COMMONWEALTH OF AUSTRALIA
SPEECH BY
The Rt. Hon. HAROLD HOLT, M. P.,
ON
APPROPlUATION BILL ( No. 1) 1966-67
SECOND READING
( BUDGET DEBATE)
( From the " Parliamentary Debates," 25th August 1966]
Mr. HAROLD HOLT ( Higgins-Prime
Minister) [ 9. O].-The House gave the
Leader of the Opposition ( Mr. Caiwell),
under our Standing Orders, unlimited time
to deal with the Budget. He seized the
occasion to make it a workout for his
election campaign. Indeed, in the latter
portion of his speech he cast aside all
pretence of Budget consideration and gave
us his familiar onslaught on the Government's
military participation in South
Vietnam. Since he speaks as the leader of
the only alternative government which can
be formed from the Parliament his comment,
however wrongheaded it may be in
our view, cannot be ignored, so I speak to
it tonight. He charges the Treasurer ( Mr.
McMahon) and the Government with
having failed completely to face up to their
national responsibilities in defence, education,
health, pensions, housing, northern
development, child endowment, the abolition
of the means test, maternity allowances,
wage and salary justice and control of
prices and interest rates.
Mr. Pollard.-How right he was.
11066/ 66 Mr. HAROLD HOLT.-He always has
been right in the honorable member's eyes,
and I give the honorable member credit
for his loyalty; it is as * rare as it is
refreshing. The implication in the Leader
of the Opposition's speech is that there
is no upper limit to Commonwealth
expenditure. I did not hear him at any
point indicate any direction in which the
Budget provisions should be reduced. I do
not think he argues that any of them should
be reduced. I do not want to misrepresent
' him, but I think that is his position. If
that is so-and he has a list of glittering
undertakings-then all we can assume from
this is that there is no upper limit and
that the sky indeed is the limit. In our
view no responsible government with its
obligation for the wellbeing of the
economy could accept this viewpoint. It
is a view that ignores the huge increase in
expenditure already proposed in this
year's Budget and the increases of recent
years. We heard the honorable gentleman
promise the abolition of the means test,
and it is a very attractive proposal.
Mr. Calwell.-That is right. Attractive
proposals. Mr. HAROLD HOLT.-Did the honorable
gentleman not promise the abolition?
Mr. Calwell.-I suggested attractive
proposals for its abolition.
Mr. HAROLD HOLT.-The honorable
gentleman talked about the abolition of the
means test as being one of the matters that
the Treasurer had failed to meet.
Mr. Calwell.-That is right.
Mr. HAROLD HOLT.-The honorable
gentleman made no reference to the cost
of his proposals for the abolition of the
means test. He must be aware that the
complete abolition of the means test would
cost, on present entitlements, $ 300 million.
It would also result in the virtual doubling
of expenditure, now running at the rate of
$ 63 million a year, under the pensioner
medical service. I shall have a little to
say in a moment about social welfare, but
I give these figures as indicating to the
House just how irresponsible is the honorable
gentleman's whole approach. He gave
no indication of what the cost of his alternative
proposals would be on the Budget of
any particular year. We are charged with
not making adequate progress in the affairs
of the economy. Let me point out that
Commonwealth expenditures last year were
more than double the level of ten years
earlier. They rose by $ 600 million in 1965-
66 and they are estimated to increase by
a further $ 600 million to almost $ 6,000
million this year. No responsible government,
I repeat, could superimpose on these
increases further large amounts such as the
Leader of the Opposition appears to have
in his mind. Indeed, the level of Commonwealth
expenditure is a broad indication
of the extent to which the Government is
drawing for its purposes on the resources
available to the community. It must not
draw so heavily as to cripple the private
sector. As a government we have tried to
strike a balance between public and private
spending-a balance which will best promote
the progress and economic wellbeing
of the economy and of the Australiar
people. We have objectives of an economic kind
which are well known. We have mentioned
them in every Budget in recent years. We
have the objective of national growth. We
press on with the development of Australia's
resources. We associate with that,
full employment for our people. We have
a sustained programme, on a large scale,
of immigration with all the pressures that
this adds to an economy which, at present,
' is not merely trying to provide as much
of its own capital facilities as it can but
has to cope with an enormous increase in
our defence provision.
Dr. J. F. Cairns.-The Prime Minister
sounds like Blue Hills
Mr. HAROLD HOLT.-The honorable
gentleman is much more entertaining, but
much -less sincere, and I am prepared to
leave it on'that footing. We ' have sustained
these objectives quite consistently throughout
our period of office. The Leader of the
Opposition speaks of the lack of confidence
on the part of business in the future growth
of the economy. What of the lack of con-
. fidence if by some miracle a Labour government
were to come into office? What lack
of confidence is there in the community
when on the last quarter's showing our
housing commencements were at the rate
of 113,000 a year and when our people
are enjoying one of the highest standards
of housing to be found anywhere in the
world? No country ' has a higher percentage
of owner occupancy than this country.
Mr. Hayden.-How is private investment
going? Mr. HAROLD HOLT.-I will tell the
honorable member in a moment.
Mr. Hayden.-It was half a million
dollars last year.
Mr. DEPUTY SPEAKER ( Mr. Lucock).
-Order! I warn the honorable member
for Oxley.
Mr. HAROLD HOLT.-No other country
has a higher number of houses containing
five rooms or more. No other country
has a higher percentage of owner occupancy-
70 per cent.-than has Australia. I
mention this because time tonight is not
going to enable me to give many illustrations
of the current state of the economy.
I will have half the time that the Leader
of Opposition was able to take. However,
there we have a barometer indication of
, the current state of the economy. The
present level of unemployment registrations
throughout the whole of Australia is 1.2
per cent. Do honorable gentlemen opposite
regard that as evidence of stagnation? This
is the situation in a year in which-and
there was no acknowledgement of this from
' honorable gentlemen opposite-this country
has, so far as the two principal pastoral
States of the Commonwealth are concerned,
passed through one of the most
serious droughts in our history. We have
some figures about the drought's effect on
our sheep population. During the year our
sheep numbers dropped by 14 million
whereas normally there is an increase of
6 million in the total Of OUr flocks. So in
a year when Australia sustained a total loss
of 20 million sheep our economy went
on almost without fluctuation, with about
99 per cent. of our people regularly in
employment and with work vacancies still
offering. The economy moved on. Only a
few years ago a drought of this degree
would have had disastrous consequences
for the Australian economy, so it is a
measure of the diversification of the Australian
economy and its basic strength that
we were able to come through this difficult
period of adjustment with so little dislocation
in the affairs of most of the citizens
of our country. I am asked about private
investment. Ninety per cent. of the capital
fixed investment in this country is provided
inside Australia itself. Despite our difficulties,
we provided last year-
Mr. Hayden.-Yes, but how much this
year? Mr. DEPUTY SPEAKER-Order! The
honorable member for Oxley should recall
what was said to him by the Chair only
a few -minutes ago.
the eqHlARLD HOLT.-We provided
last year, out of our own savings,
of our gross national product for the
purposes of capital fixed investment. There
as only one country in the world which
exceeds that percentage. It is Japan. It is
of interest to note that in the last year in
which honorable gentlemen opposite were
in office 20 per cent. only was so invested. That was not a bad performance at all at
that time, but ours is a good deal better
than they were able to produce.
There has been talk about stagnation and
lack of development. The honorable member
for Dawson ( Dr. Patterson) is very
eloquent on the lack of development. I
would remind him that I was in Townsville
a couple of weeks ago, going through the
formal ceremonies of launching a major
university and a major military establishment
there, both flowing from the policies
of this Government. Only today, members
of the Government have been sitting in
consultation, with State Ministers to consider
the question whether the Ord River
project should be developed further. I
know that honorable gentlemen opposite
say: " Of course we will develop the Ord.
Of course we will give the Snowy Mountains
Authority an opportunity to carry on
its work. We will jump on every bandwagon
that will -give us one vote tas it
passes In his Budget speech the Leader
of the Opposition offered a whole shooting
box of attractive proposals. Any time honorable
gentlemen opposite can, in a completely
reckless and irresponsible way,
undertake to do something which they
-think will attract a little passing support,
they do not hesitate to do so. Do they
think that the people can be -fooled as
easily as that?
The Leader of the Opposition, in his
Budget speech, said that there had been
no improvement in real wages during our
teryn of office.
Mr. Calwel.-It is completely true, too.
Mr. HAROLD HOLT.-He repeats
that statement tonight, but it cannot stand
up to the facts. The honorable gentleman
gave the figures for two years, 1964-65
and 1965-66. Well, the Consumer Price
Index had moved 7.5 per cent, over those
two years. The average weekly earnings
per employed male unit-that is the test of
what people are actually -receiving in this
country-had gone up 12.6 per cent. As
we know, the honorable gentleman is never
very happy when making speeches on
Budgets. He does a rather laboured job of
reading an unfamiliar document, and when
he interposes an aside of his own he usually
finds he has fallen into economic error. In
his speech the other night-I have no doubt
that everybody above grade 2 at school
who listened in picked up his error-he
gave figures on this real wage argument
and talked about how the Consumer Price
Index had -risen from 127 to 132.1.
, Mr. Calwell.-They are the figures of a
Government department.
Mr. HAROLD HOLT.-Yes, but it was
the honorable gentleman who said there
had been a rise of over 5 per cent.' I hope
he does not repeat the error this time. In
the subsequent 12 months he said, the
Consumer Price Index has risen another 3.7
per cent., which means a rise in prices of
nearly 9 per cent. in two years." He also
brought in the food component of the Index,
which he said had risen from 128.5 to
135.9. That was a rise, he said, of over
7 per cent. I think my colleague, the Postmasteir-
General ( Mr. Hulme), would quickly
correct the honorable gentleman's arithmetic
on that. I mention that because the
honorable gentleman went on in the course
of comment to say-
I hate to bore the House with these figures, but
they are important.
One might reasonably ask: If they are as
important as all that, why does he make
errors of 20 per cent. and 25 per cent, in
his recital of them. The increase in the
Consumer Price Index was not 5 per cent.,
or over 5 per cent., as the honorable gentleman
said. Indeed, the arithmetic will quickly
establish this. It was in fact 4 per cent.
So he was 25 per cent, in error there. In
the following year the Index increased by
3.7 per cent., and the honorable gentleman
was out 12 per cent, there. The increase
over the 2-year period referred to by the
Leader of the Opposition was 7.5 per cent.,
so he was 7 per cent, out in that particular
comment. It is not of any great importance,
except that the honorable gentleman himself
said it was important. Of course, the
relativity movements in the Consumer Price
Index is of itself significant in relation to
movements in wages and the standards
of the community.
The honorable gentleman went on then
to talk about the rise in prices and how
this is without control under the Government.
My colleague could point out to him.
that in the last two Budgets this Government
increased taxation by over $ 7 Thillion
on both occasions and that these taxation
Wi 7. increases, falling, as they did, heavily on
consumption items, of course had some
impact on the Consumer Price Index. So
too did the drought, with its effect on meat
prices. What should in all fairness be taken
as the test is the run, as the Treasurer
gave it, over the five-year period, which
showed that Australia had enjoyed a remarkable
period of stability, equalled by very
few countries in any other part of the world.
One could go through every aspect of this
Budget and find answers which would completely
demolish the arguments which the
honorable gentleman has brought to it.
Coming to social welfare, no section of
the Parliament has a monopoly of consideration
or concern for the aged or for
those who are invalided, and the present
Government has a record in that regard
unmatched in the history of this Parliament.
When I say " the present Government" I
refer, of course, to the Government of my
distinguished predecessor over the period of
the last 16 years. I have the figures for
social welfare contained in the Budget for
1948-49, the last full year of a Labour
Government. I know that the honorable
gentleman opposite finds this highly unpalatable,
because he wants to posture before
the pensioners of this country as one of
a party which has the sole concern for
their wellbeing. But just as the trade
unionists vote for us in their hundreds of
thousands because they know where their
welfare lies, so the pensioners, who know
that it is out of a healthy expanding
economy that more provision can be made
for. them, give us their support election after
election. And well they might, because
compared with-
Mr. DEPUTY SPEAKER.-Order! I
would be reluctant to name any honorable
member during the Prime Minister's speech
but if the honorable member for Oxley
constantly interjects I will have to take
action against him.
Mr. HAROLD HOLT.-The relative
figures are $ 160 million of expenditure in
1948-49 and $ 1,028 million of expenditure
in the Budget just introduced by my
colleague. All the juggling with movements
in the Consumer Price Index or the value
of money will not gainsay the fact that
there has been a very remarkable increase
in social welfare provisions by Governments
on this side of the House. There have been
new benefits, new provisions, increased payments.
None of us, of course, regards what
has been done as the complete answer, any
more than we regard the enormous increases
we have made in provisions for
education as a complete answer. The
Treasurer and the Government, with whom
the Treasurer in Cabinet discusses, of
course, these problems in all their detail,
have had to tailor the requirements of
the nation to fit our revenue resources. It
would have required an increase of 10 per
cent, in personal income tax and 10 per
cent. in company tax to bridge the gap of
the deficit which the Treasurer has budgeted
for on this occasion. When one measures
this against the string of proposals that the
Leader of the Opposition has undertaken to
put into effect, one gets some idea of the
sort of task that confronts him.
I want to devote the concluding minutes
of my speech, as the Leader of the Opposition
did with his speech, to the situation
in South Vietnam. I stated the ob ' jectives
of this Government in South Vietnam in
the House on 31st March. They are,' of
course, to assist the Government of the
Republic of Vietnam, at its request and in
the light of our own assessment of the
nature of the conflict there, to resist the
armed aggression of Communist North
Vietnam waged through the Communist
aggression of the Vietcong, the so-called
National Liberation Front, and by North
Vietnam's own regular armed forces. This
agg-ression, we know, is aimed at taking
over the South by a combination of force,
terror and subversion.
Our second objective is to free the 15
million people of South Vietnam from the
threat of oppression and terror which
would be their lot under the domination
of the Communists of the north, and to
help establish conditions under which they
would be able to choose and develop, free
from coercion of any kind, the forms of
government and of society that they themselves
want. Our thi-rd objective is to
demonstrate that we in Australia honour
our treaty commitments to our friends and
our allies, that we stand by our alliances.
By denying victory to Hanoi and Peking in
South Vietnam we believe the spread of Communism in South East Asia can be
checked. There will be encouragement, we
believe, to those moderate elements that
we are already supporting through the
Colombo Plan and in other ways in the
work of modernisation and of economic
and social progress. We seek a peaceful
settlement of the conflict through negotiation.
The Leader of the Opposition wants the
withdrawal of Australian forces. Does he
want the withdrawal of United States
forces also?
Mr. Calwell.-That is their business.
Mr. HAROLD HOLT.-" That is their
business he says. It is no business of
ours, apparently, in the opinion of ! honorable
gentlemen opposite, whether United
States forces remain in South Vietnam or
not. Does the Leader of the Opposition
expect our A. N. Z. U. S. and S. E. A. T. O. ally
to carry the burden of security in South
East Asia virtually unaided by us-or, for
that matter, by anyone else other than the
hotly -pressed South Vietnamese? Australia
-and -most Australians share this viewhas
a vital interest in the presence and
active participation of this great power in
the area of Asia and the Pacific. We have
an obligation to support the United States
in this role, an obligation arising from our
treaty relationships. We have a role as an
ally having the Game belief in liberty and
freedom, with a similar devotion to democratic
process and with international
interests directly involved in preserving
South East Asia'fromn Communist domination.
We hope for an expanding future
with the countries of Asia and of South
East Asia in particular. These hopes would
vanish with Communist domination of an
area so important to our wellbeing and our
security. I want to refer honorable gentlemen opposite
to a most important and significant
speech by the President of the United
States, delivered on 12th July 1966. 1 want
to know whether honorable members on the
other side of the House share -the views
expressed by President Johnson. They have
thrown jeers and gibes -at me over my support
of American policy; I want to know
where they stand on American policy. Do
they disagree with these statements of
President Johnson-
Asia is now the crucial arena of man's striving
for independence and order-and for life itself.
This is true because three out of every five people
in all this world live in Asia tonight. This is
true because hundreds of millions of them exist on
less than 25 cents a day. And this is true because
Communists in Asia tonight still believe in force
in order to achieve their Communist goals. So if
enduring peace can ever come to Asia all mankind
will benefit. But if peace fails there, nowhere else
will our achievements really be secure.
By peace in Asia I do not mean simply the
absence of armed hostilities, for wherever men
hunger and hate there can really be no peace. I
do not mean the peace of conquest, for humniliation
can be the seedbed of war. I do not mean
simply the peace of the conference table, for
peace is not really written merely in the words of
treaties, but peace is the day-by-day work of
builders. So the peace that we seek in Asia is a peace of
conciliation between Communist States and their
non-Communist neighbours; between rich nations
and poor; between small nations and large;
between men whose skins are brown and black
and yellow and white; between Hindus and Moslems
and Buddhists and Christians. It is a peace
that can only be sustained through the durable
bonds of peace; and through international trade
and through the free flow of peoples and ideas;
and through full participation by all nations in an
international community under law, and through
a common dedication to the great task of human
progress and economic development.
Is. such a peace possible? With all my heart I
believe that it is.
I1 support President Johnson because what
he said there he has stated precisely in the
terms of goals which Australia can also
accept in this area of the world. The Leader of the Opposition closed -his
speech by offering the nation a choice. He
said-Our policy on all matters will be decided by the
Federal Parliamentary Labour Party in due course.
There has been no change in the constitutional
arrangements of the Labour Party.
The honorable gentleman is still subject
to the faceless 36, as we saw the other
day in connection with the State aid issue.
The Leader of the Opposition makes the
claim that his Party will face the electorate
on 26th November united, determined and
confident. This claim of unity and confidence
is, on the face of it, ludicrous. For
most of the life of this Parliament the
Australian Labour Party has presented
the spectacle of a rabble. The people have
the choice, Mr. Deputy Speaker, between
this Government, united on this great
issue, and the Labour Party, confused and
divided; a common defence of freedom or
a walk-out on our friends and allies; the
understanding of the Communist drive for
world power or Labour's refusal to see
what is happening in our part of the world;
policies that look to an expanding future
or policies bogged down in the past; rule
by those chosen by the people or rule by
36 faceless men; a Government with
leadership or a Labour Party run by
factions; the strength, unity and purpose
of this Government's policies or the disunity
and confusion of the Australian Labour
Party. We know the choice that the people
will make.
BY AUTHORITY: A. J. ARTHUR, COMMONWEALTH GOVERNMENT PaRNER, CANBERRA, A. C. T.