Ben Chifley, 1946

Prosperity ahead

Australia is about to enter upon the greatest era in her history, this country of ours has come through two world wars and weathered the miseries and hardships of a depression, all in the space of a little over 30 years. Today Australia has become the great bastion of the British-speaking race south of the Equator. Strategically arid economically, our country has assumed a position in the Pacific on behalf of the British Commonwealth of Nations of such importance that development and responsibility go hand in hand.

Despite the strain of war, Australia has shown great advances because of two factors. One has been the sterling efforts of the men and women of this country whose spirit in war was unflagging, and the second that the Labour Government has maintained the economic balance to such an extent that no other country can claim a more favourable position.

The dimensions of the Australian war effort were in keeping with the highest traditions of the British Commonwealth at war. In 1943, 72 per cent. of Australian men In working age groups were in the forces or employed in war production and other essential industries. The corresponding figure for Britain was 75 per cent. Australia is now in the stage of transition from the interim post-war commitments to the determination of the ultimate strength and organisation of the forces for the future defence of the Commonwealth.

Pacific defence base

Future defence policy is governed by the security system that can be developed by the United Nations and the consideration that the forces we maintain must be, related to measures for co-operation in Empire defence. The Government regards tills as an arrangement for collective defence, consistent with the purposes and principles of the United Nations.

During the war, the Pacific was a sphere of American strategic responsibility, and the predominant factor in the strategy in this area was American sea and air power. All members of the British Commonwealth are agreed that co-operation with the United States is’ fundamental to the maintenance of peace in the Pacific, and Australia welcomes an arrangement for the joint use of bases on the principle of reciprocity.

At the Prime Ministers Conference, it was agreed that a corollary to Australian acceptance of a wider responsibility for Empire and regional defence was the assignment to the Australian machinery of the function of developing the defence aspect of matters relating to regional security in the Pacific, in which Britain, Australia and New Zealand are concerned} with provision for overseas representation. Action is now proceeding along these lines. The future nature, strength and organisation of the forces is dominated by the overshadowing influence of the effects of scientific developments on the types of weapons and armaments for the various services, their efficacy and the effects on future methods of warfare and organisation for it.

As a first step, the Government has approved of the creation of scientific and technical bodies to maintain the closest liaison for Empire co-operation. When the full effects of scientific developments are assessed and the future arming of the forces determined, the Government’s service advisers will submit recommendations on the future strength and organisation of the defence forces and on all considerations involved in their equipment and training. The aggregate future strength of the forces will be governed by the proportion of our national income and resources that should be devoted to defence. The size of each service will be determined by the blending of the navy, army, air force and supply services in a balanced defence which provides in the most effective man nor for our self-defence, for co-operation in Empire and regional defence, and for the fulfilment of our obligations under the charter of the United Nations.

The important lesson learned from Australia’s experience in the Pacific war is that this country is no longer a peaceful outpost, isolated by, distance from war’s destructiveness. Australia is vulnerable to attack and each year brings developments in the science of warfare that lessen still further our chances of living, unmolested. To ensure that the Australian aircraft industry will continue to enjoy the maximum benefits resulting from aeronautical research abroad, discussions have been proceeding in London for some time to determine a satisfactory working basis for the fullest possible co-operation between the Australian aircraft industry and British aircraft manufacturers. This policy will establish Australia as a vital link in a powerful chain of his nrotccting the British way of life throughout the world.

Australia’s place in the world

Closely linked with defence policy are Australia’s international relationships. Australia has willingly undertaken and loyally sustained the various international obligations and responsibilities which are likely to contribute to the purposes of the United Nations.

Australia is widely regarded as one of the main architects of the Economic and Social Council of the United Nations. Australia’s strong support of the International Trade Organisation, which is expected to emerge from next year’s Trade and Employment Conference, emphasises the importance she attaches to world economic planning, while her election to the governing body of the International Labour Office was a recognition of her consistent efforts in the field of social planning for a better world.

In the last five years, a new conception of the British Commonwealth of Nations has emerged: no longer are the Dominions active only in time of war. Collaboration within the British Commonwealth now extends to peace as well as to war. This development implies a fuller recognition by the Dominions of their responsibilities, which has resulted in the assumption of reciprocal duties by the Dominions and by Britain. Australia’s relations with Britain today are firmly based on the hard realities of world politics, with Australia not only giving practical expression to her rights but also assuming and effectively carrying out the heavy responsibilities that belong to her new status.

Re-establishment

The Labour Government is spending a great deal of money on re-establishment. It is spending it carefully and well. It is equally convinced that the nation will receive a more than equal return in the form of greater skill and greater efficiency in all sections of economic activity as a direct result of that expenditure.

The problems of finance and economic organisation handled by the Government have no parallels in Australian history. In less than five years, the Labour Government had to find over £2,188,000.000 for war purposes. We obtained £837,000,000 of this from taxation and other revenue sources, £1,040,000,000 from public loans and War Savings Certificates and £311,000,000 Treasury Bills discounted with the Commonwealth Bank.

Will review taxation

The Government has reduced war expenditure very substantially and this year will reduce it much further, but the whole job cannot be done in a month or two. Despite heavy demobilisation charges, the Labour Government was able to make one cut in taxation last financial year and is making another in this financial year. The two cuts in income tax, taken together, make up a 22 per cent, over-all reduction on the 1943 rates. They will relieve taxpayers by over £37,000,000 a year.In addition to income tax reductions, the Government has cut sales tax rates on a wide range of commodities and the savings to buyers is £4,000,000 a year. The Government will make further reductions in direct and indirect taxation as circumstances permit.

Australia’s Governmental debt in London has been reduced by £72,000,000 Australian currency by the transfer to Australia of debt amounting to £62,000,000 and the redemption of £10,000,000 from the National Debt Sinking Fund. Large overseas loans have been converted to lower rates of interest and Australia’s interest liability in London has been reduced by £5,000,000 a year. The Government’s banking legislation has been designed to adapt the banking system to present-day conditions and to provide the Commonwealth Bank, as Australia’s central bank, with adequate powers to serve the national interest.

Industrial future

Australia has expanded tremendously her, productive capacity. We now stand on the threshold of a wondrous commercial industrial age. We have expanded our industrial capacity, developed our industrial skill, broadened the scope and vision of our industrial management, and fostered and stabilised our internal economy.

The stage is set.

The Government desires a high level of technical and managerial efficiency under improved working conditions and with extended overseas and internal markets. The present level of factory employment 730,800 persons; the high rate of applications for company registrations; the pressure for new factory buildings; and the extent of recent overseas investment in Australian industry, indicate that the work of conversion and expansion to mass production Is well under way. The States and the Commonwealth have endorsed the policy of decentralisation to suitable provincial areas, and away from concentrated States to, the outer States. We are seeking a balanced economic and defensive development of industry.

Export markets

For an export market for secondary industry, Australia can look to the countries lying to the immediate north of Australia-India, China, Japan, South-East Asia, Malaya and the Netherlands East Indies - 1,000 million people, whose living standards, if increased only by a fraction, would establish a market for all that Australia could manufacture. The manufacturing resources now available and being exploited under the Government’s policy for development of secondary industry, are based upon the war expansion already outlined not only as to the manufacturing capacity already created, but also as to releases of a number of Government factories to commercial concerns for employment In secondary Industry. Over 60 factories have been made available, some of them very large, and already many have been leased by some loo different concerns, a number being directly from Britain and the United States, while others represent an association between Australian interests and well-known manufacturers in Britain, the United States or Canada.

Up to now only 10 per cent, of the wool clip had been processed in Australia, It will be raised to 20 per cent., still leaving 80 per cent, of raw wool for export. This would add about £36,000,000 to the national income, and provide employment for another 20,000 persons. The Government’s plans contemplate spending £600,000 annually on research that will improve textiles made from wool,“ and on a campaign to expand the uses of wool. The Government is proposing to spend £5,000,000 in developing the mineral resources of the country. While the secondary industries mentioned, and the satellite industries dependent upon them-such as general engineering and textiles, clothing, footwear and food-are almost entirely Australian-owned, there are Australian interests affiliated with overseas interests ia the conduct of large industries. Of these, the motor car industry is the most important, and General Motors, the Ford Motor Company, and the International Harvester Company are each working on programmes to spend millions of dollars in extending their Australian subsidiaries. The Nuffield and Rootca interests of Britain are doing likewise.

These developments are bringing numerous components manufacturers into operation, some from overseas. In the textile industries other than wool, cotton is well established already, with four large concerns and several smaller almost entirely Australian owned. One British concern is being expanded, and several more British concerns are negotiating for leases of Government factory properties. In synthetics, an American Arm has taken a lead in associating with an Australian concern in setting up rayon mills at Newcastle, while a Canadian firm of American origin is establishing another mill at Wangaratta. For provision of rayon yarn, Australia is looking to Courtaulds Ltd., of Britain. Further developments in synthetic yarns are anticipated. The success of the Government’s economic policy in the twelve months of peace as reflected in the stability of wages and prices and the reductions in taxation and Interest, warrants a firm optimism that Australian secondary industry will hold its place in the world’s markets.

Defence production

In anticipation of the contribution of Australia to Empire defence in the Pacific, tlie Government decided, before the war with Japan had ended, that its munitions production policy would be designed so that the conditions which faced the country at the outbreak of the war could never recur. Details of the manufacturing plants to be maintained as permanent defence factories ‘are still to be determined, because they will depend on the obligations to be accepted as a partner in the British Commonwealth of Nations. We have intimated our willingness to take a full part in whatever is decided in that respect. Subject to further examination of details, we have decided that we shall maintain in peace the original five munitions factories and four of the more important factories established during the war. In addition sections of two other of the important factories will be maintained. We are arranging to continue a limited number of annexes, in the care of commercial concerns which managed them during the war, and maintained in a state of readiness.

The Government has decided that nucleus status of technicians and operatives will be employed by way of assistance to commercial Industry, and already they are doing useful work in that respect. A Bill will be presented in the first session of the new Parliament providing for the establishment of a Defence Production Commission to be responsible for the administration of the factories and annexes needed for production of munitions and supplies, together with the supervision of the investment in industry which the Government has found it necessary to make for the same purpose.

The commission will be concerned with the general development of industry which will be needed if Australia is to be established as the advanced supply base for overseas armed forces which may be deployed in the South Pacific defence area. A commencement will be made shortly with the construction of aluminium smelting works. A second project of the greatest possible importance is known as guided projectiles. A joint effort is being discussed with the British Government, and we have placed our largest munitions factory under offer for the purpose. This project will carry with it many radical developments in munitions production.

Primary products

The Government is asking electors to give the Commonwealth Parliament powers for the organised marketing of primary products. If this power be granted, the Commonwealth will be able to provide sound and workable organised marketing on an Australia-wide basis and ensure that those who produce the nation’s food are justly rewarded for their services.

Stabilising primary industry

It is the Labour Government’s policy to stabilise primary industry. With the cessation of hostilities, the heavy, obligations to feed Australian, British and United States forces eased and the Government was able to increase food exports. The Government decided to make available to Britain every ounce of food which was intended for the services. Australia’s exports for 1946 are expected to total 2,500,000 tons. It is the Government’s desire to foster assured markets for Australia’s export surplus of primary produce.

Recently the Commonwealth asked the British Government for a review of the price for dairy products, and as a result, the purchase price has been increased to 216/9 a cwt. The agreement on meat purchases provided for a price increase of between 15 and 30 per cent. for various classes of meat. These ensure a floor price for the industry which was substantially better than previous years. An increased price was given to the dairy industry through a subsidy which, for the four years from 1942-43, cost £20,068,809. Similar action was taken in respect to the potato industry which cost £6,985,565. In the same period the apple and pear industry was granted subsidies totalling £1,214,216. The wheat industry was given drought relief amounting to £2,317,000. Total expenditure on wheat and other fodder for stock feeders and drought relief was £13,343,312. New facilities for exporters and manufacturers have been provided and the flow of trade inquiries from overseas importing houses is greater than their production can fulfil. During 1945-46, Australian exports of merchandise totalled £216,000,000, an all-time record.

Wool stabilisation

In 1942, shortly after the Labour Government took office, the approval of the British Government was secured to art increase of 15 per cent. in the price of wool purchased under agreement. Value of the wool sold during the past four seasons was £262,000,000 and the industry has benefited substantially from the higher, price. The net average return to wool growers at present is 17.24d., compared with 15.45d. payable under the war-time appraisement scheme. Before the Government took office the price was 13d. The Government has endeavoured to give effect to the wish of wheat growers for organised marketing. It has provided a stabilisation plan for five years which will give growers a guaranteed minimum price of 5/2 a bushel for ports.

Social services

Despite the multiple cares of a Government involved in a war threatening the very existence of Australia as a nation, the Government never lost faith in ultimate victory. The best evidence of this is furnished by the great extension of social services and health benefits since it-took office. By three successive steps, the invalid and old-age pension has been raised from 21/- to 32/6 a week. In the application of the means test, the permissible income has been lifted from 12/6 to 20/- a week, the property raised from £400 to £650 and many anomalies corrected. The permissible income for blind persons has been raised from £3/7/6 to £5/7/6 a week. The family means test imposed in respect of an adult invalid has been abolished. Allowances have been given for the wife and children of an invalid pensioner. Child endowment has been increased from 5/- to 7/6 a week. Pensions for widows were introduced in 1942 and greatly increased maternity benefits were made available from July, 1943. Unemployment and sickness benefits introduced in 1944 are an important step in social security. Arrangements have been made for reciprocity between Australia and New Zealand in respect of invalid and old-age pensions and arrangements are on the point of being concluded for similar reciprocal arrangements regarding child endowment, widows’ pensions, unemployment and sickness benefits.

Expansion contingent on referendum

The Pharmaceutical Benefits Act was designed to provide free medicine for the sick, but the decision of the High Court has prevented the Government from proceeding with this proposal. By carrying the social services question at the referendum, the Government will push on with a national medical scheme, providing clinical, pathological, x-ray and specialist services throughout Australia. When the people confer the necessary power at the referendum, the Government will not be satisfied until it has provided a medical and dental service that is complete and free.

Review of basic wage

Some time ago, the Government relaxed the regulations covering wage pegging to permit of the Arbitration Court considering a shorter working week and the basic wage. The Government has intimated that it is prepared to establish a committee to review the principles upon which the basic wage is calculated and varied, and to report to the Government. One of the first pieces of legislation by Labour in the new Parliament will be a bill to make a comprehensive revision of the Arbitration Act.

The coal problem

No, Government has done more to solve the coal problem. The Coal Industry Act joins the Commonwealth and New South Wales legislatively in dealing with a social and technical problem of complexity. Modernisation of industry is required to meet the expanding needs of all industry.

Education and research

The Labour Government is now spending £5,000,000 annually on education and research and has established a programme of Federal aid to open the way to higher education. The increase in the current number of full-time students at universities to 14,000, as against 8,000 in 1939, is entirely due to the Labour Government’s financial assistance to outstanding young students and to ex service men and women. About 10,000 full and part time students are now receiving assistance from the Universities Commission. That commission and the Commonwealth Office of Education were established by the present Government. The Government has not lost sight of the value of culture in the community. It lias continued active and practical support for the Commonwealth Literary Fund. The Government will provide £1,000,000 to establish a National University. Proposals for a National Theatre, put forward by enthusiastic groups, will receive sympathetic consideration from the Government. Australian literature, music and art will prove a national asset as our country develops a culture of its own.

It is the Government’s settled policy by agreements with the British Government in the first place, and, by other means, embracing desirable immigrants from other countries, to build up a net gain of 70,000 a year in Australia’s population. The Government gives an assurance to those persons desiring to come to Australia that they will have a reasonable opportunity of a secure economic future. The agreement with the British Government will operate as from next January. The Government has reorganised the Department of Information into a compact national publicity unit charged with the responsibility of making Australia, her way of life industries and potentialities better and more widely known abroad.