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Friday, 11 September 1942

Senator BRAND (Victoria) .- The Government's announcement of increased pay for members of the fighting services and higher allowances for their dependants has been greeted with general approval. An announcement that the pay was to be free of income tax would have caused similar satisfaction. The words " equality of sacrifice " would then be nearer reality. The Fadden Government provided that when members of the Australian Imperial Force proceeded overseas, their pay was exempt from income tax. The same concession was granted to Australian Imperial Force personnel allotted to operational stations within the Commonwealth, or who were retained in Australia for over six months, because of other defence considerations. The concessions were withdrawn by the present Government when the Australian Imperial Force returned from overseas. This brought the Australian Imperial Force, as regards income tax payments, into line with the Australian Military Forces and the civil population. Six weeks after the present Government took office. Japan entered the war and Australia became a theatre of war. Operational stations were reinforced. The returned Australian Imperial Force and the Australian Military Forces were grouped into army corps. Intensive training was speeded up in anticipation of active operations against Japan. This training, to toughen the troops and afford commanders the opportunity of handling their units under active service conditions, was and is still identical with the training of the Australian Imperial Force in Palestine prior to the Libyan campaign. Whilst the members of the Australian Imperial Force were undergoing their final training in Palestine', they were exempt from the payment of income tax. Their immediate enemy was the Italians; now their enemy is the Japanese. If the members of the Australian Imperial Force were exempt from paying income tax then, why remove that concession now? Australia is more dependent than ever for its protection upon these self-same troops. They are the- backbone of our land forces. Units of the Australian Military Forces are brigaded with Australian Imperial Force units. The officers and non-commissioned officers have been, in many instances, interlocked. That may be the reason why the income tax concession was withdrawn from the Australian Imperial Force personnel. The Government, probably, thought that it would have one-half of a brigade group paying income tax whilst the other half were exempt, and therefore decided that none should be exempt above the prescribed minimum taxable income. Would it not be possible and more equitable to differentiate between combat troops, including personnel at operational stations, and those who are never likely to come into contact with the enemy. Exempt the former by all means. The latter, doing duty remote from operational stations, are no worse off or better off than the citizens who, for good and sufficient reasons, are not in uniform.. "Many are drawing better wages or salaries than they did in peace-time. To exempt the troops who are trained for actual combat with the enemy would be fair and reasonable. I know of one senior officer responsible for the training and efficiency of a brigade equipped with £2,000,600 worth of fighting machines. His income, after paying income tax and other commitments, is about the same as his batman's income. True, both are destined for active operations, but the officer shoulders responsibility and leads his tank units into action. The personnel of the Army, whose duty it is to go where they may become casualties, and, perhaps, pay the supreme sacrifice, ought to receive every possible financial consideration.- An income-tax exemption would tend to stimulate morale. Such a concession would make them feel that their services in the fighting forces are appreciated.

I hope that the Government will find a formula to grant exemption from income tax to tike members of the actual fighting forces, as against those in uniform whose duties, essential and important though they might be, are carried out in places remote from enemy action. A few bombs dropped here and there by a nuisance enemy air raider are of no consequence.

The statement on the war situation, prepared by the Minister for External

Affairs (Dr. Evatt), and read by the Postmaster-General (Senator Ashley), on 2nd September, contained very little that honorable senators did not already know. Of course, it was necessary to record in Hansard the trend of events, since Japan entered the war. The glowing tribute paid to the immensity of Britain's war effort ought to silence those narrowminded, biased Australians who have failed to appreciate Britain's difficulties, world-wide commitments and determination to strike the enemy on the continent of Europe, when the appropriate time affords a reasonable chance of a successful invasion, notwithstanding that SO per cent, of the Empire's casualties since the beginning of the war was amongst Britain's own fighting services. No person with active service experience under-rates the enormous difficulty confronting our United States ally in waging an amphibious war against the Japanese in the Solomons and elsewhere. In this most difficult of all offensive operations, th* Royal Australian Navy and the Royal Australian Air Force are playing no small part. It is only a matter of time, when the enemy will be driven from his strategical bases in that zone. The recapture of Rabaul and the Japanese occupied territory in New Guinea will automatically follow. The menace to Australia will still remain, until the enemy is routed from all territories to the north and north-east. Are we going to leave that task entirely to our ally?

The Prime Minister (Mr. Curtin) in a broadcast speech on the austerity campaign said : " We will make of our nation two complete fighting armies - the fighting forces to smash their way back through New Guinea, Java, Malaya and the Philippines on to Japan, and the working forces that will stand behind them and back them to the limit in mine, factory and workshop ". After listening to that broadcast, 1 can. imagine such comments in army camps as : " At last the politicians are beginning to show some sense. A .complete fighting army for overseas service instead of the present shandy-gaff army, consisting of soldiers who will fight anywhere the Japanese are located and others who aTe forbidden by law to do so. Now we know where we are. It was the best item in the Prime Minister's speech ".

Not only would satisfaction be expressed in the land forces. The citizens of Australia, too, would be grateful for the removal of their embarrassment when conversing with men of the United States Army. Will the Government take the necessary steps to implement by legislation the Prime Minister's pledge ?

Nobody suggests that the whole of this proposed complete fighting army should be despatched across the sea. General MacArthur, the Allied Commander in Chief in the South- West Pacific Area is the best authority to decide when, where and in what proportion the land forces of Australia are required for offensive operations. That proportion is governed entirely by the volume of shipping available. The fact that there is to be no legal limitation to the strength of such a striking force, is what matters. Let us hope that the Prime Minister's words at the microphone will be converted into action with the least possible delay. The public, and particularly the Army is tired of hearing the words " offensive action " which mean nothing. Our war organization and war administration tend towards the defensive. It is top heavy. When the Army really gets into action, casualties must occur, reinforcements will be demanded, and must be forthcoming, if further losses are to be avoided. No matter what reserves may be in training camps, more and more will be needed, and must be trained beforehand. I give credit to the man-power authorities for an appreciation of that fact. The defence authorities are the greater sinners. Too many men of military age are engaged on the home front. If they were released for field service and their places taken by older men, it would not be necessary to denude primary industries of so much man-power. I have found it almost impossible to obtain leave for certain men in the Army to assist in harvesting and shearing. The reply generally is that they cannot be spared unless they can rejoin their unit within 24 hours. As a senior military man of long experience, I can appreciate that attitude, but I cannot understand the policy of discharging fit and capable men, who may have reached the age for retirement, and replacing them in positions, far remote from operational stations, by younger men who ought to be in the fighting army. Before this war is won these "desk and swivel chair soldiers " will have to be moved on. The same applies to many men in other Federal and State departments. A certain amount of combing out has been done, but not with the ruthlessness displayed in -combing out men in small business establishments. So drastic has this been that hundreds have had to close down. " Ruined " is the correct way in which to describe them. In the Commonwealth Parliament there are half a dozen members who should be in uniform doing real war work. If I were as young as they are, I should feel ashamed of escaping service on account of statutory parliamentary exemption. Total war is a long way off yet. The whole of the man-power problem needs revision with a greater priority of exemption to those engaged in food production, otherwise there is serious trouble ahead.

During the winter recess, I visited several industrial establishments engaged in producing war equipment. It was amazing to see the vast quantities turned out. For this satisfactory position and for laying the foundation of such a gigantic war equipment programme, now nearing fulfilment, little credit has ever been given publicly by the Curtin Government to the Menzies Government.

Senator Collings - Every credit has been given.

Senator BRAND - No, I have been in at least two places where the subject has been mentioned, and no credit was ever given. In making this observation, I am mindful of the magnificent effort on the part of employers and employees. No governmental programme could ever be successfully .carried out without their hearty co-operation and loyal service. Whilst paying tribute to the part played by Government controlled munitions establishments, Australia's production of war material and equipment could not have reached the present satisfactory position, had not private enterprise come to the rescue. This fact prompts me to refer to the 4 per cent, profit limit proposal since abandoned. This proposal, under the guise of a war necessity, had for its objective the crippling of private enterprise as a preliminary to the complete socialization of industry. However, I shall leave that matter alone for the present.

I pass by that great industrial establishment - the Broken Hill Proprietary Company Limited - without which our fighting services could never have been adequately equipped, and refer to a smaller industrial concern - Charles Ruwolt Proprietary Limited in Richmond, Victoria, one of many of its kind. Twenty-seven years ago, Mr. Charles Ruwolt had a small engineering business in Wangaratta. The premises were somewhat similar to a blacksmith's shop. He employed half a dozen men. By good management, initiative and skilled workmanship, profits began to appear. Those profits were put back into the business. More modern machinery was installed. He trained his leading hands who in turn trained others. Transferring to Melbourne Mr. Ruwolt pursued the same policy, and to-day there are 5,000 workmen on the pay-roll. When the DirectorGeneral of Munitions was appointed, the establishment controlled by the firm and used for the manufacture of mining machinery changed over to the production of war equipment. Charles Ruwolt Proprietary Limited, like similar undertakings, is the best argument in support of private enterprise.

Senator Lamp - Tell us what the firm is making out of it in profits?

Senator BRAND - Whatever profits are made are being placed in reserve to meet post-war industrial conditions. The present machinery will need renewal and bringing up to date. That being effected, this, and firms with the same policy, can compete successfully with overseas competitors. The result, will be little or no reduction of the number of employees. I venture to say that many more than the dozen or so shareholders in this company who are members of the family are glad that the 4 per cent, profit limit ideahas been abandoned.

Some time ago, it was officially announced that a committee of four Cabinet Ministers was appointed to coordinate the work of departments that may be concerned in post-war planning and generally to review difficulties and requirements. As post-war reconstruction was such an all-embracing subject of great national importance, the personnel of that committee should not be confined to a group of Ministers whose political views are shared by only half the people of Australia. The matter is too complex to be dealt with by a sectional committee.

When, soon after the outbreak of this war, it became necessary to lay the foundation of Australia's vast munitions requirements, the Government looked around for a man with intellect, organizing ability and expert knowledge to tackle the job. Mr. Essington Lewis was chosen. What is wrong with searching for a man of similar calibre to coordinate the transition period from war industry to post-war industrial development? Like Mr. Lewis, he should be given ample scope to gather around him experts as well as representatives of organized industrial labour. The demobilization of Australia's war machinery to peace requirements will be as difficult as was the mobilization of the nation's industrial machinery from peace to war. It is a job for industrial experts - employer and employee. Party politics must be kept out of it. The nation is already sick to death of party politics.

It is true that the Tariff Board is an independent body set up to gather economic evidence and then submit recommendations to the Government of the day; but the Government is not bound to accept such recommendations. The Tariff Board has already commenced its big task of probing into Australia's post-war secondary industries. It will have to try to find an answer to such major questions as: Can Australia absorb into civil employment the vast numbers of skilled and semiskilled tradesmen in our present war establishments, as well as those in the ranks of the three fighting forces ? What pre-war industries can be developed and what, new ones established in order to absorb these men? Will the present markets for Australian-made war supplies east of Suez he available for surplus post-war products from our factories? Will Australian manufacturers be able to compete with overseas manufacturers on the present overhead costs of production? What will Britain's attitudebe?

In pre-war years, Britain said: "I'll take your cheese if you take our chisels." Australia has been compelled to make its own chisels and machine tools since war began. What about the United States of America ? For his share in Australia's protection from Japanese invasion, Uncle Sam will look for some economic consideration.

In conversation with several United States of America officers, I said : " What do you think of our country?" After paying tribute to the hospitality and friendliness of the people, and to the progress made in the past 100 years, they ventured the opinion that we cannot expect American capital to assist in the development of Australia after the war unless there is industrial stability. The officers apologized for their frankness, but that was their candid opinion. Guaranteed this, there is no reason why more branches of big American industrial establishments should not be set up in this country.

Senator Collings - Some of them are here now.

Senator BRAND - The more there are here, the better, because they mean more employment and more markets. There is no doubt that Great Britain, the United States of America and the Dominions, as well as Russia, will have to come to an equitable economic understanding. A new economic order is certain if the Englishspeaking nations are to hold together in peace as they are doing in war. Australia, having proved itself a manufacturing country capable of producing almost anything, will demand, and is entitled to, a share of the overseas markets for the commodities produced after the war by the highly skilled tradesmen. In prewar years, under 5 per cent, of Australia's manufactured goods was exported. This percentage will need to be quadrupled if unemployment is to be averted.

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