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Thursday, 5 March 1942

Mr CHIFLEY (MACQUARIE, NEW SOUTH WALES) - The surplus assets which come into their hands as a result of the expansion of credit are being put into a special deposit account, which carries a rate of interest that only just covers administrative expenses. We have been warned of the dangers of inflation. Is there any man in this House foolish enough to think that our present rate of expenditure, which could not be anticipated six months ago, when different circumstances obtained, can be met out of taxation? Certainly it cannot, no matter what rate of taxation be imposed. When it is said that the deficit should be met from loans, I reply that the Prime Minister and I consulted with those persons who are supposed to know what the public can lend, and the loans that are now being put on the market, and those that will be floated in the future, are based upon their reports.

Regarding the financing of the war, the Government in a period of three months imposed additional taxes estimated to yield £50,000,000 per annum. Does any honorable member venture to assert that that is not a genuine attempt to make the nation pay as far as possible for the war? Even if the previous Government had remained in office, it could not have carried on without the assistance of bank loans. It would be nonsense to say otherwise. Whilst I agree with the statements of the Leader of the

Opposition . regarding the dangers of inflation, I remind him that the Government has taken almost every step, with the exception of that mentioned by the honorable member for Robertson (Mr. Spooner), in order to safeguard against it. The honorable member advocated the introduction of individual rationing in the community. When a government is utilizing bank credit up to the point where all of the national resources are involved and all man-power is engaged, it can no longer, with safety, expand credit. It has virtually reached the end of its tether in that respect. But these times are not normal; they are extraordinary. When a government has utilized bank credit beyond that point, it must impose stiff control so that the inflation which we fear will not occur. I challenge any one r.o 9ay that the Government has not introduced safe measures of control. Differences of opinion may exist about the incidence of taxation, but people often talk very loosely about financing the war from taxation. When I introduced the budget last year, I spent a busy time replying to requests by honorable members on both sides of the chamber for the exemption of certain articles from the sales tax, or for a reduction of the wartime (company) tax, because it would destroy the incentive of many businesses to contribute to a maximum war effort. Incidentally, these references to " incentive " are a reflection on a number of people engaged in industry. Some honorable members opposite have declared that unless companies can make ample profits, they have no incentive to expand production for the purpose of assisting in the conduct of the war. That is a reflection upon the patriotism of a number of people who accord their political support to the United Australia party and the United Country party.

The constant references to inflation during this debate were made purely for political purposes. If Australia's war effort continues to expand, the expenditure which to-day is regarded by some as evidence of inflation will doubtless seem comparatively small. We must keep our feet on the ground, and realize that, because, the situation is abnormal, we must I n unusual things. Those unusual things may have bad consequences if we fail to exercise proper economic control. The Government is endeavouring, to the best of its ability, to provide that measure of control, and I think that its efforts have met with reasonable success. In making that statement I do not overlook or discredit the measures that were taken by previous governments in this connexion. When the honorable member for Warringah (Mr. Spender) was Treasurer, he introduced a number of measures which were very creditable to him, in order to effect control in certain directions. I do not for one moment claim that this Government alone possesses a broad national outlook. I realize that we all are engaged in this fight and I hope that we all have the same objective. But our democracy does not receive a very good advertisement when the representatives of the people in Parliament engage in violent recriminations, and give emphasis to material that might create a false impression. For some hours, this House has listened to unfortunate personal invective. In attempts to bolster up a case against a Minister, extracts have been quoted from speeches that were delivered fifteen years ago. My only pleasure this afternoon arose from the fact that some one did not quote from past speeches by the right honorable member for North Sydney (Mr. Hughes), because there would have been such a mass of contradiction that every one would have been bewildered.

I am in no dilemma regarding the position of the Government. An honest man has only to say, as the representative of an honest government, that we shall see that the prospectus which we issue is kept as regards the payment of interest and the repayment of principal. If later we are again in opposition, we shall try to see that the promise is kept. No supporter of the Government would say that he does not agree fully with that undertaking. Some difference of opinion might exist about the rate of interest that is payable on these loans. Some honorable members on this side of the chamber might consider that the rate should be i per cent.; others might favour 1 per cent, or li per cent. Still others may believe that no interest at all should be paid. Before to-day, people have considered that interest was an undesirable feature in the life of a community. Every one is entitled to his opinion, even if that opinion be that interest should be nominal, and should cover only the cost of administration. But if the Government and the majority of the members of the Labour party decide that, as a matter of policy, the Government should offer interest at 3 per cent., every member of the party will abide loyally by that decision. Even if one does not personally agree with it, that does not mean that he favours repudiation and confiscation. All such talk is a mere invention of the Opposition, despite this critical period in our history. Honorable members opposite expressed their horror that the confidence of investors should be destroyed, but many of the speeches that they delivered this afternoon were calculated to arouse serious misgivings among the public. Personally, I do not think that the people believe them ; otherwise, there would not have been 8,500 applicants for the loan to-day. I have participated in this debate only for the purpose of replying to loose talk about inflation and the necessity for adequate control. I deprecate many of the utterances that have been made to-day,

I was delighted to hear two constructive suggestions by the honorable member for Robertson and the honorable member for Lilley (Mr. Jolly). The honorable member for Robertson advocated the introduction of rationing, the necessity for which I do not dispute. I realize the possibilities, and the action that might have to be taken to deal with the position. The honorable member for Lilley replied most effectively to the contention that interest should not be paid on loans. As an illustration, he said that one man might save £1,000, which he would invest in the purchase of a house or business that would return to him 3 per cent., 4 per cent, or 5 per cent, per annum. Another man, by working extremely bard, might save £1,000, which he proceeds to lend to his country for the purpose of conducting the war. Some persons contend that he should not be paid any interest upon his investment, but the honorable member for Lilley showed that that man is just as entitled to some reward for his thrift and for his patriotism in lending his savings to the Government for the purpose of defending the country as is the other man who invested his money in property. That is getting down to cold hard facts. All the other talk in the debate was loose, largely because it did not deal with realities. Unfortunately, there was a premeditated decision to launch an attack upon the Minister for Labour and National Service.

Mr Holt - That is not true.

Mr CHIFLEY - First, the question was asked as to whether the published statement by the Minister was accurate. Even after the honorable gentleman had denied the accuracy of the published statement, the debate continued. That convinced me that some honorable members opposite were determined to attack the Minister. His denial mattered nothing to them. Whilst I realize that we are engaged in politics, I warn honorable members opposite that we can overdo politics at the present time. The, responsibility for the recriminations that have taken place to-day rests with the Opposition, because it launched this attack. Honorable members opposite could have asked the Minister at question-time whether he had made that statement, and the Minister could have given his explanation. If the Opposition did not believe him, it would have regarded him as a liar. If it did believe him, there would be nothing more to be said on the subject. Certainly there was no necessity for introducing side issues and implying that some Ministers were not in favour of meeting, not the Government's obligations, but the nation's obligations. Those statements brought no credit to this Parliament. Perhaps we all are at fault; but honorable members should not forget that in the life of a democracy it is important that the public should have respect, not necessarily for a party, but for the Parliament. Everything that we do to destroy that respect deals a deathblow at democracy itself.

Question resolved in the affirmative.

Bill read a second time and passed through its remaining stages without amendment or debate.

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