COMMONWEALTH OF AUSTRALIA.
SPEECH BY
Rt. Hon. SIR ROBERT MENZIES,
M. P.,
ON.
APPROPRIATION BILL 1964-65.
Second Reading.
( BUDGET DEBATE.)
[ Fromn the ' Parliamentary Debates," 25th August 1964.]
Sir ' ROBERT MENZIES ( Kooyong-
Prime Minister) [ 8.311.-Mr. Deputy
Speaker, I am glad that the honorable member
for Barton ( Mr. Reynolds),-at the conclusion
of his remarks, has thought fit to
remind us that we are considering what
amounts to a motion of censure, because,
otherwise, this may have been overlooked
during the debate of the last week. I do
not propose to take up time discussing the
honorable member's impassioned remarks,
excepyt to suggest to him, in a friendly way,
that, since -he is so upset about interest being
charged on revenue moneys for capital purposes-
being' advanced-to the Post Office, he
DSsnhoowulyd pMerohuapnsta ilnoso k Hinytdor ot-heel epcotrsiict ionS cohfe mthee.
In that ; Scheme, the Commonwealth is not
aiming at profit. It has provided the overwhelming
-bulk of the money for the
Scheme out of revenue. That has been found
by-the taxpayers. In the calculation of the
price to be paid by the States concerned
for the. power provided by the Scheme,
interest on that money is taken into account.
There is , nothing new about this. Indeed,
the-honorable member, if he takes the next
opportunity to talk to any Labour Premier
whom he can find, will discover that this
has been accepted by -all the Premiers.
whatever their party affiliations may be. it
11003164. has been accepted for a very good reason:
There is no particular reason why a State
should secure power in perpetuity at a cost
that loads the whole of the capital burden
on to today's taxpayer. This is perfectly
proper. Therefore, I suggest to the honorable
member, in a friendly way, that he
should look into the financing of the Snowy
Mountains Scheme.
I wish primarily, Sir, to say something
abbut the attack made by the Leader of
the Opposition ( Mr. Calwell) on this Budget
in the guise of an amendment that may -be
said to amount to a censure mortion. He encountered
some difficulties, because, if ever
there was a Budget which was well balanced
and in which stability, growth and action to
counter inflation were -nicely blended, it is
this Budget. I know of no completely
responsible commentator who -has not
admitted this. All I can sa'y -for myself and
my colleagues is that we subscribe to every
line of this Budget. The Leader of the
Opposition, of course, felt that as usual he
must launch an attack. He received, no
doubt, suitable advice. Indeed, for some
time during his speech last week, I thought
he was -almost in a brown study, if honorable.
* members can follow me in that
allusion. He garnished bis~ sppegh 1withjg
few flourishes of his own. I shall say a
little about them later, I -hope in a tender
way. There were a few phrases that struck me.
For example, the honorable gentleman said
that this was a stop growth Budget. I1 suppose
even he became a little tired of saying
11stop-go So he just made this rather
pleasant variation on a theme and said that
this is a stop growth Budget. Stop growth!
Why, the honorable member for Barton has
just delivered a eulogy on the growth of
this country that I could not imagine to be
surpassed in any quarter. However, his
Leader said first that this was a stop
growth Budget. His Leader then said that
this was a deflationary Budget. All I can
say is that you cannot win with the Leader
of the Opposition. At any rate, I cannot. I
am like King Charles's head: I keep
popping up.
But what does the honorable gentleman
mean by a deflationary Budget? Does he
mean a counter to inflationary Budget or
does he belong to that school of thoughtif
it is to ' be called thought-which holds
that there is no middle course between
inflation and deflation? The whole purpose
of this Budget, as was made abundantly
clear in the most lucid terms by the
Treasurer ( Mr. Harold Holt) in presenting
it, is to produce not a deflationary result
but an anti-inflationary one-to avoid
inflation and to preserve that stability in
the country on which the honorable member
for Yarra ( Dr. J. F. Cairns) was kind
enough to compliment me when he spoke in
this debate, though I do not know why
he did so. All these things are the purpose
of the Budget. To describe it as deflationary
is to give it a fantastic description. Indeed,
the Leader of the Opposition very soon
abandoned that proposition. There is one
thing about him: He i s never so consistent
in his attack that you can detect no flaw
in the armour. On this occasion, having
explained that this Budget was deflationary,
and having -painted a picture of impending
misery and depression, as he did when last
year's Budget was presented as well as during
the last election campaign, he then
forgot what he had just done and said-
I venture to suggest that this Budget will prove,
as last year's Budget did, to have underestimated
revenue by at least as much as last year's Budget
or by at least œ 50 million. The Leader of the Opposition went on to
say, referring to the Treasurer-
If this proves to be the case the effect
on the economy may well be much more drastic
than he foresees.
So he says that we are -underestimating the
revenue. How is the revenue estimated by
the Treasury? It is estimated -by making the
best possible forecast of the state of the
economy, of prosperity, of rates of earnings,
of prices, of export earnings and so
on, and then working out the sums. If
revenues exceed estimates by œ 50 million,
this will mean that the economy has been
expanding more than had been estimated,
in that employment, earnings, sales and
imports will have risen more than the
Treasury had estimated. If that represents
deflation, we must get another dictionary.
Now that I think of it, I shall come back
to the dictionary a little later for another
purpose. What I have just mentioned is a
plain contradiction by the Leader of the
Opposition of himself. First, he says that
this Budget is deflationary and then, in
effect, he says: " No, that is nonsense. We
are to have a very expansive year."
The honorable gentleman then attempted
to show, with the aid of a table that he
incorporated in Hansard that the
incidence of taxation has changed. If I may
interrupt myself, let me point out that the
incidence of taxation does commonly
change if income grows. This is not an
uncommon experience. The Leader of the
Opposition said that the incidence of taxation
relative to prices and incomes has changed
consistently to the detriment of those on
lower incomes. This constitutes ' his case.
This is one of the great points that he sets
out to make in support of his censure
motion. With the aid of a table that he produced.
he attempted to show that a basic wage
earner with a wife and two children had
found his position deteriorating in the last
ten years under the administration of this
Government, which the honorable member
for Yarra described as unhappily popular.
The Leader of the Opposition declared that
in the last ten years the tax paid by a basic
wage earner with a wife and two children
has risen from 5s. a week to 10s. 6d. a
week, or from œ 12 8s. to œ 27 7s. a year.
These a-re the figures he cited. Let us assume
the existence of this man on the basic wage.
The honorable gentleman forgets that this
man's wages have risen by œ 187 a year, out
of which he pays an additional œ 14 or œ 15
a year in tax. He also forgets that, in addition
to the increase in his actual earnings
this man has been receiving, over this period
of time, increased social service benefits,
which can never be left out of this calculation,
and to which I shall refer again in
a moment. But I would like to carry my examination
of the honorable gentleman's table a little
further. I want to consider the increases
that have occurred in the 10 year period
from 1954-55 to 1964-65. The income of
the basic wage earner-this somewhat
mythical being-increased in that period by
œ E187. His income tax increased by œ E15, so
that of his increased income he has retained
92 per cent. The income of the average
wage and salary earner, given in the honorable
gentlemen's table under the heading of
" Income of average earnings increased
over the period of 10 years by œ E485. His
income tax increased by œ 79, so that he
retained 83.7 per cent. of his increased
income. The income of a third group is
given in the table under the heading of
" Income of four times average earnings
The increase in money income amounted
to œ 1,940. Income tax increased by œ 933,
so that the man in that category retained
51.9 per cent, of his increased income.
Let me repeat these results briefly so that
they may be considered in relation to the
charge that everything is altered to the
detriment of the lower income earner-92
per cent, retained by the basic wage earner,
83.7 per cent. by the average earnings man,
51.9 per cent. by the man in the third group
selected by the Leader of the Opposition,
which comprised those earning four times
the average earnings. If this indicates that
there is a constant pressing down on the
position of the lower income groups, then
I fail to understand the meaning of
elementary facts.
There has been no justification for the
charge made by the Leader of the
Opposition. However, as I said just a while
ago, I would like to talk about certain other
advantages that have been provided. Let
me say a word about the increased benefits
provided all the time, mark you, from the
proceeds of taxation, which go materially
in the direction of the lower income groups.
It is very proper that they should do so and
I am not complaining about it; I just want to state as a fact that they do so. The period
with which I shall concern myself is that
which covers the whole term of office of
this Government. The appropriation for age
and inv alid pensions has gone up-taking the
figures to the nearest million-from
œ 45 million to œ 215 million. No change in
the value of money can explain that away.
The amount for widow pensions has
increased from œ 4 million to œ 23 million,
for child endowment from œ 30 million to
œ 86 million, for hospital benefits from œ 6
million to œ 29 million, for pharmaceutical
benefits from one-third of a million pounds
to œ 30 million, for medical benefits from
zero to œ 18 million and for pharmaceutical
benefits for pensioners from zero to
10 million.
Mr. Deputy Speaker, if figures can have
any eloquence at all, it is perfectly clear
that the benefits of the proper social
measures for which we have been so largely
responsible do not go to the rich in the
community but to the people who need them
primarily. Therefore, this allegation that
there is a sort of policy of grinding down
the lower income earner is pathetic nonsense.
I am shocked to think that the
honorable gentleman could have obtained
any more or less academic support for it.
Now I come to the next point made by
the Leader of the Opposition: This point
was made, indeed, last year by the honorable
member for Yarra, who is a thoughtful
speaker and does a lot of work on these
subjects. The Leader of the Opposition said
that the country is slowly recovering from
the artificial depression of 1961-this depression
wickedly brought about by this
Government. Considering the results, I just
take leave to say that this is far from true.
I do not want to add to the many things
that have been so well said previously on
this side of the House, but I suggest that
to answer the -honorable gentleman's
argument the right thing to do is to compare
today's position with the position in
the boom year, because he has said: Oh,
yes, you cut down on the boom year, and
all we are doing is recovering." So I will
compare the boom year with the one which
we have the acute misery to live.
Civilian employment in June 1964 was
I1I per cent. higher than in June 1960. In
that period of time private employment
rose by 249,000 and public authority employment
by 85,000, an increase of 11 per
cent.. in each sector. Just recovering," says
the Leader of the Opposition. We are
recovering-plus, this enormous increase.
Total wage and salary earnings in this last
financial year were 27 per cent. greater than
in 1959-60, the year that we refer to as the
boom year. Average male earnings since
that year have risen by 16. per cent, and
since the consumer price index rose by
something less than a third of that the
increase in real earnings has been considerable
and notable.
Farm income increase is, of course,
explained by a variety of circumstances.
One of them is a tremendous increase in
production. There has been good fortune
in seasons and good fortune in prices, but
never leave out of account the increase in
production which is the result of the efforts
of the man on the land. Farm income
increased between the boom year and the
last year by 46 per cent. Cash social service
benefits increased in the same period by 39
per cent. and other forms of personal
income by 23 per cent. The gross national
product increased by 27 per cent.
Then let me talk about concrete matters
and get away from purely monetary considerations.
In the same period, production
of steel rose by 35 per cent., electricity 38
per cent. and cement 28 per cent. I need
not go on. I could talk about motor vehicles
and the enormous increase in the number
of houses and flats commenced. In the
boom year the number was' 91,000, which
was a record at that time, and in 1963-64
the number had increased to 107,000.
Savings bank deposits have increased by 50
per cent, since the boom year. They have
risen to an average per head of population,
men, women, children, grandchildren-I
must stick to my last-of œ 200 a head, while
in the boom year the average per head was
œ E148. Those are phenomenal figures. Anybody
who can look at them, acknowledge
their truth and be heard to say that all we
are doing is struggling out of the trough of a
depression created in 1960 and 1961 is so
far gone in partisanship that he will never
really be able to take an objective view of
anything. it is quite true-1 venture to say this and
I think the public will agree with me-that,
but for sound budgeting, sound monetary
management, sensible economic policies and
the preservation of a healthy climate, those figures that I have quoted would have produced
an inflationary pressure much more
serious that the one at which we have been
looking. I was delighted that the Leader of the
Opposition, is his speech, had a little of
his own when he said-
And when we delve deeper into this Harold
in Wonderland speech, things grow curiouser
and curiouser
He quoted the words of Alice. I thought
this was rather ' agreeable. In fact, it so
stirred me that I re-read " Alice in Wonderland"
I am indebted to the honorable
member for having given me this literary
refreshment. Mr. Falknder.-Were you thinking of
the white rabbit?
Sir ROBERT MEENZES,-No, no; I was
thinking about the March Hare. When the
honorable member began his speech, with
all the hint of a censure motion, I thought
that we were going to have something pretty
powerful, not weak tea.
Mr. Pollard.-Some people are thinking
about the Mad Hatter.
Sir ROBERT MENZ[ ES-I am thinkinig
of both, old boy; but I was going to leave
you out of it. I am sure honorable members
will recall what was said. In fact, I was
thinking of it, without having checked the
precise words, when the honorable member
was promising this powerful, pungent attack.
I am sure honorable mem bers, remember
these words-.'
" Have some wine," the March Hare said in anJ
encouraging tone. Alice looked all round the
table-For this purpose I am Alice-the Mother
of the Year. but there was nothing on it but tea. " I
don't see any wine," she remarked. "' There isn'tJ
any," said the March Hare.
That is not a bad summary of the speech
made by the Leader of the Opposition. I
also remembered-as I am sure many of
us did-as the honorable member kept
repeating some of his erroneous conclusions,
that he was doing it on the well known
principle that Lewis Carroll expressed-
" What I tell you three times is true I
recommend to the honorable member the
further pursuit of these studies. Having said
that, I will go. back to the point that he
thought he was making.
Mr. Peters.-Go back to " Alice in
Wonderland Sir ROBERT MENZIES.-I will continue
to quote his speech. And you listen
to this, my boy; you will learn from it.
Your leader-I regard him in that sense
-went on to say--
Strangely enough, we can nowhere find in the
estimates any allocation for the instalment payments
on the TFX bomber. Last year. we allowed
million; this year nothing. Why? Will the
Treasurer say why? Will the Prime Minister say
why? Will the Minister for Defence say why?
Will the Minister for Air say why?"
This is a fine rhetorical phrase--
According to the promise made last November,
this bomber was to be delivered by 1966. Despite
heated denials in this place, the former Minister
-' for Airassume that that is correctly reportedsurreptitiously
inserted into a general
statement on the TFX the fact that it could not
now be delivered before 1968.
I had always regarded the Leader of the
D pposition as something of a purist in
-language. Everybody knows that surreptitiously
means secretly or by stealth. How
a Minister is clever enough to introduce
into a public document, by stealth, a plain
statement of fact, I just do not understand;
but the word surreptitiously" is used.
Let me remind the House that in October
of last year I myself spoke about the TFX.
I have forgotten whether I did it surreptitiously
or not; but I am usually audible in
the House, I hope. I said-
The Government of Australia has agreed to
purchase from the United States two squadrons
FIIIA aircraft, which used to be called the
TFX. By special arrangements with the United
States of America, the aircraft will be available
to Australia at the same time as deliveries are
made to the United States armed forces, which
will be from 1967 onwards.
_ 1hat was my statement-not 1966, but
1967. Then on 18th June, my colleague,
the Minister for Defence ( Senator
Paltridge), in this so-called stealthy"
statement, said-
The latest expert advice available to the
Government makes it clear that the Canberra will
not begin to be phased out of Squadron service
until 1970. Doubts about its stated fatigue life
have been resolved and it will continue to be a
useful operational aircraft. In the light of advice
from its professional advisers, the Government has
decided to accept deliveries of FlllA aircraft in
1968. These aircraft will embody modifications
made as a result of United States Air Force
squadron trials, thus providing Australia with a
fully tested aircraft. In other words--Ithought all honorable
members understood this-the choice was
between getting in 1967 a type of aircraft
which we would have to handle and which
we might have to modify, and waiting one
year longer and getting aircraft after they
had gone through the whole of their
squadron testing in the United States and
had received their ultimate modification. So,
showing very good sense, the Chiefs of
Staff all said: " The second choice is a good
bargain. Let us play it that way".
Finally, the Minister for Defence, in his
statement, said-
Information from the United States shows that
the development of the FIllA aircraft is proceeding
satisfactorily.
I thought all of that was pretty well known.
But the Leader of the Opposition is troubled
because there is nothing about it in this
year's Budget. I just want to say that I am
delighted about that; and I will tell the
House why. The reason why no payment
is being made for the TFX aircraft this
financial year is, quite simply, that the
United States authorities do not require any
payment. The provisional schedule of payments
which was negotiated by my late
friend, Mr. Townley, is being revised in
consultation with the United States to reflect
the Government's decision to take deliveries
of the aircraft in 1968 for the reasons I
have mentioned and not to accept the loan
of the B47 bomber as an interim aircraft.
The Minister for Defence announced the
reasons for these decisions in June.
The revised schedule of payments has not
yet been finally drawn up, but it is clear
from discussions with the United States
authorities that no payment is required
during 1964-65 to supplement the amount
of just under œ 9 million paid by us last
year. In the meantime, that amount is earning
interest until such time as payments are
made to the United States contractors for
our aircraft. Putting it in brief, Sir, we have
a year's holiday from payments, and during
that year we receive interest on the money
that we have paid already.
Future progress payments will be determined
in consultation with the United States
authorities. The estimated total cost to Australia
of the 24 aircraft remains at the
figure of œ 56 million announced by Mr.
Townley in November of last year. Current
advice from official United States sources
is that progress on the project is on
schedule, and firm assurances have been
given that there is no reason at all to doubt
that deliveries will be made to the Royal
Australian Air Force in 1968. This is up to
date advice and it may be relied on.
I do not want to trespass on the time
of the House but I will just add one
remark on this matter as a result of something
that was said by the honorable member
for Yarra ( Dr. J. F. Cairns). He went
to some trouble in the course of his speech
to establish that we did not need the TFX; that we did not need this kind of aircraft.
On the contrary, he said, the kind of war
that might have to be dealt with by Australia
was one in which a bomber of this
order, of this range, of this capacity, would
be entirely irrelevant. So, not for the first
time the Leader of the Opposition says one
thing and the putative Deputy Leader of the
Opposition says another. Anyhow, it has
been a pretty futile attack and I do not say
any more than that we reject it.
BY AUTHORITY: A. J. ARTHUR. COMMONWEALTH GOVERNMENT PRINTER, CANBERRA.