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Thursday, 15 September 1949

Mr SPENDER (Warringah) .- We are asked to debate what I confidently hope will be the last budget of the present Treasurer (Mr. Chifley). It is likely to be a memorable budget because, upon the eve of an election, it dismally fails to present any solution of the various problems, external and internal, that will confront this country within the next three years. In fact, it follows the pattern of all other budgets presented by the Treasurer and it is a pattern to which we have become accustomed. It envisages a sterile socialist form of society in which every man will be encouraged to sit still at his job instead or engaging in a real effort to increase production and build up a new and vigorous nation, and will be led to believe that we can live from hand to mouth and from day to day. In short, we have here a depressing budget that offers no solution of the nation's problems, and contemplates, as members of the Labour party are so often prone to say these days, a possible recession or depression, against which the only palliative that is offered is some grandiose and fabulous scheme of public works under which men and women displaced from their jobs are to be directed to the four corners of the Commonwealth to carry out this or that part of a programme of works that still exists only on paper.

At the outset, I want to make three broad observations about this budget. I shall then proceed to develop them in detail. In the first place, this budget can be described as a defeatist document. I say that because it accepts as inevitable the constantly rising scale of costs and prices. It assumes, as a reading of it indicates quite clearly, that in this financial year there will be a continued upthrust of prices and living costs. The Treasurer offers no solution of the problem. He merely points it out. In his view, during this financial year, we will experience an increased cost of living and possibly, for a while, an increased national income because the national income is fantastically measured these days in terms of whatever it costs the community to run the country, whether that is due to rising costs or not. The Treasurer has contented himself with granting only such relief from taxation as he knows will be more than recovered from the swollen pay envelopes, upon which taxation will be imposed, and from the increased imports of consumer goods to which a high tariff will apply.

In the second place, this budget, like previous budgets, is inflationary. It makes no attempt whatever to reduce what I shall term the poultice of extravagant government expenditure, which during the last three or four years has imposed a very heavy and serious burden upon primary and secondary producers, and, indeed, upon all other citizens. We should make it plain to the people, that, on the expenditure side, the Government's obligation is to indicate to them clearly what they are getting for their money. It is well to repeat that what is being spent is not the Government's money, but the people's money. We have to-day a spendthrift government which disposes of every penny of the money that it takes from the people and makes no adequate provision for the future. The Government has had the good fortune to be in office for the last three years with revenue buoyant as the result of the large sums of money that we have received from exports. In that time, it has been falsely assumed that the benefits that have flowed to the people have been attributable to the efforts of the Government. Much revenue has been collected by the taxgatherers and spent, but, although our expenditure is four times greater than it was a decade ago, the people are receiving very little additional benefit. Six shillings of every £1 earned is a very serious impost to take from the people.

A select committee of members of both sides of the House should be appointed to submit plans to limit expenditure to an amount consistent only with the efficient performance of the functions of the Government, to eliminate duplication and overlapping of the services, activities and functions of government and to consolidate the services, activities and functions of government that are of a similar character. The present hopeless waste of public money is very largely due to the overlapping of governmental activities, to the fact that there is no real control of governmental expenditure and to the fact that no authority flows down from the man on top to those below and no responsibility is exercised from the bottom upwards. The government of this country has become a crazy quilt of duplication, overlapping, inefficiency and extravagance. That is aL very well for what I term the " tax eaters who live upon the taxes collected; but it is very bad for the taxpayers. The spiral of rising costs is most serious for the men and women of this country who are confronted with a rising cost of living from which they can find no escape and out of which this Government certainly gives no lead in showing a way.

The wage-earner - and I am dealing primarily with the family man and his wife - is frustrated. Every wage increase is followed by an increase of the price of goods and services like gas, electricity and transport. All these increases eat up the earnings and savings of the people. In truth, under this Labour Government, the people have learned that £1 will buy to-day little more than 50 per cent, of what it would have bought four or five years ago. The tremendous governmental expenditure has not brought about any real advance in governmental services although the Government is spending today four times as much as it spent ten years ago. "We are not receiving any services commensurate with that expenditure. On the contrary, a large bureaucratic machine has been set up and the greatest part of governmental activity is directed to restriction of production. The controls are costly and negative. Throughout the country new works are largely at a standstill. One has only to walk a few yards from this House to see that that is true. Railways and roads are rapidly deteriorating. Most, if not all, governmental planning is still only on paper. In this election year, the Government, for obvious political purposes, has given birth to spectacular schemes for Australia's future. They are merely plans. "When can they be translated into action? What is the Government's answer to that question? In the five years that have passed since the war ended we have not witnessed any real development of Australia's resources beyond the stage of their development ten years ago.

The third broad observation that I desire to make about the budget is that it contains the same cautious approach by the Treasurer to Australia's trade problems as has been revealed in every budget that he has presented. He has drawn our attention to the fact that we may at any time suddenly have our economy changed. Indeed, he has stressed that possibility. He has drawn our attention to the way in which some nations have had their economies suddenly changed overnight by the actions of other nations. He has pointed that out, but he has not given us any indication of how this country's affairs should be arranged to meet the threat. In our export trade, we rely more and more on fewer and fewer types of commodities. We rely mainly on three commodities only - wool, wheat and flour. Our internal economy has been very properly described as a "milk bar economy". We have thrown our productive effort into a large number of activities, many of which have been encouraged by the Government, and, as the result, we have spread our butter very thinly indeed over the bread of our resources. Externally, we rely more and more upon our returns from only three stable commodities, and, in the period in which the Government has been in power, it has utterly failed to harness the resources of Australia.

All the magnificent opportunities that world trade presented when the war ended have been neglected. Therefore, I shall expand my comments under the headings that I have indicated. I emphasize the inflationary character of the budget and point out that it will increase the cost of living very seriously for the people of Australia. From 1946-47 to 1948-49 the Government's expenditure has increased from £431,000,000 to £554,000,000. That is a very large increase. When the attention of the Treasurer has been drawn to this increase, he has been apt to answer, " Well, it is a good thing to take large sums of money by way of taxes during times of high national income, because you are able to make provision against the future by setting aside reserves ". As a principle, I have said that that is right, but the principle has not been carried out in practice. I direct attention to what I said in this chamber in May of this year when I made it clear that I am not one who believes that in times of buoyant national income the Government should return to the people all revenue over and above its current requirements. On the contrary, I take the view that anti-cyclical budgeting is a proper approach to our trouble. The National Welfare Fund has a credit of £80,000,000 which has since been increased to £100,000,000. Should another depression come upon us that credit would disappear within a very short time. The present budget shows only too graphically that my observations were justified, because anticipated expenditure from the National Welfare Fund this year will be £100,000,000, or an amount equal to the credit in the fund. Should a difficult period come upon us - as witness the coal strike, when unemployment reached near-depression levels - it is quite clear that the fund, as presently established, would not last for very many months. Outgoings would increase considerably, whilst payments into the fund would be very seriously diminished. The main point that I seek to emphasize is that reserves established by budgetary financial transfers can be spent only once.

We should not be lulled into a sense of false security about the effectiveness of cautious treasury policy as the answer to full employment and the trade cycle variant. If a high-level governmental expenditure, as distinct from the setting aside of reserves, means that the accumulation of real wealth in the community is retarded, the objective of the Government in maintaining stable conditions of employment will be defeated. In this connexion, I shall make two observations. One is that if no reserves were set aside in times of abundant national income to meet fully the recessive conditions which inevitably follow a big boom, the result would be that heavy demands would have to be made upon the finances of the country, either by taxation or by depreciating the currency, at a time when both national and private incomes were falling. If at a time of buoyancy, when private industry and private initiative should be encouraged, the Government competes with private enterprise for reserves, private industry will be rendered less able to take up the slack when depressive conditions arose. The only course then open to the Government, as indicated in the budget speech, would be the implementation of a mammoth public works programme, which of necessity would require the direction of massive movement of people from one place to another in order to carry out the various projects. Is this the kind of living to which we are to become accustomed? I am reminded of the Prime Minister's observation two or three years ago that we were coming to the period of the " golden age ". Now, however, we are walking through the valley that leads to depression. We have been reminded that a depression may take place, yet the Government has advanced no plan whatever in its budgetary proposals to deal with s\ich a contingency. At a time when I should have thought that we would be laying down the foundation for a vast productive effort on the part of private enterprise the Government is doing its utmost to retard private enterprise. It is significant that in other countries that do not share the idea that socialism is the answer to all evils - I speak in particular of Canada and the United States of

America - a remarkable standard of living has been achieved, because their standard springs directly from private enterprise and private initiative. A comparison of our production with theirs in respect of two major matters reflects very seriously upon the Government's handling of the economy of this country. In the United States of America the production of bituminous coal was 50 per cent, higher in 194S than in 1939. The production of anthracite, similarly compared, showed an increase of 12 per cent. In Canada, coal production was 28.9 per cent, higher in 194S than in 1939. A further improvement in the first four months of 1949 resulted in a rate of production 35.4 per cent, higher than before the war. In South Africa production in 1948 was 48 per cent, higher than in 1939.

We hear frequently that only Labour supporters can persuade workers to produce. Let us compare what has been Jone in the coal industry of this country with what has been achieved in South Africa, Canada, the United States of America, under three different types of government, of which all three share the common objection that we on this side of the chamber have to socialism. They have increased their production of coal by from 30 per cent, to 50 per cent. In Australia, however, the production of black coal was only 9.45 per cent, higher in 1948 than in 1939. That is an extraordinary comparison.

Mr Menzies - Does that include production from open Cuts?

Mr SPENDER - Yes. I shall deal with that aspect in a moment. The shameful fact is that in New South Wales underground miners produced 6.1 per cent, less coal in 1948 than in 1939. Their production rate for the period from the 1st January, 1949, to the 18th June, 1949- prior to the recent coal strike - was 1.1 per cent, less than in the corresponding period of last year.

Mr Daly - From where did the honorable member obtain those figures ?

Mr SPENDER - I obtained them from the office of the Commonwealth Statistician. I am not accustomed to making statements in this chamber that are not based on fact. In this country the production of black coal has increased by only 9.5 per cent, over a period of approximately ten years. In that period, also, we know that industry generally has developed at an extraordinary rate. Although the demand for coal has increased, the Government has done nothing whatever to measure up to its responsibilities to increase the production of coal, which is the very basis of our industrial life. Production from underground mining is now less than it was ten years ago. When the result of the coal strike is taken into consideration it will be found that the production of underground miners in Australia, particularly in New South Wales, will be very much below that of last year. The all-too-negligible overall increase of coal production in this country is attributable solely to the development of open-cut operations. Such activity could have been increased tremendously if the Government had pursued an imaginative policy. I venture to say that if the Government had taken the trouble to allow the import of modern earth-moving equipment, which, as I have said on more than one occasion, we could have acquired had Ministers used their imagination, the production of coal from, open-cuts in this country would have been four or five times greater than it is at present. We should then have been in a position to measure up to our. responsibilities and to give the Australian people a better standard of living. That should be our primary objective at all times.

It is significant that the Treasurer, in his budget speech. said that we had increased our manufacturing capacity by 50 per cent, on the pre-war figure. I emphasize the word "capacity". The words used by the right honorable gentleman were these -

In manufacturing, our capacity has increased at least 50 per cent.

He did not state that we are now working to only 70 per cent, of our capacity. If our capacity has increased by 50 per cent, and we are now working only to 70 per cent, of a capacity of 150 per cent, of the pre-war figure, that means that in ten years our overall production has increased by only 5 per cent. That is the position in Australia, but in other countries of the world where the clammy hand of socialism has not been fastened upon the national economies, the production of goods, especially coal and steel, from which most other goods flow, has increased considerably. In the United States of America and South Africa coal production has increased by 50 per cent, and 48 per cent, respectively. In this country it has increased by only 9 per cent. How can we discharge our responsibilities when production in this country is being retarded?

Output has been retarded for two main reasons which I need not state at any length. First, the Government has failed completely to exercise industrial discipline and to prevent the dislocation that has occurred. It has failed to support the arbitration system, with the ultimate result that during the recent general coal strike our economy was brought to a halt. Secondly, the Government by its restrictive policies and its taxation proposals, has refused to give any encouragement to private industry. Let me take, as an example, the figures relating to the production of steel, which is a basic requirement for the development of this country. In 1948 the production of steel ingots in the United States of America was 172 per cent, of the production, in 1939 and in May of this year the figure had risen to 184 per cent. The corresponding figures for the production of pig iron in the United States of America are 171 per cent, and 189 per cent, respectively. In Canada, which is a nation that is not very much, larger than Australia in terms of population, the production of steel ingots in 1948 was 147 per cent, of the production in 1938, and in March of this year it had increased to 160 per cent, of the 1938 figure. The story as it relates to Australia is a lamentable one. In 1948-49 the production of pig iron, blooms and billets, and steel ingots in Australia was less than the production in 1938-39 by 6.3 per cent., 11.9 per cent., and 3.3 per cent, respectively. The figures that I have given cannot be waved aside or dismissed with the statement that we have had difficulties to contend with. Other nations have encountered difficulties since the end of the war. Honorable members opposite often gibe at the United States of America, but during the last war that country very largely supported the Allied war effort on two fronts simultaneously and at the same time maintained an extraordinarily high standard of living for its people. That was achieved under what I term a free economy. Canada also made tremendous sacrifices during the war, but during the period that has elapsed since the war ended it has increased very greatly its production of coal and steel compared with the production in 1939. Australia, which has had a socialist Government during the post-war period, has to acknowledge the unpalatable fact that it is now producing less steel than it produced a decade ago. If that condition of affairs is allowed to continue, how can we develop this country and improve our standard of living, and how can the " golden age " that the Prime Minister so easily promised three years ago be anything more than a vision that is steadily receding? I have mentioned coal and steel, which are two basic products, because they reflect the position of many other commodities.

The truth is that the Australian Government is following an ideology that is now outmoded. It is following the old publications of the London School of Economics and the socialists of years gone by, who propounded what they thought to be cures for the ills of a society that had been over-developed and which could not absorb its productive capacity. The Government has failed completely to understand that the problems of Australia will not respond to the socialistic approach. Progress in this country was not won by adherence to socialistic dogma but by the sweat of the brows and by the imagination of free men. It was won by individual pioneers and not by socialists. Goodness knows what would have happened to Australia if a socialist government had been in power at the end of the last century and the beginning of this one. The foundations of this country were laid by free men. While the Labour Government has been in office Australia has had a golden opportunity to ensure its prosperity. We have received very high prices for our exports, and there has been a vast world market waiting for us, not only in respect of wool, wheat and flour but also in respect of many other commodities. During that time the Government has sat still. It has been hogged in socialistic ideas that are tied to the thinking of a generation ago.

I shall now deal with the way in which the Government's policy is affecting the cost of living. Although a decrease of the national income is imminent, revenue in this year is increasing. As the Treasurer has pointed out, there is likely to be an upward thrust of prices for a large part of this financial year, if not for the whole of it. What has the Government done to deal with that problem ? It is taking 6s. in taxes out of every fi that the people earn. It has been said that taxation is being reduced, but that is merely a dodge. If taxation is being reduced, it is very strange that the annual revenue from taxes now is approximately £160,000,000 more than it was three years 'ago. Instead of taxes being collected through direct imposts on incomes they are being taken from the people by way of indirect charges that affect the cost of living. By that means it is made difficult for the people to realize how much they are being taxed, as the full tale of taxation does not appear in their income tax assessments.

Sir Earle Page - It is a great illusion.

Mr SPENDER -- It is also a wicked illusion. There was a Prime Minister of England, I think it was Pitt, who said a long time ago that the power of imposing indirect taxes gave power to the government to tax the shirt off the back of the worker.

Mr McLeod - It is not the policy of the Opposition to help the worker.

Mr SPENDER - The honorable member for Wannon (Mr. McLeod) has not been a worker for a long time, so he need not start chipping in about the worker. He has forgotten about the worker. The Australian worker is supposed to be led by the Labour Government, and yet the truth of the matter is that the average man with a family, who earns an average wage - not the man like the honorable member, who is earning £3,000 or £4,000 a year from sheep-raising - is struggling hard to make ends meet. Yet the only concession that the Treasurer has given in this budget, apart from a slight reduction of sales tax - any loss arising from which the Treasurer knows that he will pick up in some other way - is an increase of the concessional deduction relating to payments on account of insurance. By the strangest circumstance this sole concession, which increases the allowable concessional deduction in respect of insurance payments from £100 to £150, is only to serve the interests of the Labour party. The Labour party parliamentarians said to themselves, "Now, we have to pay £150 under the pensions scheme for members of Parliament, and of that amount we are at present allowed only £100 as a concessional deduction for income tax assessment purposes, so let us jack the concession up to £150". How many working men pay £150 a year for insurance? Will the Government tell us that this concesion has been designed to assist the working man. Or will it tell us that it is designed to help the rich man ? Which is it designed to help ?

Mr Thompson - It is not for the working man. The honorable member knows that.

Mr SPENDER - Well, that is good enough. I cannot imagine this socialist Government making the only concession in the budget to the rich man. The concession was designed for members of the Parliament on the Labour party side who have plundered this country in every way that they could. If honorable members will study the provisions in the Estimates they will find that the expenses incurred in respect of all the committees of this Parliament have increased considerably. I refer, for example, to the Broadcasting Committee and the Public Works Committee. No one in the world will believe that the increase of the concessional deduction on account of insurance payments from £100 to £150 was given other than as a means of serving the interests of members of the Parliament. We on this side of the committee did not ask for that concession. It was decided upon, in the Labour caucus and its purpose is the purpose that I have stated. How can the Government expect the people of this country, who are faced with the increasing cost of living, ever to have confidence that they will be able to solve their problems, when they see things like this being done? It is a case of members of the Parliament who are in control of the government of the country using their position to serve their own ends and not the ends of the public. That is consistent with the policy of this Government, which spends money with the utmost extravagance. It spends as much money as it can get.

The Government pretends that it has reduced taxation because it has reduced indirect taxation revenue by £7,000,000. It claims that that is a real concession but it knows that, because of the increased cost of living, it will more than recoup itself for that £7,000,000. It is also strange that the amount of loss to the revenue as the result of reductions of indirect taxation, which will amount this year to slightly less than £8,000,000, is equivalent to the amount of money which the Government has had to add on to its budget for the purpose of paying to the States money to meet, it is said, the costs that were incurred by the States during the recent coal strike. I shall give some figures relating to indirect taxation so that the people may understand how they are being burdened, because it is of no use to tell the ordinary man that because his income tax assessment does not show him to be liable for much taxation, he is not being taxed just the same. The taxpayer should know that increased costs of production are ultimately reflected in his cost of living through increased costs of goods and services. Consumers will have to find £160,000,000 for the Treasurer this year through customs, excise and sales tax. The cost of goods to the consumer will, therefore, be at least £160,000,000 higher than if those levies were not imposed. Those taxes permeate the whole of society. Who will pay this huge sum of £160,000,000 in indirect taxes? How will it be collected? It will be collected entirely through sales tax and the hidden imposts of customs and excise duties. But that is not the sum and substance of the evil, because the imposition of those indirect taxes will have a tendency to increase even more the costs of production. If the cost of production rises the cost of goods will rise more than proportionately, so that an even heavier burden will be cast on the consuming public by way of this indirect taxation.

It has been the habit of the Labour party - I should call it by its true name, the " socialist party ", but it has been masquerading under the name of " Labour party " for a long time past - to say that the sales tax is applied only to luxuries. That is so much nonsense. I have taken the trouble to find the relevant facts in the Taxpayers Bulletin for March, 1949, which show that sales tax and import duties are imposed on a very wide range of goods from biscuits to baked beans and from cocoa to canned cabbage. There is sales tax on coffee and import duty on tea, and there is a tax of 2s. in the £1 on breakfast foods. There is also a tax upon a large number of items used in the construction of buildings. Each one of those imposts reflects itself in the cost of living.

What is the Government's approach to the problem of the increasing cost of living? Honorable members opposite have been complaining for a long time about the fact that the people who, after all, are the masters of the Government, refused to give them control over prices. In the years between 1940 and 1947, before the prices referendum was held, we had in this country a system of substantial payments of subsidies that kept the cost of living down. What did the Government do immediately the prices referendum was over? It changed its policy almost over night. Prior to that time the Labour party always supported the principle of subsidy payments to keep the cost of living down. Immediately the referendum was over, it used the vote as an excuse or alibi - because as I said last night this is a government of alibis. It announced that if it could not control prices it would not pay subsidies, and it rapidly diminished all subsidies, with the result that the cost of living of every person in this country went up. Thus the cost of living has increased very substantially over, for example, the last seven or eight months, in respect of, to quote only one range of goods, all men's wear and children's wear. That has been due to the policy deliberately followed by this Government. I say that the Government cannot remove subsidies while still imposing high taxation and incurring high governmental expenditure, and yet expect to bring the cost of living down. To attempt to do so would he what I can describe in no other words than "lunatic budgeting".

I now propose to discuss Australia's trade with the United Kingdom and other .overseas countries, but first let me say something about the dollar problem. Attention has frequently been drawn to the need to rehabilitate Western Europe, and the matter is mentioned in the budget speech. The needs of Western Europe are not confined to dollars. I crave the indulgence of honorable members to read the following passage from the budget speech: -

As a counter-part to Marshall aid, a system of intra-European payments was established last year with the object of providing funds by which European countries could within limits buy from their neighbours more goods than their own earnings would cover.

It is proposed that, with modifications, this scheme will be continued in the current year, in which case the United Kingdom will again make large contributions in sterling. This is because sterling, which is the means of buying goods not only in Great Britain but throughout the whole sterling area, is for many countries a very scarce currency. The United Kingdom, as honorable members know, has during the post-war years given very large financial aid to countries in Europe and this has helped them considerably to restore their industries and trade.

I pause there for emphasis. Europe must be rehabilitated. It needs to buy from other countries more than its current production enables it to pay for. It is in need of two currencies, dollars and sterling. Because some European countries need sterling, there has been established an intra-European system of trading. What staggers me is that, although Australia's economy is bogged down because we cannot obtain essential imports from hard currency areas, no positive action has been taken by the Government to get dollars. Europe is in need of goods which can be obtained from either dollar or sterling areas. The rehabilitation of Europe is by no means complete, so why is it not possible for Australia to supply more of the sterling goods which Western Europe needs? A government with a truly Australian point of view would say : " We have sterling balances in Great Britain, and,, above all, we have goods which we can supply to Western European countries. We can greatly increase our production of those goods so as to hasten the rehabilitation of Western Europe. We are prepared to make available our sterling funds so long as we receive a quid pro quo to enable us to import the things we vitally need ". However, this Government persists in its negative attitude, and in its policy of restriction. It recognizes, as we all do, the tremendous problem with which Great Britain is faced. It recognizes Britain's need for dollars, but its only cry is " We must further restrict imports from hard currency areas ". I refer honorable members to the following significant passage in the Treasurer's budget speech: -

It will be clear that, apart from longer-term considerations, the issues being discussed in Washington have a critical present importance. Further restriction of imports, whilst necessary to check the fall in gold and dollar reserves, obviously cannot be carried beyond certain limits without causing grave dislocation to industries and standards of living in the countries concerned. In any case, it can in itself contribute nothing to the solution of the dollar problem which requires a positive effort to lift levels of trade rather than to reduce them.

That has been said time and time again from this side of the chamber during the last three or four years. We have declared that it is impossible to solve the problem by applying a policy of restriction. There must be a positive approach. I have looked through the budget speech carefully for signs of such an approach, but there is none. The Treasurer discussed the London conference, which was attended by the Minister for Post-war Reconstruction. One would have expected that, from such a conference, there would emerge a plan that would be stated in plain terms for Australians to understand, so that they would know what was required of them, and what recompense they might expect if they produced more goods. The Treasurer has admitted that restrictions cannot solve the problem and that they would reduce the standard of living, as they have, in fact, already done. As I have said, one would expect a positive approach from the Government, but I invite honorable members to note the generality of the language used by the Treasurer in his speech, and the lack of any indication of a positive policy. He said -

At the London Conference, where Australia was represented by the Minister for Defence and Post-war Reconstruction, Mr. J. J. Dedman, long-term aspects of the problem were considered and agreement was reached as to major objectives which should be pursued-

What does that mean? Looking over the hill, at the end of the tunnel, or something of that sort, I suppose. The right honorable gentleman continued -

.   . long-term aspects of the problem were considered and agreement was reached as to major objectives which should be pursued-

Did any one ever before hear such drivelling twaddle in a Parliament?

Apparently we have some objectives, which are major ones, and some long-term aspects, which means, I suppose, taking the long view of our objectives, but what is to come of it all no one knows. Then the Treasurer passed from the general to the particular, and continued -

In particular it was thought that the central aim of all countries should be the achievement of a pattern of world trade in which the dollar and non-dollar countries should be able to operate within a single multilateral system, and that the strength and stability of sterling as an international currency should be a major goal.

I have no doubt that a boy in the first class in economics could have written that generality, but the words I have quoted were spoken :by our Prime Minister when he was telling the Parliament what the London conference did. It is no wonder that I have complained that the Minister for Post-war Reconstruction does not represent Australian sentiment. He cannot see the problems of this country through an Australian's eyes. The honorable member for Hume (Mr. Fuller), apparently, is about to interject. I advise him to listen to what I have to say because it will be the last chance he will have of listening to a budget debate in this House. We are confronted with a major problem involving international payments, increase of our trade and disposal of our commodities. Yet, in this time of great crisis the Treasurer merely tells us that, in particular, it was thought that the central aim of all countries should be to have a single multilateral system in which goods flow freely and dollars are easily convertible to sterling. The Treasurer might as well have said that it was thought that there should be harmony and goodwill between all countries and that that should be the major aim of our policy. Nothing has been forthcoming with respect to those proposals. Yet, the Australian people, particularly the primary producers, want to know what is to happen to their products. It is useless to talk to the Australian people about producing more goods unless they are satisfied that as the result of producing more goods their standard of living will be raised. We are producing goods and sending them to Great Britain, and for them we are getting sterling credits. Our income in that sphere is increasing, but we have not raised the standard of living in this country as the result of that increased production. We need dollars but the Government is making no effort to solve the problem. It has not made any effort to increase the production of gold. I shall amplify what I said on that subject some time ago.

Mr Rankin - The supporters of the Government talk a lot of " tripe " about the golden age.

Mr SPENDER - Yes; but we have not heard them speak very much about gold. We can produce gold in increasing quantities in this country, and although we cannot eat it, gold is equivalent to dollars for the purposes of our economy. But what is the position? As I pointed out last night, this is a sad story of lack of production; but the story is even worse in respect of gold than it is in respect of steel. In the period immediately preceding the outbreak of the last war our normal production of gold was 1,600,000 fine oz. per annum, which on present prices would he equivalent to fA.16,000,000. But, to-day, we are producing only 800,000 fine oz. of gold. In that period our production has been halved. If we brought our production of gold back to pre-war levels, we would on present prices of gold, increase our fund of hard currency by approximately £8,000,000. But the Government has done nothing in that direction. It has not only allowed the goldmining industry to become stagnant; it has even discouraged the industry. Why has it done that? [Extension of time granted.'] When the Minister for Post-war Reconstruction (Mr. Dedman) returned from the London conference, he spoke in the same terms as the Treasurer and he himself now speak in this House. We are told now that the idea was to have multilateral trade, to have a breaking-down of tariff barriers. When the Minister spoke on the International Monetary Agreement,, honorable members on this side of the House pointed out that the pegging of the price of gold was against the interests of Australia as a gold-producing country. Did the Minister, when he was overseas, speak in the interests of Australia? No. He and his colleagues spoke in terms of socialistic internationalism, and in doing so played into the hands of other countries. They sold Australia. We have now, but only as the result of what members of the Opposition have said, a conversion of the Government to the need to seek an upward valuation of gold. That move, of course, is being resisted by the United States of America, which holds the key to the position. By virtue of the agreement which the Minister for Post-war Reconstruction signed on behalf of Australia, the United States of America can now say to us, " No, there can be no upward valuation of gold under the agreement which you have signed ". Consequently, Australia, which is a goldproducing country and is producing in abundance all the things which the world urgently requires, cannot get the things it needs except by the will of other countries. The Government offers no solution of that problem. It simply says that we cannot solve it. Yet, it gives no encouragement to the gold-mining industry to increase production; and, because of its action we cannot get any upward valuation of gold unless other nations agree. This is the Government which is supposed to represent Australia's interests !

Little by little there will sink into the public mind the fact that in this splurge of internationalism and the Government's pursuit of socialistic goals, this country's interests have been sacrificed. We are not in our present position as the result of the United States of America having a lot of dollars. That is not the reason. The disparity in world trade is due principally to the fact that production per man in hard currency countries is very much higher than our own rate of production. However, the Government little realizes that on vital matters, as we shall find it to be our experience under the Havana Agreement also, it has sacrificed our own interests and has made it more difficult independently to solve our problem with respect to hard currency. Consequently, we have been forced to adjust ourselves more and more to what other countries determine for us. In other words, we have been robbed more and more of any independence of national action as the result of what the Government has done. The truth of that statement is being proved to-day. I have already cited gold as one example. It is being proved bit by bit that the socialists of this world, of whom the members of this Government are only a portion, are steadily destroying the resilience of new countries and their ability to develop their resources. Australia stands in circumstances which are entirely different from those of most other countries. This is a new country practically on the threshhold of great nationhood. Yet, by agreements overseas, the Government has tied our hands, and we are now reaping the consequences of its actions. I have sought to make it clear that this budget holds out no hope to the people at all. It merely tells the people that they are to contribute 6s. of every £1 they earn to the Government's coffers; and the Government will grab an increasing proportion of their earnings. They are told that Australia is in difficulties overseas, and because we cannot get dollars they must go without this or that article which can be obtained only from dollar areas. The Government says that it cannot buy dollars, or produce good's to obtain them. It simply tells the people that there is no hope for Australia. This budget has been described as a budget of no promises ; to me it is a budget of no hope.

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