eleven years ago. Away back in 1931, he revealed himself as a staunch supporter of the Lang plan of repudiation. A leopard cannot change its spots, and the Minister for Labour has not changed his. I say that to his credit. He has stood by his principles - lie is consistent and persistent. He is the one man who has stood loyally by the platform of the Labour party ever since he has been associated with it. He stands now, as from the beginning, for the nationalization of the means of production, distribution and exchange. He is bold enough to say frankly what he means, and try to give effect to the policy in which he believes. Therefor*, unless and until the Prime Minister is prepared to disown the statements of the Minister for Labour and National Service. we must believe that what that gentleman has said represents the accepted policy of the Government. The responsibility rests upon the Prime Minister to say that his Government does not stand for .that policy. On the 18tl February, .1931, the honorable member for East Sydney, speaking in the Paddington Town Hall .at the opening of the East Sydney campaign, .said that he still -rood behind the proposals of Mr. Lang. Mis remarks were reported as follows: -

The stand taken by Mr. Lang at the recent Premiers Conference was the most courageous thing ever done in the political history of the Commonwealth. Only those speakers who are prepared to stand behind the financial proposals of Jack Lang are going to take the platform' during the present campaign.

On the following day, Mr. Ward declared -

I.   am on the side of Jack Lang, and within six mouths there will be thousands more on his side than there are to-day.

When the Financial Emergency State Legislation Bill was under discussion in this House in May, 1932, the member for Mast Sydney declared that the then Commonwealth Ministry might continue its vindictive and panicky attack upon the Labour Government in New South Wales, but its every move would be forestalled by Mr. Lang. Coming to November. 1938, we find Mr. Ward discussing the subject of monetary control. He said it should be remembered that the Commonwealth Parliament would not exercise supreme power unless it were given authority to determine monetary policy. The Labour party, be said, was in favour of granting such powers to the national Parliament, but the anti-Labour Government was not. During the debate on my budget in 'October of last year, the honorable member declared that he was of opinion that the best plan that could be followed by the Opposition when it became the Government, would be to put the private banks completely out of operation, and 'to allow the Commonwealth Bank to fulfil the function for which it was originally established.

Government Members. - Hoar, bear !

Mr FADDEN - That applause from supporters of the Government amounts to a declaration in support of the policy outlined by the Minister for Labour and National Service. The intention of the Government to ta'ke over the private banks has become apparent during the last few days. We have been told that the number of branches belonging to the trading banks must be reduced ; that branches will be closed wherever possible, and the business diverted to the Commonwealth Bank. That is in accordance with the policy for the nationalization of banking. Honorable members opposite say " Hear, bear ". Therefore, we must believe that the whole financial structure of the country is in jeopardy if the Minister for Labour and National Service and those who follow him are to be allowed to have their way. I do not think that the Treasurer, who has a full realization of his responsibility, associates himself with the sentiments expressed by his colleague when addressing a Sydney congress of national unity for an allied victory last week-end. This is what the Minister for Labour and National Service is reported to have said -

We should nut t)u asked to pay for the war afterwards by |m.yin;: interest on any loans that are raised now.

That, in itself, is serious enough, coming as it did from a member of the present Ministry at a time when the Government is conducting an all-important war-loan campaign. I can sympathize with the Treasurer and the more responsible members of the Government. They want the loan to be a success, yet a leading member of the Cabinet, a man with ability and a considerable following, has stated that, in his opinion, no interest should he paid on war loans raised now. It would be a sorry day for Australia if the policy enunciated by the Minister for Labour and National Service were to be applied by the Government. The Prime Minister will, I am confident, give an assurance that the Government will honour its contractual obligations to pay interest, and that there will be no repudiation. The suspicion already aroused must be allayed, and that can only be done by the Prime Minister, as head of the Government, making a public declaration in this House that interest will be paid in terms of the contract on all money invested in the £35,000,000 war loan. If that be done, there will be no uncertainty in the minds of the people, and the loan will, in consequence, be a success.

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