CONSTITUTIONAL REFERENDUM - PRIME MINISTER'S BROADCAST.

On 25th July, 1944, Mr. Curtin broadcast over the national network. Mr. Curtin said -

"People of the Commonwealth,

"The Government of Australia, elected by you last August, places before you a proposal to give to the Commonwealth Parliament additional powers - powers sufficient to ensure that the transition from war to peace in this country will be as smooth as possible and will ensure security for every body, no matter their station in life.

"It is a proposal which carries a double endorsement. It was approved by the representatives of the Commonwealth Parliament and of the State Parliaments at the Constitutional Convention in November, 1942. It was approved by you when it was placed before you as part of the Government's policy at the federal elections last August.

"I now put to you plainly and simply exactly what the proposal means, and leave it to your good judgment to decide.

"The referendum is designed to give the Commonwealth Parliament wider powers for five years after the war. Remember, I said the Parliament - not whatever government is in office then.

"When the war broke out the country was ill-prepared for war. It was necessary to take special measures, progressively more severe, to organize the country for war. These measures included price control, control of materials, acquisition of export commodities, regulation of imports, control of overseas exchange, rationing of goods in short supply, control of investment, control of building, and control of labour. It is doubtful whether the Commonwealth would have had power under the Constitution to take any of these measures without the exercise of the defence power. In the National Security Act, passed at the instigation of the Menzies Government within a week of the outbreak of war, the Commonwealth was given full authority to take these and other measures under the defence power during the war and for six months after the war. No question arose as to relying on the States for their co-operation as a basis for the development of a war economic policy. The Commonwealth was expected to assume the leadership and have the authority to deal with these matters. The country rapidly developed a war economic policy that necessitated at least half its total resources being devoted to direct war needs. To do this it was necessary to build up the economic controls I have mentioned. When the war ends, the country will be conducting a war effort absorbing half its productive resources. Its economic system will be geared to the needs of war.

"The task then facing the Commonwealth will be to bring about as rapidly as possible an economic system that will produce the civilian goods needed under peace conditions; develop capital works both public and private; employ all the people; and promote an equitable distribution of income and goods. This task will be not less difficult nor less urgent than was the task of organizing the country for war. It is absurd to suppose that if controls were necessary for war purposes they will not be necessary for re-organizing the country's economic structure on a peace basis. The facts of the situation that will confront the country at the end of the war can be briefly summarized as follows:-

“The supply of civilian goods will be lower than the current demand at the end of the war, and still lower than that demand, plus the demand that has accumulated because of the war.

“Most primary products will be obtaining the benefits of a guaranteed price.

"The demand for certain types of capital works - such as houses, health and education buildings - will be very great because of deferred production during the war.

“Over 1,000,000 men and women will have to be transferred from war production, including service in the armed forces, to peace production.

"Many basic materials will continue to be in short supply.

"Many consumable goods will continue to be in short supply if Australia is to contribute her quota of these goods to the rehabilitation of devastated countries.

“The economic position, in fact, will be more acute than it was at the beginning of the war, and the transition from a war economy to a peace economy will have to be even more rapid than was the transition from a peace economy to a war economy. To abandon the war-time controls immediately on the declaration of peace would cause disorganization to the economic system, and destroy the capacity of the system to meet the needs of the first few disturbed years after the war. Leadership will be necessary just as it was in war-time. Co-operation of the States and of private industry will be necessary, just as in war-time. Without leadership and without sufficient powers reposed in the National Parliament, neither the co-operation of the States nor the assistance of private enterprise will be sufficient to meet the situation. This can be demonstrated readily by examining the six major problems I have already mentioned.

"The first one refers essentially to an excess of spending power over consumable goods at the beginning of the peace. In some ways this is the central problem. Without power to control prices, profiteering that Australia has been so careful to avoid during the war will take place on a grand scale. It will be a crime of the first magnitude if men and women, returning from the armed forces, come back to a world of profiteers. That is what they would come back to, because, with a heavy excess of demand over supply available, prices would rise rapidly far beyond the levels justified by costs of production. Profits would rise far beyond the levels permitted during the war or obtained before the war. The savings people have made during the war, and the accumulation of servicemen's deferred pay, would depreciate in value. While some people would grow rich by profiteering, most people would grow poor by the evils of inflation. These evils would prevent an orderly transition from a war economy to peace economy, and would render impossible the re-establishment of people to civilian life under good conditions. The Commonwealth Parliament will be unable to check these evils unless it gets the powers it now seek. It will, therefore, be unable to guarantee to the people, who have devoted years of their lives to the war, stable conditions in which to start out on their real life's work. This is not so in Britain, in New Zealand, or even in Canada and South Africa, where the government is organized under a federal system. No Allied country will be less able to cope with the evils of inflation after the war than Australia if the Commonwealth Parliament is not given wider powers. This alone is a sufficient argument for carrying the referendum and giving the Commonwealth Parliament adequate powers for five years after the war.

“Secondly, let us turn to the primary producer. Under a system of guaranteed prices, his position has greatly improved during the war. It will be remembered with what painful steps Australia attempted to deal with the bad markets for wheat, wool and butter and other primary products before the war. War-time powers for the National Parliament and a better demand at home and abroad have made it possible for the Commonwealth to guarantee the prices of most primary products during the war. The British Government has done this, and recently announced its intention to guarantee the prices of a wide range of primary products for four years. But in peace-time the Commonwealth Parliament is not in a position to do this, because its power to provide stable prices for the primary producer is limited to the war period. There will be heavy demands for some of Australia's primary products in the years immediately following the war. But Australia will not be able to organize her primary industries on the satisfactory plans developed during the war unless the Commonwealth Parliament has wider powers. That is serious for the farmer. But if the Commonwealth Parliament has powers in peace-time the farmer will have a decent income, security for a period and the opportunity to lay the foundations of a well-ordered industry. Thus the primary producer has very much to gain if the Commonwealth Parliament has power to continue its war-time policy into the unsettled conditions after the war, and very much to lose if there is an abrupt return to the unsatisfactory pre-war conditions.

"Thirdly, there is a large accumulated demand for certain types of capital works which have been suspended during the war. These include houses, hospitals, education buildings, certain types of public works such as irrigation and land development. The demand of these will be enormous after the war, and will far exceed the materials immediately available. The Government found during the war that it had to limit these works in order that materials, labour and capital could be set free for urgent war purposes. It will be equally true after the war that the Government will have to maintain control to ensure for a few years at least that capital, labour and materials will be available in the quantities required, and at the prices required, for the most urgent and most useful forms of capital work. It may be necessary, for example, to choose between a housing project or new shops or irrigation works. All these and other things may be quite worthy, but it will not be possible to develop them all immediately after the war any more than it was possible to build both war factories and sports grounds during the war. Some decision will have to be made as to the order of the projects themselves, and of the materials and labour and capital that will go into them. This necessary organization cannot be carried out if the Commonwealth Parliament returns to its weak position before the war. Imagine the answer that would be given to any person contending, during the war, that the Commonwealth should not have power to prevent individuals from making additions to a picture theatre at a time when there was a shortage off materials and labour for building a military camp! The problem will be exactly the same after the war, except that the choice will be rendered more difficult in that it will have to be made between one set of capital works required for peace purposes and another set. It is certain that open competition for capital works is bound to create a demand for goods, materials and capital that will lift the levels of prices, income and interest to the point of inflation. It is equally certain that, in an open market for these capital works, person, with limited means will have to make way for persons with greater means. This was not the system under which the economic basis of war was organized, and it is certainly not the system for which 1,000,000 men and women in the armed forces are giving up several years of their lives.

"Fourthly, there is the problem of demobilization. This will be by far the greatest labour placement problem Australia has ever faced. The Commonwealth Parliament will be gravely hampered if it is denied the power to enable the Government to establish avenues of employment, to train labour and to place it in the most useful occupations that it has enjoyed during war. Australia had 250,000 unemployed immediately before the war. In the ten years before the war it never had less that about 200,000 unemployed, and at times the unemployed were up to 700,000. This was at a time when the annual labour placement problem was about 50,000 people. Australia has to face the placement of 1,000,000 persons in the briefest time - not in twenty years, as was the pre-war experience, but in, say, two years. Even with twenty years' time before the war, Australia could not avoid a high level of unemployment. This problem will require courage and decision on the part of the Commonwealth Parliament that would be impossible under the powers it exercised before the war. An important feature of the demobilization will be the establishment of many thousands of young Australians in homes after the war. The sayings of women from their work in munition and other factories during the war, and the deferred pay of men in the services, will represent the start in life of these young people. There will be an immediate demand for the many goods required for housekeeping, and the pressure on prices will be greater than at any time during the war. Should price control be abandoned at this critical hour, the limited capital at the disposal of people setting up homes after the war will be absorbed in high prices and exorbitant profits to the holders of goods. The community as a whole will have failed in its duty to these young people, and will have broken its promises to them that they would not lose by rendering essential services during the war. In the absence of adequate Commonwealth powers it will be impossible to deal with this situation.

“In the fifth place, it has been seen that the demand for some materials will be very heavy. During the war it was necessary to establish controls of many basic materials of industry so that those who needed them most urgently for war purposes would get what were available, and so that price control would not be defeated by an excessive demand in an open market. Australia can expect the same situation in the years immediately following the war. The demand both inside Australia and abroad will be extremely heavy, and there is little doubt that many necessary basic materials will be in short supply. It will gravely hamper rehabilitation after the war if the power to allot materials to urgent demands is not available. It will not be available without the increased powers now being sought by the Commonwealth.

“Finally, as regards consumption of goods, it has been necessary during the war to develop a rationing plan so that goods in short supply will be equitably shared among all consumers regardless of their incomes. Equity in war-time is an important consideration. It is not less important in peace-time. It is inevitable that some widely consumed goods will be in short supply in the disturbed years immediately following the war. If this be the case, some rationing will be essential, otherwise persons on lower incomes will not be able to obtain a reasonable quantity of the goods, and persons with higher incomes will force the prices up. Even price control would not be able to prevent this because many would seek supplies in the ‘black market’. Without rationing of widely consumed goods in short supply, there can be no equity in distribution, and therefore no guarantee of a reasonable standard of living to the people.

“These will be the immediate and most difficult of the post-war adjustments. They cannot be solved without Commonwealth authority and action at least for a period of five years after the war.

“No question as to the permanent amendment of the Constitution arises.

“The same right to choose an occupation will exist if the Commonwealth Parliament is given the powers now sought as you had before the war.

“No question of socialization or any other fundamental alteration in the economic system arises.

“The only question that does arise is whether the Commonwealth Parliament, which has used war-time powers to organize the country for war, is to be denied the opportunity of continuing those powers for a sufficient period to organize the country for peace. That is the choice which the referendum gives to the people of Australia."