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Friday, 18 September 1942


Mr McLEOD (Wannon) .- The honorable member for New England (Mr. Abbott) described this budget as insincere. From the point of view of the honorable member and his colleagues, the budget may be bad, but my view is that it is the best budget ever presented to this Parliament in the circumstances.


Sir Frederick Stewart - We have never experienced similar circumstances before.


Mr McLEOD - That is true, and Australia is indeed fortunate in having a Labour government to bring down a budget of this character. The main criticism of the budget by honorable gentlemen opposite has been based on the assumption that it leaves untaxed hundreds of millions of pounds of income earned by the workers. Those honorable gentlemen pose as economists, but one does not need to be an economist to know that the workers are the most heavily taxed people in the country. They are, perhaps, not taxed directly so heavily as are other sections of the community, but their contributions from meagre earnings to indirect taxation are immense. The honorable member for New England said that we must damp down the workers' wages in order to bridge the gap between the anticipated revenue and the expenditure, and that central bank credit was to be avoided lest inflation be the result. I ask the honorable member whether he thinks the adoption of his suggestion would bridge the gap? I say that it would not. At any rate, even if the gap were not bridged, that would not mean that we should lose the war. This spectre of inflation is being raised by the Opposition in an attempt to stampede the people. The word " inflation " ought not to be used, because there is no fear of its occurring. There should never have been use of the term ten or twelve years ago when this country was cast into a depression owing to manipulations by the people who control finance. On that occasion the cry was, " Cut wages and starve ourselves back into prosperity ". But the only people who achieved prosperity were those who engineered the fraud. I ask honorable gentlemen opposite to examine the workers' wages and their obligations. Owing to causes beyond their control, notably the depression and the consequent unemployment, the workers have been in debt for years. The interests represented by the Opposition parties desire to keep them in that condition for ever. Surely it is right, now that the workers are earning a little more than they earned before in periods of intermittent work, that they should, after paying their taxes and buying the bare necessaries of life, be able to apply what little is left to the paying off of old debts, the lifting of mortgages and the like. In many respects, too, the increased wages are not wanted by the workers. Some have told me that they have had an Irishman's rise, because their resultant heavier tax commitments leave them worse off than they were before. Whatever extra money the workers are earning is not going into a jam tin under the cherry tree; it is being used to pay off homes and to buy much-needed furniture.

The honorable member for Hume (Mr. Collins) yesterday said that I had to depend on growing wool for money, not on the printing press. I tell the honorable member that I have grown wool and never been paid for it. I have been robbed by the great interests that he and his colleagues represent. Like a stage magician the honorable member produced from his waistcoat pocket a German million mark note, and said that during the period when it was printed a chaff bag full of such notes was required to buy a tram ticket. His purpose in doing that was to try to hoodwink the people into believing that, as the result of this Government's policies, a similar state of affairs will occur in this country, but the people are too wide-awake. They know as well as the honorable member knows that there will be no inflation in this country while this party is in power. They know that this Government has the means and the will to control credit. That is the chief worry of the parties opposite. They wish to regain the comfort of the treasury bench in order to ensure that the control of credit shall remain in the hands of the private banking companies so that their shareholders shall ever more reap annual harvests of interest on fictitious currency created by them. Our methods are the safer. Under this Government, credit will be issued from the central bank, and will be based on the real wealth of the nation.

Honorable members opposite have wearied, us constantly since the fall of the Fadden Government, but particularly in the last fortnight, with references to deferred credits, to be repaid after the war. I have vivid recollections of the gratuity bonds and deferred pay of the last war.


Mr Beck - Did the honorable member not find his deferred pay very useful to him after the last war?


Mr McLEOD - I did, but I was able to resist the blandishments of the land "shades " and bond salesmen who plundered the money distributed amongst the returned men. The honorable member knows that it was not long before the wealthy interests grabbed that money back. Many workers during the last war took out bonds. In order to get possession of those bonds the financiers created a depression and forced great numbers of the people out of work, and to avoid starvation they had to offer their bonds for sale. But did they get the face value of the bonds? They certainly did not. They hardly got half the worth of the bonds. And who got the bonds?


Mr Calwell - The stockbrokers.


Mr McLEOD - Yes, of course they did. The same thing will happen again. The workers are not hoarding their money. Examine any housewife's budget and you will find how small a margin she has, in spite of all that the Opposition has said about the workers having more money than they have ever had before. That is true, but the only reason for its truth is the fact that they never before had nearly sufficient money. The Minister for War Organization of Industry (Mr. Dedman) has ensured that they shall not be allowed -to waste money on luxury goods, and the only thing left for them to do with whatever they have left after meeting current requirements goes towards restoring their financial equilibrium.

Thousands of workers are contributing as much as they can voluntarily to the Government's loans and to war savings certificates. There is nothing left in their possession. Therefore, the central bank credit, under suitable safeguards, which this Government will not hesitate to apply, must be used, to finance the war. There has been a great deal of loose talk about conscription of wealth. I should like to see wealth conscripted, but I do not know how it can be. It is much more elusive than man-power, which has been conscripted, not only for the Army, but also for the Labour Corps. But efforts by this Government to conscript wealth have been hampered in every direction. Consider, for instance, the decision to limit profits to 4 per cent. So many obstacles were put in the way of that policy that .the Government was finally forced to abandon it. Honorable members opposite held up their hands in horror at the very suggestion that the manufacturers' profits should be limited in any way. There would be no incentive for them to work, they claimed. The munitions programme would suffer, because the manufacturers would have no incentive to maintain production, to say nothing of increasing it. The concentration camp is the place for any one who would refuse to work on account of his profits being limited by governmental action. Soldiers, who declined to fight, because the smallness of their wages gave them insufficient incentive to do so, would be shot out of hand. I should welcome conscription of wealth and I urge the Government to do all it can to apply it. Let us have no more of the talk about widows and orphans when the Government comes forward with further plans for the harnessing of wealth to the war effort that marked the propaganda against the -proposal for a 4 per centlimit on profits.


Sir Frederick Stewart - The Treasurer admitted yesterday that that scheme was unworkable.


Mr McLEOD - It may have been in its original form, but I suggest that some such scheme could be operated and that provision could -be made to make a rebate to any widows and orphans who may be the possessors of stock in companies. The Government and I want to get at the big man who shelters behind the widows and orphans. If we can once harness wealth, we can go a long way towards bridging the anticipated gap between revenue and expenditure. Let us get at the great industrial concerns, the insurance companies and, especially, the hanks, which hold most of the land of Australia under mortgage. The farmers are at the mercy of the banks and are constantly getting deeper into debt. Their mortgages have not been reduced. I do not trust the economists, because their theories have always been wrong. A man of average intelligence, with experience of business or farm life, usually has a far better idea of practical economics than has any of these theorists. The country will drift into difficulties unless the Government takes early action to balance its economic affairs. I myself am prepared to make great sacrifices for the welfare of the nation, but I want my neighbours to do likewise. I .am still paying the same rate of interest on my mortgage as I paid before the war; but, owing to wartime conditions, I, like thousands of other men, will soon be unable to meet my obligations as I did previously. My equity in the property which I hold is diminishing; but I have not heard anything yet about the mortgage diminishing. I have made sacrifices, but the bank still has a mortgage on my land and property without having made any sacrifices. These financial institutions will take over more and more of our land as the war progresses without having to share our growing burdens. It is wrong that this should happen while thousands of boys, who have no material assets to defend, are dying for their country. Surely the Government will not allow this to continue. The Opposition says that it wants an all-in war effort. So do I, but I especially want it to be an all-in financial effort. I am an ordinary man, and I do not pose as an expert, but I know how the war will affect me and thousands of others like me. All that Australia needs for the prosecution of the war is a sufficiency of food and plenty of material to provide the munitions of war. We could continue to fight without money for another ten years, but if we depend on money the war will soon be over. As long as we have the manpower needed to convert the wealth of the land into food and munitions we can fight. We must divert everything to the war effort. Without money we can still produce our material needs, but without food we cannot fight. That has been proved in other countries. In 1939 the economists said that the war would not last more than six months, because Germany could not finance its effort, but Germany proved them to be wrong. That nation needs, not money, but oil, wool, wheat and other raw materials. Food matters most of all, because the German? do not want to face another hungry winter. I have great confidence in our military leaders, who are well trained and know their jobs thoroughly, and they have told us that they have confidence in our men. But these military men know very little of our economic problems. They naturally want every fit man to be in the fighting services, because they know the pathetically small size of our population, but they forget about food and raw materials. We cannot afford to put all our men into uniform while the position of our civil industries is growing worse. Men have left the rural districts to serve in the armed forces and in secondary indue tries in such great numbers that the situation of our primary industries is dangerous. Our economy is already a little out of balance and the Government must take prompt action to restore equilibrium. The surest way to break down the morale of the people is to deprive them of essential foodstuffs. A nation may be strong in armaments, but it cannot succeed if its people are hungry. I remember how. during the war of 1914-18, the retreating German armies abandoned their guns and ate the horses which pulled the limbers. They were not defeated owing to a shortage of munitions. Their morale was undermined by shortage of food, and by other hardships. The German civil population suffered even more severely; I recall the terrible privations to which the people in German-occupied France were sub jected at that time. Our position in this country is made more difficult by the great distances which separate our main centres of population. For instance, wc might have plenty of one commodity in Western Australia, but might be unable to benefit from it owing to the difficult} of transporting supplies to the eastern States, thousands of miles away. The Government must plan for the future. It is useless to wait until there is a shortage of potatoes, meat or butter before taking action. Many dairy cows have already gone through the aba ttoirs, and it will take up to two years to re-establish the herds. The Government must deal with these problems now. The farmers are willing to co-operate with it. Sheepshearing presents another problem. Many people believe that it is merely a matter of sending men into die rural areas to do the work, but it would be futile to send men who were not experienced shearers. If the sheep were not shorn, they would be at the mercy of the blowflies, and the farmers and the nation would suffer a great economic loss. Many of the men who have been called up for military service are actually a liability to the Army. They should be combed out immediately and put to work in industries where they would be of some service to the country. I know of one man who served for four months in the Army, but he could not stand up to the training, and for three months of that period he was in hospital. He was able to work before he was called up, but after he was discharged he was unfit for any sort of job. That is how a great deal of manpower is wasted. Men must be found to do jobs in the primary industries that are essential to the war effort. The primary industries need men just as urgently as the armed forces and the munitions industries. The Government must strike a fair balance as between the three demands, even if it be forced to take men out of the Army. Many men could be taken from the armed forces without reducing our fighting efficiency.

The shortage of superphosphates offers a grave threat to our primary industries. Australia depends probably more than any other country on artificial fertilizers, yet I am satisfied that we have not done all that is possible to explore our local superphosphate deposits. The Parliamentary Committee on Rural Industries, of which I am a member, had evidence that, before the war of 1914-18, when the value of superphosphate was not fully appreciated, 125,000 tons had been mined from South Australian deposits. That was used mostly in the wheatgrowing areas because top-dressing was not known in those days. Those deposits should be further explored, whatever the cost may be. If a dairy-farmer's pasture is deteriorating, he will soon be getting only half the normal quantity of milk from his beasts, although he will have to e mploy the same amount of labour to look after them. Geologists hold different views about the value of Ausralia's superphosphate deposits. Some say that they are small and of little value, but, even if the quality be low, the manure could be mixed with the stocks that we already have. The Department of Commerce should give immediate attention to this problem.

We have heard a great deal of criticism of the Government from the other side of the chamber, but very little has been said of its achievements. It has been accused of encouraging inflation, but we can dismiss that as a bogy. One of its achievements is the improvement of social services which are of great value even in war-time. The Labour party is said to have nothing in common with men on the land. Iam one of these men on the land, and I know that we have a great deal in common with the workers. The Labour party is the only political party that has done anything to improve our position and the farmers have been exploited by anti-Labour elements just, as much as have the workers. I regard the United Country party as being the right wing of the United Australia party, and of the two the United Australia party has the more liberal outlook. The potato-growers were always in trouble until recently. When crops were good they received about 30s. a ton for their product, which the middleman sold in the Sydney market for about £18 a ton. The industry was unstable in every respect. Although this Government has been in office for less than a year, it has provided a guaranteed price for potatogrowers. The wool-growers also have benefited from the Government's administration. Honorable gentlemen opposite were numb, dumb and docile for two or three years over the wool agreement. The Country party members claim that they are the champions of primary producers, but they did nothing. I can admire a member of the United Australia party who stands up stoutly for the interests which he claims to represent, but I have very little time for Country party members who let the interests of the primary producers go by the board. I do not regard such honorable gentlemen as being either straight or honest.


Mr Guy - What about the honorable member for Wimmera (Mr. Wilson) ?


Mr McLEOD - He belongs over here. At any rate he is a left-winger of the Country party. This Government has been able to obtain an extra 2d. per lb. for wool under the revised agreement with the Government of the United Kingdom and that is a great achievement which will be of lasting benefit to the economic structure of Australia. Wool is a staple industry and the reasonable marketing of it is immensely advantageous to our internal economy. The payment of an extra 2d. per lb. for wool does not in any sense involve the exploitation of the consumer, for the price is still reasonable. The Labour Government is entitled to claim credit for such actions.

We arc told that in this war everybody must make sacrifices and we agree with that statement; but I regret to say that very little has been done so far - in fact nothing at all was done until this Government came into office - to require the financial interests to make sacrifices. If I had my way I would bring these people up sharply. All that honorable gentlemen opposite seem to be able to suggest is that a national government be formed. One of their number, every little while, moves the adjournment of the House to discuss subjects such as clothes rationing, butthey do little else but harass and snipe at this Government.


Mr Guy - The national governments of other countries get on all right.


Mr McLEOD - I cannot imagine honorable gentlemen opposite being satisfied even if we had a national government. They would still be hypercritical. They cannot even agree among themselves. The last anti-Labour government fell to pieces because of internal dissension.

Mr.Guy. - That was not a national government. The present Prime Minister has been forced to disagree publicly with certain members of his Cabinet.


Mr McLEOD - Honorable gentlemen opposite are fond of talking of post-war reconstruction. I am afraid if an antiLabour government is in office at the end of the war there will be no reconstruction. We shall experience a repetition of the unhappy days that followed the last war. Everything possible would be done by honorable gentlemen opposite to bolster up capitalist institutions and there would be no new order. Instinctively, I know that this would be so. Why should capitalist institutions and individual capitalists surrender their privileges? They are not likely to be interested in the new order. No doubt honorable gentlemen opposite will make promises to the people, hut I hope that such promises will fall on deaf ears. Probably threats will also be made about the inflation bogy and the dangers of tampering withour banking and monetary system. But the fact remains that after the last war the anti-Labour forces " sold out " to the financial interests. The Commonwealth Government Shipping Line, the Commonwealth Woollen Mills, the Commonwealth Bank and other government and semi-government instrumentalities were "sold out" on the ground that they were too socialistic. We do not desire a repetition of that kind of thing. The people are looking for a new order based upon justice. Recently I read an interesting pamphlet entitled William Penn, in which it was pointed out that the density of population in Great Britain was 600 people to the acre. It was said that in spite of that fact the English people were able to have the food of all nations on their breakfast table, and the goods of all nations on the shelves of business houses. But it appears that after this war Great Britain may be a debtor nation, and things may be very different. Australia could do a great deal to help the people of Great Britain. We all are well aware that we need a larger population. This country could sustain a population of probably 20,000,000 or 30,000,000 people, but it would need industries commensurate with such a population. Under any reasonable conditions we could be sure that even that number of people would be assured of adequate food, clothing and. shelter in this country; but this will not be so if the affairs of the country are allowed to return to the hands of interests which will favour private banks and other financial institutions. We all must remember the pathetic attempt that was made after the last war by means of moving pictures, posters and all kinds of enticing propaganda to entice immigrants to Australia. But the very boats that brought immigrants here were loaded with manufactured goods, so that the whole procedure amounted to little more than a disgraceful swindle. This country must be freed from the control of international financiers. By some means our great national debts must be funded and sunk. It is deplorable that in a country with a vast State like Queensland available for settlement there should have 'been, in days gone by, unappeased land-hunger and much unemployment. Our people wanted land, but they could not get it. That situation must be altered. Humanity must be regarded as being more sacred than money. After the last war our interest obligations were met while many of our people starved. I shall never be a party to the placing of the affairs of this country under a government which would allow that kind of thing to occur. The people would be well advised to take all necessary steps to ensure that the Labour party shall remain in control of the country; otherwise we shall look in vain for any satisfactory scheme of land settlement or any worth-while new deal.

Another matter to which attention should be devoted is education. It is often said that the children of the poor are deficient in brains and ability and that only the children of the upper or governing classes, so called, are worthy of higher education. That is a ridiculous contention which has been disproved on countless occasions. We should make it possible for children who show ability to pass right through the university on scholarships or bursaries without being a charge on their parents, because ultimately the country at large would reap the benefit of their education and attainments. It is highly important to every democracy that education shall be free. To-day, unfortunately, we are suffering from a lack of skilled artisans because facilities were not made available years ago for training young men who showed an aptitude for .various handicrafts. Similarly, boys and girls who show aptitude for the medical or other professions should be helped, lt may be, of course, that certain professions should be rationalized in these days by the Department of War Organization of Industry. Some of the professions could be entirely eliminated without great loss. I hope that after the war a department somewhat similar to the Department of War Organization of Industry will be an important feature of government activities in this country. We must by some means ensure that adequate free educational facilities shall be available for all the children who could benefit by them. I have in mind at the moment a father who has four sons. Two of them have gained scholarships, which were available to boys living in Victoria outside the metropolitan area. The eldest son is now in his fourth year as a medical student; but, in spite of the benefit of his scholarship, he is still costing his father £90 a year for the provision of instruments and other requirements. The second boy won a similar scholarship, and took an engineering course at the university ; but he, too, is a heavy financial burden on his father. The father is of the opinion that the two younger boys are quite as clever a3 their brothers, but he fears that he will be unable to carry the burden of maintaining them at the university, even if they should win scholarships, for he is already seriously embarrassed financially through his efforts to give to his elder sons the 'best education possible. There should be no financial obligation on a parent in respect of sons who win scholarships. The State should bear whatever expense is involved in the training of boys of ability.

I fear that if a Tory government should again come into office in this country very little would be done to promote the interests of free education, or to provide effective laud settlement schemes, or to do many of the other things that are necessary for the progress of the country.

If any effort be made to embark upon land settlement schemes similar to those which followed the last war, I shall resist it to the utmost. I do not believe that our returned men and their wives should become beasts of burden. Yet that is what happened after the last war. In many cases, women had to cart water for even the most essential household uses. The properties of soldiers were under lien and all the revenue obtained from them was required to meet interest charges and the debts which had to be incurred. Land was bought in those days at inflated prices, and returned soldiers were put upon it under conditions which did not, give them a chance to succeed. We must avoid that kind of thing after this war. Some honorable gentlemen opposite are probably as anxious as I am to avoid such errors, but I fear that the anti-Labour parties are too much under the domination of powerful financial interests to be able to do anything effective in that regard. Under a Labour government such a state of affairs would not be tolerated. There is no need for it. The State could pay a just price for the land, being financed by the Commonwealth Bank. When the land had reverted to the Crown, it should not again be alienated. Leases could be given in perpetuity to those who took it up. Gradually that would put an end to trafficking in land and inflation of values. Under the existing system, boom prices are deliberately engineered, with the result that the purchasers of .land get into debt, from which they can never escape. When they find that they are unable to continue, and realize on the equity they have in the land, another purchaser for it is found. Dealing in land values is nothing short of a racket. It could not operate under the leasehold system, because only improvements could be sold. The effect would be to stabilize values.

I regard the budget as a good one, and congratulate the Government for having brought it down. Inflation can and will be avoided. I trust that the position of the primary producer will be safeguarded, and that where labour is absolutely necessary ft will be made available. The war effort would not thereby be adversely affected. The pastoral industry will be in a serious plight, and there will be considerable loss of livestock if sheep are not shorn at the proper time, because the carrying of heavy fleeces is distinctly detrimental on account of the ravages of the blowfly pest. The release of unfit men from the Army would go a long way towards overcoming labour shortages in primary industries. It is my sincere hope that the present Government will bring down many more budgets.







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