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Thursday, 5 March 1942

Mr SPOONER (Robertson) .- I remind the House and the Treasurer (Mr. Chifley) that, up to the end of January, the Government has been obliged to lean on the system of shortloan credits through the central bank to the amount of more than £70,000,000. I have been very interested in the Treasurer's statements and his declarations regarding the trend of expenditure. It is quite evident, that Australia is approaching a point where the annual war expenditure will be not less than £300,000,000. The amount by which it is found impossible this year to bridge the gap by revenue and loan is the amount by which the country will be compelled to depend upon its inner financial resources, and we are only at the beginning of that problem now. The Treasurer is quite well aware of the difficulties with which he will be confronted during the year 1942-43. I urge the Government to take steps now - not at some time in the future - to ensure that there shall be no inflation in Australia. Unless the Government is prepared courageously to tackle the rationing of supplies, inflation must follow. There are many difficulties in the way, and some of them are political. It is hard to devise machinery for putting the system into effect, but unless action be taken the financial difficulties of the Government will increase progressively. If the Government will embark upon a scheme for rationing it will receive much support from this side of the House. I shall give all the assistance I can, and so will many other honorable members on this side. Unless something be done to ensure that a greater propor tion of the money now passing through the industrial structure shall be diverted into government channels, the Treasurer's financial difficulties next year will be very much greater than they are at present.

Mr Wilson - Why not take the money in taxation?

Mr SPOONER - The honorable member is suggesting something that is not acceptable to the Government. 1 have in mind particularly the huge spending power that lies in the hands of people with incomes below £400 a year. If the Government, in its wisdom, decides that, for the present, it cannot go further than it has gone in the direction of taxing the lower incomes, it should take what steps are necessary to limit the expenditure of those moneys which it leaves in the hands of private persons. That can be done only by introducing a system of rationing, if necessary by the use of coupons, in respect of consumer commodities. If the Government doe.not do this now. it will be forced to do so later.

I urge the Government to be consistent in the application of its financial policy. It is not consistent for one department to endeavour to get as much money a? possible from the people by way of taxation, and for another department to try to force profits back into the hands of the public for further expenditure, which is the policy of the department administered by the Commissioner for Prices.

Mr Conelan - It will be necessary to sack the economists.

Mr SPOONER - Australia to-day is an economist's dream, but very much of what is being done by the economists is contradictory. Through one department the Government is properly trying to get as much of the spending power of the community as possible into its own hands, while, through another department, it is trying to keep that spending power in the hands of the public. It is evident that a demand for consumer goods of a non-war character is being set up in competition with war needs. That ia one of the Treasurer's present difficulties, and that difficulty will be trebled next year unless action bo taken to remedy the position. The

Government will receive substantial support from members of the Opposition if it courageously tackles these two matters, namely, the rationing of consumer go 0(1 S and the necessity for obtaining consistency between the Treasury and the department responsible for limiting profits.

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