19601117_senate_23_s18.xml

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  <session.header>
    <date>1960-11-17</date>
    <parliament.no>23</parliament.no>
    <session.no>2</session.no>
    <period.no>2</period.no>
    <chamber>SENATE</chamber>
    <page.no>1619</page.no>
    <proof>0</proof>
  </session.header>
  <chamber.xscript>
    <business.start>
      <day.start>1960-11-17</day.start>
      <para>The <inline font-weight="bold">DEPUTY PRESIDENT (Senator the Hon. A. D. Reid)</inline> took the chair at 1 1 a.m., and read prayers. </para>
    </business.start>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1619</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>AIR SERVICES</title>
          <page.no>1619</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1619</page.no>
              <time.stamp />
              <name.id>KPK</name.id>
              <electorate>VICTORIA</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">KENNELLY, Patrick</name>
              <name role="display">Senator KENNELLY</name>
            </talker>
            <para>-  I preface my question, which is directed to the Minister for Civil Aviation, by saying that yesterday in answer to a question the Minister said that an application by Ansett-A.N.A. to operate in Papua and New Guinea was before the rationalization committee. Will the Minister permit an application from Trans-Australia Airlines to operate intrastate in New South Wales and South Australia to go before the rationalization committee? </para>
          </talk.start>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1619</page.no>
              <time.stamp />
              <name.id>JZY</name.id>
              <electorate>WESTERN AUSTRALIA</electorate>
              <party>LP</party>
              <role>Minister for Civil Aviation</role>
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PALTRIDGE, Shane</name>
              <name role="display">Senator PALTRIDGE</name>
            </talker>
            <para>-  No, because the legislation does not provide for such an application to go before the rationalization committee. At the moment TransAustralia Airlines is prevented by legislation from operating intra-state. Therefore, such an application to the rationalization committee could not be considered by that committee. </para>
          </talk.start>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1619</page.no>
              <time.stamp />
              <name.id>JUM</name.id>
              <electorate>QUEENSLAND</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">DITTMER, Felix</name>
              <name role="display">Senator DITTMER</name>
            </talker>
            <para>-  I wish to ask a supplementary question. I ask the Minister for <inline font-style="italic">Civil</inline> Aviation whether the Government will consider protecting those people who have pioneered air services in New Guinea against an intruder coming in at this late stage. </para>
          </talk.start>
          <continue>
            <talk.start>
              <talker>
                <page.no>1619</page.no>
                <time.stamp />
                <name.id>JZY</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">PALTRIDGE, Shane</name>
                <name role="display">Senator PALTRIDGE</name>
              </talker>
              <para>-  Apparently the honorable senator does not recall that as recently as yesterday, in reply to a question asked by his  Deputy  Leader, I referred to a statement I made some months ago when the position in New Guinea was reviewed. In that statement I said that the Government would give consideration to the lot of those people who had pioneered air services in New Guinea and were continuing to operate services. </para>
            </talk.start>
          </continue>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1619</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>MOTOR VEHICLES</title>
          <page.no>1619</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1619</page.no>
              <time.stamp />
              <name.id>KRG</name.id>
              <electorate>TASMANIA</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">LILLICO, Alexander</name>
              <name role="display">Senator LILLICO</name>
            </talker>
            <para>- Can the Minister for Customs and Excise tell me the number of motor cars imported into Australia during the year ended 30th June, 1960. and the number exported in that year? Also, can be tell me how the number of such im portations compares with the number of motor cars manufactured in Australia? </para>
          </talk.start>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1619</page.no>
              <time.stamp />
              <name.id>KOW</name.id>
              <electorate>TASMANIA</electorate>
              <party>LP</party>
              <role>Minister for Customs and Excise</role>
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">HENTY, Norman</name>
              <name role="display">Senator HENTY</name>
            </talker>
            <para>- There were 5,351 completely assembled motor cars imported! into Australia last year; 2,499 Australianbuilt or Australian-assembled cars wereexported; and 482 imported cars were reexported from Australia. 1 cannot givethe honorable senator the comparison between those figures and the number of motor cars manufactured in Australia as that .does not come within my department. Up to the present I have not been able to obtain those figures for him, but I will have the matter looked into, and in due course I will give him the comparison between the number of motor cars manufactured in Australia and the number imported. </para>
          </talk.start>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1619</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>MEAT</title>
          <page.no>1619</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1619</page.no>
              <time.stamp />
              <name.id>JZQ</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">ANDERSON, Kenneth</name>
              <name role="display">Senator ANDERSON</name>
            </talker>
            <para>-  I ask a question of the Minister representing the Minister for Trade. Has the Minister seen a statement made by <inline font-weight="bold">Mr. Marshall,</inline> the head of the Department of Animal Industry in South Australia, to the effect that snapfrozen beef, pre-packed in retail cuts for sale in British supermarkets, could be Australia&#39;s answer to chilled meat from Argentina, which has a very strong grip on the British market Has consideration been given to embarking on the establishment of a pilot export programme of this kind to test the proposition? </para>
          </talk.start>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1619</page.no>
              <time.stamp />
              <name.id>K7A</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>LP</party>
              <role>Minister for National Development</role>
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">SPOONER, William</name>
              <name role="display">Senator SPOONER</name>
            </talker>
            <para>- I think that <inline font-weight="bold">Senator Anderson</inline> is on the target to the extent that he is anticipating things to come. I believe that some work is proceeding within the Department of Trade along the lines referred to by the honorable senator. I am not fully informed on this matter, and as it is of such interest I ask the honorable senator to place <inline font-style="italic">his</inline> question on the notice-paper so that I may obtain for him a full answer. </para>
          </talk.start>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1619</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>CIVIL AVIATION</title>
          <page.no>1619</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1619</page.no>
              <time.stamp />
              <name.id>K4S</name.id>
              <electorate>VICTORIA</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">SANDFORD, Charles Walter</name>
              <name role="display">Senator SANDFORD</name>
            </talker>
            <para>-  Can the Minister for Civil Aviation say whether the Government&#39;s proposed severe credit restrictions will have any adverse effect on the purchase of aircraft necessary to keep the major airlines in Australia up to date? </para>
          </talk.start>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1619</page.no>
              <time.stamp />
              <name.id>JZY</name.id>
              <electorate />
              <party>LP</party>
              <role />
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PALTRIDGE, Shane</name>
              <name role="display">Senator PALTRIDGE</name>
            </talker>
            <para>-  Arrangements, financial and otherwise, for the purchase of aircraft for our domestic airlines have been completed for some time now. As it is not expected that the domestic airlines will require re-equipment for a considerable period, no inconvenience is expected to flow from the Government&#39;s actions. </para>
          </talk.start>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1620</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>MENTAL HEALTH</title>
          <page.no>1620</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1620</page.no>
              <time.stamp />
              <name.id>KNR</name.id>
              <electorate>SOUTH AUSTRALIA</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">HANNAFORD, Douglas</name>
              <name role="display">Senator HANNAFORD</name>
            </talker>
            <para>- My question, which is directed to the Minister representing the Minister for Health, arises from a letter published in the South Australian press during last week. The letter emanated from some Victoria authorities who are interested in the treatment of mentally retarded children. It pointed out that although a &#163;10,000,000 fund was set up on the recommendation of the Stoller report, Victoria is the only State to have used its full allocation from that fund. Because Victoria has spent its allocation from the fund, it is attracting quite a number of mentally retarded children who are taking advantage of the facilities provided in that State. I ask the Minister: What is the present state of the fund and what percentage of drawings against the fund has been used to provide facilities for the treatment of mentally retarded children? </para>
          </talk.start>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1620</page.no>
              <time.stamp />
              <name.id>KOW</name.id>
              <electorate />
              <party>LP</party>
              <role />
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">HENTY, Norman</name>
              <name role="display">Senator HENTY</name>
            </talker>
            <para>- Offhand, I cannot give the information that the honorable senator seeks. The entire sum of &#163;10,000,000 was available to the States for the renovation of buildings and for rebuilding within the States. I understand that Victoria has used its full quota and has applied for further assistance. </para>
          </talk.start>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1620</page.no>
                <time.stamp />
                <name.id>KNR</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">HANNAFORD, Douglas</name>
                <name role="display">Senator Hannaford</name>
              </talker>
              <para>- On a basis of &#163;2 for &#163;1. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1620</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>- That is right. If South Australia has not used its quota, that is a matter that the honorable senator should take up with the Premier of South Australia. If the honorable senator puts the question on notice I shall obtain details of the actual amounts that have been used in the various States. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1620</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator Kennelly</name>
              </talker>
              <para>-  Has not the fund been subsidized on a &#163;1 for &#163;1 basis? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1620</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>- I myself thought it was on a &#163;2 for &#163;1 basis. </para>
            </talk.start>
          </continue>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1620</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>SUGAR</title>
          <page.no>1620</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1620</page.no>
              <time.stamp />
              <name.id>JYY</name.id>
              <electorate>SOUTH AUSTRALIA</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;FLAHERTY, Sidney</name>
              <name role="display">Senator O&#39;FLAHERTY</name>
            </talker>
            <para>- Can the Minister representing the Minister for Trade inform me whether any negotiations are going on between Australia and America for the sale of Australian sugar at the equivalent of 4d. per lb. Australian? </para>
          </talk.start>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1620</page.no>
              <time.stamp />
              <name.id>K7A</name.id>
              <electorate />
              <party>LP</party>
              <role />
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">SPOONER, William</name>
              <name role="display">Senator SPOONER</name>
            </talker>
            <para>-  I think I would be correct, without any knowledge of the matter at all, in replying &#34;No&#34; to that question. But as I have no knowledge of the matter, I shall play safe and ask for the question to be put on notice. I cannot conceive that there is any substance in such a report. </para>
          </talk.start>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1620</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>AUSTRALIAN ECONOMY</title>
          <page.no>1620</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1620</page.no>
              <time.stamp />
              <name.id>KQQ</name.id>
              <electorate>SOUTH AUSTRALIA</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">LAUGHT, Keith</name>
              <name role="display">Senator LAUGHT</name>
            </talker>
            <para>-  My question is directed to the Minister representing the Treasurer. Has he had his attention directed to some comments which appeared yesterday in the &#34; Financial Times &#34; of the United Kingdom, which is a leading English financial newspaper, to the effect that the Australian Government had shown considerable courage in introducing its antiinflationary measures? Has the Minister noticed also that the comment &#39; highlights the need for the Government to make Commonwealth securities attractive on merit rather than to force pension funds and insurance companies to invest in them? Will the Government reconsider, as one method of encouraging the holding of bonds, the acceptance of bonds for payment of federal estate duties at face value, subject, of course, to safeguards as regards date of purchase? I might add that this was a practice recognized by the estate duty branch in this country up to ten years ago. Will the Government have a study made of other methods of making Commonwealth bonds attractive on merit? </para>
          </talk.start>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1620</page.no>
              <time.stamp />
              <name.id>JZY</name.id>
              <electorate />
              <party>LP</party>
              <role />
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PALTRIDGE, Shane</name>
              <name role="display">Senator PALTRIDGE</name>
            </talker>
            <para>-  My attention has been directed to the press item to which the honorable senator referred. It is gratifying to note a comment of that sort coming from a knowledgeable, detached and informed source. The other part of the question involves a matter of policy. It is something which has been looked at in the past, but I shall ask the Treasurer to look again at the proposal in the light of the question asked by <inline font-weight="bold">Senator Laught.</inline></para>
          </talk.start>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1620</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>OIL</title>
          <page.no>1620</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1620</page.no>
              <time.stamp />
              <name.id>K5K</name.id>
              <electorate>WESTERN AUSTRALIA</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">SCOTT, Malcolm</name>
              <name role="display">Senator SCOTT</name>
            </talker>
            <para>- I ask the Minister for National Development whether it is a fact that, prior to 1953, 80 per cent, of Australia&#39;s oil fuel was imported in refined  form and that to-day 90 per cent, is refined in Australia. Can the Minister advise me of the effect on our external payments of the finding in Australia of oil in sufficient quantities to meet Australia&#39;s needs? </para>
          </talk.start>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1621</page.no>
              <time.stamp />
              <name.id>K7A</name.id>
              <electorate />
              <party>LP</party>
              <role />
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">SPOONER, William</name>
              <name role="display">Senator SPOONER</name>
            </talker>
            <para>- I have not in my mind the figures relating to the present capacity of Australian oil refineries. One of the most dramatic features of Australia&#39;s development in recent years has been the number and the size of the refineries established. My recollection is that we are now refining practically all of our requirements of petroleum products. Imports of petroleum products, on the last figures I saw, are running at the rate of about &#163;120,000,000 a year. That is the target at which we aim in our attempt to locate indigenous supplies of oil. </para>
          </talk.start>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1621</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>NEWSPAPER REPORTS</title>
          <page.no>1621</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1621</page.no>
              <time.stamp />
              <name.id>K6P</name.id>
              <electorate>QUEENSLAND</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">BROWN, Gordon</name>
              <name role="display">Senator BROWN</name>
            </talker>
            <para>- At the risk of being hit to leg, I ask the Leader of the Government two questions. Has he read the leading articles in the &#34; Sydney Morning Herald &#34; and the &#34; Daily Telegraph &#34; today? Being a resident of Sydney and an avid reader of the capitalist press, can he tell the Senate the real reason for the almost completely different approaches to economic policy of these two newspapers? </para>
          </talk.start>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1621</page.no>
              <time.stamp />
              <name.id>K7A</name.id>
              <electorate />
              <party>LP</party>
              <role />
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">SPOONER, William</name>
              <name role="display">Senator SPOONER</name>
            </talker>
            <para>- I have read both newspapers. I cannot explain the reason for the difference of opinion between them. I hope that I shall never reach the stage at which I am incapable of taking criticism from newspapers. I am sure that on this occasion the &#34; Daily Telegraph &#34; is more correct than the &#34; Sydney Morning Herald &#34;. I make no complaint or comment except to say that I wish the &#34; Sydney Morning Herald &#34; had expressed its criticism in more temperate terms. It is a great newspaper, and I do not think it needs to go to the stage of developing catch phrases such as &#34; panic budget &#34; to describe Government policy. That policy is decided after a lot of thought and with a due sense of responsibility. It could be criticized, I think, in more dignified terms. </para>
          </talk.start>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1621</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>SALES TAX</title>
          <page.no>1621</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1621</page.no>
              <time.stamp />
              <name.id>KBW</name.id>
              <electorate>TASMANIA</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">WRIGHT, Reginald</name>
              <name role="display">Senator WRIGHT</name>
            </talker>
            <para>- Can the Minister representing the Treasurer give me some information about the effect on the sales of new motor vehicles of the imposition of the 30 per cent, sales tax in 1956? Has the Treasurer made an assessment of the volume and value of second-hand motor vehicles now ready for sale and of the effect on the second-hand market of the increase to 40 per cent, of the sales tax on new vehicles? </para>
          </talk.start>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1621</page.no>
              <time.stamp />
              <name.id>JZY</name.id>
              <electorate />
              <party>LP</party>
              <role />
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PALTRIDGE, Shane</name>
              <name role="display">Senator PALTRIDGE</name>
            </talker>
            <para>- I can answer the first part of the question only in a general way. The increase of sales tax in 1956 had a very steadying effect on sales of motor cars, an effect that diminished only over a rather lengthy period. I think it is without doubt that the imposition of increased sales tax on new motor cars at any time introduces, for some time at least, a degree of buoyancy in the second-hand motor car market. </para>
          </talk.start>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1621</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>BAUXITE</title>
          <page.no>1621</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1621</page.no>
              <time.stamp />
              <name.id>K0C</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">ARMSTRONG, John Ignatius</name>
              <name role="display">Senator ARMSTRONG</name>
            </talker>
            <para>- I address a question to the Minister for National Development. Will he make public details of the lease to the British Aluminium Company Limited of rights to bauxite deposits at Gove, in Arnhem Land? Is there a time limit on the lease? Is British Aluminium obliged to spend any money at Gove under the lease, and is the company currently spending money under the lease? Is there any activity now at Gove and, if not. does the Minister know whether activity is contemplated? If the company has no intention to develop the bauxite deposits at Gove, will the Minister consider cancelling the lease? </para>
          </talk.start>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1621</page.no>
              <time.stamp />
              <name.id>K7A</name.id>
              <electorate />
              <party>LP</party>
              <role />
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">SPOONER, William</name>
              <name role="display">Senator SPOONER</name>
            </talker>
            <para>- I am sorry to say that, because of an interruption that occurred while the honorable senator was asking his questions, I was not able to make a note of all of them. I shall therefore try to answer his queries in general terms. My recollection is that the Gove deposits are under lease to British Aluminium, or held under some appropriate title by the company, on terms and conditions under which it is obliged to spend certain amounts each year and, at the end of a certain time, to bring forward to the Government for its approval a programme for the development of the resources. The company holds the rights for, I think from memory, two or three years. At the end of that period it has to come forward with a programme which shows that the deposits are to be developed, as a condition precedent to its obtaining further tenure of title  to them. I see no reason why the lease should not be made public, but that is a matter for the Minister for Territories, since it comes within his jurisdiction. I shall speak to <inline font-weight="bold">Mr. Hasluck</inline> and ascertain the position. </para>
          </talk.start>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1622</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>COMMONWEALTH BANKING CORPORATION</title>
          <page.no>1622</page.no>
        </subdebateinfo>
        <para>Purchase of Land</para>
        <speech>
          <talk.start>
            <talker>
              <page.no>1622</page.no>
              <time.stamp />
              <name.id>KAC</name.id>
              <electorate>WESTERN AUSTRALIA</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">VINCENT, Victor</name>
              <name role="display">Senator VINCENT</name>
            </talker>
            <para>-  I ask the Minister representing the Treasurer whether it is a fact that the Commonwealth Bank recently purchased for about &#163;40,000, a vacant block of land on the Gold Coast of Queensland, for the purpose of erecting a bank building on it. Will the Minister ascertain why the bank delayed purchasing land on which to erect a bank building since it must have known, a few years ago, that a bank would be required on the Gold Coast and that land could then have been purchased for a few pounds? Will the Minister also ascertain from the bank whether it is considered wise at this time to purchase land at a highly inflated price, having regard to the recent remarks of the Treasurer concerning the nation&#39;s economy? </para>
          </talk.start>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1622</page.no>
              <time.stamp />
              <name.id>JZY</name.id>
              <electorate />
              <party>LP</party>
              <role />
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PALTRIDGE, Shane</name>
              <name role="display">Senator PALTRIDGE</name>
            </talker>
            <para>- A  question similar to that asked by the honorable senator was addressed to me in recent days by <inline font-weight="bold">Senator Robertson,</inline> and I replied that I would ask the Treasury to make inquiries of the bank. From inquiries I have made since, I know that the purchase of the property for &#163;48,000 will make it possible for the bank to erect on this block of land a building which will have the net effect of supplying premises at a very reasonable price. I shall have the details of the matter investigated and will let the honorable senator know the result of my investigations. </para>
          </talk.start>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1622</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>DAIRYING</title>
          <page.no>1622</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1622</page.no>
              <time.stamp />
              <name.id>KPK</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">KENNELLY, Patrick</name>
              <name role="display">Senator KENNELLY</name>
            </talker>
            <para>asked the Minister  representing the Minister for Primary Industry, upon notice - </para>
          </talk.start>
          <quote>
            <para>Will the Minister advise the Senate when the Government is likely to decide its attitude towards the report of the Committee of Inquiry into the Dairy Industry? </para>
          </quote>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1622</page.no>
              <time.stamp />
              <name.id>KOW</name.id>
              <electorate />
              <party>LP</party>
              <role />
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">HENTY, Norman</name>
              <name role="display">Senator HENTY</name>
            </talker>
            <para>-  The Minister for Primary Industry has furnished the following answer to the honorable senator&#39;s question: - </para>
          </talk.start>
          <quote>
            <para>The Government decided to release the report of the Dairy Industry Commitee of Inquiry on 9th November, in order to give all interested parties an opportunity to study the issues involved. </para>
            <para>Some of the committee&#39;s recommendations raise major policy issues having wide ramifications and, consequently, they require most careful consideration. The Government is considering the report but at this stage I am unable to indicate to the honorable senator when a decision is likely to be made. </para>
          </quote>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>GOVERNMENT BUSINESS</title>
        <page.no>1622</page.no>
        <type>miscellaneous</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>Precedence</title>
          <page.no>1622</page.no>
        </subdebateinfo>
        <para class="block">Motion (by <inline font-weight="bold">Senator Spooner)</inline> agreed to - </para>
        <quote>
          <para>That Government business have precedence of general business after 8 p.m. this sitting. </para>
        </quote>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1622</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>AUSTRALIAN ECONOMY</title>
          <page.no>1622</page.no>
        </subdebateinfo>
        <para>Debate resumed from 15th November (vide page 1554), on motion by <inline font-weight="bold">Senator Paltridge</inline> - </para>
        <quote>
          <para class="block">That the following paper - </para>
          <para class="block">Economic Measures - Ministerial Statement - be printed. </para>
        </quote>
        <speech>
          <talk.start>
            <talker>
              <page.no>1622</page.no>
              <time.stamp />
              <name.id>KTN</name.id>
              <electorate>Tasmania</electorate>
              <party />
              <role>Leader of the Opposition</role>
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MCKENNA, Nicholas</name>
              <name role="display">Senator McKENNA</name>
            </talker>
            <para>. - On Tuesday night last in another place the Treasurer <inline font-weight="bold">(Mr. Harold Holt)</inline> made a statement relating to the Australian economy and he foreshadowed certain corrective measures to deal with trends that were apparent in the economy. That statement was repeated in this place by the Minister for Civil Aviation <inline font-weight="bold">(Senator Paltridge)</inline> who represents the Treasurer in the Senate. Despite a multitude of words which were designed to confuse and not to clarify the situation, it plainly appears that to-day the economy is in a complicated mess. The economy is beset with three great problems. The first is the very serious deficit in our balance of international payments on current account. The next is the gross failure of our internal public loan market; and the third is an intractable inflation that has been with us throughout the life of this Government. These problems, which I repeat have been with us in one form or another for eleven years, have been deliberately provoked and aggravated by the Government and the policies it has pursued. </para>
          </talk.start>
          <para>The Government now proposes four main courses of action. The first course of action is directed against the banking institutions. The second is directed against financial institutions other than banks - institutions which are now described, to use the new phrase coined by the Treasurer, as fringe institutions. Extraordinarily enough, every time this Government wants to confuse or to break down a situation it coins a new term. It has used the term &#34; recession &#34; for depression, which is another name for unemployment, and now we have a reference to fringe institutions, about which I shall say a good deal in a moment. The third lot of controls are directed against life assurance companies and superannuation funds throughout Australia. The fourth lot constitutes a violent, even a brutal, attack upon the Australian motor vehicle industry. What shocks one is that the Government having taken these very drastic steps, it is apparent that the Treasurer and the Government have no confidence in their efficacy. They are quite uncertain about how they will pan out. </para>
          <para>When reviewing the several forms of action that have been proposed, the Treasurer said - </para>
          <quote>
            <para>If- </para>
          </quote>
          <para class="block">Let us note that he said &#34; if &#34; -  these measures lead to some reduction in consumer credit in speculative building and real estate operations and in the building up of excessive stocks- - in itself a speculative type of operation - they will be generally helpful. </para>
          <para class="block">What a complete anti-climax, considering the size and seriousness of the various problems and the drastic nature of the remedies that the Government seeks to impose! If they have the desired effects, says the Treasurer, they will be generally helpful. It is completely clear, in my view, that the Government has no true appreciation of the problems or even of the effect of the remedies it proposes to apply. The Opposition takes the view that the measures that are being taken are inefficient, pathetic, tragic and in some respects even quite craven. </para>
          <para>Let me deal with the first body of institutions affected - the banks. In February of this year, in the course of a four-point approach to exactly the same problems, the Government prescribed very stringent bank restrictions - a greater measure of Reserve Bank control over advances by the trading banks. What happened? Did the level of advances fall? According to the statement made by the Treasurer himself, they rose in eight months by &#163;150,000,000. This is not a figure that I have conjured up; it appeared in the statement of the Treasurer himself. It is plain that the private trading banks completely ignored the direction of the Government issued through the Reserve Bank. </para>
          <para>Looking at that situation, one would say that the private trading banks just thumbed their noses with impunity at the Government and at the Reserve Bank. But, of course, that is not what happened. We learn in the press to-day from <inline font-weight="bold">Mr. Marshall,</inline> the General Manager of the Bank of New South Wales Limited, that the Government was advised week by week of the trends. From my experience of being in a Cabinet for quite a number of years, I know that all these trends and figures are put before Cabinet every time it meets. They are under constant review. For the Government to present the position to the world as though it has just discovered that the private trading banks have been bad boys is plain cant and hypocrisy. The Government knew what was happening and condoned it. The obvious reason for the condonation was that the Government had rashly lifted import licensing, virtually overnight, on practically the whole field. There was a wild rush for imports and the banks, of course, came to the rescue of the importers and helped them build up stocks of materials in this country. The Government sat by for all those months watching those trends, and did nothing about the matter. This is typical of the behaviour of this Government since it took over the reins of office in 1949. It either does nothing, or it does too little too late. lt is fair to the private trading banks to repeat that <inline font-weight="bold">Mr. Marshall</inline> has said that the Government knew the figures week by week. The Government has not got the excuse that it was taken by surprise. What is the remedy proposed? More requests are to be made to the banks. Very tenderly, the Government says that, if necessary, directions will be issued - clear directions. There is a great responsibility on the Treasurer to direct the banking policy of this nation. Why did he not see that the requests that were made during those eight months were translated into directions and made effective, if that was the policy of the Government? </para>
          <para>There is another variation. On this occasion the banks are to be requested to be selective in the types of advances they make. They will not be given a mere general instruction to keep down the overall level of advances in the community; they will be requested to pick and choose between various potential borrowers. An indication is to be given as to the types of businesses that are to be helped and the types that are to be restrained and repulsed in the matter of loans. Of course, the main reason for these advances, as I have said, is to finance imports. We of the Opposition, and I in particular, warned about these effects when we spoke in February last on the sudden lifting of import controls. It was obvious to anybody who even thought about it that there would be a rush for imports the moment the restrictions were removed and that there would be a demand upon the banks. We, and I particularly, expressed very strongly the view that the Government was making a mistake and that the import controls should have been eased off gradually. It was a fatal error for the Government to take the gamble that in that situation there would be restraint. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1624</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator Wright</name>
              </talker>
              <para>- What has been the extent of imports? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1624</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- As the honorable senator knows, imports have increased appreciably. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1624</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator Wright</name>
              </talker>
              <para>- Yes, but to what extent? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1624</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- That is a question which I am not prepared to answer immediately. I point out to the honorable senator - this will be a pointer to him - that in the first three months of this financial year alone imports soared by &#163;80,000,000 in excess of exports, whereas in the corresponding period of the previous year imports were only &#163;5,000,000 in excess of exports. Those figures will give the honorable senator the broad picture. That has been the picture from the time when import controls were suddenly lifted. A further indicator is the growth in the advances made by the banks, lt is conceded - I suggest that it is not arguable - that the advances were made very largely to finance imports and the building up of stocks. That is completely implicit in the story that the Government <inline font-style="italic">hn</inline> tol ,1. The Government now intends to instruct the banks not to encourage the building up of stocks from either local production or imports. Stocks are to be dampened down; that is one of the directives that quite plainly the Government intends shall be given to the banks. </para>
            </talk.start>
          </continue>
          <para>This is the position as I see it: The Government has officially declared import controls off, but what it is now doing in that field is asking the banks to act as the import licensing authority, and that is exactly what they will do. There will be a concealed control and, unfortunately, a worse control than import licensing because there is no right of appeal against any such decision made in the secrecy of the banking chambers. For that reason I say that this is a craven action on the part of the Government. It is really exercising import licensing through the banks and throwing the blame on to the banks. It is discharging its own department which was responsible for import licensing, and throwing the burden on to the banks. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1624</page.no>
                <time.stamp />
                <name.id>KAC</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">VINCENT, Victor</name>
                <name role="display">Senator Vincent</name>
              </talker>
              <para>- Have not the private banks controlled import licensing along those lines for centuries? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1624</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- For centuries the banks controlled everything. It is only since the Labour Government&#39;s 1945 legislation- </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1624</page.no>
                <time.stamp />
                <name.id>KAC</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">VINCENT, Victor</name>
                <name role="display">Senator Vincent</name>
              </talker>
              <para>- The private banks- </para>
            </talk.start>
          </interjection>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1624</page.no>
                <time.stamp />
                <name.id>KOU</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">HENDRICKSON, Albion</name>
                <name role="display">Senator Hendrickson</name>
              </talker>
              <para>- Keep quiet. </para>
            </talk.start>
          </interjection>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1624</page.no>
                <time.stamp />
                <name.id>KT8</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCCALLUM, John</name>
                <name role="display">Senator McCallum</name>
              </talker>
              <para>- You keep quiet. </para>
            </talk.start>
          </interjection>
          <para>The ACTING <inline font-weight="bold">DEPUTY PRESIDENT (Senator Anderson).</inline> - Order! </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1624</page.no>
                <time.stamp />
                <name.id>K6P</name.id>
                <electorate>QUEENSLAND</electorate>
                <party>FLP; ALP from 1937</party>
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">BROWN, Gordon</name>
                <name role="display">Senator BROWN</name>
              </talker>
              <para>- Let us all keep quiet. </para>
            </talk.start>
          </interjection>
          <para>The ACTING  DEPUTY PRESIDENT.  - Order! <inline font-weight="bold">Senator Brown</inline> will remain silent. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1624</page.no>
                <time.stamp />
                <name.id>K6P</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">BROWN, Gordon</name>
                <name role="display">Senator Brown</name>
              </talker>
              <para>- I apologize. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1624</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- I do not mind the interjections; but, as honorable senators will realize, I have a lot of ground to cover on this occasion and I would appreciate not being sidetracked. The Minister for Civil Aviation <inline font-weight="bold">(Senator Paltridge)</inline> was listened to for an hour without one interjection. Without any disrespect to any honorable senator, I say that I am not seeking to avoid interjections, but if honorable senators will bear with me, I have a long story to tell and I take it that there will be ample opportunity for them to take part in the debate and pick me up, where necessary. </para>
            </talk.start>
          </continue>
          <para>I say that the action of the Government is craven and hypocritical because it is pretending to the world at large that import licensing has been abolished, whereas import licensing is now going to be exercised by the private trading banks in secret, without the right of appeal, under the compulsion of the Government. In selecting businesses that are to be helped, the Government is applying capital issues controls. It says that this business is not to start, and this business is not to develop; but another business is to start, and another is to develop. That control will now be entirely in the hands of the private trading banks, and, I repeat, with no right of appeal and the action taken not being subject to ventilation in this Parliament. The great protection against abuse in the import licensing field was that action had to be taken in the open; we knew the trends; there was a right of appeal; and there was an opportunity to ventilate the position in this Parliament. But, of course, that will not be so now. </para>
          <para>This control through the private trading banks is relatively useless in the changed financial conditions of to-day. We have what are termed the fringe institutions which, more than anything else, are the creatures of this Government. They were brought into existence by the action of the Government in 1953 in repealing section 28 of the Labour Government&#39;s Banking Act of 1945, which forbade private trading banks to acquire Commonwealth securities, semigovernmental securities or shares listed on the stock exchanges of Australia without the consent of the Commonwealth Bank. When this Government, with complete deliberation, repealed that section in 1953, it opened the door for the banks to escape from legitimate banking business out into the fringe, as the Treasurer now calls it - out into a field of ordinary speculative and liberal finance. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1625</page.no>
                <time.stamp />
                <name.id>JQY</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">COURTICE, Benjamin</name>
                <name role="display">Senator Courtice</name>
              </talker>
              <para>- Hire purchase. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1625</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- Hire purchase and the rest of that field. The Government opened the door and let the banks into that field. It gave the greatest possible stimulus to the creation of the fringe institutions that it now wants to bring under control. </para>
            </talk.start>
          </continue>
          <para>The net result is set out very plainly in the report of the Constitutional Review </para>
          <para class="block">Committee. To-day, the banks provide, at the most, 25 per cent, of the credit in this country. The rest comes from the fringe institutions which have been allowed to run completely free. In fact, they have run riot. I invite anybody who wants to pursue this theme to look at pages 141 and 142 of the report of the Constitutional Review Committee, where the position is reviewed and where the committee shows very plainly that to-day the private trading banks are no more than mere marginal providers of credit, although it is an important margin. The Government pretends that this is an effective control when the body through which it is about to exercise the control is providing approximately one-fifth of the credit facilities of the nation. So, I say without hesitation that in those circumstances the Government is only tinkering with the matter. There is no lack of constitutional power in this field. The power over internal banking in Australia is completely in the hands of this Government. The Government is armed with the most complete power. There is no lack of constitutional power to excuse the Government at all. </para>
          <para>Before I pass to the fringe institutions, perhaps I should advert to another of the banking changes. It is now proposed that the banks will be allowed to charge higher rates of interest on overdrafts and, in particular, to pay higher rates of interest on deposits with the banks. The longest term for fixed deposits is to be one year. The maximum rate of interest to be paid by the banks is to be lifted to 4i per cent, for that term and 4 per cent, for terms of from three to six months. How absurd and naive it is for anybody to think that raising the rate of interest paid on money deposited with the banks will attract investors away from the lucrative field in the fringe where their money can earn 8, 10, 12 and 15 per cent. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1625</page.no>
                <time.stamp />
                <name.id>KNR</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">HANNAFORD, Douglas</name>
                <name role="display">Senator Hannaford</name>
              </talker>
              <para>-  On long terms. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1625</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- No, not on long terms; some on exceedingly short terms. With ease you can get 10 per cent, on first mortgage money on the security of homes in this country. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1625</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator Wright</name>
              </talker>
              <para>-  Where? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1625</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- It is available to solicitors in any of the capital cities on the mainland. There is no difficulty in finding an appropriate security if one wants to let money out on first mortgage at 10 per cent. In the light of what we know about the rates of interest that are being offered on unsecured notes, secured notes and that kind of thing; it is farcical to say that you will attract money away from the fringe by offering 4 per cent, and 4i per cent. </para>
            </talk.start>
          </continue>
          <para>In addition, the Government proposes to increase overdraft rates up to a limit of 7 per cent. Also, the banks are asked to be selective about advances. The average rate is to be 6 per cent. Some loans will be made at less than 6 per cent, and some at as high as 7 per cent. What attack will that make on the great problem of uncontrolled inflation? Surely high interest rates are one of the gravest factors contributing towards inflation! It is obvious to anybody with an understanding of the economy that, instead of increasing interest rates, we should concentrate on decreasing them. This Government&#39;s action is plainly inflationary. </para>
          <para>I remember that the crash came in 1929 after the interest rate had reached 7 per cent. High interest rates were one of the main factors in precipitating the crisis of 1929, which was so hurtful to Australia. Who will deny that interest payments are added to costs in almost every business in this country, and are passed on to the consumer? They form part of the operating costs. In making this move to allow interest rates to be increased the Government is merely feeding the fifes of inflation. It is doing nothing to halt inflation. Inevitably its action will defeat its purpose in another great field - the local bond market. When you increase overdraft rates in this way it is inevitable that the next increase will take place in the bond rate for Commonwealth securities. It is crystal clear to me that that will be the next move. What will be the end result of that? It will mean that the capital value of existing loans will fall because of the higher bond rate available on the new issues. That means that investors will be frightened out of the market. In my opinion, the Government&#39;s move in increasing bank overdraft rates is stupid. Its action will precipitate inflation, and inevitably, in due course, will worsen the grave deficiency that persists year after year in the loan market. </para>
          <para>The Government has taken a somewhat novel step. It proposes to make borrow ings by financial institutions unattractive by freezing the allowable deduction that may be claimed for income tax purposes in respect of interest paid. The Government proposes to freeze the amount of interest at the total interest bill for last year- 1959-60- or at &#163;10,000 for the year, whichever is the greater. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1626</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator Wright</name>
              </talker>
              <para>-  In the case of companies. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1626</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- Thank you! Yes, that applies only in the case of companies. The Treasurer has made it clear that this provision will not apply to bank loans, government loans and loans made by approved pastoral societies and others. 1 concede that this is a step in the right direction, but I suggest that it is altogether too timid. The Government acknowledges that this is a holding measure only designed to correct the position, and that it has not the slightest idea what final form its action will take. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1626</page.no>
                <time.stamp />
                <name.id>KNR</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">HANNAFORD, Douglas</name>
                <name role="display">Senator Hannaford</name>
              </talker>
              <para>-  Would you not describe that as a form of capital issues control? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1626</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- No, the taxing power is being used here as an economic instrument. However, I have said that it is a step in the right direction. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1626</page.no>
                <time.stamp />
                <name.id>KNR</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">HANNAFORD, Douglas</name>
                <name role="display">Senator Hannaford</name>
              </talker>
              <para>-  Do you approve of it? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1626</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- Please do not attempt to put words into my mouth. I cannot answer you, &#34; Yes &#34; or &#34; No &#34;. The crisis that is now facing the country is not new. It has been with us during the whole of this year and for many years. The Government admits that it has been considering the problem since July, and in November it comes forward with action merely to hold the situation in respect of the fringe institutions. The Government admits frankly that nobody is to assume that its present action represents the form that its final action will take. What an inefficient approach to a grave financial and economic problem! The Government is simply parking the problem for the time being so that it may do some more thinking about it. The Government&#39;s action indicates ineptitude, lack of understanding and lack of clear thinking. Having seen that type of inefficient approach - that lack of clarity in a matter that should be crystal clear - is it any wonder that the business community has panicked, has lost confidence and is disturbed? What else could the Treasurer expect? </para>
            </talk.start>
          </continue>
          <para>The Government&#39;s action is a very clumsy use of a very great power - the taxing power. It is a power that is being abused by the Government in more ways than one. The taxing power is not necessarily the most appropriate instrument to apply in the present situation. It is dangerous from many angles to depart from the principle that an expense incurred in earning income shall be a fully allowable deduction. I do not know where this move will end once the principle has been breached. The proper action, of course, would have been for the Government to heed the recommendation of the Constitutional Review Committee that control should be exercised over consumer credit. That would enable the Commonwealth Parliament to exercise a precise control over the fringe institutions. That would have obviated the need for the Government to resort to the kind of control referred to by the Treasurer, which is quite novel and unpredictable in its effect, and is merely used as an emergency measure. Nobody - not even the Treasurer - knows what is to replace it in the future. </para>
          <para>Land speculation is another scandal. If the Constitutional Review Committee&#39;s recommendation had been accepted this Parliament would have control over interest rates in transactions affecting land. It is a grave error to apply as a remedy high interest rates in the present circumstances. That is a dangerously inflationary action, and the Government is taking grave risks in the method it has chosen, although I concede most readily the need for the Government to do something in this field. </para>
          <para>The Government is taking a desirable step in providing that interest on notes convertible to shares in the hands of holders shall in future be treated as dividends, and shall no longer be allowable deductions for income tax purposes. I have no quarrel with that action, but I am confident that the ingenuity of those who control these fringe institutions will be adequate to the task of finding an escape. What is neeeded is one broad control. Those who control these institutions are very ingenious and resourceful. I am certain that without much difficulty they will find another for mula that the Government&#39;s prescription will not fit. The Government will find itself chasing around to plug one hole after another. The efficient and truly effective thing to do is get control of all interest rates in the community - to fix the rates and to make void transactions that involve a breach of the fixed rates. The Governwould need to do nothing else but police the law. What is needed is power in the Parliament, a prescription of the rates and then to make completely void transactions that are in breach of the law so that  a  person who lends at a rate of interest in excess of the prescribed amount cannot recover the money that he has loaned. The Government would need to do nothing else than police the regulations to have no more trouble. That would be a simple, easy, clear, honest and decent method of solving the problem. </para>
          <para>Now let me pass to the third set of measures the Government proposes in relation to motor manufacturers. We all recall the effects of the little Budget of March, 1956, when on non-commercial vehicles the sales tax was lifted to what we then considered the brutal and outrageous figure of 30 per cent, lt is now being lifted to 40 per cent, on motor cars, and on motor cycles and motor scooters it is being lifted from 16f per cent, to 25 per cent. I say that that is a most brutal and discriminatory tax. It is highly inflationary as well. It does not help the Government in the great problem of inflation. The Tariff Board has made it plain that sales tax goes on to the public at double the figure that is raised, so that for every pound of this tax costs are going to rise by &#163;2. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1627</page.no>
                <time.stamp />
                <name.id>JZU</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">ORMONDE, James</name>
                <name role="display">Senator Ormonde</name>
              </talker>
              <para>-  More inflation. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1627</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- There will be more inflation. Sales tax is plainly highly inflationary. At what class of activity in this country is this measure directed? It is directed at manufacturers who have done a marvellous job in making an Australian car, and I refer to not merely one manufacturer. I have heard Ministers applaud time and time again the marvellous contribution to the development of this country that these manufacturers have made. They have applauded the wonderful avenues of employment provided by manufacturers df cars. I think it is safe to say we have all taken enormous pride in the excellence  of  the products that have been made by the various firms in this country. They have been encouraged to start manufacturing here. One of the greatest of them has spent the sum of &#163;20,000,000 in the last year or two, to the plaudits of the Government, to produce an Australian car. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1628</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator Wright</name>
              </talker>
              <para>- Which company? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1628</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- Do not let me name it. The honorable senator knows which one it is. I do not wish to name companies. This is a perfect instance. The Government encouraged the company to go into a new area, to develop a new town, and to spend &#163;20.000,000 to produce an Australian car, and now the company is hit on the head with a 40 per cent, sales tax, the effect of which, of course, will be plainly to dampen down activity in a field which most certainly and emphatically will cause widespread unemployment as it did during the period following the introduction of the little Budget. I have quoted these figures before, but they will bear repetition. </para>
            </talk.start>
          </continue>
          <para>Let me say that the motor industry affects not merely the men employed directly in the factory. Each of the great manufacturers has literally thousands of contractors supplying component parts. Diffused throughout the factories of Australia the motor industry has a tremendous area of satellite activity around it. One cannot touch the great manufacturers without affecting the whole structure of industry throughout the Australian economy. It is interesting to recall the impact of the little Budget, particularly from the point of view of sales tax. Unemployed in January, 1956, numbered 16.000. In May, within three months of the little Budget, the figure jumped to 31,000. Throughout that year, 1956, there were never fewer than 31,000 persons unemployed, and the number was as high as 36,000. During the following year, 1957, unemployed never numbered fewer than 46,000, and was as high as 58,000; throughout 1958, the figure was never below 56.000 and was as high as 74,000. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1628</page.no>
                <time.stamp />
                <name.id>KAC</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">VINCENT, Victor</name>
                <name role="display">Senator Vincent</name>
              </talker>
              <para>- We say that there would have been more unemployment without the little Budget. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1628</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- I would say that the reverse is true. I would say that the effects of the little Budget on an important industry like the motor industry permeated right through the community. The figures are plain to see if one looks at the facts in relation to the conditions at the time. That is what the little Budget did to employment in this country which only this year has begun to improve. Now that recovery is under way the Government steps in and takes this drastic, unfair, panic action, which is again going to start a spiral of unemployment in the country. </para>
            </talk.start>
          </continue>
          <para>In this very field the Government has worsened the situation by lifting import controls on motor cars. It continued those controls until just recently, but it has at this stage lifted them altogether in a field that it is trying to dampen down. The main complaint of the Government is that the motor industry is an industry which leans heavily upon overseas funds. We are told that our imports are running at present at the rate of &#163;200,000,000 per annum, mainly, of course, comprising petroleum and petroleum products. These things are indispensable, and I again must comment on this matter. I have faced for years the effect of imports of petrol on our balance of payments position. I have begged the Government to do something great and spectacular in the search for oil in this country. I have complained again and again that the Government out of its revenue of &#163;122 per head of the population spends the magnificent sum of 8s. per head on the search for oil. That is an utterly unimaginative approach to the question on the part of the Australian Government. Anybody who has an appreciation of the complete metamorphosis the finding of oil would effect in the economy of this country must regard the Government&#39;s performance in this matter as pitiful. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1628</page.no>
                <time.stamp />
                <name.id>KT8</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCCALLUM, John</name>
                <name role="display">Senator McCallum</name>
              </talker>
              <para>- Is it certain that more money would make the position any better? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1628</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- Brains are required as well, and I have said again and again that brains can be bought with money. Earlier this year I congratulated the Minister when he did buy the brains of the Petroleum Institute of France. The Government has had the report of that institute for many months, but the Minister in charge of the matter said yesterday, when questioned, that he is still considering the report, although all Australia is waiting for the result of that report. I think the </para>
            </talk.start>
          </continue>
          <para class="block">Government has shown no appreciation of the problem, no sense of urgency and no sense of taking an imaginative step to try to rectify Australia&#39;s position in relation to these imports. That is one great chance that this country has to solve this problem of overseas balances. </para>
          <para>The purpose of this sales-tax impost is to prevent people from buying cars by cutting down the demand. I repeat something I read recently, namely that cars to-day are a necessity and not in any respect a luxury. A Government that claims that there is prosperity and claims to be proud of the living standards of this country should be ashamed to make it difficult for people to obtain motor cars. After all is said and done, one would expect the Government in the circumstances to be using every endeavour to make sure that every Australian who wants a car - and what Australian does not - has his path eased towards the realization of that goal. That is not to be the case. </para>
          <para>I pass to the next item - the control that the Government proposes to use by compelling life insurance companies and superannuation funds to hold not less than 30 per cent, of their assets or of their overall investments - the Government leaves us in doubt about that - in Commonwealth and semi-governmental securities. Two-thirds of the 30 per cent, is to be in Commonwealth securities, not in semi-governmental securities. Many questions arise. The Government leaves us confused. In one paragraph it says that these organizations are to hold not less than 30 per cent, of their assets in this form, and in another paragraph it talks about 30 per cent, of their overall investments. These can be two completely different concepts. One will find the two terms used in the speech. It frightens me to see that lack of precision in a considered statement that has emanated from the Treasurer. I do not know, and it is completely certain that the life insurance companies do not know, precisely what the Treasurer means. Here is a most extraordinary thing. Most of the life insurance companies, the Treasurer acknowledged, already have over 30 per cent, of their holdings in governmental and semi-governmental securities. He said that last year the figure was 37 per cent. What does this really mean? It means that they have very few </para>
          <para class="block">Commonwealth securities and, as he told us, the 37 per cent, consists almost primarily of semi-governmental securities. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1629</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator Wright</name>
              </talker>
              <para>- Is not the whole idea that this will impact upon new investment? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1629</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- I am coming to that. Look at the effect of this particular change. At the moment there is an average of more than 30 per cent. - 37 per cent. - of life insurance companies&#39; holdings in Commonwealth securities and semigovernmental securities. That is conceded. The Government wants to alter that to make sure that at least two-thirds of that 30 per cent, of holdings is in Commonwealth securities. If all the companies comply with the 30 per cent, requirement, the Government will not be very much better off. One change that will take place is that the life insurance companies will have to change their portfolios from semi-governmental securities to Commonwealth securities. That is the change that will be effected. That will yield, on the face of the case presented by the Treasurer, very little new money to the loan market from life assurance companies. On the case presented by the Treasurer, these companies have 37 per cent, in the field in which he wants 30 per cent. The real effect will be that they will be compelled to change from semigovernmental securities to Commonwealth securities. That will not improve the overall position in the country. All it will do will be to create new problems of finance for semi-governmental institutions. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1629</page.no>
                <time.stamp />
                <name.id>JQY</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">COURTICE, Benjamin</name>
                <name role="display">Senator Courtice</name>
              </talker>
              <para>- Which are bad enough now. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1629</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- Yes, it will only provide new problems for them. I hope that whoever follows me in this debate will address himself clearly to this proposal. It appears plainly from the Treasurer&#39;s statement that the proposal will simply pose new problems for other bodies, namely, semigovernmental bodies. This has the distinction of being the first capital levy, as far as I know, in the Commonwealth. The Government has been the first in the field. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1629</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator Wright</name>
              </talker>
              <para>- One newspaper says that it is the first in the English-speaking countries. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1629</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- I would not contradict that; it may well be right. This is  the first example of which I know. I confess that, having regard to the philosophy that the Government preaches, it came as a real shock to me. </para>
            </talk.start>
          </continue>
          <para>Just let me advert briefly, for the sake of the record, to the grave deficiency in the internal loan market. I have mentioned in this place, year after year and several times a year for eleven years, the failure of the local loan market. It is one of the key points in our economy. I merely content myself at this stage with saying that this market has failed to the tune of over &#163;2,000,000,000, under this Government, in the last eleven years. I shall not go into the side issues of the effect upon taxpayers. I am merely putting that on the board as an incontrovertible fact and as a clear measure of the colossal failure of the Australian loan market under this Government. </para>
          <para>The same restriction is to be applied to superannuation funds. From the little that 1 know of them, it seems that they will be very hard hit, because most of their funds are invested in semi-governmental securities. It is some time since I looked at the position, but I recall that I was amazed to find the great preponderance - I think I am safe in saying that - of semi-governmental securities held by the Commonwealth Superannuation Fund. I was literally amazed. These funds have rendered a wonderful service in this community in helping municipalities, port and harbour authorities, and other authorities throughout Australia to develop important public facilities. I ask the Minister to say what proposal the Government has for filling the gap in that field, when the Commonwealth takes available funds from semi-governmental sources and puts them into its own coffers. That is the position that has to be faced. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1630</page.no>
                <time.stamp />
                <name.id>KBL</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WOOD, Ian</name>
                <name role="display">Senator Wood</name>
              </talker>
              <para>-  When you use the term &#34; semi-governmental authorities &#34; do you include local government authorities? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1630</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>- Yes, of course. I include local government authorities. I mentioned port and harbour authorities and such organizations. </para>
            </talk.start>
          </continue>
          <para>The Government has made three attempts to cure the position this year. In February it put out a four-point programme to remove import licensing, freeze wages, restrict banks and provide for a surplus budget. In August it reviewed the position again. Both in February and in the Budget, the Government said the very things about the economy that it is saying now. There have been no surprising developments in recent months. In the small hours of this morning I made a check, reading the speeches made by the Prime Minister, <inline font-weight="bold">Mr. McEwen</inline> and others in February, and the Budget Speech made by the Treasurer last August, only three months ago. All the trends against which the Government is now purporting to provide safeguards were mentioned with concern and clarity in the speeches made two or three months ago and as far back as eight months ago. Nothing new has happened. The Government has become a little more seised of the urgency of the situation and has dashed in precipitately, with hasty panic action that will have the gravest effect upon the business psychology and the confidence of the Australian community. </para>
          <para>Let me say a word about the problem in relation to the balance of international payments. When the Government came to office in December, 1949, overseas funds amounted to &#163;989,000,000. To-day they are &#163;400,000,000. In terms of the value of money in December, 1949, when overseas credits were &#163;989,000,000, to-day&#39;s balance is worth only &#163;200,000,000. Even this year our overseas funds have fallen from &#163;547,000,000 at the beginning of the year to &#163;400,000,000 to-day. Already this year &#163;147,000,000 of our overseas funds have gone down the drain. Those trends were there for the Government to see. Any tyro, any fool who could read, would know that the trends were there. I refer to the White Paper issued by the Treasurer only a month or two ago. Table F, on page 8 reveals that in 1957-58 the balance of international payments on current accounts showed a deficit of &#163;174,000,000; in 1958-59, a deficit of &#163;207,000,000; and in 1959-60, a deficit of &#163;243,000,000. It is already obvious and conceded that the deficit will be far greater in the current year. </para>
          <para>Those trends have been evident for three years. What action has been taken to arrest them? The only action has been promiscuous borrowing - in London, in New York, in Switzerland - wherever the Government could get money. There has been borrowing from the International Bank. Above all, there has been the fortuitous inflow of overseas capital, which may be fly-by-night investment. The Government has no knowledge whether it is solid investment or whether the money that is coming in represents fly-by-night investment. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1631</page.no>
                <time.stamp />
                <name.id>JZU</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">ORMONDE, James</name>
                <name role="display">Senator Ormonde</name>
              </talker>
              <para>-  It is fringe money. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1631</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>-  Yes, that is so. To rely upon either of those sources to keep our overseas position solvent is extremely dangerous. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1631</page.no>
                <time.stamp />
                <name.id>K0C</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">ARMSTRONG, John Ignatius</name>
                <name role="display">Senator Armstrong</name>
              </talker>
              <para>-  Overseas money is going out of Australia already because the climate for investment has been destroyed. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1631</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>-  lt will continue to go out, following the recent economic measures of the Government. Borrowed money has to be repaid, both as to interest and, in subsequent years, as to principal. That fact will worsen our balance of payments position in the future. </para>
            </talk.start>
          </continue>
          <para>The danger is that the sources from which overseas money has been coming may dry up over-night. The Government is literally gambling to the tune of &#163;200,000,000 each year on those sources not drying up. Should that happen for only one year there would be panic and chaos in this country. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1631</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator Scott</name>
              </talker>
              <para>-  Will the honorable senator make a forecast? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1631</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKENNA</name>
              </talker>
              <para>-  I am prepared to say that no government should be so careless of its responsibilities as to rely upon the inflow of money over which it has not the slightest control, and to depend on the continuance of that inflow year after year. That, I say, amounts almost to criminal irresponsibility. The trends that I have mentioned were there for the Government to see, and it is the Government&#39;s own fault that it is now in a difficult position. In 1944, the present Government parties advised the people not to agree to controls, after the Labour Government had proposed fourteen points, to be adopted for a limited period of five years so that supply and demand could be equated in the post-war years. The present Government parties advised the people against adopting those proposals at the referendum of 1944 and again in 1948. This Government refused to ask the people for the powers that we on this side strongly pressed it to seek in 1950. At that time, there could have been an agreement with the Australian Council of Trade Unions, and the trade union movement generally, to adopt wage pegging, provided that there was an adequate system of profit and price control. </para>
            </talk.start>
          </continue>
          <para>Had the Government taken that opportunity Australia to-day would be the wealthiest nation in the world. The economy could have been stabilized in a few years.. The trade union movement had a high sense of responsibility. It knew the end-all of inflation, and it appreciated what inflation could do to the little people and the workers of Australia. The trade union movement was prepared to agree to such an arrangement, and <inline font-weight="bold">Dr. Evatt</inline> made an announcement to that effect in his policy speech of 1951. There was no concealment. The view of the trade union movement was firmly stated in the policy speech, but what did the Government do? <inline font-weight="bold">Senator Spooner</inline> told us in 1950, from the place in which he is now sitting, after we had moved for a referendum on prices, and a bill concerned with the administration of prices control had been introduced, that the problem of inflation was one for the people themselves and that they had to solve it. There was a complete abdication of responsibility. Therefore, I say that the Government has brought on itself the troubles with which it is now faced. </para>
          <para>I remind the Senate, as I have done before, that cost-of-living adjustments of the basic wage amounted to 13s. a week in 1950, 38s. in 1951, and 31s. in 1952, or a total of &#163;4 2s. a week in three years. That increase occurred under a Government that was pledged to put value back into the &#163;1 and to restore its purchasing power. There has never been a government with a worse record for lack of appreciation of the economic position, for ineptitude and inability to get things done. When we look back on this period in future years, it will be seen that the record of the Government has been a sorry one. Economists of the future, looking at this period in an atmosphere remote from party politics, will say what a tragedy it was that, in a time of buoyant seasons, with only an infrequent flood, bush fire, or drought, when the Government needed only to hold inflation - which could have been done had it appreciated the position and applied the few controls that were necessary- - the proper action was not taken. The Government has betrayed the best interests of Australia. </para>
          <para>We have an outmoded Constitution, <inline font-weight="bold">Mr. Deputy President.</inline> The Government has had before it a report on constitutional reform from a committee that included six Government supporters. It has had that report in its hands for two years. It is quite obvious that the Government now sees the virtue of the controls recommended by the committee, and that it is getting round to implementing them in a backhanded way, through the banks and by other remote means. I implore the Government to stop considering the report and to do something about it, in the best interests of the nation. Inactivity and ineptitude have characterized this Government through its whole period of office. It disgusts me to think that it has had before it for two years the report of a parliamentary committee on a matter of such importance, and has done nothing about it. I give to the Senate and to the people of Australia an unqualified pledge that if the Government will pick out the economic controls that are recommended by the committee or, in fact, any recommendations of that committee, and move to have them adopted, the full support of every member of the Federal Parliamentary Labour Party will be forthcoming. The Government need not be timid about approaching the recommendations for fear that the Labour Party will play party politics. In advance, I solemnly give a pledge on behalf of the party that we will, without reservation, fully support every one of the 21 recommendations of the committee. Let the Government be honest instead of trying backhand, inefficient controls in fields in which they cannot be effective. The Government should stand up and face its responsibilities. </para>
          <para>I could say a word or two about the known character of the accused, a term with which we are not unfamiliar to-day, when I look at the Government and think of its record. I am reminded that this pattern of inaction and inefficiency has been repeated every year that it has been in office. I have already referred to the horror budget. Let me remind honorable senators of the import cuts that were imposed in 1951-52. We had an example of the behaviour of the Government on that occasion. I think honorable senators will remember that in April, 1954, a large number of items was removed from the noquota restrictions list, the significant factor being that there was to be a general election in the following month of May. The Government was obliged to clamp on the controls again only five months later, in October. In the meantime, our overseas balances had gone down the drain to the tune of &#163;142,000,000. The great warehouses had filled their shelves and their stores with imported goods, including luxury items of every conceivable description. They drew on the banks and ran our overseas funds down by &#163;142,000,000. </para>
          <para>My time has almost expired, <inline font-weight="bold">Mr. Deputy President.</inline> I regret having taken so long, but I wanted to deal in some detail with the measures that &#39;the Government proposes to take. Australia has lost its most favorable opportunities under this Government. Our best interests have been entirely betrayed. Instead of real prosperity we have a spate of words, with very little action from the Government. We are in an economic mess both internally and externally. We have the chronic cancer of inflation. The present measures, which are the third group of a series this year, constitute the most abject confession of failure on the part of the Government after eleven years of office. In those circumstances, if this Government and its supporters had any sense of decency they would resign forthwith. </para>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1632</page.no>
              <time.stamp />
              <name.id>K7A</name.id>
              <electorate>New South WalesVicePresident of the Executive Council and Minister for National Development</electorate>
              <party>LP</party>
              <role />
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">SPOONER, William</name>
              <name role="display">Senator SPOONER</name>
            </talker>
            <para>. -  It has been my fate to listen to <inline font-weight="bold">Senator McKenna</inline> lead debates for the Opposition on many occasions. I am sorry to have to say that I have never heard him to less advantage than I have to-day. He departed altogether from the field of logic; he departed altogether from the field of argument. He just embarked upon a series of criticisms, abuse and obvious attempts to gain headlines in the press. There is no future in substituting a string of adjectives for argument. If tomorrow we read the &#34; Hansard &#34; report of the honorable senator&#39;s speech, I am sure we will see that no other speech ever delivered in this chamber has contained a greater number of carefully considered adjectives aimed at getting publicity. We are considering  a  great national matter. The object of our comments should not be to gain headlines in the press or to endeavour to whip up electoral support. Surely the object of those who carry responsibility should be to try to analyse the situation logically, to criticize as one&#39;s spirit may impel one to criticize, and to speak in moderate, logical and decent terms. I again say with great respect that, if tomorrow we look at the &#34; Hansard &#34; report of the honorable senator&#39;s speech we will find that there has never before been a more extravagant speech, a speech with so little real content. We are debating, as I said earlier, a matter of great national importance. Let us remember the old Biblical advice that it is not the strong wind, the earthquake or the fire to which we should pay attention, but the still small voice. It is the still small voice of a reasoned and logical approach that is needed on this occasion. </para>
          </talk.start>
          <para>I have been invited to make some comments upon what <inline font-weight="bold">Senator McKenna</inline> said. 1 have not noted all the adjectives that he used. But one of the points made by the honorable senator was that it is absurd to think that the increase in deposit rates will attract money away from the fringe banking institutions - that it is a farce to think that an interest rate of <inline font-style="italic">4i</inline> per cent, will be effective. To say that either displays a complete lack of appreciation of the Government&#39;s proposals or is a complete falsification of them. The proposal to increase bank deposit rates is accompanied by a proposal to make it more unremunerative for the fringe bankers to borrow money. We will have the two forces working together. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1633</page.no>
                <time.stamp />
                <name.id>JQY</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">COURTICE, Benjamin</name>
                <name role="display">Senator Courtice</name>
              </talker>
              <para>- There is a big gap. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1633</page.no>
                <time.stamp />
                <name.id>K7A</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SPOONER, William</name>
                <name role="display">Senator SPOONER</name>
              </talker>
              <para>- I am not worrying about the gap. I point out to the honorable senator who interjected that it is not adjectives which count but that what counts is a careful analysis, to which even the Opposition should pay some attention. I repeat that, when the Leader of the Opposition  i  takes only one side of the problem and leaves out of account the other influence that is being put into operation, he either does not understand the matter or is endeavouring to put it unfairly. I repeat that two influences will be operating: We are raising bank deposit rates and we are making it more unremunerative, less profitable, and therefore more difficult, for the fringe banking people to attract deposits and continue their activities. </para>
            </talk.start>
          </continue>
          <para>The Leader of the Opposition further said that high interest rates on advances are inflationary, because they increase costs. He does not acknowledge the fact that an increase of interest rates is one of the traditional weapons that are used in any anti-inflationary campaign. The first approach the theorist makes is to consider an increase of interest rates, believing that whatever interest rates may do to increase costs that increase is more than offset by reducing the volume of money in circulation. The higher interest rates make the entrepreneur, the investor, pause before he commits himself to a new project which would cost him more than it previously would have cost. <inline font-weight="bold">Senator McKenna,</inline> instead of acknowledging that situation and canvassing it, reels off a list of adjectives. As I said earlier, I am sorry that I have not noted them all, but I think it was in relation to this matter that he was intemperate and said it was a stupid move. If I have applied that term to the wrong matter, I apologize. I am quite certain that he described something as being a stupid move, and I think it was the matter to which I have just referred. National matters are not being approached properly if the moves proposed are described as being stupid without there being any argument to support the description. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1633</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator Wright</name>
              </talker>
              <para>-  What are the provisions that will make the operations of the fringe institutions less profitable? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1633</page.no>
                <time.stamp />
                <name.id>K7A</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SPOONER, William</name>
                <name role="display">Senator SPOONER</name>
              </talker>
              <para>-  They are the removal of the income tax deduction and making the net effective interest rate paid by the borrower considerably higher than it was previously. <inline font-weight="bold">Senator McKenna,</inline> in one of his few attempts to offer suggestions, said that the first thing we should do is to fix all interest rates. But he ignores the experience of the past, which indicates that there would be black markets pursuant to the fixation of interest rates just as there were black markets when prices were controlled. </para>
            </talk.start>
          </continue>
          <para>I thought that one of the most pathetic efforts of the Leader of the Opposition was his attempt to try to convince the Senate that there had been unemployment in Australia as the result of the policies that had been pursued by the Government. It is almost incredible that the Leader of the Opposition should attempt to establish that there has been unemployment in recent years and that the Government&#39;s present proposals will lead to further unemployment, especially when it is quite clear that one of the principal results of the inflationary trend has been over-full employment. One of the great difficulties facing the Government is to maintain full employment, without over-full employment and without inflation. In a set of circumstances in which one of our immediate problems is that of over-full employment, the Leader of the Opposition canvasses the subject of unemployment. </para>
          <para>
            <inline font-weight="bold">His</inline>remarks about our proposals concerning the life assurance companies showed a complete lack of knowledge and a complete lack of appreciation of what is contemplated and of what the Government aims to do. If I understood him correctly, he said that the Government&#39;s proposals were aimed at transferring life insurance investment from semi-governmental securities to Commonwealth securities. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1634</page.no>
                <time.stamp />
                <name.id>KTN</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKENNA, Nicholas</name>
                <name role="display">Senator McKenna</name>
              </talker>
              <para>- I did not say that. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1634</page.no>
                <time.stamp />
                <name.id>K7A</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SPOONER, William</name>
                <name role="display">Senator SPOONER</name>
              </talker>
              <para>- I find it difficult to understand how he thought that up. I cannot understand how anybody could suggest that that was the intention. The whole purpose of these proposals is to correct the situation, not only for the benefit of the Government and the Commonwealth loan market, but also for the benefit of the policy-holders in the life assurance companies. Whereas in the past these companies were traditional investors in Commonwealth loans, in recent years they have departed from that practice. The whole purpose of our proposals is to restore the former position, in which the life companies made bigger investments in Commonwealth loans. Whether or not the Leader of the Opposition agrees with the proposal is one thing, but I find it difficult to believe that he does not understand the objective of the proposals. </para>
            </talk.start>
          </continue>
          <para>The Leader of the Opposition indulged in criticism, using certain adjectives, of our overseas funds position. He said that we were borrowing promiscuously and were receiving fortuitously an inflow of capital. I know that the Leader of the Opposition is a very hard worker. I commend him for the work he does. However, for the good of the party he leads in this chamber, I ask him to apply his talents, not to devising catch phrases, such as &#34;fly-by-night money &#34;, but to developing a solid appreciation of the problems with which we are faced. </para>
          <para>One of the important reactions to the governmental proposals has been the favorable comment that appeared in the &#34; Financial Times &#34;, which is probably one of the world&#39;s leading financial journals. <inline font-weight="bold">Senator Kennelly</inline> laughs. I point out that one of the great strengths of the Australian economy and of Australian industry is the fact that overseas funds are coming into this country. They are coming into Australia because of a belief in the strength and stability of the Australian economy and of the potentialities of this country. Not only do the overseas investors give us great economic assistance; they give us technical assistance also, because the capital is accompanied by plant and machinery and knowhow. When the Leader of the Opposition says that we should always talk in critical terms about this overseas investment and that we should not take it into account in considering future development, he shows, in my opinion, a lack of knowledge and a lack of appreciation of our problems. </para>
          <para>I come now to a criticism that touched me to the quick. I refer to the criticism that the Leader of the Opposition made in relation to the search for oil in Australia. I believe that, within the limits of our resources and the limits of the best practical methods, the search for oil has been one of the most vigorously supported programmes of development in Australia. It has been most imaginatively controlled. When I assumed the National Development portfolio, I inherited something that had been bequeathed to me by the previous Labour Government. I refer to its proposal to buy a big drill with which to dig a deep hole in north-western Australia. This was typical of the socialist attitude: &#34; We will push everybody else to one side and do it all ourselves &#34;. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1634</page.no>
                <time.stamp />
                <name.id>JZU</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">ORMONDE, James</name>
                <name role="display">Senator Ormonde</name>
              </talker>
              <para>- We had to make a start somewhere. </para>
            </talk.start>
          </interjection>
          <para>
            <inline font-weight="bold">Senator SPOONER.^</inline>A &#34;Government only &#34; programme for the search for oil in Australia would be pathetic indeed. In view of the fact that a vast area of about 3,000,000 square miles has to be covered, the only hope of success lies in bringing into the search a great number of people and companies who can supply the know-how as well as the capital that is needed. <inline font-weight="bold">Senator Ormonde</inline> stated by interjection a moment ago that we had to make a start somewhere. My reply to that observation is that there could not have been a worse policy on which to make a. start than to announce to the world, in effect, &#34; This is a Government field of enterprise; others will keep out&#34;. If that had been the effect of the big drilling proposal, we would not have aroused overseas interest in the search for ofl in this country, which is the most important component of that search. </para>
          <para>I- have endeavoured, so far, to cover the main points in connexion with which I thought <inline font-weight="bold">Senator McKenna</inline> was simply inaccurate. I am not at present talking in terms of political criticism. At the moment, I am- endeavouring, to establish the point that in relation to the major matters I have selected, his summary of the position, his diagnosis and his analysis were quite wrong. When he makes a wrong diagnosis, expressing it in picturesque phrases, he does great harm not only to the Government, but to the Opposition, because neither an Opposition nor a Government can survive unless it commands the respect of the community. That respect is not gained by ignorance, abuse and ill-tempered or ill-judged criticism. What is the net result of all that <inline font-weight="bold">Senator McKenna</inline> said? He said, in effect, &#34; Join hands with us. Let us have a referendum. When we get the necessary powers by that referendum, all will be right in this best of all worlds.&#34; </para>
          <para>Sitting suspended from 12.45 to 2.15 p.m. </para>
          <continue>
            <talk.start>
              <talker>
                <page.no>1635</page.no>
                <time.stamp />
                <name.id>K7A</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">SPOONER, William</name>
                <name role="display">Senator SPOONER</name>
              </talker>
              <para>
                <inline font-weight="bold">- Mr. President,</inline>1 propose to continue my remarks in more temporate terms than those I used before the suspension of the sitting. This is a very great national matter and I believe that one should say what one wishes to say to the best of one&#39;s ability and in terms that are not personal. The great objection 1 have to <inline font-weight="bold">Senator McKenna&#39;s</inline> speech is that he was so flambuoyant iin his criticism. I make the point that the action we have taken has been taken in the exercise of our responsibilities as a Government. We have taken the action in what I consider to  be  a responsible way. So; those who oppose the action taken must also- act responsibly and must make their criticism in a responsible way. 1 make the general point that I have made more than once when dealing with matters of great importance. When I listen to the critics on the other side of the Senate and read1 critical newspaper reports, 1 always think it is significant that the critics never submit an alternative course of action. Very seldom indeed do they make any constructive proposals; they are always destructive in their criticism. Even on an occasion such as this, as I read the newspapers and listen to <inline font-weight="bold">Senator McKenna,</inline> it seems that by and large there is no great divergence of opinion upon the trends in the economy that need to be corrected. The argument turns upon the methods to be employed and not so much upon the diagnosis of the trouble. </para>
            </talk.start>
          </continue>
          <para>It seems to me that the great divergence of opinion between honorable senators on opposite sides of the Senate and the two opposing political forces is that <inline font-weight="bold">Senator McKenna</inline> relies so considerably upon proposals to obtain more constitutional power for the Commonwealth. Although that is his general proposition, he makes no attempt to set out a detailed programme that he would endeavour to implement if the Commonwealth had those powers. This, <inline font-weight="bold">Mr. President,</inline> is the whole milk in the coco-nut: What is the right thing to do in the specific circumstances? Rather than resting the argument upon the ground that what is needed is greater constitutional powers for the Commonwealth, the argument is whether what the Government is doing in the proposals before the Senate is adequate and correct. It is an inherent weakness to rely upon the Commonwealth getting greater constitutional powers. Speaking personally, I do not regard that as a sound approach. I regard it as an impracticable approach because of the time factor that is involved. No great constitutional change can take place except over a long period of time and after bitter political argument, a campaign, a referendum and all that goes with it. </para>
          <para>Furthermore, I disagree with those who hold the view that the Australian people would give greater constitutional powers to the Commonwealth. I believe that the people are so wedded to the federal system that, despite what those who advocate greater constitutional powers may think, there would be a rude awakening for them in the result of a referendum. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1636</page.no>
                <time.stamp />
                <name.id>K4S</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SANDFORD, Charles Walter</name>
                <name role="display">Senator Sandford</name>
              </talker>
              <para>-  Why not try it? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1636</page.no>
                <time.stamp />
                <name.id>K7A</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SPOONER, William</name>
                <name role="display">Senator SPOONER</name>
              </talker>
              <para>- Because I do not believe that it is the correct approach, in the first place. We propose to do what is possible under our existing powers, believing that that will be sufficient to meet the situation that we now face. That is the basic divergence of opinion between the Government and the Opposition. The proposals contained in the programme which is now before the Senate are, in the view of the Government, adequate for the problem that has to be met. Therefore, it is not an adequate reply to say that the Government should seek greater constitutional powers when we believe that what we propose to do, which can be done within our present powers, will be satisfactory. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1636</page.no>
                <time.stamp />
                <name.id>K4S</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SANDFORD, Charles Walter</name>
                <name role="display">Senator Sandford</name>
              </talker>
              <para>-  Why did you set up the Constitutional Review Committee? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1636</page.no>
                <time.stamp />
                <name.id>K7A</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SPOONER, William</name>
                <name role="display">Senator SPOONER</name>
              </talker>
              <para>-  Let me continue with my speech in my own way. Another point I want to make - which seems to me to be a pretty fundamental one - is that those who object to a particular item in the proposals before the Senate should remember that the programme as a whole has to be considered. In the opinion of the Government and its professional advisers, there was a need to achieve a general reduction in activities throughout the community and, in addition to that general dampening down of inflationary processes, a need to take action in regard to particular sections of industrial and economic activity. So the Government aimed at an overall result. </para>
            </talk.start>
          </continue>
          <para>To be logical, those who object to an activity or a particular proposal in the overall scheme have to agree, if they accept the view, as I do, that some general reduction in the tempo of activities was necessary, that if they delete one proposal because they object to it, they have to replace it with another proposal in some other direction. If they object to the increase in sales tax on motor cars or to the arrangements to restrict the extent of what we are now calling fringe banking activities, something else has to be put in the programme in its place if we are to secure the same general overall result. In the view of the Government, whatever may be proposed to replace something that is in the proposals we are considering will not be as effective as the proposals taken as a whole, and therefore will not be as beneficial in the national interest. </para>
          <para>Another general observation I make is that despite the length of time I have been in politics, I cannot accept the habit of newspapers, in circumstances such as these, of criticizing the Treasurer personally. These are Cabinet decisions made by Cabinet as a whole. On these matters the Treasurer is the spokesman of the Government, but the final result is the collective action of the Cabinet. I would prefer to see all members of the Cabinet criticized equally, just as J hope that when the programme in the fullness of time is shown to be effective we will all share in the congratulations. </para>
          <para>I come back to what <inline font-weight="bold">Senator McKenna</inline> said, and I make the point that on this occasion, as in previous debates of this kind, he has confused policy with methods of implementing policy. He has confused policy and performance - strategy and tactics. The Government has always maintained the same steady policy. It has always aimed at maintaining employment and the rate of immigration, developing national resources, encouraging production and making quite certain that the prosperity of the community is distributed equitably in generous social service benefits. That is the policy that the Government has adopted, and that is the policy that it has most successfully implemented during the years it has been in office. I should not need to repeat what I have said on previous occasions in the Senate, that it is a most difficult task indeed to implement a policy such as that and at the same time restrain effectively inflationary trends. As I have said in the Senate before - I think this bears repeating - in the modern world in which we live the great problem of governments is to maintain full employment and proceed with development, while at the same time restraining inflation. </para>
          <para>I ask honorable senators to remember that although prices in Australia have risen, the rise has been accompanied by the great boon of full employment. I ask honorable senators to remember that the rise in the purchasing power of wages has been substantially greater than the rise in costs. I wish to refer to figures for the June quarter of this year and compare them with figures for the June quarter of last year. Those figures show that over a period of twelve months award wages increased by 5.6 per cent., average earnings increased by 10 per cent, and the consumer price index increased by 3.7 per cent. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1637</page.no>
                <time.stamp />
                <name.id>K4S</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SANDFORD, Charles Walter</name>
                <name role="display">Senator Sandford</name>
              </talker>
              <para>-  The workers will be pleased to know that. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1637</page.no>
                <time.stamp />
                <name.id>K7A</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SPOONER, William</name>
                <name role="display">Senator SPOONER</name>
              </talker>
              <para>- I think the workers are fairly pleased with the record of this Government, as evidenced by the fact that at five successive elections it has been returned to power. </para>
            </talk.start>
          </continue>
          <para>I do not propose to try to prove all my arguments by citing figures, but I think it is beyond the field of argument that the vast majority of Australians are enjoying very much higher living standards to-day than they enjoyed ten years ago. But the Government is not content to rest on past achievements. We want to do more than maintain present living standards. We want to improve living standards even further, and we must look not only at the immediate problem, not only at the factors that are causing us concern at the moment, but also at circumstances that will permit us to continue our development, to continue seeing Australia grow and at the same time continue to distribute the fruits of our prosperity equitably throughout the community. </para>
          <para>I think it is well to recapitulate the circumstances with which the Government was confronted. It was confronted with a rise of &#163;148,000,000, or 16 per cent., in the level of bank advances; a fall in the price of wool of lOd. per lb., which meant a loss of &#163;60,000,000 in our overseas earnings; a most extraordinary expansion in the motor car industry; a decline in investments in Commonwealth loans by life assurance companies; and conditions of dangerously over-full employment instead of full employment. One of <inline font-weight="bold">Senator McKenna&#39;s</inline> principal lines of argument, if I understood him correctly, was that the Government should not have lifted import controls. He contended that the lifting of import controls was a major factor contributing to the present situation. That is <inline font-weight="bold">Senator McKenna&#39;s</inline> political philosophy. Australia is a great trading nation. We must export to live. We must export in order to grow greater. Our economy needs the spur of competition. We need access not only to plant and raw materials, but also to ideas from overseas. All of those things cost money. Above all, we must do our utmost to keep costs down as far as it is practical to do so. We need capital from overseas. As far as possible we must put our exporting industries, which in the main are our primary industries, in the position where they can sell their products overseas as competitively as possible. I reject completely any suggestion that the Government should re-introduce import controls. The re-introduction of import controls would mean that a government department, no matter how good it is, would have to make the final choice on various items, and I think that that choice is better left in the hands of the person who requires the goods. </para>
          <para>I reject <inline font-weight="bold">Senator McKenna&#39;s</inline> view that the proposals announced by the Treasurer will place the control of imports in the hands of the banks. It is true that the volume of money in the hands of the community will be reduced. But those who formerly had access to credit still will be able to import. The responsibility will be placed primarily on them to use their resources in what they consider to be the best way to suit their particular type of business. If their resources are not unlimited they will make the choice whether they put their resources into some local products or imports from overseas. Subject to the overall general restrictions on the amount of money in circulation, the net result of their having to make that choice will dampen down activities. That is the objective at which the Government is aiming. I infinitely prefer the general approach of reducing the volume of money available, which is inherent in these general proposals, to the approach advocated by the Leader of the Opposition. </para>
          <para>To be effective these general proposals, which I prefer, have to be accompanied, in the opinion of the Government, by specific measures against particular activities which every one admits are substantially causing and aggravating the existing problem. I have not heard any one during the course of the debate say that the high rates of interest being paid by fringe bankers are desirable. Every one agrees that some action to curb those high interest rates is necessary. The argument turns entirely upon what is the appropriate course of action. I have not heard anybody with a sense of responsibility deny that the extraordinary development of the motor car industry has set up a demand for materials and resources which is severely straining the supply of resources that are available. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1638</page.no>
                <time.stamp />
                <name.id>JZU</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">ORMONDE, James</name>
                <name role="display">Senator Ormonde</name>
              </talker>
              <para>- The Government helped it along. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1638</page.no>
                <time.stamp />
                <name.id>K7A</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SPOONER, William</name>
                <name role="display">Senator SPOONER</name>
              </talker>
              <para>- That is the Government&#39;s continual problem. The Government has to develop Australia in every direction. It has to encourage development so that we will have a well-balanced economy not only in the field of motor cars, but also in primary production, mining and in every other direction. </para>
            </talk.start>
          </continue>
          <para>Let us look at the motor car figures. The number of new cars and sedan wagons registered in the September quarter was 22,400, no less than 28 per cent, more than the number registered during the same quarter last year. The number of motor chassis assembled was 17 per cent, above last year&#39;s figure. The September quarter sales of new vehicles reached an all-time record, being equal to a rate of 330,000 vehicles per annum. As <inline font-weight="bold">Senator McKenna</inline> indicated this morning, if you follow this through, it affects not only men, machinery, plant and materials in the motor car industry but also petroleum products and other requirements. We reach the deduction on the information available to us that the imports necessary to maintain this industry, on the September quarter figures, were running at an annual rate of not less than &#163;200,000,000 a year compared with &#163;152,000,000 last year. </para>
          <para>In order to get these figures into perspective may I remind honorable senators that the overall export figure for Australia is &#163;880,000,000. At the same time, capital inflow amounts to &#163;210,000,000, and imports to &#163;1,050,000,000. We have reached a situation where one particular industry, with imports running at the rate of &#163;2,000,000 a year, is absorbing no less than 19 per cent, of our total import payments of &#163;1,050,000,000. I admit that we all want motor cars. It is an indication of the high standard of living in Australia that a tremendous demand exists for motor vehicles. </para>
          <para class="block">Much as the Government may dislike increasing sales tax, and much as it dislikes doing other things, surely there is the strongest possible need for the action that the Government has taken to discourage activities in this particular direction. We want the resources that are going into this industry to be diverted elsewhere. The situation is that we are short of resources because of over-full employment in most sectors of the Australian community. We believe that the net result of the action of the Government will be that many people will defer purchasing a new car at this present time of expansion. If that is the result it will make a very good contribution to straightening the Australian economy. </para>
          <para>I turn now to the criticism that <inline font-weight="bold">Senator McKenna</inline> levelled against the Government in respect of its life insurance proposals. As quickly as I can, I shall put the other side of the story. There must be confidence in life insurance companies; there must  be  incentives for people to insure their lives, and that is accepted by every one. These companies have been traditional lenders to governments. Back in 1939, life insurance companies held 50 per cent, of their assets in government securities. The percentage fell to 37 per cent, in 1959, and it is only in recent years in this unhealthy atmosphere that has developed that the pattern has changed. The extent of the change in the pattern is illustrated by the following figures. In 1958, the assets of the life insurance companies increased by &#163;75,000,000, of which they put only 16 per cent, into government securities compared with the much higher percentage that I cited earlier* In 1959, their assets increased by &#163;90,000,000, of which they put only 9 per cent, into government securities. Those figures indicate a tremendous growth in assets - an increase from &#163;75,000,000 to &#163;90,000,000. It is not unreasonable to conclude that that growth is the result of a conscious reaction to the Government&#39;s policy of encouraging life assurance, of increasing the tax concessions available to those who insure their lives and of making favorable deduction arrangements for life insurance companies themselves. The traditional level of assets held in government securities has fallen from 50 per cent, in 1939, down to 9 per  Cent, in  1959; and I believe that the 1960 figure  is  even lower* </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1639</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator Wright</name>
              </talker>
              <para>- What are the special provisions of favouritism to the companies themselves. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1639</page.no>
                <time.stamp />
                <name.id>K7A</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">SPOONER, William</name>
                <name role="display">Senator SPOONER</name>
              </talker>
              <para>- I ask for notice of that. Dividends received from other companies are not taxable income, but I would not like to be definite on that. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1639</page.no>
                <time.stamp />
                <name.id>K0C</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">ARMSTRONG, John Ignatius</name>
                <name role="display">Senator Armstrong</name>
              </talker>
              <para>- That is true of any company. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1639</page.no>
                <time.stamp />
                <name.id>K7A</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">SPOONER, William</name>
                <name role="display">Senator SPOONER</name>
              </talker>
              <para>-  1 am sure that there are others. Despite this change in the constitution of life insurance companies, about 36 per cent, of their total assets arc held in Commonwealth loans. We are aiming to alter the trend. We have said that they shall put 30 per cent, of their investments, from this stage forward, in Commonwealth loans. That is not a bad thing for the policy holder. Whatever might be said to the contrary, there is no safer investment than Commonwealth loans, and the prime objective of all insurance companies must be the security of their investments. To those who are critical, I say that 30 per cent, is not nearly as high a proportion as that which is applicableto savings banks, which are required to earmark some 70 per cent, of their assets in this way. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1639</page.no>
                <time.stamp />
                <name.id>JZU</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">ORMONDE, James</name>
                <name role="display">Senator Ormonde</name>
              </talker>
              <para>- Will this affect housing? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1639</page.no>
                <time.stamp />
                <name.id>K7A</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SPOONER, William</name>
                <name role="display">Senator SPOONER</name>
              </talker>
              <para>- I cannot follow through all the reactions to the proposal. I noticed this morning a statement that there would be an effect upon housing. We have to consider not so much the general effect on housing. We must ensure that the effect is not upon the building of small houses. Much as I want to see the housing programme continue, even I must admit that completions at the rate of 100,000 a year, which is far in excess of anything we contemplated a few years ago, must have ramifications throughout the economy. </para>
            </talk.start>
          </continue>
          <para>My time is running out and I have had a pretty fair hearing. I do not want to traverse all the ground again. What we are doing is aiming to reverse trends, remembering all the while that these trends are basically due to the great development that has occurred in Australia in recent years. The banks remain the greatest single influence in our monetary system. These proposals will strengthen their position and put them in a situation where they will be able to attract a greater volume of deposits. They will be in a better position in relation to their competitors. We are reducing the power of their competitors by making it more expensive for them to borrow, by eliminating the tax concessions that they have previously enjoyed. </para>
          <para>We have adopted two programmes. We believe that these measures, following what we did in the Budget, will be sufficient and successful. In all these matters there is always a choice of alternatives. There is always a great number of proposals as to what should be done. The Government must exercise its judgment in deciding finally upon a formula. With respect to those who hold the contrary view, I do not think that one can ever take only one proposal out and criticize it. We must look at all the proposals together to determine their cumulative effect. To those who criticize one proposal and prefer an alternative, I say only that the probabilities are that their alternative has come before the Government and been most carefully considered before a choice was made. We must look at the overall result. </para>
          <para>The first point that observers must consider is whether it is necessary to do what we propose. I believe that it is necessary and that it will achieve the desired result. Like <inline font-weight="bold">Senator Laught,</inline> I was very heartened by the comment in the London &#34; Financial Times&#34;, which is one of the world&#39;s leading financial journals. We are, and will be for a long time, dependent upon capital inflow in terms not only of money but also of industry and resources that go with it. Our great objective is not only to do the best we can with our internal economy and make it sounder but also to maintain Australia&#39;s status overseas so that we shall continue to have coming into Australia the investment that we believe is so important to us. </para>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1639</page.no>
              <time.stamp />
              <name.id>KPK</name.id>
              <electorate>Victoria</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">KENNELLY, Patrick</name>
              <name role="display">Senator KENNELLY</name>
            </talker>
            <para>.- We have just listened to a speech that was more or less in two parts. </para>
          </talk.start>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1639</page.no>
                <time.stamp />
                <name.id>KNR</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">HANNAFORD, Douglas</name>
                <name role="display">Senator Hannaford</name>
              </talker>
              <para>-  One before lunch and one after lunch. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1639</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>- If fools rush in where angels fear to tread, I do not mind. This is an important discussion, and if I provoke interjections I do not mind hearing them, but the matter is so important that we are entitled to put our case in our own way. <inline font-weight="bold">Senator Spooner</inline> commenced by using what is, for him, a rather hackneyed phrase. He said, &#34; I have never heard <inline font-weight="bold">Senator McKenna</inline> to worse advantage &#34;. During the suspension for lunch, I looked up the records and I found three or four occasions on which he had used the same words. Before lunch I thought that this was going to be a really good debate. <inline font-weight="bold">Senator Spooner</inline> got a little hostile, and I thought, &#34; This will wake the old place up &#34;. He even went so far as to accuse <inline font-weight="bold">Senator McKenna</inline> of not being fair. These were strong words from the Leader of the Government to the Leader of the Opposition. My mind went back to a speech that I heard <inline font-weight="bold">Senator Spooner</inline> deliver on 27th March, 1958, in which, according to &#34; Hansard &#34;, he said -  ! suppose I have been too long in politics to attempt to be fair. </para>
            </talk.start>
          </continue>
          <para class="block">So, of course, T smiled very widely when <inline font-weight="bold">Senator Spooner</inline> accused my Leader of not being fair. When the honorable <inline font-weight="bold">Senator came</inline> back after lunch - no doubt he had a very good lunch, as most of us do - he was in a much more conciliatory mood. If I may say so, it was much more becoming than his previous mood. He admitted after lunch that the Government could not restrain inflation. Those were his words. Then he said, in effect, &#34; Prices have risen, it is true, but of course there has been a great boom in employment&#34;. He proceded to give figures for only one year to show that the increase in wages had been greater than the increase in prices. Of course, if he had based the figures on a 48-hour or a 56-hour week, with the hours above 40 being paid for at penalty rates, the position would have been altogether different. </para>
          <para>Let us have a look at the movement of prices and wages since this Government has been in office. Let us consider, first, the movement of land prices. What are my dumb friends in the corner party - I say that with respect, <inline font-weight="bold">Mr. Deputy President</inline> - going to say about the price of land as it affects farmers? I am speaking on behalf of young people who are trying to buy land on which to build homes. Land prices have gone through the roof, so to speak. I heard <inline font-weight="bold">Senator Spooner,</inline> in his closing remarks, compliment himself on the number of homes that had been built. We are all delighted that homes are being built. </para>
          <para class="block">We know that in the less-populous States, particularly Western Australia, to which <inline font-weight="bold">Senator Vincent</inline> referred last night, the housing problem no longer exists to the degree that it exists in the States in which relatively large populations are to be found; but there are more than 84,000 names on the waiting list of the Victorian Housing Commission, for homes either to rent or to buy. If the Goverinment had not improved the housing position over the years, we could well say to it, &#34; Well, you have not done much else. You have allowed the economy to reach the stage at which you must now rush in with panic measures.&#34; Even the friends of the Government are not all pleased- </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1640</page.no>
                <time.stamp />
                <name.id>K3W</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">CANT, Hartley</name>
                <name role="display">Senator Cant</name>
              </talker>
              <para>- Has it any? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1640</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>- lt has one friend - the Packer show. Of course, when the time comes for the Government to seek re-election its friends will rally round. </para>
            </talk.start>
          </continue>
          <para>
            <inline font-weight="bold">Senator Spooner,</inline>when he was being so complacent and so nice - in fact he became almost apologetic towards the end of his speech - said that he derived great comfort from statements that had appeared in the London &#34; Financial Times &#34;. I interjected, taking advantage of your great courtesy, <inline font-weight="bold">Mr. Deputy President,</inline> to the effect that we on this side are so used to lack of support from the newspapers that we do not care what they say. Speaking for myself, I have never cared, because to my mind a person who reads anything against himself needs to have his head read. My advice, <inline font-weight="bold">Mr. Deputy President,</inline> is never to let anything worry you. The newspapers may publish what they like, so far as I am concerned. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1640</page.no>
                <time.stamp />
                <name.id>K7A</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SPOONER, William</name>
                <name role="display">Senator Spooner</name>
              </talker>
              <para>- All that you hope is that they will write something. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1640</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>- I do not mind whether they do or they do not. Of course, whenever a person in the newspaper world attains a position of power, this Government and its friends in the States see that he is knighted. That is the greatest joke in the world. </para>
            </talk.start>
          </continue>
          <para>
            <inline font-weight="bold">Senator Spooner</inline>claimed that we did not agree with alteration of the Constitution. The Government appointed a committee to review the Constitution, consisting of six members of the Parliament from the Government side and six from the Opposition side. In the majority of instances, the twelve members of the committee were in agreement. According to <inline font-weight="bold">Senator Spooner,</inline> apparently three years of effort have been wasted. When all is said and done, the honorable senator is influential in Government circles. He needed only one more vote to become the  Deputy  Leader of the Liberal Party. He therefore wields a lot of influence with the Government. Apparently, he now does not want to take any notice at all of the report of the Constitutional Review Committee. </para>
          <para>The Government&#39;s proposals in regard to insurance companies make me laugh. 1 recall that in 1949 the banks pushed out their employees- -those weak-kneed people who have nothing but their labour to sell - to organize against the Australian Labour Party. Insurance clerks also took part. They said, &#34; If Labour wins, the banks will go &#34;. It is true that they would have been nationalized, and they will be sooner or later. It is only a matter of time. King Canute could not hold back the waves, and neither will the banks keep back the philosophy of this party. <inline font-weight="bold">Senator Spooner,</inline> I think in the flamboyant stage prior to the suspension for lunch, accused <inline font-weight="bold">Senator McKenna</inline> of not knowing what the Minister&#39;s statement contained regarding insurance companies, but in the period of quiet before he sat down he omitted to tell us what the statement said. Let me read the following passage: - </para>
          <quote>
            <para>The legislation will also provide that, of this amount of 30 per cent., not less than two-thirds is to be invested in Commonwealth securities. </para>
          </quote>
          <para class="block">I am delighted that the Government is facing its responsibilities so far as the insurance companies are concerned. 1 know what I would do. I would laugh at this 30 per cent, provision. In 1939, 50 per cent, of the assets of insurance companies were invested in Commonwealth and semi-governmental securities. By 1949, the percentage had risen to 68 per cent., but by 1959 it had fallen to 37 per cent., as <inline font-weight="bold">Senator Spooner</inline> has stated. Why has it fallen? Let me say that I hold no brief for the insurance companies. I would be supporting the Government if it proposed that all their funds should be invested in government securities. Make no bones about that. I want honorable senators opposite to understand clearly where I stand. But we are entitled to ask why the percentage has fallen. I suggest that the reason is that the Government has allowed the bottom to fall out of the bond market. If we sell to-day bonds that are due to mature in 1963, we receive only &#163;92 7s. 6d. for them. </para>
          <para>I can understand why the insurance companies are not investing their funds in Commonwealth loans. They know that the Government will do nothing about inflation. They know that, if they had continued to invest 68 per cent, of their funds, as they did in 1949, in Commonwealth loans, they would have lost heavily. They would have been putting in good money and taking out bad money. It is true that a person who invested &#163;1.000 in Commonwealth loans in 1946 will receive back 1,000 &#163;1 notes, but it is equally true that those notes will be worth only one-third of what they were worth in 1946. That is why the insurance companies are not investing so much of their funds in Commonwealth bonds. Let the Government not think that I am in sympathy with these companies. On the contrary, I would have been delighted if the Government had obliged them to invest all their funds in Commonwealth loans. When I hear the Government talk about controls, I realize that a lot of effort must have been needed to make it take the step it has taken. Last year, the insurance companies invested 37 per cent, of their funds in Commonwealth bonds, but henceforth they are obliged to invest only 30 per cent. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1641</page.no>
                <time.stamp />
                <name.id>K3W</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">CANT, Hartley</name>
                <name role="display">Senator Cant</name>
              </talker>
              <para>-  They can reduce their investments by another 7 per cent. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1641</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>-  That is so. I do not suppose any one who is insured with one of these companies wants to have his bonuses reduced; I certainly do not want mine reduced. But if the insurance companies had invested their funds in Commonwealth loans, possibly the bonuses payable now would have been as low as they were when the companies were investing a substantial portion of their assets in this way. All that the average insured person gets as a bonus is his proportion of the company&#39;s profits after expenses have been paid. These companies support the Government and no doubt they have provided electoral funds for the Government parties. The only reason why they are not investing their funds in Commonwealth loans is that they are frightened about what they will get back. </para>
            </talk.start>
          </continue>
          <para>I do not know whether my friend, <inline font-weight="bold">Senator Spooner,</inline> said anything else, either when he was in a flamboyant mood or in a quiet mood, that is worth answering. I have .at least attempted to answer the main points that he -made. But I emphasize that we are dealing with an important -matter - the state of the Australian economy. As one looks back &#60;over the years, one sees that the Government has attempted to deal with the situation in fits and starts, with long periods of inactivity in between. Now, to use a phrase : that was used -by the &#34; Sydney Morning Herald &#34;, and which <inline font-weight="bold">Senator -Spooner</inline> does not like, the panic has come. What efforts has the .&#39;Government made to control the economy? It introduced the little Budget in 1956. Earlier this year, it lifted import controls, and now it has decided to increase the rate of sales tax on motor cars, to restrict bank credit, and to require insurance companies to invest 30 per cent, of their funds in Commonwealth loans. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1642</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate>TASMANIA</electorate>
                <party>LP</party>
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>- You read the wrong leading article. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1642</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>- I do not think you are good enough -to read any, let alone read the wrong one. Let us look at the background .of the latest proposals that the Government has -put forward. Australia is confronted, in the main, with two economic problems. The first is that of continually rising prices, and the second that of maintaining ,our overseas balances. It is .to the solving of those two problems that the Government&#39;s policy should be directed. As I indicated earlier, when the Government assumed office in 1949, it was .handed an economy which was second only to that of Canada. The Liberal Party and the Australian Country Party had been out of office so long that in order to win the 1949 election they decided that the sky was the limit, that controls had to go, and that everything had to be made nice for those who supported them. The present state of affairs is the outcome of what the Government did when it won that election. </para>
            </talk.start>
          </continue>
          <para>To-day, a government cannot conduct the .affairs of the nation in the interests of the mass .of the people unless it is prepared to control certain things. At the beginning of this year, the Prime Minister <inline font-weight="bold">(Mr. Menzies)</inline> outlined his programme to deal with rising prices. He proposed four measures, the first of which was that the Government w.ould oppose wage increases. We can understand the .glee with which the Government decided to do that. Of course, we as members of the Parliament did not oppose an increase of our own salaries. I voted in favour of an increase, and those who did not vote in favour of it took it; so we are all in the same boat. But when the ordinary outside person sought an increase of wages, for the first time in the history of this nation the Government decided to employ counsel to oppose the application. When I asked how much of the boodle counsel for the Commonwealth got, I was told that I could not have that information. I was furnished with the names of counsel, but I repeat that when I asked what their cut was I was told that I could not have the information. </para>
          <para>The second measure proposed by the Government to control the economy was the restriction of bank credit. But every one knows that the Government left that matter in the hands of the private banks. We know just how the private banks responded. The Government said, -too, that it would avoid .deficit finance. In addition, it lifted import controls. The Government said that the lifting .of import controls would .help in two ways to reduce prices. First, it said that an inflow of imports would increase the supply of goods and thus reduce the pressure of &#39;purchasing power within the nation. It believed also that competition provided by low-priced goods coming from foreign countries would lead to a reduction of prices here. Did any one ever believe that a responsible government, which the people for a number of years had entrusted with the control of the economy, would lift import controls and allow into the country some of the most outrageous products that one could think of? One has only to walk the streets of the main cities to see what goods are being imported. One sees shoes that have come from Italy&#34; and canned fruits that have come from the United States of America. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1642</page.no>
                <time.stamp />
                <name.id>K3W</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">CANT, Hartley</name>
                <name role="display">Senator Cant</name>
              </talker>
              <para>-  What about frogs&#39; legs? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1642</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>- I understand that even frogs&#39; legs have been imported. Not being a connoisseur of frogs&#39; legs, and because they have not been displayed in front windows, I have not seen them. Of course, controls should be placed on the import of luxury goods - on goods that can be manufactured in this country. If the purchase of frogs&#39; legs and other such commodities is eating up our overseas balances, let the people go without them. We should ensure that we have sufficient money overseas to enable us to import essentials for the continued development of this nation. 1 can say with all honesty- </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1643</page.no>
                <time.stamp />
                <name.id>JXR</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">DRAKE-BROCKMAN, Thomas</name>
                <name role="display">Senator Drake-Brockman</name>
              </talker>
              <para>- That will be a change. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1643</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>- How does the honorable senator know? It does not matter to him if the rate of interest charged by the banks on loans to farmers is raised. If members of the Country Party are challenged on their attitude to this matter, they will say, &#34; Within the party room we tried to defeat this proposal but it was forced through by the weight of numbers &#34;. After all, they would rather see the rate of interest on farmers&#39; loans increased than dream of helping the Labour Party. We know the old story - that if they helped the Labour Party they would be associated with the Communists and their homes and their hearths would be in danger - all that baloney and rubbish. </para>
            </talk.start>
          </continue>
          <para>The immediate cause of the present trouble in this country was the lifting of import controls. If I remember the position correctly, the adverse trade balance for the first two months of this financial year was &#163;59,000,000, compared with &#163;11,000,000 in the corresponding period of last year. The reason why the measures adopted by the Government have failed to prevent prices from rising is that they did not deal with the principal cause of rising prices, namely, high profits. This Government sent eminent counsel to appear before the Conciliation and Arbitration Commission to oppose an increase of wages for the mass of the people, but it did nothing at all to control prices. This was the greatest  three-card  trick that the country has ever known. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1643</page.no>
                <time.stamp />
                <name.id>K3W</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">CANT, Hartley</name>
                <name role="display">Senator Cant</name>
              </talker>
              <para>- The Prime Minister made an appeal to the commercial interests. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1643</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>- Yes , and that appeal was no more successful than were the financial measures that he introduced. The second cause of rising prices is the lack of real competition due to the monopolistic and cartel-like nature of the industries in this country. Only yesterday I pointed out that there is no competition in relation to petrol, the importation of which costs &#163;120,000,000 a year. All the petrol companies tender to supply petrol at the same price. No doubt all the oil is extracted from wells in the same area, but the tender price is the same for each company. I do not believe that the Government wants to halt rising prices, because it has not introduced any effective measures for that purpose. </para>
            </talk.start>
          </continue>
          <para>One would have thought that the Government would have told us about our economic troubles three months ago when the Budget was introduced. After all, these troubles did not arise only yesterday. The trends must have been known to the Government when it brought down the Budget, but nothing was done to remedy the situation that was developing. The Government has now rushed in with this panic statement - I know that honorable senators opposite do not like that term - in the belief that the measures it now proposes will avert a crisis. Why is the Government taking these measures? It is taking them because it is rightly concerned - as we on this side of the chamber are concerned - about our reduced overseas balances. Our overseas funds will fall by &#163;70,000,000 this year, due to the lower price of wool. As I said a few minutes ago our overseas funds dropped by &#163;59,000,000 in the first two months of this financial year, compared with a fall of &#163;11,000,000 in the corresponding period of last year. Are there any signs that the position will right itself? If the banks restrict credit in order to reduce imports the position will improve a little - but by how much? Our wool check will be &#163;70,000,000 less than last year, which will be a tremendous blow to the economy of this nation. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1643</page.no>
                <time.stamp />
                <name.id>K3W</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">CANT, Hartley</name>
                <name role="display">Senator Cant</name>
              </talker>
              <para>- Do you think that, as it has taken the Government ten years to create this crisis, it will need another ten years to cure it? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1643</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>- I am more concerned with considering the number of people in Australia who will suffer in the process of our economic troubles being righted. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1643</page.no>
                <time.stamp />
                <name.id>KTL</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKELLAR, Gerald</name>
                <name role="display">Senator McKellar</name>
              </talker>
              <para>- There were considerably more economic troubles under the Labour Government than there are now. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1644</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>- The honorable senator would not have any idea of that. 1 remind him that Labour handed over to the present Government an economy that was second only to one other economy in the world. That cannot be denied. If that economy had been preserved, the farmers would have been able to produce as much wheat, butter and meat as they liked without having to worry about markets, because they would have been able to undersell their competitors on the markets of the world. There are none so blind as those who will not see. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1644</page.no>
                <time.stamp />
                <name.id>KSS</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MATTNER, Edward</name>
                <name role="display">Senator Mattner</name>
              </talker>
              <para>-  The honorable senator is advocating the underselling of labour. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1644</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>- I am not talking about that. 1 cannot be responsible for what my friend is attempting to make out of the words I use. If the economy of this country had been held at the 1949 level, our costs of production would have been such that we could have produced as much wheat, v/ool, meat and butter as we liked, without being afraid of the consequences, as we are to-day, and the primary producers would have received profitable returns. </para>
            </talk.start>
          </continue>
          <para>I cannot remember any industry in this country going out of existence due to prices control. It is true that a lot of our industries were abandoned during the period of the war, but no industry subsequent to the end of the war went out of existence due to prices control. They all received their fair corner, and all that we asked this Government to do was to ensure that that state of affairs continued. Everybody knows that no person is engaged in industry other than for the purpose of getting a fair profit. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1644</page.no>
                <time.stamp />
                <name.id>JXR</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">DRAKE-BROCKMAN, Thomas</name>
                <name role="display">Senator Drake-Brockman</name>
              </talker>
              <para>-  For how long does the honorable senator think the wheat industry would have continued if another wheat deal had been made with New Zealand? </para>
            </talk.start>
          </interjection>
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              <talker>
                <page.no>1644</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
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                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>- The honorable senator knows as well as I do that no farmer lost anything over the New Zealand wheat deal, because the Commonwealth paid the farmers. If my friend will be fair, he will admit that when the New Zealand Wheat Agreement was signed no one said it was a bad agreement. It turned bad later because of an upsurge in world wheat prices. It is all right for honorable senators opposite who are interjecting to say, &#34; Ha, ha! &#34; I know they like saying &#34; Ha, ha! &#34; and &#34; Bow wow! &#34; But they should forget about that and just face the facts. </para>
            </talk.start>
          </continue>
          <para>What are the Government&#39;s present proposals? It proposes these measures: First, the enforcement of restrictions on bank lending, together with a general control over the direction of all loans; secondly, income tax revision designed to discourage companies primarily interested in financing consumer spending or soliciting money from the people; thirdly, a requirement for insurance companies to put a minimum of 30 per cent, of their funds into public loans; and fourthly, a revision of bank interest rates to increase the cost of bank loans and encourage savings and deposits in the banks. I ask my farmer friends opposite whether the farmers will be happy with the increase in bank interest rates. They will be delighted, won&#39;t they? </para>
          <para>The Government has also increased the rate of sales tax on motor cars to 40 per cent. I must admit that I am pleased that the Government did not apply the increase to trucks; but a tremendous number of motor cars, apart from those that are used only for pleasure, are used in the business activities of this nation. Although admittedly this increase does not apply to trucks, it must increase the cost of transport for that reason. We know that this increase of 10 per cent, will be like the pay-roll tax and sales tax in that by the time the consumers get the goods the increase will be much more than 10 per cent. One of the worst factors in Australia&#39;s present cost structure, compared with the cost structures of other countries, is that transport costs 33 per cent, of the total cost, compared with 19 per cent, in the United States of America and 18 per cent, in Great Britain. It is true that Great Britain is much smaller than Australia, but there is not much difference between the areas of the United States of America and Australia. It is no good saying that this increase in sales tax will not affect employment in the Australian motor car industry. I suppose that it is one of the greatest, if not the greatest, secondary industry in Australia. It is certainly within the first two or three secondary industries. lt is true that at present, to all intents and purposes, we have full employment in this country. Along with every one else, I am delighted that we have full employment. 1 do not want over-employment any more than any one else does. I want full employment. 1 want every man who wants a job to get a job, and I want him to get a job which is sufficiently well paid that he has not to send his wife out to work in order to buy the nice things of life, the things that make life worth living. I say without hesitation that this increase must increase transport costs, although it does not apply to trucks, trailers, and other types of vehicles that usually carry goods. 1 believe that the Government&#39;s policy is one of despair. I hold the same opinion as that expressed in the &#34; Sydney Morning Herald &#34;. I must admit that I very seldom agree with any newspaper; but when one is right I admit it is right. The newspaper said that the Government panicked and decided to restrict credit, which must affect the economy of this nation. I do not think that any one can logically disagree with that statement, knowing what this Government has done in the past in applying credit restrictions. After the Government&#39;s horror Budget it lost the seat of Flinders, one of its blue-ribbon seats, because that Budget caused an upsurge in unemployment for the time being. These measures must also cause a similar upsurge. </para>
          <para>I do not believe that these measures will affect in any way the chronic balance of payments problem in the long term. If they do affect the problem, it will be to an extremely limited degree. There are many features of the Government&#39;s proposals to which 1 would like to refer. The Government proposes to rely upon the Reserve Bank to determine the order of priority in which bank loans should be made. Why do we not say who should be entitled to obtain a loan? Why do we not name the industries which should be so entitled? Why do we not in this Parliament say, &#34; Farmers, yes; secondary industry, yes; imports of luxury goods, no; imports of essential goods, yes? &#34; Then the world would know and the nation would understand. Why does the Government have to hide behind the Reserve Bank and allow it to say who is to receive finance and who is not to receive finance? </para>
          <para>The Government&#39;s proposals in respect of the people who borrow money at 8 and 10 per cent, but who do not really pay all the interest because their income tax payments are reduced, will not affect hirepurchase interest rates. If the Government wants to deal with hire purchase, there is only one way to do so, and that is for this Parliament to allow the Commonwealth Bank to enter that field and give the banks instructions that they may charge only a certain rate of interest, as the States do in regard to money-lenders. I have recollections of legislation passed by the Victorian Parliament when I was a member of it, which prescribed the maximum rate of interest that money-lenders could charge. Hire purchase is so great a part of the Australian economy that any one who wanted to stop it would be silly. But at least we should be honest enough among ourselves to say that the people are being fleeced by interest payments. If the Government wants to deal with hire purchase, it can do so. If the Commonwealth Bank was permitted to enter the hire-purchase field a lower rate of interest would certainly prevail. </para>
          <para>That would have two consequences. First, it would divert money from what is now a more profitable field of investment than banking; and secondly, it would achieve a considerable reduction in interest payments by the people. We ask ourselves what the Government&#39;s policy should be to meet the economic position as we see it to-day. First and foremost, I believe that import controls should be re-imposed, particularly on luxury goods. No one would be silly enough to suggest that you should re-impose controls over all imports. That would be stupid, but there should be some control over fancy goods, such as mink coats from Russia. The ladies, no matter how nice they may be, would not get mink coats from me. I cannot understand why the Government does not do something to curb the importation of luxury goods, which is eating into our overseas balances. Nobody would complain if these imports were not affecting our economy, but in view of the falling off in our overseas balances and the drop in the price of wool it is stupid to continue to permit the importation of luxury goods. I do not think that the Government will take any steps to re-impose import controls because it would not like to admit that it made a mistake only three months ago. But if its decision had been taken twelve months ago it would not mind coming forward and altering that decision. The Government will deal with the economy as it deals with the defence of this nation. Every three or four months we get a new list of proposals. I would expect the Government to accept its responsibilities. I would admire it if it admitted that its decision to lift import controls was wrong. I think it should do that. I believe that we should have control over imports. I believe that the interest rate should be reduced instead of being increased. Today, in Melbourne, we have conditions exactly the same as those that preceded the 1930&#39;s. Immense buildings are being erected, and the idea seems to be that Australia should borrow as much money from overseas as it can. Interest rates are to be increased. If the Government does not suffer as a result of its actions it will be very lucky, because what is happening in Melbourne to-day is exactly what happened in 1929. We have the same signs. I often wonder whether the Government will ever learn. Perhaps it does not want to learn. </para>
          <interjection>
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              <talker>
                <page.no>1646</page.no>
                <time.stamp />
                <name.id>JXR</name.id>
                <electorate />
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                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">DRAKE-BROCKMAN, Thomas</name>
                <name role="display">Senator Drake-Brockman</name>
              </talker>
              <para>-  Have you tried Western Australia? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1646</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
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                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>-  I do not know what is happening there, but I know that big buildings are going up in Melbourne. </para>
            </talk.start>
          </continue>
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                <page.no>1646</page.no>
                <time.stamp />
                <name.id>JZY</name.id>
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                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">PALTRIDGE, Shane</name>
                <name role="display">Senator Paltridge</name>
              </talker>
              <para>-  Do you think their erection should be stopped? </para>
            </talk.start>
          </interjection>
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            <talk.start>
              <talker>
                <page.no>1646</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
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                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>- Yes, I would rather build homes than luxury hotels. I make no bones about that. I do not have to pay regard to what the press or the financiers say. The signs are the same as they were in 1929. Let us hope that the years that follow 1960 will not be as disastrous as those that followed 1929.  f  believe in selective price control. I can never understand why the Government controls wages but refuses to control prices. How the mass of the Australian people had the wool pulled over their eyes in the prices referendum is one of the conundrums of politics that I will never be able to understand. The Government on that occasion preached freedom. Let it ask the people to-day whether they want freedom. If you control what a person earns surely you should control the price he is asked to pay for commodities in order to give his wife and children a decent standard of living. </para>
            </talk.start>
          </continue>
          <para>The Government will never be able to deal with the economy as it should until it is prepared to give some thought to altering the Constitution. The founders of the Constitution, great men though they were, lived in the horse-and-buggy days. We live in the atomic age, and what was good enough for this nation in 1900 cannot by any stretch of imagination be expected to be good enough for it to-day. If the Government is worried because certain companies are offering 8 per cent, and 10 per cent, on investments, why does it not assume control over all interest rates? It has control over bank interest? What is wrong with assuming control over all interest? The Government intends to tax companies in respect of interest paid in excess of &#163;10,000. Is that right? </para>
          <interjection>
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                <page.no>1646</page.no>
                <time.stamp />
                <name.id>JZY</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">PALTRIDGE, Shane</name>
                <name role="display">Senator Paltridge</name>
              </talker>
              <para>-  Or the level for last year. </para>
            </talk.start>
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                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>-  Seemingly the Government agrees that it is wrong to allow these companies to pay 8 per cent, and 10 per cent, on investments. It is now devising ways and means to curtail their activities. </para>
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                <name.id>JZY</name.id>
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                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">PALTRIDGE, Shane</name>
                <name role="display">Senator Paltridge</name>
              </talker>
              <para>-  That is right. </para>
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                <in.gov>0</in.gov>
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                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator KENNELLY</name>
              </talker>
              <para>-  Of course it is right. I have said it is right. Having said that I think I will conclude my remarks, because if my friend agrees with me I will have to give the matter some thought. The Government is, in effect, admitting that it is not in the best interests of this nation to allow companies to borrow money at 8 per cent, and 10 per cent. It wants to control their activities up to a point. That is implicit in the statement made by the Treasurer. All that we on this side of the chamber ask is that the Government control all interest just as it controls bank interest. If it has not the power to do that, let it go to the people and we will be behind it all the way. I only hope that the Government&#39;s proposals will cure the ills that beset our economy. I, like everybody in this chamber, want to see this country great. However, I doubt whether the Government&#39;s action will have the desired effect. Probably the Government will not present any more proposals to deal with the economy in view of the fact that the elections are drawing close, but sooner or later it will be forced to admit that on this occasion it has failed, just as it has failed during all the years that it has been in office. </para>
            </talk.start>
          </continue>
          <para>
            <inline font-weight="bold">Senator MCKELLAR</inline>(New South Wales) 13.451.  -  For one horrible moment this afternoon I thought that <inline font-weight="bold">Senator Kennelly</inline> was going to finish his speech without making reference to the party that I represent. I would have been greatly disappointed had he not done so. It is with a great deal of pleasure that I rise this afternoon to support the measures that the Government intends to bring down. I think they are in the &#39;best interests of Australia in spite of the pessimistic utterances to which we have just been listening. We know that the Opposition has never been proved right in its forecasts, and I cannot see any indication that it is going to be proved right on this occasion; and that observation applies to our newspaper critics also. </para>
          <para>I should like to correct the statement that this policy of the Government has resulted from panic. Nothing is further from the truth. After all, if a doctor has a patient he diagnoses his trouble and treats him for it. Then, if something else develops the doctor does not continue with the same old treatment and allow his patient to die for the want of trying some other treatment. That would be asking too much of the medical man; and it would be asking too much of a sane government which has the welfare of its people at heart. 1 ask to be pardoned when I say that only a short time ago, during my speech on the motion for the printing of the Estimates and Budget Papers, I said that the measures then being taken by the Government were not sufficient. Unhappily I have already been proved to be right. We have found, as I mentioned a little while ago, that circumstances alter; and they alter very rapidly. When such an alteration occurs there is, of course, only one thing to be done, and that is to develop fresh measures. It has been done before by this Government, and invariably it has been successful in spite of what the critics have said. One very memorable case comes to my mind. The Government was roasted up hill and down dale because it instituted what was known as the wool levy. The criticism came not only from the Opposition but also from Government supporters. We lost seats over that action, but it was proved to be taken in the best interests of the country, and also in the best interests of the particular section of the people concerned. It was not very long before the same body of people acknowledged that fact with very grateful appreciation. </para>
          <para>It is a poor Government that has not the courage to risk unpopularity when the welfare of the country is at stake. That is the proposition to-day. I know that some of our memebers feel perhaps that we are not going the right way to win votes, but surely to goodness the welfare of the country is more important than the winning of a few votes from a few disheartened people who do not believe in what the Government does. I have sufficient faith in the Australian people to believe that they are level-headed enough to know when the best possible measures are being taken for their welfare. These measures are something like a dose of castor oil. None of us likes it but sometimes it has to be taken. We all feel we would prefer to have the other fellow take it. The same thing applies here. The measures that have been introduced have to be taken. Everybody agrees that something must be done, but in the doing of it nobody wants to be among those who will be hurt financially. It is only human nature to adopt that attitude, but that is the position. This Government would deserve the strongest condemnation if it had sat back and not taken any action in view of the circumstances that confront us to-day. There is no question on that score. It is also to be expected surely that the industries that will be most affected by the measures that have been decided upon will put up a very strong protest and become very vocal. That again is only human nature. </para>
          <para>The industry that will be hardest hit is the motor industry. The Leader of the Government <inline font-weight="bold">(Senator Spooner)</inline> this afternoon gave us facts and figures which showed that that industry has been enjoying what might be termed a boom. Surely the extra tax that is to be imposed on motor cars - on motor cars alone and not on trucks, as <inline font-weight="bold">Senator Kennelly</inline> has pointed out - will not cause large scale unemployment. I grant that there may be some unemployment, but I think it will be of a temporary nature. After all, everybody in this Senate will agree that New South Wales and Victoria have reached a state of over-full employment. I feel that any unemployment that occurs will be of a temporary nature. </para>
          <para>One thing has come out of all this. We have been given a very sharp and salutary reminder that in spite of all that has been said to the contrary the wool industry still plays a very large part in the economy of Australia just as it did a few years ago. During the last few months people have been saying that times have changed. They have been telling us that although in times past we had to rely on our primary industries, particularly wool - that we had been carried on the sheep&#39;s back - those conditions no longer exist. They told us that we now had to rely on our secondary industries and not on the wool industry. That argument is fallacious because had wool prices gone up, as we hoped they would, by approximately ls. per lb., most of our troubles would have been overcome and the necessity for these alterations in our economic programme would not have arisen. Something has been said about the need for reducing costs. That is one of the themes I have stressed almost every time I have spoken in this chamber. Rising costs have affected people engaged in primary industries and also those living on fixed incomes. Certain measures were outlined by some of us which we felt would have reduced costs had action been taken along the lines we suggested. </para>
          <para>The Government has been criticized for lifting import restrictions, but I have not the faintest doubt that such action will eventually bring our costs down. The position in regard to import restriction and restrictions on credit is somewhat similar. It takes quite a time for the full effect to be felt. After the lifting of import restrictions the first thing that occurred was that people who may have had goods in short supply took the opportunity to restock with the consequence that more money was needed overseas to pay for those goods. That added to the stringency of our balanceofpayments position; but in the long run we will find that the lifting of import restrictions will mean that our local industries will have to produce goods at prices that approximate the prices of goods coming into the country. As an illustration of what is happening, only last week an official of the. Commonwealth Scientific and Industrial. Research Organization told&#39; me that one of the difficulties that that body faces to-day is its inability to obtain sufficient tool-makers. The reason, he told me, was that the C.S.I.R.O. was not in a position to compete with the wages being offered to tool-makers in the motor car industry. That is an instance of the way these things affect our costs of production. Some of us have been saying for a long while that our whole tariff set-up needs revision. We have suggested that we should have a board to advise the Tariff Board on the consequences of what can happen, just as some of us have advocated the setting up of a board for the same purpose in regard to the Arbitration Court. </para>
          <para>
            <inline font-weight="bold">Senator Kennelly</inline>mentioned what was going on in the building industry in Melbourne. The same conditions exist in Sydney. We. must remember that, as the  Deputy  Prime Minister <inline font-weight="bold">(Mr. McEwen)</inline> said in another place only yesterday, during the life of this Government the population has increased by 2,400,000 people, many of whom are migrants. Let us not forget that when that immigration programme was first mooted, the catch-cry of honorable senators opposite was that we would have, unemployment in Australia. Once again they have been proved wrong. Not only has employment been found for immigrants, but also, in the main, housing facilities have been made available. I know that we have not caught up with the housing lag, but our record in relation to housing is something of which Australians might well be proud. One of the factors in increased building costs, particularly in New South Wales, is the action of large oil companies in paying exorbitant prices for land upon which, perhaps, old buildings, homes or even picture theatres stood, demolishing the buildings and establishing petrol stations. The prices paid for land in those circumstances are taken into consideration when land in the vicinity is valued, which leads to higher values being fixed generally. This tends to aggravate our economic position. </para>
          <para>I do not know the size of our work force at present, but only six to nine months ago it numbered 4,000,000. That includes not only married men and single men, but also married women. If there were some recession in the number of jobs available, the family wage-earner would still have employment, even if this meant that some married women could not find work. There is a buffer there of which use might be made, if we are faced - I do not expect that we shall be - with a reduction in the number of positions available. </para>
          <para>
            <inline font-weight="bold">Senator Kennelly</inline>has given us his idea for overcoming the present trouble. Expansion of industry and trade is something that his party never had to face when it was in government. The position was rather the reverse. There were shortages in all directions. We could not get enough coal to provide steel for our own requirements. To-day we have coal in abundance. Although steel production has been stepped up to a figure that would have been thought fantastic when Labour was in office, we are still not able to provide sufficient steel for our own purposes, but this is not because of a shortage of coal. If we adopted the Opposition&#39;s suggestion that we take control of industry, we would revert to the old system of black markets, ration tickets, and the other evils associated with that course. Surely to goodness none of us wants that! Things would need to be very bad before we would fall back on that means of overcoming our troubles. </para>
          <para>It has been suggested that we should give effect to the recommendation of the Constitutional Review Committee in relation to control of the banking system. Do honorable senators who advocate that course believe that the Australian people would be satisfied with a referendum on only one of the committee&#39;s recommendations? Is it not reasonable to assume that they would say: &#34; Why have a referendum on one recommendation? Let us make up our minds on all the recommendations or on none at all &#34;? I do not think that the adoption of the suggestion for a referendum would provide the solution to our problems. </para>
          <para>Although we face some troubles, these are very small in comparison with those of the 1930&#39;s. Our savings bank deposits have never been higher. We know that much of the difficulty stems from the large amount of money that has been devoted to hire purchase. Honorable senators opposite suggest that we take control of hire purchase. I remind them that the States have the opportunity of controlling this section of the economy, but so far they have failed to do so. Honorable senators opposite know as well as I do that it is not within our constitutional power to control hire purchase. There is no doubt that much of our trouble has come during the last fifteen months or so from the rise of a second, or fringe banking system. This does present a very serious problem. If this were a totalitarian State, the solution would be easy. Overnight, controls would be introduced, and these people would be told very smartly what to do. That is not possible under a free enterprise government. I remind the Senate that the trading banks have entered this field to some degree through their holdings in companies that are engaging in these activities. I was very pleased to read in this morning&#39;s press the following statement attributed to <inline font-weight="bold">Dr. Coombs:</inline> - </para>
          <quote>
            <para>Interest rates would not be increased on overdrafts to meet reasonable requirements of borrowers for export production. </para>
          </quote>
          <para class="block">This is a most important aspect. It involves recognition of the need to help primary industries in order to maintain our overseas balances. Amidst the welter of criticism from some quarters, it is refreshing to read the commendation of the Government&#39;s action by <inline font-weight="bold">Mr. T.</inline> M. Scott,  president  of the Australian Wool Growers and Graziers Council. Such people realize that increasing costs constitute the greatest difficulty confronting primary producers. As I have said before, how much we receive is not as important as what we retain after paying living expenses. </para>
          <para>I revert to the subject of sales tax on motor vehicles. I happen to live now on the North Shore, in Sydney. Of the thousands of cars that one sees passing over the Sydney Harbour Bridge daily, possibly 90 per cent, contain only one person. It is true that there are many circumstances which make it necessary for people to have motor cars. It is very nice to have a car, provided that you can afford to run it. I know from bitter experience that cars are expensive to run. Of course, the position in Canberra in this respect is somewhat different from that of other Australian cities. In Canberra, the suburbs and important government buildings are situated at considerable distances from one another, which means that motor cars are necessary for many people; but we do not want to run away with the idea that everybody in </para>
          <para class="block">Australia should have a car. If you can afford one, <inline font-weight="bold">Mr. Deputy President,</inline> well and good, but a car is not as essential, in many instances, as are other things. </para>
          <para>There has been criticism of the proposed measures relating to insurance companies. Those companies have played a large part in the success of our loans in past years, but to-day, we find that they are investing in bricks and mortar to a far greater degree than they did previously. Many of the buildings to which I have already referred are being erected by insurance companies. It is true that the companies are making quite large profits. I do not begrudge them those profits. I have had insurance policies for many years and, of course, the more money that is made by the companies with which I am associated, the greater will be my interest in them; but that is adopting a purely selfish attitude. If we look at the proposed measures in their true perspective, we shall see that the Government is taking courageous action that possibly will be unpopular in some quarters. I do not think that the measures are being taken because of panic. It is always wise to do the things that are necessary to correct a position before it becomes serious. This is the case of a stitch in time saving nine. Those of us who have the welfare of the country at heart - and I think that that includes most people in this Parliament - should get behind the Government and commend it for the measures it proposes to take, rather than criticize it. </para>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1650</page.no>
              <time.stamp />
              <name.id>K0C</name.id>
              <electorate>New South Wales</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">ARMSTRONG, John Ignatius</name>
              <name role="display">Senator ARMSTRONG</name>
            </talker>
            <para>. - It is both amazing and disappointing that, from time to time during the ten years that this Government has been in office, we have found ourselves discussing the failure of the Government to avoid problems similar to those which it is now seeking to solve, and which have been created by its ineptitude. It is of no use to say that the measures are being taken for the national good. Surely some one must have told the members of the Government that an ounce of prevention is worth a ton of cure, particularly when the cure is so unpalatable as that which the Government now proposes to adopt. </para>
          </talk.start>
          <para>
            <inline font-weight="bold">Senator McKellar&#39;s</inline>speech was very interesting in many respects. He stated that he did not mind losing a few votes in the national interest, a statement that sounded rather strange to me, having regard to the events in the Calare electorate recently. As we know, success at the Calare by-election was very important to the Government. </para>
          <interjection>
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                <name role="metadata">MCKELLAR, Gerald</name>
                <name role="display">Senator McKellar</name>
              </talker>
              <para>- By how many votes does the honorable senator want us to win? </para>
            </talk.start>
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                <name role="metadata">ARMSTRONG, John Ignatius</name>
                <name role="display">Senator ARMSTRONG</name>
              </talker>
              <para>- It is true that the Australian Country Party won the seat, but I thought that <inline font-weight="bold">Senator McKellar</inline> did not worry so much about votes. It was so important for the Government to retain the seat that, with blatant dishonesty, it withheld the report of the dairying industry committee of inquiry, a report that would have shocked the country people who, apparently, still think that their representatives in this place wish to serve their interests. </para>
            </talk.start>
          </continue>
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                <name role="metadata">MCKELLAR, Gerald</name>
                <name role="display">Senator McKellar</name>
              </talker>
              <para>- How many dairy farmers are there in Calare? </para>
            </talk.start>
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                <name role="metadata">ARMSTRONG, John Ignatius</name>
                <name role="display">Senator ARMSTRONG</name>
              </talker>
              <para>- That is the point. The report had been in the hands of the Government for some weeks. Surely, there was no necessity to delay publication if there was nothing to hide. The honorable senator spoke of sacrificing votes in the national interest, but certainly the Government took no risks in the Calare by-election. Immediately after that byelection the panic measures that we are now discussing were proposed. They have been aptly named. It must have been known at that time that the measures that the Government now proposes to take would have to be taken, but the electors of Calare were given no opportunity to vote on this issue. </para>
            </talk.start>
          </continue>
          <para>To my way of thinking, the approach of the Government in this respect has been most dishonest. No new facts have come to light within the last week or two. The facts have been known for a long time, but the Government has delayed action on them. <inline font-weight="bold">Senator McKellar</inline> spoke of many matters, including import restrictions, shortages in the days of the Labour Government, the rate of building, and immigration. He displayed an extraordinarily superficial knowledge of very important problems. In regard to import restrictions, the honorable senator said that local manufacturers would have to produce goods which would sell at prices equal to those of similar goods being imported. </para>
          <para>Surely he realizes that that is impossible for most Australian industries, which have been protected, and must continue to be protected in the future, if employment is to be maintained. </para>
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                <name role="metadata">MCKELLAR, Gerald</name>
                <name role="display">Senator McKellar</name>
              </talker>
              <para>- Did I suggest that they should not be protected? </para>
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                <name role="metadata">ARMSTRONG, John Ignatius</name>
                <name role="display">Senator ARMSTRONG</name>
              </talker>
              <para>- The honorable senator said that they would have to produce goods at prices equal to those of goods coming here. </para>
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                <name role="metadata">MCKELLAR, Gerald</name>
                <name role="display">Senator McKellar</name>
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              <para>- It would be a good thing if they did. </para>
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                <name role="metadata">ARMSTRONG, John Ignatius</name>
                <name role="display">Senator ARMSTRONG</name>
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              <para>- Would it be a good thing if we were to reduce our standards to those of the countries from which many goods are being received at present? When <inline font-weight="bold">Senator McKellar</inline> speaks of these matters one gets the impression that he is speaking of a policy of 40 years ago. After all. it is Australian Country Party policy. Perhaps he thinks that that party has been fooling the country people with it for so long that there is no need to change it. </para>
            </talk.start>
          </continue>
          <para>The honorable senator also referred to developments in the building industry. The measures that the Government proposes to take will result in a reduction in homebuilding. Apparently the Government thinks that too many homes are being built. The fact is, of course, that even according to members of the Government there is a shortage at present of 70,000 homes. I suggest to the honorable senator that if he wished to acquire a suite of offices in one of the principal cities of Australia, he would have difficulty in doing so. Over the years, this Government has been trying to sell the people a story about great prosperity and the tremendous growth that have resulted from the wise and dynamic leadership of the Liberal Party and the Australian Country Party. <inline font-weight="bold">Senator Spooner</inline> has said that all the trends that are now so evident result from the great growth that has been made in this country. I ask him: Are similar panic measures being taken in the countries of western Europe, in Canada and in the United States of America? I point out that the growth of those countries, in almost every respect, has been both considerably faster and more permanent than the growth that has occurred in Australia. </para>
          <para>According to those who control the International Monetary Fund, between 1953 and 1959 the volume of world exports rose by 36 per cent. The rise in various countries was as follows: - In Canada, 24 per cent.; in France, 47 per cent.; and in West Germany, 120 per cent. Perhaps the situation in Japan is not a good basis for comparison, but the increase there was 170 per cent. The position in the United Kingdom forms a good basis for comparison; the increase there was 30 per cent. But Australia&#39;s export trade rose by only 1 per cent. How can the Government continue to speak about tremendous economic growth in this country when it has no proof of its claim. </para>
          <para>Let us consider the depreciation of the value of money. Our record in that respect is one of the worst in the world. Of the 35 countries that are listed by the First National City Bank of New York, Australia is seventh from the bottom. The only countries that are below us on the list are Greece, Mexico, Colombia, Austria and Uruguay. According to that authority, the annual rate of depreciation in Australia is 6.9 per cent. According to figures published by the United Nations, we have pride of place for having had the largest increase in the cost of living in the western world. Between 1948 and 1958, the cost of living in the United Kingdom rose by 55 per cent., in the United States of America by 20 per cent., and in West Germany by 18 per cent. But in Australia it rose by 105 per cent. They are the facts that we must face. </para>
          <para>The Government says that the rate of growth in Australia is too fast. It is only too fast because the Government cannot handle it. It is just as well that we have a magnificent country. This Government is like a bad trainer with a champion horse; despite the trainer the champion horse wins races. To put it in another way, it is like a bad general with magnificent soldiers under his command. Just as the soldiers win battles despite the general who is in command, this country has maintained an even keel over the last ten years despite the administration of the Government. Everything that God has put into any country is here for our development. The only thing lacking is population. Unfortunately, that lack is being overcome too slowly. </para>
          <para>Let us now consider the national income. According to the National Bank of Australasia, which obviously would not be on the side of Labour, in the last ten years Australia&#39;s real national income has risen by only 2 per cent, compared with an increase of 15 per cent, in the United States, 19 per cent, in the United Kingdom and 23 per cent, in Canada. In 1958-59 the real national income per head of population in Australia was &#163;6 less than it was in 1948-49. That is the growth that has led to all the troubles that we in Australia are now experiencing! Even in relation to industrial production, we rank badly with the European countries I have mentioned. I could have quoted the position in other countries, too; but the figures I have quoted are indicative of the pattern that is to be seen throughout western Europe. The history of this Government proves beyond all question that the gentlemen who parade as Cabinet Ministers and the leaders of this country are failures. They have shown once more that they allow the state of the economy to drift until they are forced to adopt extraordinary measures to correct it. 1 do not think the Government realizes what will be the impact on the community of the measures it has adopted. Before I conclude my speech I shall deal with one or two matters to illustrate what has happened in the community even within the last two days. </para>
          <para>When in December, 1949, in the full flush of glorious victory the Government assumed office, it decided to abandon all controls. Labour had implemented a relatively simple import licensing system and capital issues control. We had a few safeguards to keep down costs. We did not want costs to get out of control. We did our best, by way of referendum, to obtain control of prices. As <inline font-weight="bold">Senator Kennelly</inline> pointed out, control of prices is eminently suitable in the case of monopolies. If the price of labour employed by monopolies is controlled, costs can be readily ascertained. Surely it is not a bad thing to place a control on the price of commodities produced by such organizations. </para>
          <para>What has been the record of this Government? In 1951, it introduced the horror Budget. That was purely and simply the result of the Government&#39;s maladministration of the country from 1949 to 1951. The Government also lifted import controls, the theory being that inflation was rising so rapidly that, if a flood of materials were allowed into the country, inflation would be cured. That action not only did not cure inflation but also gave rise to a level of unemployment that we had not seen in this country since before World War II. All members of the Parliament will recall the number of unfortunate people who called at the Commonwealth parliamentary offices at that time looking for work. The finding of employment for people is the one task that no member of Parliament appreciates. We feel it is the duty of governments to maintain employment for every one who wantsit. But the Government&#39;s action in that, bitter year made a very severe impact on the level of employment. </para>
          <para>The Government then found it necessary to reimpose import licensing, and it used the period of free trade as a basis for the giving of import licences to people who traditionally were engaged in the import trade. Knowing the history of this Government, importers have learned that it is desirable to bring in as many goods as possible during a period of free trade so that when licensing is reimposed they will be able to establish a quota that will enable them to carry on profitably. In 1951 people believed that it was for the good of the country that they should not import extraordinarily large quantities of goods, and they imported according to their needs. But, when import licensing was clapped on again, their quotas were based on their imports in the earlier period and they found themselves in a very serious situation. We all know of companies that were creaking at the knees and which were almost broke. For years they struggled to get themselves back into a satisfactory state. Many of them did not emerge, from the blow of 1952 until as late as 1958. The horror Budget caused unemployment everywhere. Unemployment is the one thing that Labour men cannot bear. It must be fought against. </para>
          <para>Things raced along again from 1954 onwards, and in 1956 the Government had to introduce a special budget. It was called the little Budget; the measures proposed in it were to be temporary. According to the Government, a few aspects of the economy had got out of control and it decided the temporary measures should be taken to solve the problems with which it was confronted. It increased the rate of tax on companies. lt also raised the rate of sales tax on motor cars from 16$ per cent, to 30 per cent. Both those temporary measures are still in operation. Why is the motor industry singled out to be the bunny? Why is a person who can afford a reasonable price for a motor car denied the right to own one? As we march forward we in this country are placing in our homes everyday requirements which 20 years ago were regarded as luxuries. What home to-day is without a refrigerator or a radio? We have almost reached a state of saturation in the installation of television sets. All families are entitled to have these things in their homes, and they should be encouraged to acquire them. The same remark applies to motor cars. If a man who works five and a half days a week desires to have the pleasure of taking out his family at weekends in a small car, surely he not only is entitled to have a car but should be encouraged to acquire one. But, as a result of the introduction of this latest panic budget, the rate of sales tax on motor cars is to rise to 40 per cent. I do not believe there is any other country which has such a high impost on motor cars as that which now obtains in Australia. Most countries of the world realize the tremendous importance of keeping the motor industry on the move. In Australia, I think, it is the largest employer of labour in the secondary industry field. </para>
          <para>That brings me to this panic Budget. This year, income tax has been increased by the amount by which it was reduced last year. Why? Things must have been all right last year, otherwise the Government would &#39; not have reduced taxation. I do not know whether any one has benefited greatly by the reduction of ls. in the &#163;1 last year, because the reduction was not in force long enough for the effect really to be felt. This is typical of the untidy history of this Government in trying to run this country and keep the economy on an even keel. Now the panic is on again. </para>
          <para>The first great mistake that was made by the Government was its decision to lift import restrictions. Even a child would have learnt a lesson from what happened in 1951. Exactly the same thing is happening to-day. The importers lacked confidence in the ability of the Government to maintain an unrestricted flow of imports, so they approached the bankers. Bank overdrafts have increased by &#163;150,000,000 in the last six months, and a great deal of that money has been spent on imports. Now the Government says that it can reduce the flood of imports by asking the banks to be more careful in their lending. What happens in these circumstances? We have seen it before. Once the amount of money available for the purchase of imports is restricted, the importers import ready-made articles - the articles which can be retailed at the biggest profit for themselves. Orders for the machines which industry needs so much are pushed back for twelve or eighteen months and the available money is used to bring into the country those things on which there can be the greatest possible mark-up. Australian industry is not protected. </para>
          <para>What has happened in this country in the few months since import licensing was removed is indicative of the present trend. <inline font-weight="bold">Senator Courtice</inline> and I have been working on a case concerning the chemical industry for the last week. Imports are coming in at the cost of production of Australian chemicals. Look at what is happening in the Australian textile industry, which, after the motor industry, is perhaps one of the largest employers of labour in Australia. The Government has done a tremendous job in trying to step up in this country a sheet manufacturing industry. In South Australia Actil Cotton Mills has been given all the encouragement that it is possible for a government to give to an industry of that kind. The Actil organization has been fostered by high duties and all sorts of protection. But look at what is happening now. I shall deal with what I call sheet sets, comprising a sheet and a pillowcase. In 1959-60 18,000 pairs of sheet sets were imported, but in the first three months of this financial year almost as many of these sets were imported as in the whole of the previous twelve months. The great bulk of the imports in the financial year 1959-60 took place after import licensing was lifted early in this calendar year. If the trend of the last three months continues, there will be an increase of 250 per cent, on last year. </para>
          <para>The story in relation to pillow cases is much the same. In 1959-60 we imported 78,000 dozen pillow cases. Between July and September of this year we imported 60,000 dozen - nearly as many as in the whole of the year 1959-60. This shows the trend. If it is not stopped, it must bring unemployment to the textile industry. These imports are coming mainly from China, Japan and Hong Kong. Let us look at the position in relation to handkerchiefs. In 1959-60, the imports were greater by 270,000 dozen than those in 1958-59. On present indications, the imports will increase by 500,000 dozen in 1960-61. Almost any industry could quote similar figures to show the drift that is occurring and the problems that will confront us. </para>
          <para>Take ready-made shirts. I do not think anybody minds how much is spent on piecegoods that come into this country for fabrication here, but we must be very careful about the imports of completely made-up goods which go straight from the ships to the shops. In 1958-59, 44,000 dozen shirts were imported. The number rose to 63,000 dozen in 1959-60. This increase of about 20,000 dozen represents a labour cost of &#163;100.000 in Australian industry. It would take one factory employing about 200 girls to produce that quantity! of shirts. In July, August and September of 1960. 48,000 dozen shirts were brought in. In 1959-60, the imports increased by 45 per cent, and, ir is expected there will be a further increase of 200 per cent, in 1960-61. </para>
          <para>You can see why people are coming to Canberra, trying to see Ministers, to stop this sort of thing before it goes too far. Surely honorable senators remember the petitions that were presented daily in 1952. Businessmen from Sydney, Melbourne and other capital cities came to Canberra, pleading with the Government to re-introduce import restrictions because their factories were closing down. In those days things such as made-up radio sets and stoves were brought into this country - things that were made here. If we go to shops like those of David Jones Limited we find to-day that they are full of goods of American, French and Swiss manufacture. In almost all cases, similar goods are produced here in Australia. I do not know why it is necessary to import little girls&#39; dresses and made-up frocks, unless it is to enable the stores to put a bigger mark-up on them than on other goods. </para>
          <para>
            <inline font-weight="bold">Mr. R.</inline>J. Vicars, the  chairman  of John Vicars and Company Limited, has been an adviser to the Menzies Government and he held a similar position when Labour was in office. He was Controller of Woollens for the Menzies Government and remained in that position when Labour came into office. He did a remarkable job. He is a most intelligent man, and the bearer of a proud name in the Australian textile industry. At the annual meeting of the company held yesterday, he said that strict import controls should be re-imposed at once, and that they should be on a strictly selective basis, distinguishing between essentials and non-essentials, necessities and luxuries. <inline font-weight="bold">Mr. Vicars</inline> went on to say that there was very clear evidence of deterioration in the economy, that imports had risen steeply since restrictions were wholly removed last February, and that exports were hard-pressed to maintain their previous figure. He continued - </para>
          <quote>
            <para>Australia&#39;s balance of payments shows a large and continuing deficit. This is accompanied by a growing financial stringency in Australia. The rate of decline is so great that one can foresee in the not too distant future a severe overall recession. Before long there could be unemployment developing. Import licensing will control the nature of imports, bank credit will not. </para>
          </quote>
          <para class="block">Why import licensing has been eliminated in Australia, a country that depends <inline font-style="italic">on</inline> protection, I cannot understand. Hovever, somebody sold the idea to the Government, and somebody&#39;s pride is going to be hurt if the Government reverses its policy. I recall that the Minister for Trade <inline font-weight="bold">(Mr. McEwen)</inline> said that import licensing would be reimposed over his dead body. I heard the Leader of the Government in the Senate <inline font-weight="bold">(Senator Spooner)</inline> say something similar to that in relation to another matter, but he is still with us, although what he opposed was in fact done. I think <inline font-weight="bold">Mr. McEwen</inline> will be walking around in good, virile health when we have import restrictions once again. </para>
          <para>These are the matters that worry us. The Government in its approach to this problem has missed the point. The Government has talked about bringing in a bill whereby restrictive trade practices and monopolies will be brought under control. A few months ago <inline font-weight="bold">Dr. Coombs</inline> said that it was hard to determine the great impact that monopolies have on the rising cost of living. Their position is such that without the price of their products being controlled they are able to put their own prices on their products; and because there is no other place to buy the products - particularly when we had import licensing when one could not get an import licence - the people have to buy from those monopolies which are causing the cost of living to rise. </para>
          <para>Let me take the most important basic commodity in Australia which projects more increased cost into the community than anything else, 1 refer to steel. The steel industry in Australia is a monopoly which cannot even play the game. It cannot even supply Australia&#39;s needs, despite the fact that it has the material to do so. lt adds millions of pounds to our import bill because steel is being imported into Australia when it should be manufactured here. Cannot the Government do something about this? Cannot the Government hold out a hand of friendship or some encouragement to overseas steel companies? Cannot the Government earmark some iron ore deposits in order that we might have another steel producer in Aus tralia? Cannot the Government introduce a partition bill, or a divorcement bill, which is a common practice in America, and say to the Broken Hill Proprietary Company Limited, &#34; If you cannot produce enough steel, let some one else have a go. Use all your resources to produce enough steel for Australia and, in addition, produce enough steel to give Australia a very substantial export income &#34;? Based on the price of iron ore in Australia, in most categories of common steel we can produce steel which is cheaper than imported steel and we could take command of the SouthEast Asian market without any trouble, as we have done previously on occasions when the Broken Hill Proprietary Company Limited had an over-supply and found a foreign market open to it. </para>
          <para>In this morning&#39;s &#34; Sydney Morning Herald &#34; I read this article - </para>
          <quote>
            <para class="block">SHIP LOADS U.S. STEEL FOR AUSTRALIA. </para>
            <para>NEW YORK, Nov. 16.- The motor vessel City of Sydney (1 1,570 tons), in Philadelphia on its maiden voyage, loaded 900 tons of steel for Australia yesterday. </para>
          </quote>
          <para>Steel is coming into Australia from the United States of America and Great Britain. Australia should be a great exporter of steel and steel products, but we are in the position of importing steel because this great monopoly in our midst does not supply steel to meet the Australian market. </para>
          <para>I wish to deal with what may be the most important aspect of this question. For some years this Government has been depending upon what is known very nicely as foreign investment in Australia. In the last year or so it has been running at the rate of  &#163;200,000,000  a year. The main reason why that money comes into Australia is confidence in Australia. Overseas investors believe that when they put money into Australia they will not have to worry about any more little Budgets or horror Budgets and that there will be stability in Australia. They believe that, because the Prime Minister <inline font-weight="bold">(Mr. Menzies)</inline> has been telling them for the last year or two that Australia is a most stable country and that we are entering the glorious &#39;sixties. However, we are entering a very murky atmosphere to-day. Already on the Sydney and Melbourne stock exchanges there is substantial selling by London interests. In some cases they are sustaining quite a severe loss in the sale of stocks that sold yesterday and to-day in Sydney and Melbourne.  The  Government should have its finger on the pulse of this important aspect. From information I have received, I would say that in the last two days the rate of outflow of overseas money in London selling must be between  &#163;400,000  and  &#163;500,000. </para>
          <para>This is what is happening to the hot money about which <inline font-weight="bold">Senator McKenna</inline> has been talking. It always turns out to be hot. It looks cold when it comes into the country; it seems to be a stable investment in the community. But when the first pressure comes - this is the first pressure on it - it cannot get out quickly enough. Unless this outflow is stopped, a very serious position may arise in Australia because our exports cannot match our imports. This foreign investment has been carrying the Government for the last few years, and it was only a matter of time before something like this happened. We will see whether this tendency continues in the next few weeks. </para>
          <interjection>
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              <para>-  Have you seen this afternoon&#39;s stock exchange call? </para>
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              <para>-  I  have been  in touch with the position. I can tell  you  about the London sales. </para>
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              <para>-  Have  a  look at this afternoon&#39;s call. </para>
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              <para>- Tell  me  about it. </para>
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              <para>-  You  have a  look at it. </para>
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              <para>-  I can tell  you  about the call at half-past twelve to-day, if that is early enough. </para>
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              <para>-  No, I am referring to this afternoon&#39;s call. </para>
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              <para>- As a matter of fact, the price of some of the shares on the market rose to-day. The Broken Hill Proprietary Company Limited&#39;s shares rose from 75s. to 80s., but their price was 1 00s. Colonial Sugar Refining Company Limited shares came back to &#163;77, but they were &#163;88. In my opinion, this is where the Government has missed the boat. </para>
            </talk.start>
          </continue>
          <para>Any one who has been watching the position of the hire-purchase companies since the previous restrictions were introduced by the Government, and before that, has seen a very severe curtailing of hirepurchase profits. Over the last three months the reports of company chairmen have shown decreasing profits and a higher rate of repossession. What the Government has done on top of that will carry the effect far beyond the hire-purchase companies into the field of the manufacturers of the products that are normally purchased with the aid of the hire-purchase companies. I do not know what happened to the shares of Custom Credit Corporation Limited this afternoon. Did you notice? </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1656</page.no>
                <time.stamp />
                <name.id>JZY</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">PALTRIDGE, Shane</name>
                <name role="display">Senator Paltridge</name>
              </talker>
              <para>-  No, I do not follow the finance companies. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1656</page.no>
                <time.stamp />
                <name.id>K0C</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">ARMSTRONG, John Ignatius</name>
                <name role="display">Senator ARMSTRONG</name>
              </talker>
              <para>-  This morning the price of its shares was 8s. 6d., and a very short time ago it was 24s. The important point is not just these figures, but what they mean to the many people who are shareholders of the companies and the many people who are employed by  the  companies and are affected by this situation. The market had already shown  a  decline before the restrictions were announced on Tuesday night. I do not know what is achieved by knocking the market down. The market can get too high. Email shares were at 8s. 6d. this afternoon, and that is a sound and solid company. I am not speaking as an investor. I have no shares in any of these companies. As a matter of fact, all my money is in Commonwealth bonds. </para>
            </talk.start>
          </continue>
          <para>This is what is happening in the Australian community. I stress the fact that the outflow has occurred on both the Sydney and Melbourne stock exchanges. As I have said to the Minister, that is something that he can shed very quickly. For years we have been led along by the Prime Minister and the Treasurer <inline font-weight="bold">(Mr. Harold Holt)</inline> telling us how wonderful things are, and when the Treasurer brings down these panic measures, the first words he says are - </para>
          <quote>
            <para>According to its practice, the Government has recently made a further review . . . </para>
          </quote>
          <para class="block">The Government is getting too much practice at this sort of thing, and it is causing too much disturbance in the community. I say that, despite the Prime Minister&#39;s statement in May, 1959, that - </para>
          <quote>
            <para>Australia&#39;s economic position is now as sound as ever in history. </para>
          </quote>
          <para class="block">At the International Congress on Scientific Management in Melbourne he said - </para>
          <quote>
            <para>It will be hard for many to understand that the days of competition have returned. The tariffs though important are not the whole answer and management will have to carry the main burden. </para>
          </quote>
          <para class="block">Surely he realizes that sustaining Australia is more than a problem for management. Unless Australian industries are properly protected they have no future. So, I say that the Prime Minister and other members of the Government remind me of a quack doctor who will give a child something to make it worse so that he can take the credit for trying to make it better. </para>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1656</page.no>
              <time.stamp />
              <name.id>KBW</name.id>
              <electorate>Tasmania</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">WRIGHT, Reginald</name>
              <name role="display">Senator WRIGHT</name>
            </talker>
            <para>.- The more one contemplates the subject of this debate, which is focused on the Australian economy, the more intense one&#39;s mystification becomes. On the one hand we heard <inline font-weight="bold">Senator Armstrong</inline> deploring the fact that the stock exchange is falling, and on the other hand we heard the Minister for Civil Aviation <inline font-weight="bold">(Senator Paltridge)</inline> encouraging us to confidence because this afternoon&#39;s call shows a rise on the stock exchange. </para>
          </talk.start>
          <para>I have understood that the Government&#39;s proposals have been designed to dampen down monetary activity within the country. We live in an island continent the economy of which is wholly dependent on trade with other countries. We must maintain a degree of relativity between export earnings and import costs; otherwise we shall go broke. Our reserves have fallen to such an extent that the Government has been prompted to put before the Parliament what can only be described as drastic economic proposals. I am not one to engage in a wailing and gnashing of teeth over Australia&#39;s position to-day, despite the inflation that is rampant within the country, and which ls having a ruinous effect on many sections of the community. The prospects of development are, I suppose, almost unique, not because of any activity on our part, but due to our present stage of development in relation to the present stage of the world&#39;s development. Australia is the last democratic British country in the early stages of development, and naturally she attracts from all English-speaking countries their surplus capital, especially when we recall that that capital is being goaded out of those countries by false policies of savage taxation. We in Australia rejoice in encouraging immigrants to come to this country. We encourage not only people, but also capital, and we are inspired by the luck that we have to live under British traditions. </para>
          <para>My entrance into this debate is not prompted by any desire to state my views, because I claim for them no expertness, but I would be failing in my duty if I did not make clear my opinions as to the appropriateness of the majority of the measures that have been put forward to solve the particular problem confronting the Government. Last night, I was privileged to be in another place and to hear the speech of the Leader of the Country Party, the  Deputy  Prime Minister <inline font-weight="bold">(Mr. McEwen). His</inline> display of intellectual effort, energy and initiative was good for the soul. The theme uppermost in his mind obviously was that the corrective of this situation lies in an expansion of our exports and our export income. I do not want to give the impression that <inline font-weight="bold">Mr. McEwen</inline> did not support the Government&#39;s proposals.  His  speech may be analysed in print by those who wish to do so. All I am doing is taking one-half minute to pay my meagre tribute to him for the positive and energetic way in which he emphasized that we should expand our exports. He referred to such matters as the negotiation of the Japanese trade agreement and other endeavours that the Department of Trade has made to gain access to new markets and to re-orient our export trade to the changed conditions of our European markets. That theme seems to me to be only remotely relative to the proposals that the Government has put forward for solving the present emergency economic situation. </para>
          <para>Before I proceed briefly, I hope, to develop my views on this matter, I wish to take one-half minute to disabuse the mind of my leader in the Senate, if I may be so presumptious, as to the value of becoming preoccupied with phrases. <inline font-weight="bold">Senator Spooner</inline> chided <inline font-weight="bold">Senator McKenna</inline> this morning for using adjectives calculated to obtain newspaper publicity. I am somewhat interested in this matter, because I received the same lash when I predicted the actuarial computation of the parliamentary superannuation fund not two years ago. Some people must have been mystified to discover that my simple arithmetical calculations were completely confirmed by the Commonwealth Actuary within eleven months. However, that is by the way. One phrase used by the Treasurer <inline font-weight="bold">(Mr. Harold Holt)</inline> in his speech merits further study and, perhaps, substantial correction. In his speech on Tuesday last the Treasurer said - </para>
          <quote>
            <para>Then, when we came to the Budget after the middle of the year, we followed through on the third of these objectives by providing in our Budget for a cash surplus in 1960-61. To make this possible, we kept additional expenditure down well below the level of 1959-60, and we made substantial increases in taxation. </para>
          </quote>
          <para class="block">
            <inline font-weight="bold">Mr. Deputy President,</inline>I ask the Senate what meaning should we, without being disrespectfully suspicious, give to the phrase, &#34; we kept additional expenditure down well below the level of  1959- 60  . . .&#34;? If we had not learnt the curves of phraseology calculated to mislead in statements that are prepared outside for presentation to the Parliament, and if I were not prepared to be snagged by that adjective &#34; additional &#34;, I would be inclined to read that statement in an easy-going confidential fashion as meaning that Government expenditure had been kept well below the level of  1959-60.  To put the matter in its true perspective we must remember what we did in one field of expenditure over which we have complete power and in respect of which we make our own decision. At a time when the economic trend was plain even to the man from the turnip fields we increased the salaries of Commonwealth public servants. The cost of those increases was between &#163;16,000,000 and &#163;18,000,000. Some salaries were increased from &#163;6,000 to &#163;6,900. That fact wants to be known by those who read a statement couched in language such as, &#34;We kept the additional expenditure down well below the level of 1959-60 &#34;. </para>
          <para>I am not so much concerned with phrases to-day. I have said that I understand that the purpose of this economic exercise is to dampen down internal business activities as a means of closing the disparity that is occurring between export income and import costs. T think that stocks and shares have shown speculative inflationary increases during the last three months; but when people buy Broken Hill Proprietary Company Limited shares for 100s. after an issue, I would think that that would indicate that those people were trying to get capital security in an undertaking that was soundly based to take care of industrial expansion. They accept a return on their outlay of some 2 per cent, in preference to 5 per cent on Government stocks, 8 per cent, on Customs Credit Corporation Limited bonds or in preference to shares in land trusts and other fixed trusts. </para>
          <para>Land speculation is rife. One of my colleagues - not in association with me, although it is the kind of question I may have asked - this morning inquired whether the chief custodian of our stability had recently bought a quarter acre of land on the Gold Coast for &#163;48,000. What position does land speculation occupy in these proposals? Is any special tax to be levied on the land speculator? Then let us consider finance companies. Honorable senators have referred quite freely to fringe banking institutions. Then there are brokerage companies and companies such as Lombard House to which I have referred during the last few weeks. There are hirepurchase companies such as Custom Credit Corporation Limited, Australian Guarantee Corporation Limited and a few others. I do not find in these proposals that a tax is to be imposed to any special degree on the earnings of these companies. </para>
          <para>I pass to the question of take-overs. On recent occasions some merchants have been reaching out for fashionable stores such as George&#39;s. That would be only a midget take-over, but there are others. No special duty is to be imposed on the transfer of shares in take-overs, and no restriction is to be placed on the issue of watered-down capital. However we do find in the speech of the Treasurer the following statement: - </para>
          <quote>
            <para>The excess demand Tor resources is most evident, and over-expansion has been most pronounced, in certain sectors. Building is an obvious case. Preliminary statistics just released show that, in the September quarter, houses and flats were being started at a rate of 100,000 a year. This is 16 per i.ent cent, higher than a year earlier. Building of offices, hotels, shops, factories- </para>
          </quote>
          <para class="block">And mark you, <inline font-weight="bold">Mr. Deputy President,</inline> even -  hospitals and the like has risen by an even greater percentage and, on all indications, the rise goes on. </para>
          <para class="block">In the Australian Capital Territory last year, under the control of the Department of the Interior &#163;12,000,000 was spent on building, or 20 per cent, of the total capital works vote expended by that department. I note an inquiring attitude so let me state that my authority for that statement is &#34; Hansard &#34; of the Senate, page 659. </para>
          <para>I pass now to the consideration of motor cars. I heard with a little sorrow this afternoon from my Country Party colleague, <inline font-weight="bold">Senator McKellar,</inline> the view put forward that motor cars are not an essential item. He said that he has seen cars passing along Sydney streets with one person to each car. I am not here to judge the resources of individuals, but all I can say it that if those cars were purchased on hire purchase the companies would show a readiness to repossess if the individual could not finance his repayments. In recent months companies have shown a more marked interest in thai procedure than heretofore. But what about country people? Are they dependent upon motor cars? I would have thought that a motor car was one of the essential aids to country life. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1658</page.no>
                <time.stamp />
                <name.id>KTL</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKELLAR, Gerald</name>
                <name role="display">Senator McKellar</name>
              </talker>
              <para>-  Did any one suggest that they were not? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1659</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator WRIGHT</name>
              </talker>
              <para>-  Not at all. The honorable senator has just come into the chamber, but he should know that in the context of my speech I am not misrepresenting him. Had all these things been put into proper perspective, had finance for houses and hospitals been encouraged and had motor car prices been cheapened for the man who is receiving now an income for his wool very much lower than he received in 1952, I would accept the position. I remind honorable senators that at that time the wool-grower was getting himself into a hated category by owning three or four Bentleys as a result of receiving for his wool an average price of 140 pence per lb. or thereabouts. In those circumstances I would find some reason for increased taxation and a special levy to impound a surplus. It seems odd that the circumstances which have caused this excessive levy of sales tax on motor cars are those in which the woolgrower is receiving - I saw it quoted yesterday in the Arbitration Commission - 40. Id. per lb. for his wool. At any rate I rely on current prices of about 46d. to 47d. per lb. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1659</page.no>
                <time.stamp />
                <name.id>KTL</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKELLAR, Gerald</name>
                <name role="display">Senator McKellar</name>
              </talker>
              <para>-  Where is the woolgrower with three or four Bentleys? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1659</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator WRIGHT</name>
              </talker>
              <para>-  That was said to be the state of affairs in 1952. Circumstances of that sort would warrant increased taxation, but when the price of wool is as low as 48d. per lb. the situation is different. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1659</page.no>
                <time.stamp />
                <name.id>KTL</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">MCKELLAR, Gerald</name>
                <name role="display">Senator McKellar</name>
              </talker>
              <para>-  That was a hypothetical statement. You do not know of any such wool grower? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1659</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator WRIGHT</name>
              </talker>
              <para>- Not at all. We have had this out in this chamber many times, and I hope that I shall not be misunderstood. Let me proceed. In the cut and thrust of this debate, the Labour Party says that we lost control of the economy by releasing controls. On our side, Ministers go forward and thrust the sword of free enterprise. In the bag of these economic measures, I find a proposal to divert the investment of insurance companies and superannuation funds by compelling these organizations to put 30 per cent, of their investments into government securities. I should have thought that that was control of a novel kind, and I shall have something to say about it. I mention it to show the intermixture of arguments on both sides of the chamber. From neither side has come a single reference to the wage-fixing machinery that we continue to employ in this country, which is unique in the world, and which, probably has contributed mainly to the position shown by figures in the &#34; United Nations Statistical Year Book&#34; of 1959. Through the courtesy of the Minister for Civil Aviation I have had them verified by the Treasury. The figures show that between 1948 and 1958 the cost of living in Australia increased by 105 per cent., while in the United Kingdom the increase has been only 55 per cent. With the concurrence of honorable senators, I incorporate the following figures in &#34; Hansard &#34;:- </para>
            </talk.start>
          </continue>
          <para class="block">
            <graphic href="018232196011175_40_0.jpg" />
          </para>
          <para class="block">It would behove a responsible government of this country to look to this wage-fixing apparatus, the discordance of principle between Commonwealth and State, and the manner in which we are being hijacked on an escalator of internal costs by the irresponsible inappropriateness of this machinery, but there has been not a word as to that. Having, with my blessing, successfully staved off an increase in the basic wage last year, the Government has abstained from intervention in the application that is now proceeding for three weeks&#39; annual leave. </para>
          <para>That brings me to the question of import controls. I am one of those who think, as I said with a good deal of political courage at the time, that the Government took the right course in removing import controls. Those controls were arbitrary, official and secret. I was interested to hear <inline font-weight="bold">Senator Kennelly</inline> this afternoon proposing their restoration, not perhaps over the whole gamut of trade, but at any rate in relation to the luxury trade. I am at a loss to understand how there could have developed any difficulties whatever from the relaxation of import controls if the banking system had performed responsibly - the Reserve Bank has a lot to answer for - in watching, week by week, the progress of banking advances. If we have reached a situation where an increase of &#163;150,000,000 in bank advances is causing this, not crisis but serious situation, the trading banks, too, have a lot to answer for. It is quite obvious that the big customers have been getting undue advantage from the trading banks by reason of their status. </para>
          <para>In relation to the use of bank interest as a corrective measure, I say that the increased rate on overdrafts is approved and that the increased rate on deposits is long overdue. It will remedy a senseless situation whereby interest on fixed deposits has been kept down to about 3 per cent., while unfixed deposits at call on the competing market any day of the week can earn 4&#163; per cent, or 5 per cent., and fixed deposits for two years can earn 7 per cent. As to the severity of banking controls on a selective basis, I realize the difficulty of the Government and of the Reserve Bank in knowing the special facts as to any particular client, but surely the bank has been keeping itself informed, industry by industry, about the rate of advances. 1 should have thought that banking controls would be completely ineffective unless in export industries all the money necessary were forthcoming, and in luxury industries there were restraint. </para>
          <para>I therefore think that there should be great support for the idea that the banks be required to be selective in making advances. The proposed control over investments by life insurance companies and superannuation funds is something novel. As a Liberal, I find it extraordinary and I should like to know of a precedent for it. I was informed during the day that a precedent existed in New Zealand for legislative control of this sort, stemming from some activity of the Labour Government there. I have not had time to fossick through the records but, by the good offices of the Treasurer, I have been informed of the factual situation as to insurance company investment in New Zealand, Canada, the United Kingdom and the United States. With the concurrence of honorable senators </para>
          <para class="block">I incorporate the following particulars in &#34; Hansard &#34;:- </para>
          <para class="block">
            <graphic href="018232196011175_41_1.jpg" />
          </para>
          <para class="block">I should have thought that the chief victims in this inflationary period that we have experienced in Australia are the fixed income earners, people who are dependent upon the investment of the proceeds of a life insurance policy upon the death of a husband, farmers and family men. I emphasize how mysterious it is that, as a means of correcting speculative monetary activity in the country, the notion should occur to anybody to issue a direction to the life insurance companies and the trustees of superannuation funds to invest in government securities. As the Treasurer has properly stated, they are not the owners of the money they handle, but merely the custodians of it. They are to be directed to invest in government securities, although not on the basis that the investments already being made by them are unsound. That is expressly stated in the Treasurer&#39;s speech. </para>
          <para>There is no doubt that the investments of those organizations in other fields are sound from a financial point of view. Quite obviously, because of the forces of inflation, they have been obliged to seek higher income so that the bonuses accruing on policies will follow the movement of costs. They want to provide, in a modest way, a better return from sound investments elsewhere in the investment market. For the most part, <inline font-weight="bold">Mr. Acting Deputy President,</inline> the insurance companies are mutual companies, with no shareholders. They pay no dividends. They devote the income from their investments to the mutual advantage of their policy-holders. For that reason, and for that reason only, they enjoy special provisions relating to the assessment of their income. </para>
          <para>According to my outlook, there is a kind of gravedigger&#39;s humour in this proposal to direct the life insurance companies and the trustees of superannuation funds to invest 30 per cent, of their funds in government securities because, forsooth, we have allowed premiums paid by policy-holders to be deductible from income tax. We need not stay to reflect cynically that the allowable deduction for life assurance and superannuation combined was increased to &#163;400 in a year, in which the highest Public Service salaries, for the first time, qualified for deductions, on account of superannuation alone, of between &#163;300 and &#163;400 a year. There were other sections of the community, including self-employed persons, who were clamouring for the benefit at the same time. Whatever the reason for the increase, one of the objects was to encourage thrift and the making of provision for families by contributions from earnings to insurance companies and superannuation funds. To my way of thinking, those funds should be the last to be touched by way of governmental direction for the purpose of filling government loans, unless the Government also proposed to make a return to the policyholders and contributors to superannuation funds equal to that which the market, on a proper, sound basis, would provide. If that were done, there would be no need for a direction from the Government. Even Commonwealth bonds would be sought on their merits. </para>
          <para>My friend, <inline font-weight="bold">Senator Laught,</inline> referred at question time this morning to an excerpt from the &#34; Financial Times &#34;, which appeared in the Sydney &#34; Daily Telegraph &#34;. The &#34; Financial Times &#34; said that it was praiseworthy that the Australian Treasurer, in spite of uncertain prospects for Australian exports, was not thinking of reimposing imports control. The proposal to legislate with a view to having insurance companies and pension funds invest a minimum of 30 per cent, of their funds in government securities was not the subject of creditable comment. The article continued - </para>
          <quote>
            <para>One criticism, however, must be made. . . . The object of policy surely must be to make- </para>
          </quote>
          <para class="block">Here, there is a misprint which I understand to be the word &#34; securities &#34; -  securities attractive on merit, not to force pension funds and insurance companies to invest in them when higher returns might be earned elsewhere. This point apart, though, the Australian Government is showing considerable courage. </para>
          <para class="block">I should have found merit in a proposal that in respect of take-overs, involving expenditure of more than &#163;500,000, 10 per cent, of the amount should be invested in Commonwealth stock. I should have found some merit, too, in providing that for every increment of &#163;1,000,000 in the capital of hire-purchase companies, 10 per cent should be invested in Commonwealth stock. If the Government were hitting at the speculative elements in the community by attempting to channel investment into Commonwealth stock, I should not flinch so much from the idea of control, although it would be contrary to my liberal outlook and my understanding of Liberal Party policy. To make thrifty people who have put their savings into savings banks, superannuation funds and life insurance policies, the subject of forced loans at present Commonwealth security rates, seems to me to be both inappropriate and unjust. It is quite contrary to the principles which I have stood for in politics. </para>
          <para>I come now to the proposal to abolish the taxation provision relating to the deductibility of interest in respect of certain loans made to companies. The proposal will not apply if loans are sought from a bank, a pastoral company, a building society or a government. It is to apply in respect of loans made since 30th June last, and will thus apply to loans at present in course of negotiation, in respect of which commitments of a very heavy character may have been undertaken. This proposal will not subtract from the profit to be made by way of taxation on loans by fringe institutions. The lender will not be asked to contribute. It is the borrower who is to be deprived of the right to deduct interest. But nobody in his senses would ever dream that a decent system of British taxation would fail to make provision for such an allowable deduction. What is the difference between interest on money borrowed exclusively for the purposes of one&#39;s business and advertising expenses or travelling expenses? Because we have power over taxation, and for the purpose of wounding the lender, it is proposed to hit away the deduction that is available to the borrower. I hope, <inline font-weight="bold">Mr.</inline> Acting Deputy President, that further argument will be forthcoming to put the requisite ingredient of reason into that proposal. </para>
          <para>Now let us consider the matter of sales tax. In the financial year 1955-56, the Government introduced the little Budget and raised the rate of sales tax on motor cars from <inline font-style="italic">16i</inline> per cent, to 30 per cent I was not convinced at the time of the efficacy of that measure. With very few exceptions, for quite a long time I deferred to the superior experience of those who were responsible for adopting that proposal. The fact remains that the Government yielded to the argument that the import-export relationship should be corrected by that means. I have already referred to the increase in the rate of sales tax on cars. Figures I have before me show that in 1955 there were 166,000 new registrations of motor vehicles; in 1956, 163,000; in 1957, 150,000; in 1958, <inline font-style="italic">165,000;</inline> and in 1959, 170,000. I have not complete figures for 1960, but the figures I have indicate that new registrations for this year will be between 185,000 and 190,000. So the measure adopted in 1956 dampened down new registrations of motor vehicles. I will be corrected if I am wrong in saying that I believe that the proposals adopted at that time did not apply to commercial vehicles. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1662</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator Henty</name>
              </talker>
              <para>- I think there was a small increase in the rate of sales tax on commercial vehicles. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1662</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator WRIGHT</name>
              </talker>
              <para>- Exactly the same curve is to be seen in relation to new registrations of commercial vehicles as obtained in the case of motor cars. With the concurrence of honorable senators, 1 incorporate in &#34; Hansard &#34; the following figures relating to the registration of new motor vehicles in Australia: - </para>
            </talk.start>
          </continue>
          <para class="block">To steepen the already severe impost on motor vehicles is a fanciful method to adopt to correct the imbalance between exports and imports. I am driven to the conviction that this proposal is so ill-advised that it will relight the fires of economic inflation. </para>
          <para>In recent times a rise in sales of new cars has been held back by relatively light trading in second-hand cars. Second-hand cars have been devalued from time to time. But the Government&#39;s latest announcement has resulted in this section of the motor trade receiving an impetus overnight. There will be a speculative approach to the second-hand car market which will continue for the next six months. That, in my judgment- </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1662</page.no>
                <time.stamp />
                <name.id>JZY</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">PALTRIDGE, Shane</name>
                <name role="display">Senator Paltridge</name>
              </talker>
              <para>-  Yes, in the honorable senator&#39;s judgment. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1662</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator WRIGHT</name>
              </talker>
              <para>- This may be an appropriate occasion for mirth on the part of my mirthful and genial friend, the Minister for Civil Aviation. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1662</page.no>
                <time.stamp />
                <name.id>JZY</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">PALTRIDGE, Shane</name>
                <name role="display">Senator Paltridge</name>
              </talker>
              <para>-  I hope I am not displaying any mirth. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1662</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator WRIGHT</name>
              </talker>
              <para>- I thought the Minister was a little amused. If this impost of 40 per cent, will deter people from buying new vehicles for more than six months, I shall be surprised. I see in this proposal a very strong factor that will increase the inflationary pressure in the motor trade. Believe me, if those who are now worried by increasing stocks of second-hand cars can get rid of those vehicles, they will be able to trade much more virulently in new cars. </para>
            </talk.start>
          </continue>
          <para>Of course, this measure which has been adopted by the Government is not unrelated to the state of our external balances. I know that imports of all sorts of constituents for motor cars are involved. An increase in the price of new cars will result indirectly in an increase in the price of old cars. As the experience of <inline font-style="italic">1955-56</inline> shows, the volume of sales will rise, as must happen in an expanding economy. For that reason, I believe that this measure is lacking in justification. </para>
          <para>I can see some similarity between convertible notes and share capital. If the </para>
          <para class="block">Government&#39;s proposal is prospective only, it can be justified. But, apart from that, apart from the restriction of bank credit, and apart from an increase of bank interest rates, I have very grave misgivings about the Government&#39;s proposals. I am sorry to have to say that I believe they fall short of the remedy that is required to adjust our external balance of payments situation. When we find that the disparity between our living costs and those of comparable countries has grown over the last decade, I believe that the Government should try to ascertain what is the unique nigger in the Australian woodpile. I believe the nigger in the woodpile is the irresponsibility that has been displayed in the management of our wagefixing apparatus. If the history of this Government&#39;s term of office is traced, it will be seen that every upsurge of inflation can be traced to adjustments of wages by wage-fixing tribunals. Why is it that that situation is not faced up to? We have not been told. Is it because it is easier to attack capital than it is to attack labour? </para>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1663</page.no>
              <time.stamp />
              <name.id>K3W</name.id>
              <electorate>Western Australia</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">CANT, Hartley</name>
              <name role="display">Senator CANT</name>
            </talker>
            <para>. - The least we can say about <inline font-weight="bold">Senator Wright</inline> is that, like the leopard which never changes its spots, he has been consistent in urging the Government to attack the wages of the workers. At least, that has been so during the time that I have been a member of the Parliament. It would seem that the honorable senator has only one cure for Australia&#39;s ills. The cure he advocates is to give those who are on a minimum income a little less - to reduce the spending power of those who have only just enough to live on, and who each week put into circulation the money they receive, and in turn keep other workers in employment. Any reduction of the amount of money in the hands of the working people could result only in what <inline font-weight="bold">Senator Wright</inline> complains about, that is, a boost to the hire-purchase companies. As I have said before in this chamber, it is of little use to restrict liquidity within the nation whilst the finance companies are able and prepared to supply any amount of money that any one wants, without security, to enable the purchase of goods without deposit, without the purchaser having any equity in the goods whatsoever. I deplore these continual attacks upon the wages of the working people. </para>
          </talk.start>
          <para>The Government deserves the censure of the people of Australia for the manner in which it is handling our economy and the manner in which it has handled the economy over the last ten years. There have been three panics within the past nine months. Three measures have been brought down and three policies have been enunciated to cure the inflation that exists to-day as a result of the inflationary spiral that the Government has not worried about for the past ten years. The first of these policies was anounced by the Prime Minister <inline font-weight="bold">(Mr. Menzies)</inline> in February last. It came in for a considerable amount of criticism from honorable senators on this side, from the daily press and from the people generally. On that occasion, the Government announced a five-point plan. I shall not weary the Senate by enumerating the five points. Suffice it to say that the Government attempted to implement four of them. The fifth - the one that I considered to be the most important - has been completely forgotten. The AttorneyGeneral <inline font-weight="bold">(Sir Garfield Barwick)</inline> announced that a bill to curb monopolies and restrictive trade practices would be brought down, probably next year. I shall believe him when I see it. </para>
          <para>I believe that the curbing of monopolies and restrictive trade practices would go a long way towards curing the economic ills from which this country is suffering to-day. Only last year, television was introduced in Ihe State of Western Australia. There have been several complaints about the policy of the Government in allowing only one commercial television station in country centres. I remind the Senate that there is only one commercial television station in the metropolitan area of Western Australia and we have to take what is dished out to us. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1663</page.no>
                <time.stamp />
                <name.id>KAC</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">VINCENT, Victor</name>
                <name role="display">Senator Vincent</name>
              </talker>
              <para>-  What has this to do with the matter we are considering? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1663</page.no>
                <time.stamp />
                <name.id>K3W</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">CANT, Hartley</name>
                <name role="display">Senator CANT</name>
              </talker>
              <para>- If the honorable senator will be quiet, he may learn something - if he is capable of learning. Upon the introduction of television in Western Australia, the electrical traders and others who were going to sell television sets formed a price ring and it was made  cleaT  that if any of the traders breached the price ring they would not be provided with goods by the manufacturers or the wholesalers. In addition, no retailer was allowed to have a gimmick to help the sale of television sets from his store. A couple of the big retailers breached the agreement and there followed something in the nature of a price war for a little while. I read an article in the &#34; West Australian &#34; the other day in which a complaint was made by the retail traders&#39; association that, owing to the price war concerning television sets, only &#163;2,000,000 profit was made last year, instead of &#163;3,000,000. A profit of &#163;2,000,000 was made on the sale of 50,000 television sets, but the retailers were not satisfied; they wanted a profit of &#163;3,000,000. Public reference has been made to this matter, but there has been no attempt by the Government to control that sort of -practice. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1664</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator Wright</name>
              </talker>
              <para>-  The average profit on a set would be &#163;40? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1664</page.no>
                <time.stamp />
                <name.id>K3W</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">CANT, Hartley</name>
                <name role="display">Senator CANT</name>
              </talker>
              <para>-  Yes, the average profit on the 50,000 sets sold was &#163;40. That profit, of course, was apart from the profit made by the finance companies in financing the purchase of those television sets. This is only one instance of the exploitation of the people. The practice is apparent throughout practically the whole of the retail trade. </para>
            </talk.start>
          </continue>
          <para>In Western Australia there is a trade protection society which fixes the prices of goods. Quite recently, when the price of Turf cigarettes was 2s 6d. a packet in a tobacconist&#39;s shop they could be bought at Coles&#39; store for 2s. 4d. a packet. As the store was under-cutting the fixed price, the supply of Turf cigarettes to it was stopped. It is not now possible to buy those cigarettes from that store. </para>
          <para>Despite the fact that the Government parties opposed the prices referendum that was held in 1948, despite the fact that they opposed the granting of power to the Commonwealth to rix maximum prices - I emphasize the word &#34; maximum &#34; - the Government has allowed certain industries to combine and to fix minimum prices. No retailer will be denied a supply of goods if he sells them al prices higher than those fixed by the combine, but he is not allowed to sell for less. No attempt has been made by the Government to prevent this p: ?.ct&#39;&#39;-:e. </para>
          <para>To-day, <inline font-weight="bold">Senator Wright</inline> has referred to take-overs. I want to say that the takeovers that are going on are contracting the sphere of business and creating monopo lies. The day of the small businessman has gone. Even the little corner stores in the suburbs are being closed because the big chain stores have moved out into the suburbs. No attempt has been made by this Government, which professes to stand for free enterprise and for the protection of the whole of the people - the small man as well as the big man - to control the monopolies which are gradually driving the small people out of business. </para>
          <para class="block">Sitting suspended from 5.45 p.m. to 8 p.m. </para>
          <continue>
            <talk.start>
              <talker>
                <page.no>1664</page.no>
                <time.stamp />
                <name.id>K3W</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">CANT, Hartley</name>
                <name role="display">Senator CANT</name>
              </talker>
              <para>-  Before the sitting was suspended I was explaining that the panic measures taken by the economic witchdoctors in February last had not been successful, mainly because they failed to deal with the most important problems. Following those measures and the depreciation of our overseas balances, which was mainly caused by the fall in the price of wool and the lifting of import licensing, the Government brought down its Budget which was designed to cure the inflationary spiral by increasing taxation, both personal and company, and reducing expenditure on public works. </para>
            </talk.start>
          </continue>
          <para>It is interesting to recall what was said at that time. We expect to be able to take every word that is said in the Budget speech as having some meaning. In the Budget speech, the Treasurer <inline font-weight="bold">(Mr. Harold Holt)</inline> said - </para>
          <quote>
            <para>In the coming months, the fall in our overseas reserves will tend to reduce liquidity both  of  the public and of the banking system and the sharper the fall in reserves the greater the decline in liquidity will be. We have necessarily taken account of this prospect in shaping our policy for the year. It is one of the consequences which increased imports will have for our situation, others being, of course, the increase in available supplies and the advantage of obtaining, quite possibly, some goods and materials at more competitive prices. </para>
          </quote>
          <para class="block">The measures taken in February were designed to reduce liquidity through the banking system. The lifting of import licensing was designed to create competition for goods in order to reduce what was then known as demand inflation. But, apparently, in view of the latest efforts, the measures taken in February and in the Budget were not successful in curing the inflationary spiral. It is interesting to note that the Treasurer said that the Budget proposals would take care of the position for the year. Yet within three months we have this panic statement; and the impending legislation, we are told, will be designed to check the inflationary spiral. This Government, with the resources of the Liberal Party plus those of the Australian Country Party, has taken eleven and a half years to create this crisis. That is the period from 29th May, 1948, when those parties opposed the prices referendum, until now. If the Government takes as long to solve this problem, a lot of people in the community will suffer. </para>
          <para>There is only one aspect of these new measures on which I believe the Government should be congratulated, and that is its entry into the socialist field. I agree that it is a very small entry into it. I refer to the move to control the life assurance companies and superannuation and provident funds. I note with interest that the latest figures showed that the life assurance companies had invested 37 per cent, of their funds in Government bonds, and the action taken by the Government will compel them to invest Only 30 per cent, of their funds in Government bonds. I suggest to the Government that by its making the compulsory investment less than the voluntary investment, the life assurance companies will take the compulsory investment as being what they should put into Government loans. If they do that, there will be a fall of 7 per cent, in the amount invested by the life assurance companies in Government loans. </para>
          <para>The measures also include increased taxation on investments, restriction of bank credit, increased interest rates and increased sales tax on motor vehicles. I shall not deal with the increased sales tax on motor vehicles because other senators on this side of the chamber know more about the motor industry than I do. Later in this debate, or in the debate on the sales tax legislation, they will be able to explain to the Government exactly what this increase will mean to the motor vehicle building industry. </para>
          <para>What is the real cause of the present economic crisis? Surely we are entitled to think at this time that the effect of the two wage increases last year has just abou: finished; yet there is a continuing upthrust in the inflationary spiral. In talking about increased productivity, the Institute of Public Affairs in Victoria, said - </para>
          <quote>
            <para>Work done for Australia indicates a figure foi the period since the war of somewhere between 1 per cent, and 1.5 per cent. </para>
          </quote>
          <para class="block">That is the increase in production. Dealing with wages, the institute said - </para>
          <quote>
            <para>For instance, since 1954, notwithstanding the November marginal increase and frequent wage adjustments, the real nominal wage of a fitter has risen by only 3 per cent. </para>
          </quote>
          <para class="block">So, between 1954 and 1960, there has been an increase of 9 per cent, in productivity, on the basis of an increase of 1.5 per cent, since the war; yet real wages for the fitter - and after all, in the fixation of margins i.i industry the fitter is the key man - have increased by 3 per cent. Therefore, it if&#62; not fair to say that the wages of the workers have caused or had a substantial effect on the inflationary spiral, because they have not kept pace with the increase in productivity throughout Australia over that period. </para>
          <para>I believe that part of the inflationary spiral could be checked if the Governmen implemented the recommendations contained in the report of the Constitutions! Review Committee, in order to give the Government power to control interest rates, particularly in respect of finance companies. However, the Government has no intention of doing anything of that nature. I believe that the inflationary spiral is being accentuated by the irresponsible actions of the Government and its lack of a firm economic policy. </para>
          <para>Dealing with import licensing, 1 wish to quote from the address delivered on 26th November, 1959, by the  president  of the Associated Chambers of Manufactures of Australia. In his address, delivered shortly before the Government lifted import restrictions, the  president  said - </para>
          <quote>
            <para>We must avoid, at all costs, an &#34; ofl again, on again &#34; atmosphere in our import licensing administration. Because of its widespread effect on the business community, import licensing should be characterised by prudence and orderly consistency. For these reasons it is apparent that the wise  course  of action would be to hold the present position until such time as we can see more clearly the course ahead. </para>
          </quote>
          <para class="block">Despite that statement, the Government went ahead and lifted import controls. The lifting of those controls is now having its effect on the economy. The lifting of import controls, and the fall in export earnings, chiefly attributable to the fall in the price of wool, have accentuated the economic difficulties that face this country to-day. it is interesting to note the lack of public confidence in Commonwealth loans. I propose to refer to the Commonwealth security loan that was opened between 4th May and 19th May, 1960. The figures that I will quote relate to Western Australia. In group 1 - the metropolitan and suburban districts - the quota set was &#163;307,100 and subscriptions amounted to &#163;81,050. In group 1 the loan was under-subscribed by &#163;226,050. In group 2 - areas with a population exceeding 5,000 - the quota fixed was &#163;143,000 and subscriptions totalled &#163;49,500. In that group the loan was undersubscribed by &#163;93,500. In group 3 - areas with a population of more than 2,500 and less than 5,000 - the quota fixed was &#163;48,600, and subscriptions totalled &#163;21,480. The loan was under-subscribed in that group by &#163;27,120. In group 4 - areas with u population of more than 1,000 and less than 2,500 - the quota fixed was &#163;32,800 and subscriptions totalled &#163;17,630. In that group the Joan was under-subscribed by &#163;15,170. In all, the loan was undersubscribed by 68 per cent. That is a clear indication of the way in which the public has lost confidence in Commonwealth loans. The Government&#39;s recent action will in no way cure the position. lt is interesting to note that whereas honorable senators on the opposite side think of wages as being a contributing factor in the inflationary spiral, <inline font-weight="bold">Mr. Menzies</inline> does not hold that view. Speaking on 21st March last at the 23rd annual meeting of the Capel Court Investment Company (Australia) Limited the  chairman  said - </para>
          <quote>
            <para>
              <inline font-weight="bold">Mr. Menzies</inline>. . . described inflation as &#34; perhaps the greatest challenge to management in Australia &#34;. He said that the employer who simply passed on wage increases into higher prices was contributing to the inflationary spiral, rendering inevitable  the next wage increase. &#34; Vast numbers of ordinary citizens &#34;, <inline font-weight="bold">Mr. Menzies</inline> added, &#34; will suffer in the process, the export industries will be penalised and the national finances will be disorganized. </para>
            <para>Secondly, he emphasised the importance of increased efficiency, to reduce, or at least stabilise, unit costs of production. </para>
          </quote>
          <para class="block">Despite those statements by <inline font-weight="bold">Mr. Menzies,</inline> what action has the Government taken? It has not done anything and it will not adopt the recommendations of the Constitutional Review Committee. </para>
          <para>In his address on 23rd May last to the second annual meeting of Johathan Investments Limited the  chairman  said - </para>
          <quote>
            <para>Addressing the National Export Convention on 17th May, the Acting Prime Minister, <inline font-weight="bold">Mr. McEwen,</inline> forecast a trade deficit of &#163;200 million for the whole of 1959-60, after allowing for &#34; invisible &#34; payments. </para>
            <para>
              <inline font-weight="bold">Mr. McEwen</inline>also said that Australia would need to increase her export income by &#163;250 million per annum in the next five years to sustain the tempo of national development and population growth. </para>
          </quote>
          <para class="block">What has the Government done about that? It has done nothing to assist the earning of export income. The only thing that has happened in this Senate has been a movement by an Australian Country Party senator for an inquiry into the marketing of wool. Such an inquiry would occupy a period of twelve months or two years, during which time our overseas balances would continue to depreciate and the price of wool would continue to fall. Our export earnings must be increased in order to stop the drain on our overseas reserves. </para>
          <para>The Government should quickly decide what it intends to do about granting a licence for the export of iron ore from Western Australia. The company concerned seeks to export 10,000,000 tons of ore at not less than &#163;7 a ton. That would bring into the country &#163;70,000,000 over a period of years. It is no good saying that Australia is short of iron ore deposits because I can prove that there is an abundance of iron ore in Australia waiting to be exploited. The Government of Western Australia has sought a licence to export 500 tons of lower grade ore to Japan for experimental purposes. Millions of tons of this ore have been found in the south-west corner of the State. The ore is of a grade between 40 per cent, and 50 per cent. The Government of Western Australia wishes to know whether sponge iron can be made from the ore. If sponge iron can be successfully made from the ore there is a chance of establishing a sponge iron industry in Western Australia, because Collie coal can be used to make sponge iron. But the Commonwealth Government refuses to make any decision on these matters. </para>
          <para>These are two ways in which our export earnings could be increased. I urge the Government to make some decision about these matters not only in the interests of Western Australia, but also in the interests of Australia generally at a time of economic crisis. The present crisis has been created by the Government&#39;s actions over the years. The Australian Labour Party has continually warned the Government about the dangers of the inflationary spiral, but the Government has gone merrily ahead, lt accused members of the Labour Party of being scare-mongers. It said that we were seeking to bring about a depression. But in the last nine months the Government has had to take panic measures, none of which has been successful. I do not think that its latest action will be successful because it does not deal with the fundamental issues that are responsible for the inflationary spiral. </para>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1667</page.no>
              <time.stamp />
              <name.id>KOW</name.id>
              <electorate>Tasmania</electorate>
              <party>LP</party>
              <role>Minister for Customs and Excise</role>
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">HENTY, Norman</name>
              <name role="display">Senator HENTY</name>
            </talker>
            <para>. -  I have read and listened to most of the points of view that have been expressed on the economic measures which were announced by the Treasurer <inline font-weight="bold">(Mr. Harold Holt)</inline> on Tuesday night. In my judgment I come down on the side of the  president  of the Associated Chambers of Commerce whose comment, I thought, was very sound. He said that the economy was likely to need continuing review in the coming months. He did not agree with all that the Government had done. </para>
          </talk.start>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1667</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator Wright</name>
              </talker>
              <para>- - Who is the  president  of that organization now? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1667</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>- <inline font-weight="bold">Mr. Connell</inline> of Victoria, f think his was a very wise and prudent comment because, of course, any economy needs careful watching and the Australian economy may need continual review in the months that lie ahead. Whether we like it or not the difficulty that has arisen at the moment is not a crisis or something for panic. When the Budget was being formulated it was realized that certain measures in addition to those that were taken then might have to be implemented within a few months if the price of wool continued to fall. lt is very easy to be wise after the event and say that these steps should have been taken at that time. If, of course, the price of wool had gone up there would be no need for any measures to be taken so far as liquidity and our overseas balances are concerned. If we had taken these steps then and the price of wool had risen we would have been accused of doing something that was unnecessary. Any prudent government watches the economy from time to time and takes steps that it feels are necessary. It takes them when people can see the reason for the steps that are being taken. In matters of government you cannot get too  far ahead  You cannot anticipate things, because public opinion has to know why you are doing these things The conditions have to be apparent for the people themselves to see why the measures are being taken. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1667</page.no>
                <time.stamp />
                <name.id>K2N</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">RIDLEY, Clement</name>
                <name role="display">Senator Ridley</name>
              </talker>
              <para>- They would have to be pretty dumb to-day. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1667</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>- I do not want to be rude to the people of Australia. I do not think they are dumb; 1 think they are very intelligent. Their actions during the last eleven years have shown their supreme intelligence. It is a matter of judgment. If you like to think they are dumb, that is  all  right; but I do not think they are. </para>
            </talk.start>
          </continue>
          <para>Whether we like it or not our economy, our overseas balances and our export market are geared to wool. In the last feu years our secondary industries have developed, into the export market. Last year, for the first time, the value of our secondary exports exceeded &#163;100,000,000, but largely we still depend upon our primary industries, and principally upon wool. Every country has its dominating cash producer, if I might use that expression. Ceylon has its tea, Kuwait has its oil and Australia has its wool. They are the dominating factors that bring wealth into the economies of those countries. The unknown factors are completely wrapped up in the price we receive for our primary exports. The question might be asked whether any one can tell that wool is not going to take an upward trend within the next two or three months. On the other hand, who can tell that it will not go lower still and present even greater difficulties than we are facing at the moment? These things are intangibles. They are intangibles which any government can take into account only when it is framing a Budget. <inline font-weight="bold">Senator Cant</inline> himself said a while ago that the price of wool had dropped and that our income from wool at the present time is 20 per cent, lower than it was at the corresponding period of last year. The position is that the Government must take whatever steps are necessary when the need arises. I agree with the  president  of the Associated Chambers of Commerce who said that there will need to be a continual review of the economy and that steps will have to be taken continually to deal with matters as they arise. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1668</page.no>
                <time.stamp />
                <name.id>JQY</name.id>
                <electorate />
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                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">COURTICE, Benjamin</name>
                <name role="display">Senator Courtice</name>
              </talker>
              <para>-  After they arise. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1668</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
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                <in.gov>0</in.gov>
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                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>-  You always were a bit pessimistic. You have been saying that for eleven years. I do not think there is need for serious worry because these matters will be dealt with as they arise. 1 want to refer to one or two matters which were mentioned by <inline font-weight="bold">Senator Wright,</inline> because I think they are of importance and ot interest. He referred to the motor car industry and to the increased sales tax on motor cars. In dealing with that particular aspect he overlooked the prime factor in this matter, namely the huge import content associated with the motor car business. No one is seriously worried about the sales of motor cars; it is the manufacture of motor cars about which they are worried. That which concerns us is the huge import of rubber that is necessary, the diversion of steel, that could be exported, into this huge output of cars, and the import of oil that now amounts to some &#163;200,000,000 a year. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1668</page.no>
                <time.stamp />
                <name.id>JZQ</name.id>
                <electorate />
                <party />
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                <in.gov>0</in.gov>
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                <name role="metadata">ANDERSON, Kenneth</name>
                <name role="display">Senator Anderson</name>
              </talker>
              <para>-  Which is about &#163;50,000,000 above normal. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1668</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
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                <in.gov>0</in.gov>
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                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>-  That is right. These things have to be dampened down a little or consolidated. I like the word consolidated. Any man who has been in a developing business finds that there are times in his career when there is a need for consolidation. Many thousands of excellent second-hand cars are on the market in Australia. If for a time some people, who were intending to buy a new car, buy themselves a good second-hand car, that will remove the necessity for further increases in imports of steel, rubber and all the components that are used in the manufacture of cars. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1668</page.no>
                <time.stamp />
                <name.id>K2N</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">RIDLEY, Clement</name>
                <name role="display">Senator Ridley</name>
              </talker>
              <para>-  How much imported steel is used in the motor car industry in Australia? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1668</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>-  I do not know the quantity, but I do know that we have been importing  steel. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1668</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator Dittmer</name>
              </talker>
              <para>-  You  could inquire and  find  out. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1668</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
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                <in.gov>0</in.gov>
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                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>-  You have a very inquiring mind, Doctor. Have a look for yourself and find out. I am putting before the Senate the facts of this particular matter. I am mentioning the import content of the motor car industry which is causing worry and concern. It might be only temporary. That is the position which the honorable senator did not, perhaps, stress sufficiently when dealing with this aspect. He referred to the requirement that insurance companies and superannuation funds place 30 per cent, of their invested funds in Commonwealth and local government investments. He said that this was something new, and that compulsion of this type was somewhat foreign to his outlook. A little while ago the honorable senator was advocating in the Senate some sort of compulsory loan from taxpayers for works now financed from consolidated revenue, and he has made this suggestion two or three times. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1668</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
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                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator Wright</name>
              </talker>
              <para>-  Only as a preferable alternative to taxation. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1668</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
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                <in.gov>0</in.gov>
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                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>-  Irrespective of what it may be preferable to, it would be compulsion. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1668</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator Wright</name>
              </talker>
              <para>-  It would be applied to all taxpayers. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1668</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
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                <in.gov>0</in.gov>
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                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>- He said that he did not, on principle, agree with compulsion. If compulsion is against his principles, it would not matter, in my opinion, whether it was applied to the taxpayer or the insurance company. I listened to the honorable senator and I disagreed with a great deal of what he said. I did not interrupt him, as he is interrupting me now, but I gave h/rr an untrammelled opportunity to say what he wanted to say. He said that interest on convertible notes should not be removed from the field of tax deductions. What are convertible notes? They are purely and simply delayed share capital. If this method of raising money were not available to companies, they would raise the money they required by issuing shares. It was only to avoid the taxing of dividends that convertible notes were issued. This was quite legal. In the cut and thrust of commerce, business concerns find ways of avoiding taxation laws, and the Taxation Branch finds ways of closing gaps when laws are being avoided. No one can argue that convertible notes are other than delayed share capital. If they could not be issued, capital would be raised by issuing shares, and the dividends from the shares would be subjected, first, to company tax, and secondly, to personal income tax when they reach the hands of the shareholders. If business organizations, in their experience, find a way around taxation provisions by issuing convertible notes, it is quite sound for the Government to say that capital should be raised by the issue of shares, with the income therefrom being dealt with in the normal way. I throw these matters into the ring, as I think they are interesting. </para>
            </talk.start>
          </continue>
          <para>I agree with <inline font-weight="bold">Senator Wright&#39;s</inline> statement that under the present system of bank finance large organizations have an advantage. The honorable senator has said over and over again in this chamber that import restrictions should never be imposed by any government, and that control should be left to the banks. Time after time, I have said to him, &#34; If you leave it to the banks, you can say &#39;good night&#39; to the little fellow, as the big fellows will get the run &#34;. Now he complains when import restrictions are removed, and says that the large customers are getting the advantage. I agree completely. That is an aspect at which the central bank must look closely. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1669</page.no>
                <time.stamp />
                <name.id>JYY</name.id>
                <electorate>SOUTH AUSTRALIA</electorate>
                <party>ALP</party>
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">O&#39;FLAHERTY, Sidney</name>
                <name role="display">Senator O&#39;FLAHERTY</name>
              </talker>
              <para>-  Why do you not do it yourself? Why throw it on to the bank? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1669</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
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                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>-  We believe in following every course, except compulsion, that is available. We know how much honorable senators opposite like compulsion. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1669</page.no>
                <time.stamp />
                <name.id>JYY</name.id>
                <electorate />
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                <in.gov>0</in.gov>
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                <name role="metadata">O&#39;FLAHERTY, Sidney</name>
                <name role="display">Senator O&#39;Flaherty</name>
              </talker>
              <para>-  You are dodging the issue. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1669</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
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                <in.gov>0</in.gov>
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                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>- The Opposition&#39;s outlook is that there should be constitutional power to compel. <inline font-weight="bold">Senator Kennelly</inline> is the most honest man on the other side. There is no humbug about him. He says, &#34;You give mc the numbers, brother, and I will nationalize the banks &#34;. Good luck to him! He is entitled to his point of view; at least he says what it is. That is the answer to </para>
            </talk.start>
          </continue>
          <para class="block">
            <inline font-weight="bold">Senator O&#39;Flaherty&#39;s</inline>interjection. As he knows, interjections are most disorderly. I am surprised that anybody should interject upon my speech, because I never interject. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1669</page.no>
                <time.stamp />
                <name.id>JZY</name.id>
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                <name role="metadata">PALTRIDGE, Shane</name>
                <name role="display">Senator Paltridge</name>
              </talker>
              <para>-  Take questions at the end of the meeting. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1669</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
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                <in.gov>0</in.gov>
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                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>-  That is a very good idea. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1669</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator Dittmer</name>
              </talker>
              <para>-  Who wrote your notes? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1669</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>-  I wrote them and my girl typed them. She had a very difficult job in reading my writing. I want to refer to one or two other matters raised during a very interesting debate which has been conducted in quiet tones. <inline font-weight="bold">Senator Kennelly</inline> said that 67 per cent, of insurance company funds were invested in Commonwealth bonds in 1949, and that the percentage had now dropped to 37. It must be realized that in the years 1947, 1948 and 1949, not much alternative investment was available. The great expansion in Australia started after the election of 1949, and has continued during the eleven years of this Government&#39;s administration. Prior to that, there was not much room for investment, because the investors never knew what the socialist government would do next. At one period it was going to nationalize the banks. The investors played safe and invested in Commonwealth securities. They would not take the risk of the socialists&#39; nationalizing industry. The honorable senator also said that investors put in &#163;1,000 of good money and received back &#163;1,000 of bad money. I think, <inline font-weight="bold">Sir, that</inline> if you insured your life in 1947, 1948 or 1949 for &#163;5,000, you will receive from the insurance company only the amount of &#163;5,000, whatever the value of money may be at the time when the policy matures. The same is true of bonds and similar investments. But nobody who has invested in Commonwealth bonds has ever lost one pennyworth of his capital or one pennyworth of his interest. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1669</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator Kennelly</name>
              </talker>
              <para>-  Of course he has. He has lost the purchasing power. </para>
            </talk.start>
          </interjection>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1669</page.no>
                <time.stamp />
                <name.id>K6P</name.id>
                <electorate />
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                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">BROWN, Gordon</name>
                <name role="display">Senator Brown</name>
              </talker>
              <para>-  If you sell bonds with a face value of &#163;100 to-day you receive only about &#163;91. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1669</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>- If you short-sell anything on the market you have to take what the market will give you for it. Bui you do not have to short-sell. If you wait until maturity date you will receive from the Commonwealth the full value of the bonds. I am sorry that <inline font-weight="bold">Senator Wright</inline> was not in the chamber when 1 said, a few moments ago, that if a person insures his life for &#163;5,000 the insurance company will pay him only that amount, regardless of the value of the currency at the time that the policy matures. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1670</page.no>
                <time.stamp />
                <name.id>KBW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">WRIGHT, Reginald</name>
                <name role="display">Senator Wright</name>
              </talker>
              <para>-  I have been in the chamber during the whole of the honorable senator&#39;s speech, except for about two minutes when I left to make a telephone call. T have been listening intently. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1670</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>-  I am not suggesting that the honorable senator has not been doing so. </para>
            </talk.start>
          </continue>
          <para>In addition to the reduction in the price of wool, there has also been a reduction in the volume of our exports of lead and zinc, due to action by the American Government to restrict the importation into America of those commodities. The reduction in our sales of lead and zinc also has affected our overseas balances. As the Minister for Trade <inline font-weight="bold">(Mr. McEwen)</inline> said last night in another place, if we are to buy the imports that we need we must also increase the volume of our exports. lt is fascinating to watch the development of Australian secondary industries which, as time goes by, will play an increasingly important part in our economy. All the ingenuity of Australian industry and of the work-force must be directed to finding more and more markets for the products of our secondary industries. </para>
          <para>Honorable senators opposite have spoken of increasing costs. Of course, they do not take any notice of the increase of costs in other countries, but I assure them that costs have been increasing rapidly overseas. The products of many of our specialist industries that have been developed around our great steel industry, which honorable senators opposite have condemned many times, will be able to compete with those of other countries. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1670</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator Dittmer</name>
              </talker>
              <para>-  What products has the honorable senator in mind? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1670</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator HENTY</name>
              </talker>
              <para>-  T have in mind particularly the products of the great steel industry that has been built ut&#62; round the Broken Hill Proprietory Company Limited. </para>
            </talk.start>
          </continue>
          <para class="block">I think that those products will provide the basis for much of our future prosperity. The references to panic and to a crisis are designed as catch-cry propaganda to appeal to a few people who may not have faith in the ability of the Government to deal with matters of this kind as they arise. Crises have arisen many times in the history of Australia, and the measures that have been taken have overcome them. Honorable senators referred this afternoon to the horror Budget, as they call it. They condemned those budgetary proposals, but nevertheless the proposals did the job they were designed to do. When I think of the economic measures that have been taken by this Government during the eleven years it has been in office, I believe that those measures have done the job they set out to do. The people of Australia believe in this Government and have full confidence in its ability to deal with the conditions that arise from time to time. </para>
          <para>I close my remarks, as 1 began them, by saying that I believe, with the  president  of the Chambers of Commerce of Australia, that the conditions that operate to-day will continue to operate because of intangible factors. No one - not even Mandrake or <inline font-weight="bold">Senator Cant</inline> - can tell us what will happen to the prices of commodities that we export to the markets of the world. If we had a crystal ball and were able to foresee what will happen to the prices for our major exports, such as wool, within the next three months, suitable measures could be taken to meet the position. I have the fullest confidence that the measures taken in the Budget, together with those we are now discussing and others that may be necessary as the economy is reviewed every three months, will be adequate to meet any economic problem that arises in Australia; and I think, too, that they will be to the great satisfaction and also to the benefit of the people of Australia. </para>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1670</page.no>
              <time.stamp />
              <name.id>JUM</name.id>
              <electorate>Queensland</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">DITTMER, Felix</name>
              <name role="display">Senator DITTMER</name>
            </talker>
            <para>. - I rise to-night with no hesitance at all. I listened with real interest to <inline font-weight="bold">Senator Wright,</inline> who gave a careful analysis of the economic position. I do not necessarily agree with all the views that he expressed. Overall. I think it can be said that his comments amounted to a condemnation of the present Government&#39;s economic measures. 1 also listened with interest to <inline font-weight="bold">Senator Henty,</inline> although I realized that he had no real confidence in the cause that he was attempting to support. Why he entered the debate when he did, I do not know, because his entry interrupted the order of speakers. However, he had the right to do so, and I am not quarrelling with that. The honorable senator referred to the need to damp down the motor car industry. That industry does not exist in the region from which he comes, but I suggest that he and his associates should tell that to the people who are employed by motor car firms. </para>
          </talk.start>
          <para>The honorable senator also referred to convertible notes and gave the impression that the notes could be converted to shares at any specified time. That, of course, is not so. They may be redeemed at a particular time, the option being with the holder of the notes. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1671</page.no>
                <time.stamp />
                <name.id>KOW</name.id>
                <electorate />
                <party />
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                <name role="metadata">HENTY, Norman</name>
                <name role="display">Senator Henty</name>
              </talker>
              <para>- That is true of some of them. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1671</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator DITTMER</name>
              </talker>
              <para>-  By and large, that is the basis on which the notes are issued. I was courteous to the Minister when he was speaking, and I hope he will reciprocate and allow me to proceed with my speech. The honorable senator also said that those who opposed the Government&#39;s proposals were using catch-cries. 1 noticed when he was speaking that there was a measure of interjection from his own side of the chamber. Perhaps he will deal next week with his colleagues who interjected while he was speaking to-night, but I doubt whether he would make against them the kind of false accusation that he made against honorable senators on this side of the chamber to-night. lt is a tragedy that we have such a brief period in which to discuss this matter. Many honorable senators on this side of the chamber would like to speak but will not have the opportunity to do so. Let us have a look at the statement of the Treasurer <inline font-weight="bold">(Mr. Harold Holt)</inline> and see what he said. The statement contains so much verbiage about the functions of the Government that we are apt to forget its real purpose. The Treasurer said, proceeding to the crux of the proposals - </para>
            </talk.start>
          </continue>
          <para>The principal features will, however, be these - </para>
          <quote>
            <para>The new provisions will apply only to interest on borrowings by companies . . . </para>
          </quote>
          <para class="block">In other words, the friends of the Government are to be protected - </para>
          <quote>
            <para>Interest will also be fully deductible on borrowings by and from banks, approved pastoral finance companies, approved short-term market dealers and  building  societies. </para>
          </quote>
          <para class="block">There, again, we find a measure of protection for the big firms. Surely honorable senators opposite do not believe that the Colonial Sugar Refining Company Limited would be refused money by the Commercial Banking Company of Sydney Limited. Surely they do not believe that other firms of the kind would be refused assistance by the banks. </para>
          <para>The next feature of the Government&#39;s proposals is that, apart from the exceptions I have referred to, the amount of interest for which deduction will be permitted will not exceed the amount of interest actually deductible in the income year 1959-60, or the sum of &#163;10,000, whichever is the greater. There again, is a measure of protection for the Government&#39;s old friends. Another feature of the Government&#39;s proposals has te do with newly established companies. It means, by and large, that the right to expand will be denied new companies, even those that are worth while. Those are the aspects of the Treasurer&#39;s statement upon which every one should concentrate his attention. </para>
          <para>Let us try to get the situation in perspective. On an occasion such as this we should exercise a sense of proportion, because the interests of the nation and its people are at stake. Last night, in another place, the Prime Minister <inline font-weight="bold">(Mr. Menzies)</inline> dealt with the state of the economy. I went across and listened to him. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1671</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
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                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator Scott</name>
              </talker>
              <para>- It was a good speech. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1671</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator DITTMER</name>
              </talker>
              <para>-  Did you think so? </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1671</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator Scott</name>
              </talker>
              <para>- I thought it was excellent. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1671</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator DITTMER</name>
              </talker>
              <para>- Well, I do not admire you now. Previously I did. I have no doubt that, when the full history of Australia is written, the Prime Minister will be regarded as having been a failure. He failed Australia during World War II., he failed England on the occasion of the Suez Canal incident, he failed America in New York, and now he has failed Australia in the economic war. I have spoken to certain prominent businessmen. They have described the present Treasurer as the turnabout Treasurer. He is in a whirl the whole time. He has had to present only two budgets, but from the time he was appointed to his present office he has not been constant in his approach to economic problems. It must be said of the previous Treasurer, <inline font-weight="bold">Sir Arthur</inline> Fadden, irrespective of whether or not the Labour Party differed from him politically, that he was constant in his approach. What happened after the presentation of the two budgets that the present Treasurer has introduced? Last year, there was an alteration of postal charges. This year, no sooner has the treasurer proposed certain financial measures than he wants to alter them. In view of that how can business people operate their business efficiently? What does the ordinary person think? What does the businessman think? Some honorable senators opposite are reasonable. They know that one cannot plan one&#39;s business if there are to be continual economic changes. As I have indicated, there are honorable senators on the other side of the chamber who, irrespective of their political affiliations, are prepared to be sincere in their approach in these matters. We on this side of the chamber feel that those honorable senators, like ourselves, speak for the ordinary people and the ordinary businessmen. We do not speak for big business; neither do many honorable senators opposite. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1672</page.no>
                <time.stamp />
                <name.id>JZY</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">PALTRIDGE, Shane</name>
                <name role="display">Senator Paltridge</name>
              </talker>
              <para>-  Are you not a mate of Fairfax? | </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1672</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator DITTMER</name>
              </talker>
              <para>-  I am not particularly interested in Warwick Fairfax. 1 disagree with him on occasions. For example, the leading article in to-day&#39;s &#34; Sydney Morning Herald &#34; was not particularly illuminating. There are occasions when Warwick Fairfax is right and then I agree with him. When he is wrong, I disagree with him. But let us not talk in terms of being mates, because when I have a responsibility to discharge I discharge it, irrespective of how big or how small, mentally or physically, the other party concerned may be. </para>
            </talk.start>
          </continue>
          <para>Let us consider the various budgets that have been presented by this Government. In 1952, it presented the horror Budget, and later the little horror Budget, the stayput Budget and so on. I do not propose to deal with those budgets, because already to-day they have been dealt with ad nauseam. Possibly they were dealt with more efficiently than I would have dealt with them, but I doubt it. 1 have before me the leading article of to-day&#39;s &#34; Daily Telegraph &#34;. In that article are to be found the excuses that have been put up to the public of Sydney in the hope that they will be conveyed to the public of Australia. No one can accuse the chief of the &#34; Telegraph &#34; of being an enemy of the present Government. This passage appears in the leading article to which I have referred - </para>
          <quote>
            <para>The Government has taken steps to correct the economy for the very simple reason that: </para>
            <para>It did not know wool prices would drop to the extent they have. </para>
          </quote>
          <para class="block">But the Government had been warned of the possibility. <inline font-weight="bold">Mr. Chislett,</inline> of the Australian Wool Growers and Graziers Council, has been cautious in his approach to the subject of wool prices and the economy of the wool industry. For the sake of fairness, let us concede that point. The next excuse is - </para>
          <quote>
            <para>It did not think the flow of imports, after the lifting of restrictions, would be as great as it has been. </para>
          </quote>
          <para class="block">That is quite divorced from reality, because there was a precedent in 1951-52 which led the Government to introduce the horror Budget. There bad been a fall of &#163;400,000,000 in our overseas credits. In December, 1949, our overseas credits amounted to &#163;508,000,000. Some people will say that they were built up because of the war. At least they were there. On 1st July, 1951, they stood at nearly &#163;800,000,000. But, because of the inexperience and the lack of caution of the Government of the day, which happened to be led by the present Prime Minister, our overseas reserves fell. Suddenly the Government had to adopt measures which within six weeks led to more than 100,000 people in Australia becoming unemployed. It was then that the Treasurer of the day. <inline font-weight="bold">Sir Arthur</inline> Fadden, had the horror Budget thrust upon him. Every anti-Labour member of the Parliament ducked for cover. Many people, including <inline font-weight="bold">Sir Frank</inline> Packer, have referred to the horror Budget as the Fadden Budget. At that time, there were still some import restrictions, although the gate was left open. On this occasion, 90 per cent, of the import restrictions have been abolished. As I look at honorable senators opposite - both men and women - </para>
          <para class="block">I think that they are reasonably intelligent, but apparently they cannot learn from previous example, irrespective of what <inline font-weight="bold">Sir Frank</inline> Packer has said in the statement I mentioned, </para>
          <para>I come now to the hire-purchase companies, whose volume of business has grown from &#163;47,000,000 in 1946 to &#163;452,000,000 to-day. I am referring to the recognized major hire-purchase companies. Do not forget that, if this matter were investigated meticulously, a few more millions of pounds or tens of millions of pounds would be added to that figure. Yet the protagonist of the Government tries to defend it in the eyes of the people of Australia by saying that it did not know where the hire-purchase companies were going. Surely the Government will not raise that defence. It has done nothing towards bringing the hire-purchase companies under control. The Government now says that it is worried about the position and intends to control this field. It proposes to do this by disallowing as an income tax deduction interest paid on secured and unsecured notes. Does not the Government realize that these companies will find a solution? They will offer higher interest rates to investors. Who will bear the burden of the higher rates of interest that these companies will pay for money lent to them? As any reasonable person knows, this burden will be borne by the buyers of consumer goods. </para>
          <para>The Minister stated that the Government adopted a flexible policy. Of course it did. The policy was changed from month to month and from year to year. Nothing the Government proposes to do, except the increase of sales tax on motor vehicles, will affect the man in the street. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1673</page.no>
                <time.stamp />
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                <name role="metadata">DRURY, Arnold</name>
                <name role="display">Senator Drury</name>
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              <para>-  If the Government&#39;s policy were any more flexible than it is, it would not stand up at all. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1673</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
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                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator DITTMER</name>
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              <para>-  That is the most sensible interjection that has been made, and it has come from my side. It is a shame that we will not have sufficient time to deal with all the faults of this Government, particularly those revealed by the economic statement. </para>
            </talk.start>
          </continue>
          <para>I wonder whether supporters of the Government realize what they have done to the used car market. The economic statement was made last Tuesday night. </para>
          <para class="block">Next morning, every one who is interested in used cars was up before daylight wiping the old prices off the windscreens and substituting prices &#163;50 or &#163;100 higher. </para>
          <para>I have seen a statement to the effect that differential rates of interest will be charged on bank overdrafts, ranging from 5 per cent, to 7 per cent., but that the average rate charged will not be higher than 6 per cent. <inline font-weight="bold">Mr. Marshall,</inline> the general manager of the Bank of New South Wales Limited, has praised that proposal. How will the banks work out which of their customers shall pay interest of 5 per cent., 6 per cent, and 7 per cent.? Do honorable senators opposite think that the big firms will be required to pay interest of 7 per cent., or will that rate be charged to home seekers, home builders and small businessmen? Why should any one who has operated on an overdraft of &#163;10,000, &#163;20,000 or &#163;30,000 for years and has not speculated so as to affect the economy of this country suddenly, because of the stupidity of this Government, have to pay an increased rate of interest on the money borrowed? There is no reason why his interest rate should be lifted. Why should the activities of an ordinary importer who has been carrying on a legitimate business be curtailed because of a direction from the central bank? This smacks of chaos, as any member of this chamber who has any knowledge of business will realize. </para>
          <para>Under its proposals, the Government will not control the hire-purchase companies or the land companies. All that the Government is doing is to increase the prices paid by consumers. This is, in effect, a supplementary Budget, but legislation arising from the Budget proper still has to be passed. By these proposals, the Government will hit young married couples, men who have carried on businesses in a legitimate way and people who have developed this country by using money obtained on bank overdrafts of from &#163;10,000 to &#163;30,000. This Government is now going to penalize them. Does the Government intend to lay down rules for the determination of the rates that will be charged on bank overdrafts? The average rate must not exceed 6 per cent. Does the Government intend to lay down that small borrowers shall pay interest at the lowest rate and that big firms shall be charged the highest permissible rate? I am not speaking in a derogatory manner of the big firms, because I think many of them, such as General MotorsHolden&#39;s Limited, the Colonial Sugar Refining Company Limited, the Myer Emporium Limited and David Jones Limited, are very efficient. Does the Government intend to insist that those companies shall pay interest at 7 per cent, on floating overdrafts? 1 do not think it does. </para>
          <para>We live on borrowed time. We are running out of overseas credits. When the Chifley Labour Government relinquished office on 10th December, 1949, we had a credit overseas balance of &#163;598,000,000. To-day, eleven years later, our overseas credits amount to &#163;400,000,000, including bank funds overseas of &#163;73,000,000. The Government believes that in an emergency it could borrow &#163;200,000,000 from the International Monetary Fund. It would have to go cap in hand to borrow from the fund, and the money would be lent, to meet an emergency, for only from three to five years. If this amount of money were borrowed from the International Monetary Fund, we would then have overseas funds amounting in all to &#163;600,000,000. Compare this with the fact that our overseas credits of &#163;598,000,000 under the Chifley Government, if preserved, would have been worth &#163;1,200,000,000 to-day. </para>
          <para>Supporters of the Government claim to be great financiers, yet they are doing nothing constructive to correct this state of affairs. Some members of the Government claim to represent the country interests - the people who produce wool and wheat and those who are engaged in the dairying industry - as well as the mining industry. Yet they are doing nothing to help those interests. We have an adverse trade balance with the United States of America, which bars our lead and zinc. If copper were not produced at Mount Isa, the mines there would not be open to-day, because the company could not operate and survive on the proceeds of the sale of lead and zinc. The Broken Hill Proprietary Company Limited, so far as mining is concerned, is surviving by using its reserves. The Government must find a solution to this problem. It must protect existing businesses, which are entitled to protection. I do not believe that the Government is justified in providing a mechanism for the private trading banks to charge higher rates of interest. They have carried on all right with the existing rates of interest. The Government must protect the home seekers and the home builders, who are the backbone of the country. In time of war the younger people are sent to fight in martial conflict, and therefore I think that these people  and  their dependants are entitled to protection in times of peace. The Government must also protect rural production. How often have we heard <inline font-weight="bold">Senator Wright,</inline> in his inimitable way, refer to the fact that rural production has increased, but farm incomes have decreased by 11 per cent.? He, of course, speaks in some measure in terms of increased wages, but the increases have not done much to raise the standard of living. We have a responsibility to protect the producers of primary products which are valuable to Australia - wool, wheat, dairy products and minerals. If the Liberal senator from Tasmania to whom I have referred espouses the cause of the farmers, as he always does, we will be happy to support him. He realizes, as well as any one does, that the wheat stabilization fund is in jeopardy, but at the present time there has been a bad wheat season overseas, so we may be able to export some wheat. </para>
          <para>So, the Government has to face up to the imposition of controls. What are these measures if they are not controls? The Government is imposing the highest rate of sales tax on motor vehicles that is known in the world. Is that not a measure of control? Yet honorable senators opposite say that they will not have controls. The Government intends to insist that from now on assurance companies shall invest 30 per cent, of their funds in Commonwealth loans; but it does not intend to control the land sharks and hire-purchase companies which have taken hundreds of millions of pounds from the Australian public in the past. Ultimately, the Government may have to face up to the responsibility of subsidizing Australia&#39;s exports, including the staple product on which the Australian standard of living depends - wool. </para>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1674</page.no>
              <time.stamp />
              <name.id>K5K</name.id>
              <electorate>Western Australia</electorate>
              <party />
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              <name role="metadata">SCOTT, Malcolm</name>
              <name role="display">Senator SCOTT</name>
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            <para>. - The Australian Labour Party, with all the figures that have been cited throughout the whole of this debate, has been calamity howling about these proposals which have been presented by the Government to stabilize the Australian economy. </para>
          </talk.start>
          <para class="block">When we look at the Government&#39;s policy since it came into office in 1949, we find that it has been able to maintain a balanced economy to such an extent that at no stage during those eleven years has more than 2 per cent, of our work force been unemployed. That is a marvellous record for any government. It was not equalled by any previous Australian government. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1675</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator Dittmer</name>
              </talker>
              <para>-  You have had ten good seasons out of eleven. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1675</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
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                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator SCOTT</name>
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              <para>-  The honorable gentleman says that we have had ten good seasons out of eleven. We hope that we will have another ten good seasons out of the next eleven. As long as this Government can maintain full employment it will remain the Government of Australia, because the Australian people to-day are satisfied with the conditions under which they live. 1 have been in this chamber for eleven years and in each of those years I have heard statements and accusations by members of the Australian Labour Party to the effect that we were ruining the country. But what has happened? </para>
            </talk.start>
          </continue>
          <para>Let me go back to Australia&#39;s overseas balances when this Government came into office. Very shortly after that time, it was stated - and it has been stated subsequently in this chamber - that the Government allowed the overseas balances created by the Labour Government to be decreased. Tt has frequently been stated by Labour senators and Labour members in another place that at the time of the fall of the Labour Government those balances were in the vicinity of &#163;900,000,000. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1675</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
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                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator Dittmer</name>
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              <para>-  I did not say they were &#163;900,000,000 at all. I said they were &#163;598,000,000. Be truthful. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1675</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
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                <name role="metadata">SCOTT, Malcolm</name>
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              <para>-  At no stage did I say that <inline font-weight="bold">Senator Dittmer</inline> said that the overseas balances were &#163;900,000,000; I said that his colleagues had said that. On one occasion a Labour member in another place said that the overseas balances held by the Labour Government in December, 1949, were over &#163;900,000,000. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1675</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator Dittmer</name>
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              <para>-  And in the other chamber it was admitted that that was  a  mistake. </para>
            </talk.start>
          </interjection>
          <para>The ACTING <inline font-weight="bold">DEPUTY PRESIDENT (Senator Anderson).</inline> - Order! <inline font-weight="bold">Senator Dittmer</inline> must not interrupt. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1675</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
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                <in.gov>0</in.gov>
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                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator Dittmer</name>
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              <para>- It was admitted- </para>
            </talk.start>
          </interjection>
          <para>The ACTING DEPUTY PRESIDENT.  - Order! </para>
          <continue>
            <talk.start>
              <talker>
                <page.no>1675</page.no>
                <time.stamp />
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                <electorate />
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                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator SCOTT</name>
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              <para>-  In June, 1948, Australia, under a Labour government, had overseas balances of &#163;280,000,000. By June, 1949, those balances had increased to &#163;446,000,000. On 10th June, 1949, when the great Australian Labour Party disintegrated, Australia had overseas balances of &#163;528,000,000. On that date, this Government came into office, and in the first financial year of its reign it increased the overseas balances from &#163;528,000,000 to &#163;629,000,000. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1675</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator Dittmer</name>
              </talker>
              <para>-  What was the price of wool in that year? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1675</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
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                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator SCOTT</name>
              </talker>
              <para>- If  the honorable senator studies Australian history, he will know that in 1951, when, I admit, the price of wool did increase, our overseas balances increased to &#163;803,000,000 under the present Government, the highest level in Australia&#39;s history. In 1952, they fell to &#163;372,000,000. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1675</page.no>
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                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator Dittmer</name>
              </talker>
              <para>-  And the Government introduced the horror Budget. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1675</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator SCOTT</name>
              </talker>
              <para>- That, my friend, was when this Government had the courage to introduce measures which were termed, throughout the length and breadth of Australia, the horror Budget. Of course, the Government, being a responsible government, had to introduce severe measures to maintain the Australian economy. The Government had to tighten up on bank advances on that occasion and it had to impose a 20 per cent, deduction on the gross proceeds received from the sale of wool. That was not supposed to be a popular measure. Honorable senators opposite think that a government should always bring in popular measures. In that particular instance, members of the Opposition stood up and said they were speaking for the wool-growers of Australia, but neither the wool-growers nor the wheatgrowers of Australia will have a bar of the Australian Labour Party, because they know its history. </para>
            </talk.start>
          </continue>
          <para>In 1945, the then Labour Government, knowing full well that there was to be an election in New Zealand, sold wheat to the </para>
          <para class="block">Labour Government of New Zealand at 5s. 3d. a bushel, when the overseas price of wheat was 9s. 6d. a bushel. There was nothing in the agreement for the sale of that wheat to compensate the wheat-growers for the difference between the 5s. 3d. and the 9s. 6d. Later, the Government was forced to compensate the wheat-growers for that loss. The Australian Labour Party claims that it looks after the interests of the rural community. In 1951-52, when the horror Budget was introduced, the Opposition said that the Government was ruining the wool-growers. It claimed that it was the only party that was capable of looking after the interests of the rural community. But the horror Budget had the desired effect on the economy, despite its unpopularity. After the introduction of the horror Budget, our overseas balances rose from &#163;372,000,000 to &#163;561,000,000 in 1953. In 1954, our overseas balances stood at &#163;560,000,000. In 1957, they amounted to &#163;570,000,000. In 1958, they had fallen slightly to &#163;528,000,000. In 1959, our overseas balances were down to &#163;516,000,000, and at 30th June last they stood at &#163;512,000,000. To-day, mainly because of the fall in the price of wool, our overseas balances stand at slightly more than &#163;400,000,000. </para>
          <para>The Government and its supporters firmly &#39;believe that action must be taken to straighten out the economy. Earlier I mentioned that we have achieved full employment in Australia, but at this moment in New South Wales and Victoria we have a situation of over-full employment. That is bad for any country. In New South Wales and Victoria, two jobs are vacant for every person who is unemployed. We are reaching the stage where employers must bargain for labour. That is bad for the economy because it immediately has the effect of increasing costs. We are faced with slight inflation and over-full employment, but the Government is determined to take action which, in its opinion, will stabilize the economy. </para>
          <para>Having decided to remedy the situation, what measures should we adopt? One of the first measures necessary is to increase the bank interest rate. <inline font-weight="bold">Senator Dittmer</inline> said that nothing was being done to affect the operations of hire-purchase companies, but those companies are already paying tax at the rate of 8s. in the &#163;1, and  in  future they will not be allowed to claim a deduction for income tax purposes in respect of interest paid on money borrowed. So the hire-purchase companies have been affected by the Government&#39;s proposals. The banks will be allowed to increase to 4i per cent, the rate of interest paid on deposits for periods of twelve months. Where the period is six months or less the rate is to be 4 per cent. The Government&#39;s action will reduce the amount of money that is likely to be invested in hirepurchase companies, and will channel it into the banks by allowing the banks to pay a higher rate of interest. In turn, the banks will be allowed to increase their interest rates on overdrafts from 6 per cent, to 7 per cent. Whereas the average rate in the past has been 6 per cent., it will now be, I think, 6i per cent. </para>
          <para>Up to 1959 insurance companies invested approximately 39 per cent, of their assets in Commonwealth and semi-government securities. Over the past twelve or eighteen months the tendency has been to refrain from investing in such securities. In 1959, the assets of the insurance companies increased by &#163;90,000,000, but the companies invested only &#163;8,000,000 of that increase in Commonwealth and semigovernment securities. At some date in the future legislation will be brought down compelling the insurance companies to invest at least 30 per cent, of their assets in Commonwealth or semi-government securities. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1676</page.no>
                <time.stamp />
                <name.id>K6P</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">BROWN, Gordon</name>
                <name role="display">Senator Brown</name>
              </talker>
              <para>-  Did you say that they would be compelled to invest in that way? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1676</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator SCOTT</name>
              </talker>
              <para>- Yes. They will be compelled to invest 30 per cent, of their assets in Commonwealth and semigovernment securities. Two-thirds of the sum invested must be invested in Commonwealth bonds. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1676</page.no>
                <time.stamp />
                <name.id>K6P</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">BROWN, Gordon</name>
                <name role="display">Senator Brown</name>
              </talker>
              <para>-  How much have they invested now? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1676</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator SCOTT</name>
              </talker>
              <para>-  In the last twelve months their assets rose by &#163;90,000,000, but only &#163;8,000,000 was invested in Commonwealth or semi-government securities. The Government&#39;s action in this regard will increase the amount of money available for government securities and will restrain the insurance companies from investing their assets in hire-purchase companies and organizations engaged in importing large quantities of goods from overseas. </para>
            </talk.start>
          </continue>
          <para>In the last twelve months the banks have increased advances by about &#163;150,000,000, notwithstanding the fact that certain credit restrictions have been imposed by the Reserve Bank. Although the banks, acting on instructions from the Reserve Bank, have reduced overdrafts - probably those of people in the rural community, amongst others - they have channelled their funds to organizations engaged in the importation of non-essential goods. In February last, certain proposals were announced that were designed to check the inflationary spiral in this country. Those proposals were slowly having an effect on the economy, but when import restrictions were lifted we found that the value of imports rose steeply. Last month goods to the value of about &#163;100,000,000 were imported. If that rate were maintained our overseas balances would run down to a dangerously low level. </para>
          <para>In my opinion, the Government&#39;s proposals will have the desired effect. The Government has stated that it will ask the Reserve Bank to tighten credit to people and organizations engaged in the production or importation of non-essential goods, such as homes. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1677</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator Kennelly</name>
              </talker>
              <para>-  Homes are not imported. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1677</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator SCOTT</name>
              </talker>
              <para>- We are building at the rate of 100,000 homes a year to-day and we have to tighten up on that. In Western Australia, the major State of Australia, we have no shortage of homes at all. I think all honorable senators recognize that fact. The home-building rate in that State has reached a level of 20,000 per annum greater than it was twelve months ago. It is getting a little bit too high and we want to restrain it a little. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1677</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator Kennelly</name>
              </talker>
              <para>-  You want to reduce home building? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1677</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator SCOTT</name>
              </talker>
              <para>-  A little. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1677</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator Kennelly</name>
              </talker>
              <para>-  That is all right, as long as we know that. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1677</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator SCOTT</name>
              </talker>
              <para>-  Because of the state of the economy at the present time, I think it is necessary. I do not think that any one is not entitled to a home. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1677</page.no>
                <time.stamp />
                <name.id>KPK</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KENNELLY, Patrick</name>
                <name role="display">Senator Kennelly</name>
              </talker>
              <para>-  I am not worried about what you think; I only want to know what you said. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1677</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator SCOTT</name>
              </talker>
              <para>-  I stand by what 1 said; and what I have said can be found in the statement by the Minister. </para>
            </talk.start>
          </continue>
          <para>Because of the need to increase our export income, the Reserve Bank of Australia under instructions from this Government will request the trading banks to endeavour to make available adequate finance to those organizations and people producing goods that will earn Australia an increased export income. That is very important, because Australia has to increase its export earnings. It has been stated by the Export Development Council and by the Minister for Trade that Australia needs to increase its export income by &#163;250,000,000 a year in the next five years. It would appear that the only reasonable way to do that is to increase the products of our rural and mining industries. </para>
          <para>One of the reasons for the setting up of the Development Bank was to make money available for rural development. If we can make money available through that organization to our rural industries we can go ahead and increase their production and thus help to earn extra money for Australia. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1677</page.no>
                <time.stamp />
                <name.id>K6P</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">BROWN, Gordon</name>
                <name role="display">Senator Brown</name>
              </talker>
              <para>-  The job is to sell the products on the world&#39;s markets. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1677</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
                <party />
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                <in.gov>0</in.gov>
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                <name role="metadata">SCOTT, Malcolm</name>
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              <para>-  It is a problem at the present time to sell our wool at a reasonable price. The price of wool is below the cost of production but wheat and meat markets are quite healthy. In the last two or three months Australia has made record sales of wheat because of bad seasons experienced in Europe. It would appear that Europe has less stocks of wheat on hand this year than it had last year. Australia has also endeavoured to increase its mining production. Within the next three years, Mount Isa in the North of Queensland aims to increase its production from 8,000 tons to 20,000 tons a day. We have the new uranium mine at Mary Kathleen, and the new mine that was started during the last ten years in the Northern Territory. Instructions have been given to the Reserve </para>
            </talk.start>
          </continue>
          <para>Bank of Australia to help increase considerably the export income of our mining industries. </para>
          <para>As in the past, the Labour Party&#39;s criticism on this occasion falls short of the mark. The Government does not believe that there is any real need for worry in Australia. 1 was very interested to read the editorial in to-day&#39;s &#34; Daily Telegraph &#34;. It is headed. &#34;Don&#39;t let the Jeremiahs panic you &#34;. The Jeremiahs in this instance are members of the Labour Party. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1678</page.no>
                <time.stamp />
                <name.id>KNR</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">HANNAFORD, Douglas</name>
                <name role="display">Senator Hannaford</name>
              </talker>
              <para>- There are only a couple of them over there now. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1678</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator SCOTT</name>
              </talker>
              <para>-  We have driven them out. The editorial states - </para>
            </talk.start>
          </continue>
          <quote>
            <para>The Government has taken steps to correct the economy for the very simple reason that: </para>
            <para>It did not know wool prices would drop to the extent they have. </para>
            <para>It did not think the flow of imports, after the lifting of restrictions, would be as great as it has been. </para>
            <para>It was worried at the way hire-purchase companies were operating, and about their mushroom growth. </para>
          </quote>
          <para class="block">Then it goes on - </para>
          <quote>
            <para>But do the carping critics- </para>
          </quote>
          <para>They are the members of the Labour Party - ever look at this: We are one of the most prosnerous countries in the world. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1678</page.no>
                <time.stamp />
                <name.id>K6P</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">BROWN, Gordon</name>
                <name role="display">Senator Brown</name>
              </talker>
              <para>-  Who is this? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1678</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator SCOTT</name>
              </talker>
              <para>-  Australia under the present government. The article continues - </para>
            </talk.start>
          </continue>
          <quote>
            <para>We have low taxation, high wages, full employment good working hours and conditions. </para>
            <para>We have in fact everything that makes life worthwhile. </para>
            <para>And we can thank the Menzies Government which has held the reins for the past eleven years. </para>
            <para>The &#34; Herald&#34;&#34; Sun &#34; and &#34; Mirror &#34; can have their Calwells and Wards. </para>
            <para>What are their suggestions? How would they handle a situation like the one facing <inline font-weight="bold">Mr. Holt?</inline> It&#39;s a thought too terrifying to contemplate. </para>
          </quote>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1678</page.no>
                <time.stamp />
                <name.id>K6P</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">BROWN, Gordon</name>
                <name role="display">Senator Brown</name>
              </talker>
              <para>-  Now read what the &#34; Herald &#34; had to say. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1678</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator SCOTT</name>
              </talker>
              <para>-  I will leave that to you.  I  am telling you what one of the leading newspapers in Australia - a truthful newspaper - has said. The Government has looked after the economy of this country during the last eleven years, and in the whole of that time it has never allowed unemployment to rise above 2 per cent. The Labour Party has never been able to do that. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1678</page.no>
                <time.stamp />
                <name.id>K6P</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">BROWN, Gordon</name>
                <name role="display">Senator Brown</name>
              </talker>
              <para>-  Congratulations. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1678</page.no>
                <time.stamp />
                <name.id>K5K</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
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                <name role="metadata">SCOTT, Malcolm</name>
                <name role="display">Senator SCOTT</name>
              </talker>
              <para>-  I think we will accept your congratulations because that is an achievement of which Australians can be proud. The people know at this moment that the Government is taking these actions because they are necessary. They know full well that within twelve months the nation will have ridden out this storm and will be on a safe, steady sea again. They know that the ship will not be wrecked. They know they are safe under this Administration. Therefore,I support the statement of the Minister. &#91;Quorum formed.&#93; </para>
            </talk.start>
          </continue>
          <para>Suspension of Standing Order. </para>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1678</page.no>
              <time.stamp />
              <name.id>K6P</name.id>
              <electorate>Queensland</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">BROWN, Gordon</name>
              <name role="display">Senator BROWN</name>
            </talker>
            <para>.- I  move - </para>
          </talk.start>
          <quote>
            <para>That so much of Standing Order No. 63  be  suspended as would prevent me moving  the  adjournment of the Senate. </para>
          </quote>
          <para class="block">I take this action in order to move for the adjournment of the Senate. </para>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1678</page.no>
              <time.stamp />
              <name.id>JZY</name.id>
              <electorate>Western Australia</electorate>
              <party>LP</party>
              <role>Minister for Civil Aviation</role>
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PALTRIDGE, Shane</name>
              <name role="display">Senator PALTRIDGE</name>
            </talker>
            <para>. - Standing Order No. 63 reads - </para>
          </talk.start>
          <quote>
            <para>The adjournment of the Senate may be moved at any time by or on behalf of a Minister of the Crown, and on such motion matters irrelevant thereto may be debated. </para>
          </quote>
          <para class="block">I submit that <inline font-weight="bold">Senator Brown</inline> cannot propose this motion as he is not speaking on behalf of a Minister. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1678</page.no>
                <time.stamp />
                <name.id>K6P</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">BROWN, Gordon</name>
                <name role="display">Senator Brown</name>
              </talker>
              <para>-  In order to save time. I am prepared to withdraw the motion. </para>
            </talk.start>
          </interjection>
          <para>Motion - by leave - withdrawn. </para>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1678</page.no>
              <time.stamp />
              <name.id>K6P</name.id>
              <electorate>Queensland</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">BROWN, Gordon</name>
              <name role="display">Senator BROWN</name>
            </talker>
            <para>.- Now that the numbers have increased a little, I shall say a few words. I shall not detain honorable senators for very long, as I understand that <inline font-weight="bold">Senator Lillico</inline> wants to speak. The debate has been very interesting, indeed. As usual, of course, our friends on the other side have, metaphorically speaking, patted themselves on the back and told us what wonders have  been  performed by <inline font-weight="bold">Mr. Menzies</inline> and those  who  support him. We have been accused  of  being Jeremiahs. I have never  been  a </para>
          </talk.start>
          <para class="block">Jeremiah. I have always said that where the modern capitalist economic system is being rapidly developed we will find the greatest employment and the workers will be able to command the highest price for their labour. I remember saying many years ago to our departed friend, <inline font-weight="bold">Mr. Chifley,</inline> that I was in favour of getting the greatest amount of capital possible from outside sources for the development of Australia. He said that that would be putting Australia practically into pawn. I said: &#34; We can do what other countries have done, and I am not very concerned about the future. All that I am concerned about is the rapid development of Australia, the employment of its people, and the migration here of hundreds of thousands of people so that we can populate Australia and make it as safe as possible against the encroachment of those who would like to possess it.&#34; That is my view to-day. The more capital I see coming into this country under the capitalist system the better it suits me and the mass of the people, and the more quickly will we be able to people this country and safeguard it. </para>
          <para>Government supporters have engaged in self-flattery, and have told us what they have done. They never refer to the basis for development that was laid by Labour. In this political game we always inflate, glorify or enlarge what we have done and decry what others have done. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1679</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator Dittmer</name>
              </talker>
              <para>- Not on this side of the chamber. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1679</page.no>
                <time.stamp />
                <name.id>K6P</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">BROWN, Gordon</name>
                <name role="display">Senator BROWN</name>
              </talker>
              <para>- I have had 60 long years in politics since I was a boy of fifteen, and I know the game from A to Z. When you are on the platform, you tell the story to win the votes so you can get into Parliament and have a majority. I do not blame <inline font-weight="bold">Senator Spooner</inline> for speaking as he did to-day. He is a wily old bird. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1679</page.no>
                <time.stamp />
                <name.id>K2N</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">RIDLEY, Clement</name>
                <name role="display">Senator Ridley</name>
              </talker>
              <para>- Does he believe what he said? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1679</page.no>
                <time.stamp />
                <name.id>K6P</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">BROWN, Gordon</name>
                <name role="display">Senator BROWN</name>
              </talker>
              <para>- That does not matter. He is there to put his case for his party and make out that all is well in the best of all possible worlds. It was the same with <inline font-weight="bold">Senator Scott,</inline> who quoted from the Sydney &#34; Daily Telegraph &#34;. I do not blame him for doing that. He did not refer to the &#34; Sydney Morning Herald &#34; or 101 other papers up and down Australia, which bitterly criticized the Government because it is treading on the corns of vested interests. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1679</page.no>
                <time.stamp />
                <name.id>JUM</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">DITTMER, Felix</name>
                <name role="display">Senator Dittmer</name>
              </talker>
              <para>- He did not care about the millions who are suffering under the Government&#39;s maladministration. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1679</page.no>
                <time.stamp />
                <name.id>K6P</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">BROWN, Gordon</name>
                <name role="display">Senator BROWN</name>
              </talker>
              <para>- Of course, many are suffering to-day. Certain amelioratory measures have been suggested to overcome the difficulties. There are difficulties. Government supporters in this chamber and in the other place have admitted the existence of these difficulties. Some say that there is a crisis. Others, including <inline font-weight="bold">Mr. Menzies,</inline> say that the difficulties are only temporary, and that there is no real crisis. The Government is imposing an extra 10 per cent, sales tax on motor vehicles. It says that it will strike back at the fringe bankers, adjust overdraft rates, and abolish taxation rebates on interest received by people who use capital in a certain way. These paltry measures are of little value as a solution of the main problem of inflation. I admit that economists fall out and do not always agree with each other; but to economists and other people with high intelligence in Australia, it is as plain as plain can be that the legislation which it is proposed to introduce will not overcome the difficulties that confront us at the present time. Such measures will have no practical effect at all in overcoming inflation. </para>
            </talk.start>
          </continue>
          <para>We live under a system of financial capitalism. Those who run that system and make a profit out of it will, to the best of their ability and regardless of the interests of the nation, grab all they can get their hands on. They are doing so to-day. As has been pointed out by <inline font-weight="bold">Senator Wright</inline> and other honorable senators, even though legislation is enacted to impose on the fringe bankers, as they are called, certain deterrents by way of income tax provisions and so on, those people are so cunning and so resourceful that there is no doubt they will adopt other methods to beat the Government. From what I can see of trends in this country and in most other countries, an intense effort is being made by the financial capitalists to dominate the producers, such as the farmers and the workers. The farmers of this country are suffering because we are dominated by financial capitalists. The first consideration of the money mongers is their wealth and the working of the monetary system. There are many people, not exactly workers in the sense that they work for wages, such as those who manage engineering works, who are doing a real and an honest-to-goodness job in the community. They are producing wealth. Yet, they are dominated and controlled by financial interests. </para>
          <para>Only recently, I was speaking to the manager of a firm who told me of the pressure that was being brought to bear on him by the Broken Hill Proprietary Company Limited. A few months ago, in Brisbane, I was speaking to a man who was doing refrigeration work on a big scale in various industrial buildings, shops, and so on, and he informed me that because he was doing his work for a lower charge than were others similarly engaged, his supply of steel had been stopped. I know of a certain jeweller who wanted to become a wholesale jeweller. When that became known, the wholesale jewellers wrote to him and told him that if he continued his efforts to become a wholesale jeweller they would stop supplies of goods to him. We know that things like that are going on. </para>
          <para>Throughout Australia to-day bitterness is being engendered amongst men who are the real workers and producers of the country - not only farmers, but also city workers and businessmen of every description - because the claws of financial capitalism are seizing upon their entrails. We are faced, and have been faced for many years, by constant inflation, perhaps more particularly so under this Government than was the case previously. Let us consider the steps that the Government proposes to take to arrest inflation. I do not propose to criticize the measures in a paltry way but to look at them from a national point of view. The Government proposes to attempt to solve the problem by increasing the sales tax on motor vehicles from 30 per cent, to 40 per cent. As <inline font-weight="bold">Senator Wright</inline> has asked: What will be the effect of that? I was in contact to-day with people engaged in the motor industry in Brisbane, and I was informed that the immediate effect of the increase of sales tax was to cause second-hand dealers to increase the price of cars they have for sale. Many people, instead of buying new cars, will now spend their money on second-hand cars. How far will that go towards solving the problem of inflation? There will no doubt be a decline in the demand for new cars. But why has not the Government also sought other methods to solve the problem? I admit that the Government supports the capitalist system, which is not a Labour system. The Government has the ball at its feet and it, not the Opposition, must find the solutions of the problems that arise. </para>
          <para>If the Government can cause a diminution of several million pounds in expenditure on the purchase of new cars and also prevent people from buying second-hand cars, that action may have some influence on the economic problems. But why has it failed to turn its attention to other sections of the community? I recall that some years ago, after the Government had played ducks and drakes with the economy and removed restrictions on imports, all kinds of luxury goods came flooding in. I think it was <inline font-weight="bold">Senator Armstrong</inline> who pointed out that such things as frogs&#39; legs preserved in aspic, musical toilet rolls and much other rubbish, came into this country. Millions of pounds were spent on the importation of paltry goods. After all, shopkeepers are concerned only with making a profit. If they can import musical toilet rolls and other articles on which they can make a profit, they will not bother about the interests of the country. They will buy hundreds of pounds worth of commodities of that kind if they can make a profit by selling them. </para>
          <para>I ask <inline font-weight="bold">Senator Paltridge</inline> whether the Government is afraid to take action similar to that which it has taken in the past, or whether it is ashamed to do so. If there is a crisis or economic trouble, why concentrate on the motor car industry? I hold no brief for that industry. Indeed, I do not drive a motor car now, since I have had two operations on my eyes. I have not renewed my licence. I think that all honorable senators have received from the Federal Chamber of Automotive Industries a copy of the &#34; Commonwealth Automotive Review &#34;, in which in the form of a letter addressed to the Prime Minister, that journal states - </para>
          <para class="block">Dear <inline font-weight="bold">Mr. Menzies,</inline></para>
          <para>I have been requested by our members to lodge a strong protest at the discriminatory treatment meted out to the &#39;motor industry through the recent raising of the sales tax level on cars and station wagons. We fail to understand why the burden of repressive measures should have been placed, once again, within a short span of less -than five years, on the motor industry . . . </para>
          <para class="block">Why pick on that industry? I am not arguing that it is not necessary for the Government to adopt certain measures to overcome its economic and financial difficulties; but surely other industries could have been looked at, such as industries producing luxury goods, and measures applied to them that would help the Government to achieve the purpose it has in mind. Instead, it has picked on the motor industry. The letter to which I have referred continues - </para>
          <quote>
            <para>Apart from the unemployment which will inevitably occur in some thousands of retail vehicle establishments, there is bound to be severe retrenchment of staff in the factories which produce vehicles and parts . . . </para>
          </quote>
          <para class="block">I am not a Jeremiah. I realize that we have had wonderful seasons and that this country has forged ahead. Except when we are trying to win a few votes, I am not so stupid as to say that the whole of the credit for the development of Australia should go to the Senate and the House of Representatives. To say that would be utter bunkum. But what I do say is that, when there is a fear of unemployment, we members of the Labour Party should speak out in an effort to offset it. It is our duty to do that, just as it is our duty to criticize the Government. </para>
          <para>
            <inline font-weight="bold">Senator Spooner</inline>said that the Opposition had not placed one suggestion before the Government to correct the present state of the economy. It is not our duty to make such suggestions. The Government is in the saddle; it has the numbers. But, according to the. press, over the last few months it has failed to take appropriate action. Let me read what <inline font-weight="bold">Mr. H.</inline> C. G. Marshall, the general manager of the Bank of New South Wales, had to say. He said - </para>
          <quote>
            <para>The rate of increase in advances in the last year has been substantial, but the trend was known to the Government week .by week. </para>
          </quote>
          <para class="block">Those trends have been known to the Government all the time, but it is only within the last few weeks that it has brought out its plan of action. In my opinion and in the opinion of several honorable senators opposite, that plan will not achieve what the </para>
          <para class="block">Government says it will achieve. <inline font-weight="bold">Sir Thomas</inline> Playford said - </para>
          <quote>
            <para>We are living beyond, our incomes. We are borrowing to make up the deficit, and we are paying the highest interest rates for the least desirable loans. </para>
          </quote>
          <para class="block">These two men are of the same kidney as are honorable senators opposite. They support the Government. The press also said that the Government knew of the trends. But it said that the Government had been lax in bringing forward remedies. The Government has allowed things to pile up. </para>
          <para>Members of the working class do not worry about banks and interest rates. They do not worry about the squabbles that occur between the different vested interests. The working people are concerned mainly about their jobs. Members of the Labour Party are concerned mainly about that matter too. That is why we want to see the country run properly, even though a tory government is in office. I could speak for another hour, but I shall not do so because I believe that a couple of our friends want to have a say. </para>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1681</page.no>
              <time.stamp />
              <name.id>KRG</name.id>
              <electorate>Tasmania</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">LILLICO, Alexander</name>
              <name role="display">Senator LILLICO</name>
            </talker>
            <para>
              <inline font-weight="bold">.- Senator Brown</inline>said that he knew politics from A to Z. If he does, he is probably the only man in Australia who does. </para>
          </talk.start>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1681</page.no>
                <time.stamp />
                <name.id>K6P</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">BROWN, Gordon</name>
                <name role="display">Senator Brown</name>
              </talker>
              <para>- Perhaps that was an exaggeration. One lives and learns. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1681</page.no>
                <time.stamp />
                <name.id>KRG</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">LILLICO, Alexander</name>
                <name role="display">Senator LILLICO</name>
              </talker>
              <para>-  I have always thought that one could continue to learn in this world. It would seem that most honorable senators are eager for the debate to be curtailed. In spite of that, I have a few observations that I should like to make. I have listened with interest to most of the debate. I have listened to most of the criticisms that have been offered and the few suggestions that have been made by honorable senators opposite to correct the present state of the Australian economy. I believe it was <inline font-weight="bold">Senator Cant</inline> who said that a measure should be introduced to control restrictive business practices. I understand that the Government is working towards that end. I agree that we do not want to find ourselves in the position that existed in America in the early part of this century, when small businesses either went to the wall or were absorbed by trusts and combines. </para>
            </talk.start>
          </continue>
          <para>I look askance at the exorbitant profits that are made by a lot of companies in </para>
          <para class="block">Australia. But I take a good deal of comfort from the fact that approximately onethird of those profits are paid out in the form of income tax, and that another onethird are ploughed back into industry. As I have indicated, the Government is moving towards the introduction of legislation to control restrictive trade practices. I am sure we all appreciate that the preparation of such legislation is a difficult task - that such legislation requires a good deal of consideration and that it cannot be framed within a limited period. I agree with the Leader of the Government in this chamber when he says that to suggest putting the whole galaxy of powers recommended by the Constitutional Review Committee to the people by way of a referendum is to adopt a negative attitude. I have heard it suggested ever since I became a member of the Senate that possession of these powers by the Commonwealth provide a solution of all the problems that afflict this country. Those who make that claim do not say how the powers would operate. It certainly is a negative approach to suggest that at this critical time in our history we should submit twenty-odd proposals to the people as a remedy for the ills that afflict the Australian economy. </para>
          <para>The Constitutional Review Committee was set up by this Parliament. Indeed, it was composed of members of the Parliament. Quite naturally, it indicated in its report just what powers it thought the Parliament should take to itself to enable it to be fully equipped to deal with any matters that come before it. Let me remind the Senate that the Commonwealth is a federation of the States. There are people who do not value the federation, and who want to see it pulled down to such a degree that it would virtually cease to exist. Any referendum to decide whether the powers recommended by the Constitutional Review Committee should be given to the Commonwealth might well evoke a good deal of opposition. May I say this in regard to the setting up of the Constitutional Review Committee: Before the committee sat, six men, half of the committee, were pledged to support any aggregation of power to the Commonwealth. Six of its members owe allegiance to a platform which says that the Commonwealth Parliament should be clothed with unlimited power. So, any move to detract from the powers of the States and to aggregate more power in this Commonwealth Parliament, and any move to destroy the federation, would be certain to obtain their support. In my opinion, it was entirely the wrong sort of committee to set up to review such an important subject as the Constitution of the Commonwealth of Australia. </para>
          <para>During the past few months we have been told a good deal to the effect that the whole of our f uture economy depends upon increasing our export trade. I believe that the Minister for Trade <inline font-weight="bold">(Mr. McEwen)</inline> has striven manfully in trying to bring about an increase in our exports. He has said that unless we can increase our exports by &#163;50,000,000 a year it will not be possible even to maintain our existing high standard of living and to continue the development that has taken place, principally since this Government came into office. The difficulty is that we have built up an edifice of costs that cannot be supported by our existing export trade. There are two ways in which that position can be counteracted, namely, by increasing our export trade or. in some other way, reducing the costs that accrue to the people who produce for export. </para>
          <para>It seems to me to be incongruous that we in this place spend so much time discussing matters such as what controls should operate in this direction and in another direction when, as the Treasurer <inline font-weight="bold">(Mr. Harold Holt)</inline> has pointed out, Australia is among the first twelve great trading nations of the world, both in quantity and value of exports, in spite of its comparatively small population. It seems incongruous to me that we should spend so much time discussing these matters when the exports and imports about which I have spoken are carried by ship. </para>
          <para>When I arrived in Melbourne on Monday, I went into the terminal building at Essendon airport and bought a newspaper. The first thing I saw in it was a statement that 50 ships had been tied up in the Port of Melbourne. Yesterday T opened another newspaper and read that those ships had been tied up for five days in succession. Surely to goodness, that sort of thing adds fuel to the fires of inflation. It must impose a penalty on  everything that is exported from this country and it must impose a similar penalty on everything that is imported. This is the position in spite of the fact that I suppose we have the most elaborate wagefixing and condition-fixing paraphernalia in the world, which is operated at a great cost to the Australian people. It is one of the bottlenecks that are strangling the economic development of Australia. </para>
          <para>Last night <inline font-weight="bold">Senator Kennelly</inline> said that the waterside workers were good fellows. I agree with him that probably the majority of rh::r) <inline font-style="italic">:\rc</inline> good fellows, but they are badly led. They are led by people who have a vested interest in the destruction of the Australian economy. I do not know how that situation can be remedied. While it continues and there are troubles in other Communist-dominated trade unions which undeniably are led by men who do not want to see Australia develop but are dedicated to the destruction of its economy, and until a stand similar to the stand that was taken in New Zealand some years ago is taken, for the life of me I cannot see how this country can prosper as it should prosper. lt seems to mc to be ridiculous that, as I heard stated in another place only last night. <inline font-weight="bold">Mr. Healy</inline> of the Waterside Workers Federation was one of the people who were asked to participate in the export convention that was held in Canberra some months ago. Having regard to the philosophy that emanates from <inline font-weight="bold">Mr. Healy</inline> and others of his ilk, it is perfectly certain that he would not be interested in increasing Australia&#39;s export trade. Until a solution can be found to obviate the farcical position that has existed for so long of wages chasing prices, or the other way round - whichever way you like to put it - I must agree with <inline font-weight="bold">Senator Wright&#39;s</inline> contention that the Commonwealth Conciliation and Arbitration Commission should show a greater appreciation of values in the fixing of wages and conditions. We have to approach these questions with a new slant and a new realization that costs cannot keep increasing forever; that there has to be a limit somewhere, unless we are to arrive at the position that existed in Germany when one could buy a one million mark note for 2s. or 3s. </para>
          <para>It is all very well for <inline font-weight="bold">Senator Cant</inline> to accuse <inline font-weight="bold">Senator Wright</inline> of clamping down on the workers, but where are we to stop? Will this position exist forever, or until costs go right up through the roof and the economy collapses under the strain? 1 repeat that I believe that those are the factors that have caused the inflationary spiral. I do not think the complete solution is to be found by altering the Constitution to permit control of all aspects of the economic life of this country. I do not believe that the solution to the problem is to be found in control of prices. Prices control is no more than a means of indexing price rises. Prices control does not get down to the basic cause of the trouble that afflicts the economy of Australia. Until the great majority of the people realize that real value comes from greater productivity, no government, not even one clothed with all the power with which the New Zealand Government is clothed, can find the complete solution to our economic ills. </para>
          <para>I welcome the Government&#39;s proposals to increase the bank overdraft interest rate. I was interested to read the Treasurer&#39;s statement that advances outstanding had increased by no less than &#163;150,000,000 in twelve months. I would be interested to know where those advances have gone. T live amongst farmers, and I know that they can obtain substantial accommodation from the banks only with the very greatest of difficulty. I know of one man who has assets worth more than &#163;30,000. He sought bank accommodation to the tune of &#163;4,000. which he would have spent on developmental work. He was requested to hand to the bank the deeds of his property. An inventory was taken of all his stock, including even his old motor car. In addition, the local bank had to obtain authority from its head-quarters before it was able to proceed with the transaction. Other farmers have experienced similar difficulties in their attempts to obtain bank accommodation. The &#163;150,000.000 referred to by the Treasurer certainly did not provide accommodation for primary producers. It may well be that that money was used to provide accommodation for importing companies and other people. Some of that money may have found its way into hire purchase, but it has not been used to offset the disadvantages under which primary producers work. T have referred to primary producers because they are the people to whom  we look when we seek to increase our export trade. </para>
          <para>I note that the Treasurer stated that the Reserve Bank will request that as a general rule the banks should continue to provide preferential rates below the average for export producers in the rural and mining industries.I sincerely hope that the banks will do that. I hope that the trading banks will be more generous in their treatment of export industries than they have been in the instances that have come to my notice. </para>
          <para>The proposals put forward by the Government are not very palatable to a large number of people. That is inevitable where proposals of this kind are concerned. Proposals designed to correct evils in the economy never are very palatable. However, I cannot help but look askance at the proposal to increase the sales tax on motor cars and other vehicles. Surely motor cycles and motor scooters are not used extensively, yet it is proposed to increase the rate of sales tax on such vehicles from 16 per cent. to 25 per cent. It seems to me that if the rate of sales tax on motor cars is increased from 30 per cent. to 40 per cent. there is a good deal of room for the contention that you immediately thereby boost the sales value of second-hand cars. There was some merit in <inline font-weight="bold">Senator McKellar&#39;s</inline> remarks on this matter. He referred to cars that he has seen occupied by one or two people only. To primary producers who have suffered a decline in their incomes and an increase in their costs, a car is an absolute necessity. I look askance at any suggestion that the sales tax on such vehicles, which is already high, should be increased beyond its present level. I doubt very much whether it will have the desired effect of curtailing expenditure in this country on motor vehicles and all that goes with such expenditure. I think that despite an increase in sales tax, people will continue to purchase motor cars and that the position in this regard will not change. </para>
          <para>Debate interrupted. </para>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>ADJOURNMENT</title>
        <page.no>1684</page.no>
        <type>adjournment</type>
      </debateinfo>
      <para>The <inline font-weight="bold">DEPUTY PRESIDENT (Senator the</inline></para>
      <interjection>
        <talk.start>
          <talker>
            <page.no>1684</page.no>
            <time.stamp />
            <name.id>K2G</name.id>
            <electorate />
            <party />
            <role />
            <in.gov>0</in.gov>
            <first.speech>0</first.speech>
            <name role="metadata">REID, Albert</name>
            <name role="display">Hon A D Reid</name>
          </talker>
          <para>-  Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question - </para>
        </talk.start>
      </interjection>
      <quote>
        <para>That the Senate do now adjourn. </para>
      </quote>
      <para>Question resolved in the affirmative. </para>
    </debate>
    <adjournment>
      <adjournmentinfo>
        <page.no>1684</page.no>
        <time.stamp>22:30:00</time.stamp>
      </adjournmentinfo>
      <para>Senate adjourned at 10.30 p.m. </para>
    </adjournment>
  </chamber.xscript>
</hansard>