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Thursday, 2 March 1950


Mr McMAHON (Lowe) . Before I deal with the subject I desire to discuss this afternoon, I shall refer briefly to two points raised by the honorable member for Martin (Mr. O'Connor). I shall deal first with his reference to bank officers. The Bank Officers Association is a registered trade union, many of the members of which are also members of the Labour party. Their sole offence in the eyes of the members of the socialist party was that they were prepared to fight for their freedom and their principles. In that they found us, on this side of the House, behind them. The honorable member also referred to petrol rationing and to the storing of petrol by some of his friends.

May I draw his attention to a statement that appeared in a newspaper this morning to the effect that in the last two months petrol stocks in Australia have increased by 12,000,000 gallons? Petrol rationing has been expeditiously abolished by the Menzies Government. It will not be re-introduced. We on the Government side of the House are committed to a policy of full employment of the nation's productive resources. The Opposition pays lip-service to that ideal, hut we treat it as a genuine obligation to the Australian people. We regard it as both worthy and practicable. Worthy because we know it will prevent the disillusionment and suffering that are attendant on unemployment; practicable because we consider that it will .tend to increase production and the material well-being of the people. We regard unemployment as potential production. We shall not permit any of our resources to remain unused instead of being utilized for the benefit of Australia. We do not regard employment as an end in itself but as a means to an end. It is part and parcel of the problem of improving the social and moral well-being of the people. If we compare the methods employed by the Labour party when it was in office with the proposals of the present Government, we shall find it easy to decide which methods have the greater prospect of maintaining full employment and full production. As I see it, it is an essay based on probabilities. We can ask ourselves which plans have the greater probability of success, those of the socialist party or those of the present Government. That is a simple proposition. I hope the explanation is just as simple and conclusive.

Historically, this problem was first dealt with by Lord Beveridge, the great Liberal statesman and economist. In later years by far the greatest contribution has been made by Lord Keynes, another Liberal. Right down the line, wherever we look in the sphere of scientific and philosophical thought, we find that the men who have provided leadership in exploring this problem were mainly Liberal economists and philosophers. Does that mean that we on the Government side of the chamber are ignorant of the problem and are not familiar with the methods suggested to combat unemployment and falling production? I leave honorable members and the nation to judge that issue. The problem is still one of the great academic questions that exercises the minds of a number of scientific men. This we can say: It is certain that unemployment does not constitute a pressing problem to-day, and I do not consider that there is any likelihood of it becoming a vital problem during the forseeable future. The honorable member for Melbourne (Mr. Calwell) briefly referred to the subject in this debate. The honorable member for Bendigo (Mr. Clarey) spoke on the subject a little more fully. I shall examine some of the remarks made by the honorable member for Bendigo for the reason that his speech was, in my opinion, one of the finest contributions made in this House since I have been a member of it. It appeared to me, however, that some of his statements are completely at variance with those expressed in official manuals and scientific reports. For example, he stated that output per man in Australia had increased since the introduction of the 40-hour week. I dispute that assertion. In Economic Monograph No. 116 of September, 1949, Dr. S. P. Stevens said that output in industry per standard week had not decreased in the same proportion as working hours had fallen. In other words, he said nothing at all about an increase in manhour output by 9 per cent., but simply that production had not fallen in the same proportion as it might have been expected to have fallen as a result of the reduction in hours. The most relevant portion of his article stated in general terms that the improvement in man-hour output can be attributed mainly to mechanization " and organizational efficiency. It was mainly due to managerial efficiency. That is a very important fact, and the honorable member for Bendigo may, if he is interested sufficiently, study the monograph itself, which is available in the Parliamentary Library. I regard it as an authoritative publication.

The second point concerns the honorable member's reference to the proportion of wages in relation to national income or gross national product. Again, if he cares to study a paper presented to this

House by the present Leader of the Opposition (Mr. Chifley), when Prime Minister, which was entitled National Income and Expenditure 1948-49, he will find that the percentage of wages has increased in proportion to the gross national product. In 1939, the total wages bill of Australia, was £444,000,000 when the gross national product was valued at £949,000,000; in 1948-49 it was £1,055,000,000 out of a gross national product, valued at £2,256,000,000. That tendency has been the same in all western democratic countries during the last few years. Other statements on this problem are contained in the last three issues of the London Economist. Honorable members who would like to see for themselves how wages are an increasing proportion of national income can find very clear statements of the position there. I turn now to the references by the honorable member for Bendigo to the problem of actual wages. He referred to that problem as if the basic wage of £6 14s. were the wages actually received by workers. I have before me the Quarterly Summary of Australian Statistics for the quarter ended June last year. At page S4 of that publication there is a statement which shows that the average weekly earnings of males during that quarter were nearly £9.46 a week in Victoria and £9.24 a week in New South Wales. I have not advanced my refutations of the arguments of the honorable member for Bendigo in any spirit of carping criticism, but merely so that the record can be made clean and clear.

Returning to my original proposition that we on this side of the House have a greater probability of maintaining full employment than could be achieved under the methods employed by the present Opposition when it was in office, I shall examine the methods of the Chifley Government during its last six years of office. What were those methods? First, there was a peculiar lack of warmth for private enterprise. The Leader of the Opposition used a very unpleasant euphemism, to describe the attitute of the Labour party when he said, in effect, We shall drive private enterprise out of existence by the method known as virile competition". The Labour party's policy towards air ways, shipping and banking provides clear-cut evidence of an intention either to curtail the operations of those engaged privately in those industries or to drive them out of business. Other section's of industry were reluctant to expand, because they did not know the limits of the Government's intentions and they did not desire their heads to be the next to fall under the " guillotine ". In those circumstances, private enterprise could not be expected to expand. On the contrary, its activities would be gradually reduced. The first method to which th» Labour party resorted was to foster public enterprise and public works. In the white paper that was issued in 1945, thecost of the public works programme was estimated at £560,000,000, and the present-day cost would be probably double;that figure. The second method of th* Labour party was gradually but surely to increase the size of the Public Ser~ vice. The effect of that policy was tri canalize all additional employment into spheres which did not increase production. That tendency has been evident during the last six years.

Let us consider the position of the basic heavy industries. Our requirements of coal in 1949 amounted to 18,500,000 tons Approximately 14,000,000 tons of black coal were produced in that year. That output was 900,000 tons less than the production of 1948, despite increased mechanization and additional amenities at the mines. The objective for 1951 is 21,000,000 tons. There was little or no prospect of that quantity being obtained while the Labour party had control of the coal-mining industry. The steel industry has been operating at approximately 65 per cent, of its capacity. Strangely enough, the former Minister for Commerce and Agriculture (Mr. Pollard), forecast last year that, in certain circumstances, this great primary producing country would be importing lamb and other foodstuffs. That forecast proves that our economy has become sadly distorted. The heavy industries have been neglected, and the lighter industries; have been considerably expanded. Manufacturing industries to-day employ many thousands more persons than they employed in 1939. That process of distortion stopped on the 10th December last.

This Government has set out to ensure, in co-operation with the trade union movement, that the heavy industries shall not be starved for labour and that this country shall quickly have the opportunity to return to conditions of full production.

I have dealt so far with the attitude of the Labour party. I now turn my attention to the policy of the present Government. Honorable members on this side of the chamber believe that the best way in which we can ensure continuity of employment and. at the same time, expand opportunities with rising rates of real pay, is to provide greater opportunities for private enterprise. In the words of the Prime Minister (Mr. Menzies), " we intend to make private enterprise both profitable and successful ". The right honorable gentleman used that telling phrase when to took us away shortly before the last election on what was for the Liberal party a very profitable and successful enterprise. I mention that matter in passing, because most honorable members on this side of the House will remember his words. Our first endeavour is to increase opportunities for employment by expanding free and competitive enterprise. Our second avenue of expansion is to allow private enterprise to engage in international trade. That factor is most important because governments in the past have not been able satisfactorily to engage in international trade. The history of the socialist government in the United Kingdom is conclusive proof that, when the Board of Trade becomes involved in any activity, the British people suffer tremendous losses and hardships. Our third line is that, in the most unlikely event of the formation of a pool of unemployment, then and only then will the Government engage in compensatory public works. However, we make a definite distinction between compensatory public works and works of a national developmental kind. That is why it is proposed to establish a Ministry of National Development. Honorable members may have read in the press during the last few days that the Minister for Supply and Development (Mr. Casey) has announced a. developmental programme that will involve in the next five year9 an expenditure of more than £1,000,000,000. 1 foresee an expanding economy and an increased supply of goods and services coming to the Australian people at prices which they can well afford to pay.

The international balance of payments and our London balances are, of course, of extreme importance to a country which relies so greatly on primary production and export incomes for its prosperity. I do not propose to discuss that subject in this debate. I shall take a later opportunity to do 90.

I shall now briefly summarize my earlier remarks. The Labour party has only one policy, and that is slowly to strangle private enterprise. The methods of public works and expansion of the Public Service are common to both governments. Honorable members on this side of the chamber have several policies and they include the expansion of private enterprise, the increase of international trade and the adoption of a great national developmental programme. At this point in my speech, I should like to make a particular statement about socialism, and I do so as a person who, during the last two or three years, has made a study of scientific socialism. When I say that I have studied socialism, I do not mean that I have merely read a couple of books on the subject. I have spent two years of hard effort and mental sweat in the university. Statistics prove that since 1870 the increase of total production in liberal democratic communities that favour free enterprise has been at the rate of about 2 per cent, per annum. In other words, as the years passed, material standards considerably improved. The forecast has been confidently made by Professor Joseph Schumpeter, the greatest scientific socialist since Karl Marx, that if this process were permitted to continue for another 50 years, it would do away with anything that, according to present standards, could be described as poverty, even in the lowest income groups. Pathological case9 alone are excepted. The same authority has made a plea which may be stated as follows : - " Leave private enterprise alone, and it will give the goods and services at the proper prices to the people who want them ". What, then, is the answer to my question ? Evidence proves that we know and understand the problem of unemployment. We know the various theories that have been put forward for solving unemployment and increasing production. The Government is determined, as far as lies within its power, to create more jobs than there are persons able and willing to fill them. On the probabilities, we can say that within the next decade this country will experience a period of prosperity that has been equalled only once in our history, and that was in the 'twenties, when a Liberal govern ment was also in office. T wish to make it abundantly clear to every one that the Menzies Government is h pro-worker, pro-woman, and pro-family Government. If it is given the opportunity to do so it will realize most of the promises it made to the people of this country. There is, I think, a clear answer to the question that I posed earlier in my remarks. I shall not couch the answer in conclusive words. From what I have said any reasonable man will regard the answer as reasonably conclusive. I have shown that there is a far greater probability of maintaining full employment and production under the methods advocated by the Menzies Government than there could ever be under the methods that were pursued by the socialist Administration during its last six years of office. Unquestionably, time will bring a full realization of the promises that have been made by the Government.

In conclusion, I may say that some of my colleagues have told me that they experienced considerable nervousness when making their maiden speeches i" this debate. They said that their hearts were in their mouths. They fared better than I have done, because I am sure that my heart has been lost somewhere in the corridors. It is not marked, " Please return to the owner " or " Reward to finder " ; but if any honorable gentleman should find it I should be pleased if he would return it to me. As this is the first occasion on which I have made a speech before dinner, I trust that it has not proved too indigestible. Finally, I thank you, Mr. Speaker, for the way you have placed your wings around honorable members who are now making their first appearance in this chamber and for the considerable help that you have given to new members who have made their maiden speeches. I would also like to thank honorable members for having listened so attentively to my first speech in this House.







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