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Thursday, 25 August 1960

Mr CREAN (Melbourne Ports) .- The Leader of the Opposition (Mr. Calwell) has moved, on behalf of the Labour Party, that the first item in the Estimates be reduced by £1, which is the traditional way by which an Opposition records its disapproval of an inadequate and unjust Budget. The honorable gentleman has done so because the Labour Party believes that the Government has failed to grapple with the problems of inflation as they beset the nation. It seems to have become the policy of the Government not to answer for what it has done, or what it has not done, but to say to the Opposition, " Well, what would you do about the position, anyway? " I believe that at budget time it is the primary duty of the Opposition to attack the Government where it believes it to be vulnerable.

To-night the Prime Minister spoke, and we did not have to move that he be granted an extension of time, as we had expected. In fact, he did not take the half-hour to which any honorable member is entitled, but he did repeat the four points that have been quoted almost ad nauseam by the Government since the Address-in-Reply debate some seven or eight months ago. I can only touch on them briefly. The Prime Minister says that the Government is co-operating with the Reserve Bank in restricting credit - or in a credit squeeze. It has intervened in the Australian arbitration court in a wage freeze, and it claims that it is entitled to great praise because of a new policy. This new policy is revealed in the presentation, not of a deficit budget but of a balanced budget or of a budget with a surplus. The fourth thing for which the Government believes it should be given credit is the removal of import licensing.

Those points are the broad substratum of this Government's economic policy at a time when it is admitted, even by the Government, that a state of inflation exists in the nation. We of the Labour Party believe that some people profit by inflation, because, if they did not, inflation would not be continued. But because of inflation the vast masses of the population suffer from great injustices and it is the task of the Government, where it can intervene in economic policy, to attempt to redress those injustices. Even the Treasurer (Mr. Harold Holt) said the other night, " The Budget is not the only instrument of policy that the Government has at its disposal. There is monetary policy and there is trade policy, which have important roles to play." He says there must be consistency between those three factors - the Budget, monetary policy and trade policy. 1 hope to show, later this evening, that there is something else, also, that the Government ought to be having a look at and which goes to the very root of this problem. I refer to the fact that in this situation, which is basically one of price inflation, nothing whatever has been done by this Government to intervene at the point which is the source of the trouble. The Government springs into action after the wageearners have endeavoured to get back a little bit of what they were entitled to. All at once, we are told that inflation, which had formerly been creeping, is now rampant or leaping. The Government is worried not while profits or prices are merely rising, but when the wage-earner attempts to get justice. After all, the wageearners form the majority of family units in the Australian community and the wage is the only means they have of enjoying their share of what the Government is pleased to call prosperity. We do not deny that prosperity exists and probably exists, in the aggregate, to a greater extent in Australia in 1960 than ever before. And why should it not? Australia is a nation well endowed by nature with natural resources. Its population is growing by reason of natural increase and also by immigration by 2 or 3 per cent, per annum.

The Treasurer said in his Budget speech that the wage-earners of Australia had received nearly £300.000,000 more in this financial year than in the previous year. But he did not say that, at the end of June, 1960, there were 93,000 more people in employment in Australia than there had been at the end of the previous June - an increase of 3.4 per cent, in the wageearning force. He did not say that, during the year, there had been a 6 per cent, increase in prices. When you link those facts you realize that there was very little real increase in wages in the last financial year. In fact, if you analyse the figures closely enough you find that the real share of the national income received by wage-earners was almost stationary. The Government never gets down to the root of these problems.

We are told that the Budget can be a dominant instrument in the economy. Primarily, what does this Budget do to alter the situation which existed before its introduction? It restores the 5 per cent, reduction in income tax which was made at this time last year. This seems to me to be a recognition that the policy then adopted was wrong. The Budget imposes an additional tax of 6d. in the £1 on company profits earned last year. Those are the sole changes so far as the Budget as an instrument of policy is concerned.

The Treasurer proposes to pay a small additional amount to those in receipt of social services. He proposes to pay them another 5s. a week, which is less than the fall in the value of their existing pensions due to the raging of inflation during the last year. Because of the effect of the 6 per cent, increase in prices, an increase of 5s. in the pension of £4 15s. a week merely leaves the pensioners where they were before. They are no better off. They are only as well off as they were twelve months ago. Yet this is regarded as largesse by the Government. 1 think it is time that the Government grappled with the problems of the community. I wish to direct the attention of the Government and the Treasurer in particular - I see him in the chamber now - to a document which I suggest is not usually quoted on this side of the chamber. _This is the thirteenth annual report of the Bank for International- Settlements for the year ended 31st March, 1960, which surveys the economic conditions in member countries. The report reads as follows: -

Budgetary and monetary policy, wage policy and the price policy of enterprises have to move in harmony if inflationary tendencies are to be kept in check. " Enterprises " means " businesses ".

In this country, of course, budgetary policy is a public matter. Because we have a Reserve Bank, monetary policy is subject to a certain amount of public control. In relation to wage policy, we have had the spectacle of the Government directly intervening, as a government, before the court and saying that certain wage increases should not be given. Wages are publicly regulated in this country, but the price policy of enterprises is not touched. Yet this conservative body, the Bank for International Settlements, says that if inflation is to be halted, if there is to be harmony between the various sections of the community, it cannot be done without doing something that will affect the price policy of enterprises.

Australia is like some other parts of the world in which the distinctive form of business enterprise consists of large-scale corporations, which are sometimes referred to as monopolies, or semi-monopolies, or oligopolies or some other term. These are -economic organizations which, because of their size, can no longer be described as " private enterprises " in a real sense of the term. What sort of stakes are at issue? The "Financial Review" of 11th August, 1960, referred to what that publication was pleased to call the " battle of the grocers " the great drama that has been going on between two great retail organizations, Woolworths and Coles, for the possession of a chain of grocery stores. A battle has been taking place between financial institutions with profit in mind; but at stake is the destiny of the daily budget of nearly every housewife in the metropolitan area of Sydney and, ultimately, in Melbourne. What do we read concerning the battle of the grocers? We read -

This meant that in Melbourne alone something like 120,000 Coles shares had been traded in the four trading days to Tuesday and their price had been forced down from 19s. 3d. to 17s. 4d. . . .

This sort of thing is more than a private event. It is a public event. This is the sort of event in which there should be intervention. We have heard about the zeal of the new Attorney-General (Sir Garfield Barwick) to reform the law and control this sort of thing. He has been going to introduce a law to curb this sort of thing. Meanwhile, it is going on to a greater extent than ever, while all that the Government wants to do is to reach out to stop the wage-earner from taking up the leeway in the effect that inflation, which this sort of activity promotes, has had on the fruits of his labour.

I want to cite a set of figures which I have brought up to date for this occasion. I gave them during the Budget debate last year. They show the structure of the cost of business activity in Australia.. They indicate at least that there are other things which, in the aggregate, are just as important to the cost structure as are wages, in respect of every one of which the Government has either done nothing whatever or has itself been an active agent in their promotion. I refer to the table which is contained in the document known as the " White Paper on National Income and Expenditure ". I hear a Government supporter laugh. This is nothing to laugh about. This paper shows, in the aggregate, the incomes received by every individual in the Australian community, lt shows how these incomes are shared between wages, profit, interest and rent. Honorable members on this side- of the chamber are primarily interested in the share going to wages, because the wage-earners form about 80 per cent, of the Australian community, although they get little more than 60 per cent, of the total of goods and services. For the year ended June, 1960, the total outlay of what are called " trading enterprises " reached1 the gigantic sum of £6,068,000,000, which represented roughly about three-quarters of the total economic activity of Australia. The wages item was the biggest single item in that table, and so it should be, because wages are the sole source of income of the- main section of the Australian people. Wages aggregated £2,606,000,000, or near enough to 43 "per cent, of the total outlay of £6,068,000,000. Company profits in aggregate were £672,000,000, or 11 per cent, of the total outlay. The surplus of public authority undertakings was £100,000,000, and that was aggravated by this Government's increasing postal charges by £17,000,000 more than was necessary to balance the receipts and expenditure of the Post Office. That is why I say the Government itself has actively intervened in regard to some of the items set out in this table, not to restrict them but to increase them.

Farm income is a matter in which honorable gentlemen opposite ought to be interested. The aggregate of farm incomes was £466,000,009, or 7i per cent, of the total outlay. Farm incomes have declined over recent years. Other business profits - those of the small businesses in the community - aggregated' £577,000,000, or nearly 10 per cent, of the total outlay. Net interest and rent amounted to £367,000,000, or 6 per cent, of the total outlay. This Government has been an active agent in both increasing the interest oh its own securities and failing to check the exhorbitant interest rates which are charged on everybody else's securities. The next item is indirect taxes. This Government is an active agent in imposing taxes. The total of indirect taxes was the gigantic sum of £772,000,000, which was more than a quarter of the total wages bill. Indirect taxes account for £1 in every £8 of costs in Australia. Allowances for depreciation, which are amounts appropriated by companies and businesses before they compute and are taxed on their profits, totalled £512,000,000, or eight per cent, of the total outlay.

Over the period during which this Government has been in office the outlays in respect of these items have actually risen more rapidly than have wages. Yet the only time this Government takes action is when the wage earner, through the machinery of an arbitration court, takes the only possible action and seeks an increase in wages so as to maintain his real standard, having regard to the increases in prices that have occurred.

The Government chides us on this side of the chamber and says, " What would you do?". It is the Government which should be doing something. It is this Government which, for the time being, is charged with the responsibility of governing this country. Surely " governing " means endeavouring to do justice to the various sections of the community, but at the moment the greatest injustices in this country are being wrought against those people who are on fixed incomes - that is, among others, the 500,000 or more people in receipt of social service payments - and also against the wage-earning family groups in the community, when the prices they have to pay are rising far more rapidly than are their wages.

I ask honorable members to contemplate the situation which is developing in the Australian community. It is all very well for Government supporters to say that last year the number of jobs in Australia increased by 93,000, but I ask them to have a look at the report on Australian manufacturing indust y in the next decade, a document prepared by a council set up under the authority of the Minister for Trade (Mr. McEwen). Referring to the next decade, this document says -

The Council estimates that the Australian work force will number 4,700,000 by June, 1965, and 5,300,000 by June, 1970. This will represent an annual rate of increase of approximately 24 per cent, in the work force between 1960 and 1970, which is somewhat higher than the expected annual fate of growth in total population.

Therefore, roughly 100,000 to. 125,000 additional jobs' will heed to be found by the end of June in one year, as compared with the end of June in the previous year. Yet the Government tries" to' take credit unto itself because last year there" was an increase of 93,000 in the number of jobs in Australia, and last year" was the first year for a long time, in which there was any significant increase. I suggest that the Government study Some of its own documents. I shall refer to one which was quoted in this chamber last night by the Parliamentary Secretary to the Minister for Trade, the honorable member for Darling Downs (Mr. Swartz), lt is a document entitled, " Survey of Manufacturing Activity in Australia". Already in some sections of industry apprehension is being felt about the capacity of industry to increase in the next year or so as it has in the past. This document says -

At the time of the survey-

That was only a few months ago, because this document is hot off the press - manufacturers interviewed generally expected output and employment to continue to increase until September, 1960, though at a rate of growth lower than that of the previous 12 months.

Yet the rate of growth over the last twelve months was nowhere near sufficient to meet the programme that is required for Australian manufacturing industries, in the estimation of the Department of Trade, which prepared this document.

It is all very well for the Prime Minister (Mr. Menzies) to say that certain people' in the community want a restriction of Government spending and for him to take great pride in pointing to the fact that this year public works expenditure by the Commonwealth Government will be £4,000,000 less than in the previous year, but do not the' States want tens of millions of pounds more' for schools and hospitals? With reference to those matters, the report on Australian manufacturing industry in the next decade says -

The age distribution of the Australian population is such that within the next decade there will .be a need for a great increase in educational facilities and. in housing.

Apparently, the Government points with pride to the fact that, having been chided for reckless Government expenditure, this year it has reduced the amount to be spent on public works. I suggest that any government that does that is recreant to its trust. Since changes, structural and otherwise, are being made in the Australian community, the .Government should be examining those changes.

Another council drew, attention to the need to examine certain features pf oversea investment . in Australia... In a document entitled " Oversea Investment in Australia " the Manufacturing Industries Advisory Council refers to the extent of control exercised by oversea interests over individual companies and industries in Australia. This council is another one set up by the Minister for Trade. The Government is a great one for setting up councils, getting advice from them and then ignoring the advice. In the document to which I have just referred the council says -

The extent of control exercised by oversea interests over individual companies and industries ... is a matter warranting careful examination with a view to making a sound assessment of the nature and extent of oversea ownership and control of Australian companies and industries.

I suggest that it is equally relevant to see whether those who control what the Government calls private enterprise in this country have the capacity and enough confidence in the future to make plans which will enable the children who are coming on to the labour market every year, and the new Australians who are hopefully coming to Australia to seek a decent life for themselves and their families, to be absorbed into employment. That is the sort of thing that the Government ought to be doing. The members of the Government should not be just rubbing their hands together and saying in the name of some orthodoxy, " We have balanced the budget; we have applied a credit squeeze; we have applied a wage freeze; and we are restricting the flow of imports into Australia ". Not every section of the community which normally is friendly towards this Go vernment is unapprehensive about the future flow of imports into this country. Let me quote now from the " Monthly Summary of Australian Conditions" published by the National Bank of Australasia Limited on 12th August, 1960. In that journal, we find the following statement: -

Imports totalled approximately £270,000,000 for the three months ended July, an annual rate of around £1,080,000,000.

Then it adds this, rather cryptically, I think-

It is worth remembering that nine years ago

When prices were about half what they were now - they reached £1,050,000,000 in conditions of free importing.

In other words, the bank has not the same complacency about the future flow of imports into this country if imports are allowed to enter Australia unchecked. Whatever chiding we may receive from honorable members on the Government side about the re-imposition of controls, we say without any equivocation that certain things which are not needed in the Australian economy and which do jeopardize already established Australian industries are being imported into Australia to-day. For instance, whilst our motor manufacturing industry is working at under-capacity, why should there be any suggestion of the importation of second-hand motor cars? A government which allows any person to import anything at all merely if he thinks he can sell it, irrespective of its effect on the Australian economy or its need, especially when our economy is so vulnerable, is being recreant to its trust.

Let me quote again from some of the sources that normally support the Government. I shall quote now from a document entitled "Director Reports", published by the Australian Industries Development Association. On page 4 of publication No. 10, the following statement appears: -

However, wasting overseas funds on luxury and consumer goods instead of building assets is likely to create contingent liabilities which could impose a strain on balances.

That is a discreet way of putting it, but it does illustrate that the Australian Industries Development Association has fears for the future of Australian industries. The children who will leave our schools in the next ten years) and the new Australians, are not going to obtain employment in firms overseas; they are going to secure it in firms which are growing and developing within our own economy. This Government should be straining every resource available to it in planning these things properly. The best we can say of this Government is that its actions are haphazard, that it is adopting a policy of stopandstart. The Government which says it now does not need import controls, at least had to have them for several years earlier. I feel that it may have to re-impose them sooner than it expects. It is all very well for the Government to feel that it has done something, but the fact is that the Government really may actually have to repair a bigger hole in the wall than it did last time. The Government took great unction to itself twelve months ago for reducing income tax by 5 per cent. That reduction meant hardly anything to the man on the bottom rung of the ladder, but it meant a good deal to the man on top. Now, only twelve months after granting the reduction, the Government has been forced to re-impose taxation at the level at which it stood before the reduction. It may also have to eat its words on import controls.


Order! The honorable member's time has expired.

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