House of Representatives
7 October 1927

10th Parliament · 1st Session



Mr. Speaker (Hon. Sir littleton Groom) took the chair at 11 a.m., and read prayers.

page 361

QUESTION

HIGH COMMISSIONER’S RESIDENCEIN LONDON

Mr SCULLIN:
YARRA, VICTORIA

– Is it a fact that the Government hae leased a house in the West End of London for the use of the High Commissioner? If so, what did it cost, and what are the terms and the length of the lease ? At whose, request was the action taken, and is the house being provided free of rent to the High Commissioner ?

Mr BRUCE:
Minister for External Affairs · FLINDERS, VICTORIA · NAT

– It would be well to place the question on the notice-paper so that it may be answered in detail. The Commonwealth Government has acquired the lease of premises in London for the use of the High Commissioner free of rent. The sum of £6,000 has been paid, the lease being for a period of 21 years. This has been done after full consideration, it being deemed necessary to provide the High Commissioner with a suitable residence in London.

page 361

QUESTION

VISIT OF SIR ERNEST HARVEY

Mr FENTON:
MARIBYRNONG, VICTORIA

-Was Sir Ernest Harvey, Comptroller of the Bank of England, brought to Australia at the request of the Commonwealth Government, and if so, who will pay the expenses of his visits Has any report been received from him by the Government or the Commonwealth Bank Board, and, if so, are beneficial results likely to accrue from the report and visit?

Dr EARLE PAGE:
Treasurer · COWPER, NEW SOUTH WALES · CP

Sir Ernest Harvey visited Australia at the invitation of the Commonwealth Bank Board, in order that the Board might have the benefit of his oxperience and advice in connexion with central banking operations. Valu-. able results have accrued from the visit, Sir Ernest having heldconsultations not only with the Commonwealth Bank Board, but also with other important financial institutions.

page 362

QUESTION

ARMISTICE COMMEMORATION

Mr MARKS:
WENTWORTH, NEW SOUTH WALES

– Is the Government arranging for a ceremony to be conducted at Canberra on the. 11th November, in conjunctionwith the Navy and Army and Air Forces? I seek the information so that honorable members may have an opportunity to arrange accommodation if the day is to be commemorated here.

Mr BRUCE:
NAT

– It is the intention of the Government to hold the Armistice Day commemoration at Canberra on the 11th November. It is considered desirable that ail such functions should take place at the capital of the Commonwealth.

page 362

QUESTION

BENDIGO-MELBOURNE. TELEPHONE

MR HURRY:
BENDIGO, VICTORIA

– Some time ago the Postmaster-General promised extra telephone accommodation between Bendigo and Melbourne, particularly between Harcourt and Bendigo, Harcourt being a leading and busy fruit centre. When is it likely that that accommodation will be provided ?

MR GIBSON:
Postmaster-General · CORANGAMITE, VICTORIA · CP

– The telephone line from Melbourne to northern Victoria is being reconstructed. Seventeen new circuits will be provided, extending as far north as Mildura, and embracing Harcourt, Bendigo, and Castlemaine.

page 362

QUESTION

CAPITAL TRUNK TELEPHONE LINES

MR MAKIN:
HINDMARSH, SOUTH AUSTRALIA

– Will the PostmasterGeneral inform the House when the alter ations for an increased and improved trunk line service between Adelaide, Melbourne, and Sydney will be completed?

MR GIBSON:
CP

– I am unable to say definitely when the work will be completed, but anticipate that it will be about the end of this year.

page 362

QUESTION

TIMBER DUTIES

MR COOK:
INDI, VICTORIA

– Has the Tariff Board inquiry into the duties on timber ended? If so, when will the report be presented to the House, and when will honorable members have an opportunity of discussing it?

Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT

– I replied to a similar question last week. The report of the Tariff Board on timber was received only recently. It still has to be considered by the department and the Minister. I shall endeavour to expedite its consideration, after which it will be considered by the Government.

page 362

QUESTION

TRANSFERRED PROPERTIES

MR FENTON:

– Does the Commonwealth still owe the £9,000,000 or £10,000,000 which was originally due to the States for transferred properties? If so, what amount of interest is being paid to the States on the debt?

DR EARLE PAGE:
CP

– The amount set down as the value of transferred properties is about £11,000,000, on which the Commonwealth Government has hitherto paid interest at the rate of three and a half per cent., which absorbed about £387,000 a year. Under the new financial agreement with the States the Commonwealth Government will take over obligations in respect of State debts which will necessitate the payment of 5 per cent. . on the amount, increasing the annual payment by £165,000. and the “ transferred properties “ item will be wiped out.

page 362

QUESTION

CANBERRA LAKE SCHEME

MR PERKINS:
EDEN-MONARO, NEW SOUTH WALES

– Has any further action been taken towards constructing the artificiallake in Canberra that was so strongly recommended by the Chief Commissioner ?

MR BRUCE:
NAT

– No further action has been taken.

page 362

QUESTION

SEMI-OFFICIAL POSTMISTRESSES

MR McGRATH:
BALLAARAT, VICTORIA

– Has the PostmasterGeneral taken any steps to improve the conditions of the thirty or forty semi-official postmistresses employed by the Commonwealth Government, who are classified as temporary employees, although some have been employed for as many as thirty years. They are not permitted to carry on any other business, are denied the benefits of the superannuation fund, and are working for about £156 a year?

MR GIBSON:
CP

– No steps have been taken, nor is it possible to take any steps.

page 363

QUESTION

TARIFFRESOLUTIONS

MR SCULLIN:

– Will the Minister for Trade and Customs state whether the Tariff resolutions that have thrice been placed upon the table of this House, will be brought before honorable members this year for discussion, ratification and, if necessary, improvement?

Mr PRATTEN:
MARTIN, NEW SOUTH WALES · NAT

– When introducing the recent motor industry duties, I stated that it was the intention of the Government that tariff resolutions should be discussed at the earliest possible moment.

MR FENTON:

– Will the Prime Minister state why we cannot proceed with the consideration of the tariff resolutions now upon the table of the House, instead of rushing through measures of which notice has just been given?

MR BRUCE:
NAT

– The business of the House mustremain in the hands of the Government, and it is for the Govern- ment to decide the order in which it shall be taken. Full opportunity will be given to honorable members to discuss the tariff resolutions ; but the tariff is operating in accordance with the resolutions that were put before the House, whereas the new measures to which the honorable member refers are necessary to give effect to the policy of the Government.

page 363

QUESTION

VISIT TO AUSTRALIA OF THE SECRETARY OF STATE FOR THE DOMINIONS

Mr BRENNAN:
BATMAN, VICTORIA

– Will the Prime Minister inform me what arrangements have been made to enable honorable members to exchange views with the Secretary of State for the Dominions while he is in Canberra? I suggest that honorable members of this chamber, other than Government supporters, should be given a special opportunity to submit to our visitor their views on the subject of migration.

Mr BRUCE:
NAT

– The Secretary of State for the Dominions will be in Canberra on the 3rd of November, and he will remain here for about two days. It is hoped that during that period there will be an opportunity for him to address honorable members of both houses of the Parliament, and for them to place before him any views that they wish to express.

page 363

QUESTION

EX-ENEMY VESSELS

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

asked the Prime Minister, upon notice -

  1. What profits were earned by the following ex-enemy vessels: - Boonah, Barambah Bakara, Boorara, Barunga, Bulla, Carawa, Taromeo, Cooee. Dongarra, Araluen, Parattah, Booral, Conargo, Calula, Carina, Gilgai Talawa, Bulga, Mawatta, Burrowa, Cardinia,, Cooroy, Canowie, and Carrabin, prior to their transfer from the Department of the Navy to the Commonwealth Government Line of Steamers.
  2. How were the profits disposed of.
Mr BRUCE:
NAT

– The information is being obtained.

page 363

QUESTION

DEVELOPMENT OF CENTRAL AUSTRALIA

Mr NELSON:
NORTHERN TERRITORY, NORTHERN TERRITORY

asked the Minister for Home and Territories, upon notice -

Will he state whether he has yet received any recommendations front the Government Resident of Central Australia in connexion with the development of that country; if so, will the Minister state the nature of such recommendations.

Mr MARR:
Minister of Home and Territories · PARKES, NEW SOUTH WALES · NAT

– No recommendations from the Government Besident of Central Australia for the development of that country have yet reached me. As the honorable member is aware, the Government Besident has been in office for a few months only.

page 363

QUESTION

FREMANTLE QUARANTINE STATION ROAD

Mr WATSON:
FREMANTLE, WESTERN AUSTRALIA

asked the Minister for Works andRailways, upon notice -

Whether he will make provisions for repairing and maintaining in a good state of repair the road lying between the Quarantine Station at Fremantle and the New Market Hotel, as this road is the only direct and rapid approach to the Quarantine Station from the port and metropolitan area?

Mr HILL:
Minister for Works and Railways · ECHUCA, VICTORIA · CP

– The matter will be inquired into, and a reply furnished to the honorable member at a later date.

page 363

QUESTION

LOCOMOTIVES FOR OODNADATTARAILWAY SERVICE

Mr STEWART:
WIMMERA, VICTORIA

asked the Minister for Works and Bailways, upon notice -

  1. Have the fourteen locomotives for the Oodnadatta line contracted for by Thompson and Company, of Castlemaine, been delivered?
  2. Were the engines delivered within the contract time?
  3. Were the engines built to the specified standard ?
  4. Were they tested and passed as satisfactory by the Department before delivery was accepted ?
  5. Is it a fact that some have developed serious mechanical defects, and are at present being extensively overhauled; if so, how many?
  6. What is the estimated cost of the repairs per locomotive?
  7. At what cost are the repairs being made?
Mr HILL:
CP

– The information will be obtained and furnished to the honorable member at a later date.

page 364

QUESTION

EAST-WEST RAILWAY

Mr WATSON:

asked the Prime Minister, upon notice -

Whether he has been approached by the State Government of Western Australia with a view to the consummation of an agreement to continue the Trans-Australian Railway from Kalgoorlie to the coast?

Mr BRUCE:
NAT

– No.

page 364

QUESTION

DEVELOPMENT AND MIGRATION COMMISSION

Works Approved

Mr BRUCE:
NAT

– On Wednesday the honorable member for Perth (Mr. Mann) asked the following question, upon notice: -

With reference to the statement in the budget speech that through the recommendation of the Development and Migration Commission, final approval has been given to schemes upon which £5,898,000 will be expended, will he state what are the schemes referred to, and the respective States which submitted them ?

I am now in a position to furnish the following information: -

page 365

QUESTION

MURRAY WATERS AGREEMENT

Mr HILL:
CP

– Yesterday the honorable member for Swan (Mr. Gregory) asked me the following question, without notice, regarding the expenditure incurred on the works which are being carried out under the River Murray Agreement: - “ I direct the attention of the Minister for Works and Railways (Mr. Hill) and also that of the Prime Minister to the following statement which appeared in the Melbourne Argus on the 5th October, respecting the cost of the Murray waters scheme: - “The total ultimate cost of the whole of the works set out in the agreement would probably approximate £14,000,000 against the estimate of £4,663,000 appearing in the agreement.”

Is there any justification for that statement ?

I then furnished him with the following reply :- “ The original estimate of the cost of the works referred to in the agreement was £4,603,000, but probably £14,000,000 will be nearer the actual cost. We are building 26 weirs and locks along the Murray, and nine along the Murrumbidgee, at an average cost of about £250,000. It is estimated now that the cost of the Hume dam. the high-level bridge over the Murray, and the replacement of roads and railways that will he submerged, and resumption of land will be in the neighbourhood of £4,750,000. These amounts are additional to the money which has been spent on the Lake Victoria storage scheme.”

I now have pleasure in supplying the following further explanations regarding the increase in the expenditure on these works over that set out in the agreement : -

When the River Murray Agreement was entered into in 1914, very little data was available in regard to the river conditions generally, particularly in connexion with the nature of the foundations for the proposed works. As a result, it has been found necessary to incur considerably greater expenditure on foundation works in connexion with those weirs and locks put in hand to date than that contemplated in the agreement. This is mainly due to the fact that at practically every site for these works there is an absence of rock foundation, necessitating very extensive protective works, in order to ensure the stability of the structures. I may state that, when the agreement was entered into, the sites for these works were not selected. It was therefore not possible to determine the nature of the foundations by means of borings, etc.

In connexion with the Hume reservoir, the original estimate for a reservoir of 1,100,000 acre feet was £1,353,000. It has been decided to increase the capacity of the storage to 2,000,000 acre feet, the revised estimate of which is £4,500,000. The increasing of the capacity of the storage involves the acquisition of a considerably greater area of land, provision of many additional miles of roads and railways, in substitution for those which will be submerged by the stored waters, the widening and lengthening of the dam, the base of which on the Victorian section of the work will be increased from a width of 530 feet as originally proposed to680 feet. With regard to the proposed bridge to provide a means of outlet from the area enclosed by the stored waters, the increasing of the capacity necessitates the construction of a bridge of much greater length and height than originally intended. The cost of this structure alone is estimated at approximately £200,000.

I may also point out that since 1914 very great increases have taken place in the cost of materials and the rates of wages. Seductions in the daily working hours have also materially added to the cost of the work. As president of the River Murray Commission, I am keeping in close touch with expenditure on these works, and, with my fellow commissioners I am taking every opportunity to impress upon the constructing authorities the necessity for curtailing expenditure in every possible direction.

page 366

RAIL MOTORS ON DARWINKATHERINERAIL WAY

Mr HILL:
CP

– On Wednesday last the honorable member for Swan (Mr. Gregory) referred to the provision of rail motors on the Darwin-Katherine railway. I find that a Sentinel steam rail motor car has been used, which carries fifty passengers and hauls a trailer; but it is not in use at present, as a daily train is running for the conveyance of construction material. The rail car was provided when only a fortnightly service was running. Up to the time that the construction trains commenced to run the rail motor was in regular use for the conveyance of passengers and mails.

page 366

EX-SOLDIER HOUSING IN SOUTH AUSTRALIA

Mr HILL:
CP

– The honorable member for Hindmarsh (Mr. Makin) referred yesterday to the amount of the advance which might be made available in South Australia to enable a returned soldier to acquire a home. I have made inquiries regarding this matter, and find that under the agreement entered into between the Commonwealth and the South Australian Government on the 17th October, 1922, the State agreed to make advances under its own legislation, the Commonwealth’s responsibility being limited to providing the money. At the time of the agreement the advance under the State Act was limited to £700, and there Avas no obligation on the State to amend its legislation to bring it into line with anv subsequent amendments to the War Service Homes Act. Under the War Service Homes Act, the maximum advance is limited to £800, but it may be increased to £950 in special cases, as provided by the amendment made to the act this year. The State legislation still limits the advance to £700, and although the agreement does not provide for an increased advance to £800, and £950 in special cases, I propose to take the matter up with the State authorities, and request them to amend their legislation to bring it into line with the War Service Homes Act in this regard.

page 366

QUESTION

QUESTIONS ON NOTICE

Mr BRUCE:
Prime Minister and Minister for External Affairs · Flinders · NAT

.- (By leave).- Considerable difficulty is being experienced by both the Clerks of the House and departmental officers in dealing with questions that honorable members ask upon notice. I wish to suggest that honorable members should place such questions in the hands of the Clerk not later than 5 o’clock on the afternoon of the day preceding that on which the questions are intended to

*Commonwealth Bank* [7 October, 1927.] *(Savings Bank) Bill.* 367 appeal- on the notice-paper. I understand that this was generally the practice in Melbourne. I am informed also that in many cases where the questions were not urgent the Clerk, after consultation with the honorable member concerned, placed them upon the notice-paper for a day later than the following day. This, of course, precluded the questions from being asked in the interim by any other member, and it greatly assisted the departmental- officers in obtaining the information desired. Conditions at Canberra make it very difficult for the officers to obtain some of the information required, especially when questions are not given to the Clerk until late in the evening. I trust that honorable members will adopt my suggestion. {: .page-start } page 367 {:#debate-21} ### COMMONWEALTH BANK (SAVINGS BANK) BILL {:#subdebate-21-0} #### Second Reading Debate resumed' from 5th October, *(vide* page 220), on motion by **Dr. EARLE** Page - >That the Bill be now read a second time. {: #subdebate-21-0-s0 .speaker-F4Q} ##### Mr SCULLIN:
Yarra .- The object of this bill is to separate the. administration of the Savings Bank Department from the general administration of the Commonwealth Bank, and to appoint three commissioners to administer the Savings Bank business, one of whom is to be the chief commissioner, who will be a full time officer, and the other two part _ time officers. It is also provided that one of the part time commissioners shall be a director of the Commonwealth Bank. I have listened to the speech of the Treasurer **(Dr. Earle Page)** and I have examined the bill as carefully as possible in the time at my disposal. I have also with the consent of the Treasurer perused a copy of his speech, and yet I am still at a loss to find any reason for presenting the bill to the House. The Chief Commissioner will be a new appointment. His salary is not stated but is to be fixed by the Government. Two part-time commissioners are to be paid £500 a year. I presume that one of those Commissioners will receive that sum in addition to the salary of £600 a year that he receives as director of the Commonwealth Bank. That will be in addition to any income from private business. Under the bill the commission need not sit more than once a month, so that the commissioners may be paid £40 for each sitting. The bank has at present a board of seven directors, including tha chairman, who receives £1,000 a year, thu others receiving £600 a year. In addition there are the Governor and the Deputy-Governor of the Commonwealth Bank. Before this Government came into office the bank was managed by a Governor, a Deputy-Governor, and the staff. Now we have seven directors, and two additional commissioners are to be appointed to manage, in conjunction with one of the ordinary directors, the Savings Bank Department. Also there is the London Board of the Bank, and under the bill the commission or the Government may appoint boards of advice in each State and in London. The commission will also have power to appoint more officers and servants of the Savings Bank, and to establish branches, agencies, and sub-agencies. It is well known that the habit of newly appointed heads of departments is to gather large staffs about them. Yet we are appointing commission after commission and board after board. In fact the Government is making boards almost as fast as they are turned out by a saw-mill. We have protested against most of these appointments. Some of them were necessary, but many were not. The Government has overloaded the Australian Government Line of steamers with directors. That Line is to-day controlled by three directors drawing £9,500 a year. {: .speaker-KNP} ##### Mr Maxwell: -- To run seven ships. {: .speaker-F4Q} ##### Mr SCULLIN: -- The. Line is loaded down to the Plimsol mark with administrative costs. Yet right throughout Australia statements are being made about the impossibility of doing a fair thing to the men on the bottom rung of the ladder. The Workmen's Compensation Act to provide for men who meet with accidents, and the Child Endowment scheme to enable those on the basic wage to rear their children, are opposed as placing burdens upon industry, the community, and taxpayers generally; yet we are piling burdens upon this country *by* the establishment of sinecures for highly paid officials, many of them receiving salaries above that of even the Prime Minister of Australia. The position is becoming absolutely scandalous. To justify these proposed new appointments the Treasurer eulogized the work of the board of directors. I know of nothing that has been done by the bank directorate that was not being done formerly by the governor, his deputy, and his 3taff, who did the pioneering work, and they controlled tha bank without the assistance of a directorate. There has been no subsequent improvement because of the directorate, and it, in my opinion, has in some instances acted unwisely. The Treasurer has stated that under the control of the board of directors the bank has gained the confidence' of the trading banks. We established this bank not to win the confidence of the trading banks, but to get their business for the people of Australia. We established it with the people's money as the people's bank, so that the credit of the people should not be used for piling up profits for a small section of the community. The Treasurer has not said whether this separation of the savings bank department from the Commonwealth Bank will necessitate a new building. I assume that the present bank premises will continue to be used by the savings bank department. I gather from the bill that the existing staff is to be utilized and that there will be an interchange of officers. The only alteration is the appointment of three commissioners to control the savings bank department. The Government's object is to separate the savings bank department from the Commonwealth Bank, and the effect of this will be to weaken the prestige and strength of the Bank and the foundation upon which it was built. The Commonwealth Bank was established with capital provided by the depositors in the savings banks. It was the people's m'oney that laid the foundation of the people's bank, and now some £46,000,000 of savings bank deposits will be cut off from the resources of the Commonwealth Bank. The prestige of a banking institution depends upon the amount of its deposits; it is that alone that creates public confidence npt only in Australia but also abroad. When the deposits of the Commonwealth Bank, have been, reduced by the separation of the savings bank department, -, the standing of the bank' will be weakened and its status reduced, and its rivals will be able to compete successfully against it. The Government's policy is to pave the way for private enterprise and to subsidise it wherever possible. The Treasurer refuses to give consideration to public enterprise, which is the enterprise of the people. There is no doubt that this separation will strike a blow at the security and prestige of the Commonwealth Bank. For 16 years the savings bank department has been conducted in conjunction with the Commonwealth Bank, and I ask the Treasurer what improvement will be effected by the alteration, and whether there has been any inefficiency in management during that period. The change is futile and unnecessary as well as dangerous and costly to the people of this country. I have looked through the Treasurer's speech to find a reason for this drastic step. He says in one part of it- >If the savings bank enlarges its functions to provide money for the building of homes, a greatly increased toll and burden will be laid upon the directors. Under the Housing Bill, what burden and toll is to be laid upon these poor unfortunate gentlemen? It is a misnomer to call that piece of legislation a Housing Bill, because not one house will be built by the savings bank, or erected under its supervision. The bank will neither call tenders for, nor supervise the construction of one home in Australia. During the last election the Government gave prominence to the £20,000,000 housing scheme that it intended to provide for the people, yet under this scheme it will not collect one penny from any householder in Australia. The Commonwealth Bank will borrow money, hand it to the savings bank, which, in turn, will hand it to State or municipal building authorities, which will carry out the work. {: .speaker-KV8} ##### Mr Stewart: -- What becomes of the principle that those who spend the money should raise it ? {: .speaker-F4Q} ##### Mr SCULLIN: -- It has gone to the wind. Principles that previously were vicious from the Treasurer's point of view become virtuous when he desires a change of control. During the war the Commonwealth Bank floated war loans amounting to £300,000,000, redeemed the loans when they fell due, handled the subscriptions, and paid the interest halfyearly to the subscribers. All that work was done without one director being appointed to the bank. Now we have seven directors, and yet they cannot administer the savings bank department and the so-called housing scheme". A special directorate is to be appointed consisting of a chief commissioner and two parttime commissioners. Before I consent to such an alteration of the constitution of the bank, sound reasons for it must be advanced by the Treasurer. He has said that the Government is determined to separate the administration, that the central bank fund must be liquid, and that the savings bank fund for housing must be used for long term investments. The functions of a central bank or a trade bank, we are reminded, are entirely different from those of a savings bank, and therefore the administration must be separated. In telling us that, the Treasurer was saying nothing new. The first governor of the Commonwealth Bank was well aware of it, and each succeeding governor knew it. They showed their recognition of that elementary principle by keeping the business of the Savings Bank department entirely separate from that of the trading bank, and used the moneys deposited in the Savings Bank for long-term investments. That practice will be continued. In the past the Commonwealth Bank has been controlled by one authority, and the funds of the Savings Bank department have assisted in building up the prestige of the institution, which is a triumph of Labour legislation. Now it is proposed to divide the control of the bank. This will lower its standing in the community, and no practical advantage will be gained. No sound argument can be advanced to justify the change that the Treasurer says is necessary. Appointment after appointment is being made by the Government. We arc told to-day, in reply to a question, that the High Commissioner is to have a house rent free. That matter has been " carefully considered," and it is regarded as a proper thing to do. Have not the High Commissioners been able to pay their rent in the past? Why does the Government improve the position of a few men only ? To use a homely illustration, its policy is one of greasing the fatted pig. Will any of the workers be provided with homes that are rent free, as will the highly-paid High Commissioner in London? We must not talk of class distinction, or say anything that would incite class war; but there are no cheap houses or rent-free land for the struggling farmers in the district represented by the member for Wimmera **(Mr. Stewart).** On these and other workers the burden of the cost of government mainly falls. The Ministry appoints commission on commission, and board on board, without reason. We are informed that £20,000,000 worth of houses are to be built, and that this will be a burden and toll on the existing directors of the Com- monwealth Bank, although, in fact, not one house will be constructed by the Federal Government or the bank. The scheme is mere camouflage. It is a proposal to raise money and let other authorities undertake the actual work. I have a great desire that the Commonwealth Government should build both houses* and roads, but it should do the work itself. How will more houses be built, if we simply ask the existing State authorities to do it? The argument of the Treasurer is that those authorities will be enabled under this measure to do more than they are doing at the present time, because they are to be provided with more money; but what is the Loan Council doing? If the Commonwealth Government is able to float a loan and hand the money over to the States for house construction, the Loan Council could do the work itself. As a proposal to raise money and assist the State housing authorities the scheme may be commendable; but that is all it is. I notice that under one clause savings banks may invest money on fixed deposit with the Commonwealth Bank or any prescribed bank. That is to say, under this bill the State Savings Bank Commissioners, who have spent their lives in upholding private enterprise and big business, can take savings bank deposits and invest them, if they choose, in private banks. One finds nothing in the measure to recommend it; but great danger is apparent to the future prosperity of the Commonwealth. All I can see is cost piled on cost by the appointment of new commissioners, more sinecures and more plums for the big man, which will be a burden on the taxpayers of this country. {: #subdebate-21-0-s1 .speaker-KYI} ##### Mr PROWSE:
Forrest .- I do not share the fears entertained by the honorable member for Yarra **(Mr. Scullin)** as to the result of the appointment of commissioners to control, the funds of the Commonwealth Savings Bank as provided in this bill. It is quite possible that one man would be unable to administer its affairs efficiently. In a land such as Australia the savings of the people could not be invested to greater advantage than in the industries of the country. Individual landholders may be able to conserve fodder and provide storage against lean years, and probably no country has found such provision more necessary than Australia has; but to-day we are passing through a period in which millions of pounds worth .of stock have died through lack of feed. The wool from the surviving stool? will have depreciated considerably owing to the lack of fodder, and the clip will probably be not more than half as large as usual. The disabilities due to drought could be greatly reduced by the storage of fodder, since the periods of drought occur so regularly that they may be safely anticipated. It is well that the savings of the people should be invested in such a way as to advance the real Wealth of the community in the manner suggested under this measure. The salaries of the three commissioners to be appointed will be a mere bagatelle, if the- scheme is properly managed. Persons who could not think on broad lines considered that it was a shocking waste that the shareholders in Bawra should be called upon to bear the expense of a chairman of directors in receipt of £10,000 a year, but the enormous savings effected by that efficient officer proved him to be a valuable asset to the association. If the Government appoints suitable Savings Bank commissioners their salaries will be a mere .drop in the bucket as compared with the value of the services they will render. Although I am not enamoured of the housing proposal, I realize that those desirous of owning their houses should be assisted to do so. The redeeming feature of the proposal is that the money will be only lent and trained men will see that it is not wasted. Personally I think it would be infinitely preferable to leave the subject of housing to the States, because if the Commonwealth makes large sums easily available, spendthrift administration may be induced, with resultant harm to industry I cannot imagine better managers of the project than the directors of the Commonwealth Savings Bank. If the provision of war service homes had been entrusted to the organized bodies which had had experience in carrying out similar work, the losses sustained in providing those homes would not have occurred. Where the State Savings Bank controlled the erection of homes for soldiers, the work was done much more economically and satisfactorily than under a Commonwealth department, and I am glad that the Government proposes to hand the War Service Homes work in Victoria over to the State Savings Bank. In regard to the lending operations of the Savings Bank, the Government has taken a step in the right direction in providing that the fundamental industries of Australia shall get some benefits 'from the savings of the people. Those savings could not be invested in any better security than the industries out of which they were created. {: #subdebate-21-0-s2 .speaker-KEV} ##### Mr FENTON:
Maribyrnong .- I rise to oppose the bill. In times of financial stress a strong and stable institution like the Commonwealth Bank is more necessary than anything else, and I am confident that if the Government is allowed to lop from the bank a limb at a time, soon very little of it will remain. It is interesting to review briefly the genesis and progress of the Commonwealth Bank, and the benefits it has conferred upon the people. Having regard to its performances, any sane man would realize the wisdom of not interfering with such a beneficent institution. I shall give to the House a few facts contained in a speech delivered by **Sir Denison** Miller at the laying of the foundation stone of that magnificent branch of the bank in Collins-street, Melbourne. Included in the company were the then Prime Minister and the *elite* of the financial and business community in southern Australia, and one may be sure that if **Sir Denison** Miller had made any misstatement his banking rivals would have been only too pleased to draw attention to it. He related how, when he was appointed Governor of the new institution by the Fisher Government, he borrowed a messenger from, the Treasury, and rented a small upstairs-room, in Collins-street. The bank had not a penny of capital at that time. {: .speaker-KFP} ##### Mr Foster: -- He borrowed £10,000 from the Treasury. , {: .speaker-KEV} ##### Mr FENTON: -- He borrowed £5,000 from the Treasury and in a very short space of time the money was repaid. From that small nucleus of a Governor, and a messenger the staff of the bank throughout Australia and the territories has grown to about 2,500 persons. There are 70 branches and 10,000 agencies throughout the world. By reference to the bank's balancesheets, honorable members may be able to see the large number of agencies that **Sir Denison** Miller was able to establish in various countries. He showed his wisdom in so doing, for those branches helped him to keep his finger on the financial pulse of the world. There are now 3,300 Commonwealth Savings Bank agencies throughout Australia, the depositors number nearly 1,000,000, and the total deposits amount to £47,000,000. **Sir Denison** Miller stated that because the Commonwealth Bank undertook on behalf of the Government the flotation of various loans, it was able to save the people of Australia in respect of brokerage and other charges about £6,000,000. Another benefit conferred by the bank was that during the war and for a considerable time afterwards, the rate of interest on overdrafts and advances was kept down to a reasonable figure. {: .speaker-JMG} ##### Mr Atkinson: -- This bill will not hurt the Commonwealth Bank in that respect. {: .speaker-KEV} ##### Mr FENTON: -- The honorable member is mistaken, and later I shall quote a great authority in regard to the advantage that accrues from the association of a savings banks with a general banking institution. It is well known that during the war, as at other times of stress, the financiers endeavored to reap a rich harvest and, in connexion with contracts for the supply of meat and the hiring of vessels, exorbitant charges were made. Because of the existence of the Commonwealth Bank the interest charges on overdrafts and advances to business men were maintained at a uniform rate of 6 per' cent. I know friends who were paying 6 per cent, upon overdrafts in the Commonwealth Bank and 7 per cent, in private banks. Had the Commonwealth Bank not been established, the private banks would have charged for this accommodation at least 2 per cent, more than they did. {: .speaker-KXD} ##### Mr Watson: -- Often it would have been beneficial if borrowing had been prohibited by a higher rate of interest. {: .speaker-KEV} ##### Mr FENTON: -- Had the interest rate been prohibitive during wartime, thi3 country would have experienced finanical stagnation. I believe that the advances to business men during that period amounted to over £200,000,000 and had the interest rate been 2 per cent, higher than it was, a sum of between £60.000,000 and £65,000,000 would have been, taken out of the pockets of the community over a period of about twelve years. The Commonwealth Bank was able to prevent grasping private institutions from exploiting the people. The London and Westminster Bank and other institutions which used to control Australian loan flotations in London, always charged a fee for merely paying interest over the counter to the bondholder. Various other expenses had to be paid in connexion with not only the flotation of loans, but also the payment of interest during their currency. By the operations of the Commonwealth Bank the loan charges which previously had averaged £2 Ils. per cent, were reduced to 5s lid. {: .speaker-JMG} ##### Mr Atkinson: -- That good work of the bank will continue. {: .speaker-KEV} ##### Mr FENTON: -- If we weaken the institution we shall destroy its efficiency. The savings branch is recognized to be a great buttress of the general bank. {: .speaker-JMG} ##### Mr Atkinson: -- Does the honorable member contend that this bill will weaken the Commonwealth Bank? {: .speaker-KEV} ##### Mr FENTON: -- I do. {: .speaker-C7E} ##### Dr EARLE Page: -- The bill merely separates the administration, of the two branches, but the figures of both will stil) appear together. {: .speaker-KEV} ##### Mr FENTON: -- The management of the £47,000,000 worth of savings is being placed in the hands of Commissioners who will dictate the application of this money, and this will tend to weaken the general bank. The Australian system of banking is different from systems that obtain in some other parts of the world. In America and in some European countries there has been a considerable growth of co-operative and trade union banks, which now handle effectively very large sums of money. Many of the smaller countries of Europe carry on banking activities which assist the general community, on lines similar to those adopted by our joint stock banks. The general public has endorsed the establishment of our great national bank, and *I believe we should have such n. bank; that it should receive not only the thousands of pounds of the rich but also the pennies of the poor. The humblest of our citizens should be able to avail, himslef of its services, whether of its general or savings bank branch. {: .speaker-KNP} ##### Mr Maxwell: -- They will still be able to do that. {: .speaker-KEV} ##### Mr FENTON: -- We must appreciate the fact that the Commonwealth Bank has its head offices in Australia and is Australian managed. **Mr. Anderson,** when chairman of the Bank of Australasia Limited, said, "We must realize as private bankers there has entered into the field, with government backing, a great institution which is hound to affect our business; but if that bank is properly conducted there is not the slightest reason why it should not be a wonderful feature, affecting advantageously the finances of our country." This bill seeks to establish a set of commissioners whose duty will be merely to act as a filter through which money will pass to the agencies. The' honorable member for Yarra **(Mr. Scullin)** very pertinently pointed out that these Commonwealth commissioners will not be able to supply one weatherboard or brick fo, the carrying out of the housing scheme. {: .speaker-KNP} ##### Mr Maxwell: -- That may be a good argument for the non-appointment of these additional commissioners, but the honorable member for Yarra **(Mr. Scullin)** clearly indicated that the Commonwealth Bank had two functions - a general and a savings hank department - which had to be kept entirely separate. {: .speaker-KEV} ##### Mr FENTON: -- That has been done. The institution has been so well conducted that I see no necessity for this innovation. There is nothing to prevent the Commonwealth Bank, under its present constitution, from advancing money either from its general cr its savings banks department. In the past it has advanced loans to metropolitan boards, municipal councils, and similar semigovernment activities. {: .speaker-F4Q} ##### Mr Scullin: -- The lending of. money for housing will not give them very much extra work. {: .speaker-KEV} ##### Mr FENTON: -- That is so. This innovation merely provides good salaries and sinecures for three commissioners. Australia cannot afford that excrescence at the present time. I shall give an illustration of how this bank has operated to the advantage of metropolitan boards. Some years ago the Victorian Treasurer wished to inaugurate a water supply for the Flinders Naval Base, on the Mornington Peninsula. The Commonwealth Public Works Committee was instructed to inquire into the proposition, and various schemes were placed before it. The Melbourne Metropolitan Board of Works wanted to construct a reservoir to serve the naval base, the water to be carried a distance of 40 miles. The committee turned that proposition down, considering that a combined scheme' would be more suitable. Finally, a combined scheme was submitted, and the State Rivers and Water Supply Commission was so enamoured of it that it was adopted; but difficulty was experienced in" providing finance. It was then war time, a time of financial stringency, but our committee was aware that the Commonwealth Bank had money available. The Bank was approached and it advanced £160,000, at 4^ per cent, interest, to carry out the initial work. Savings Bank money was used for that purpose. , **Mr. Maxwell.** - Why was the money advanced at such a low rate of interest? That was sweating the depositors. {: .speaker-KEV} ##### Mr FENTON: -- Not necessarily. They are receiving only3½ per cent..now. but the appointment of these commissioners will entail greater overhead expenses and possibly depositors will receive less than that in future. {: .speaker-F4Q} ##### Mr Scullin: -- One of the reasons actuating the establishment of the bank was the desire to keep down the rate of interest. {: .speaker-KEV} ##### Mr FENTON: -- It is remarkable to me that the bank to-day, offering only 3½ per cent. interest, has £47,000,000 odd deposited in its savings bank section. There are savings banks in Sydney offering 4 to4½ per cent. To demonstrate the timidity of some people, I may mention that individuals have approached me and asked whether it would be safer to deposit their savings in the Commonwealth Savings Bank at3½ per cent. than in a State Savings Bank at4½ per cent. I informed them that they had no reason to doubt the stability of either bank, which had its respective Government behind it. At the same time, I consider the Commonwealth Bank the better institution, as it has behind it the credit of the whole of the people of Australia, not merely that of the people of an individual State. It was the Commonwealth Bank that negotiated the first New York loan. When the then Premier of Queensland, **Mr. Theodore,** had the door slammed in his face in London and was unable to borrow there, he got in touch with **Sir Denison** Miller, then governor of the Commonwealth Bank, and that gentleman arranged the raising of 22,000,000 dollars in New York for the Queensland Government. **Sir Denison** Miller very truly stated that, with its 10,000 agencies throughout the world, the Commonwealth Bank was able to keep its finger on the financial pulse of the world. It was able to effect great savings in connexion with the flotation and re-flotation of loans, and with the conduct of loans during currency. Great savings were also effected by the business people of Australia because the rates of interest were kept down, and that affects every citizen, because every one has to meet his proportion of taxation and interest in some shape or other. The Commonwealth Bank has had a remarkably successful history, and it is incomprehensible to me that, instead of endeavouring further to stabilize its activities, the Government is endeavouring to disintegrate it. {: .speaker-KMU} ##### Mr Marks: -- Does the honorable member consider that the stability of the Commonwealth Bank will be jeopardized by this innovation? {: .speaker-KEV} ##### Mr FENTON: -- No; but the benefits it is able to confer on the community will be considerably lessened by this measure. Some of the brainiest officers in the service of the Commonwealth Bank believe that that institution should be truly national, while others have retained the outlook of private banking men from the day they entered its service. I am glad that some of the latter are now out of the service. One of the most brainy of the officers employed by the Commonwealth Bank said to me " This bank will get on all right so long as it does not cut off its right hand." I asked what he meant by "right hand," and he replied "The savings bank branch." That man is one of the finest men associated with the bank, as honorable members would realize if I disclosed his name. {: .speaker-KFE} ##### Mr Gregory: -- This is the only way in which people can obtain houses on the 90 per cent. basis. {: .speaker-KEV} ##### Mr FENTON: -- I am surprised that such a remark should emanate from the honorable member for Swan **(Mr. Gregory),** who generally objects strongly to the overloading of the Public Service, but now appears to concur heartily in the establishment of this new board. {: .speaker-KFE} ##### Mr Gregory: -- I have not said anything about it. If I had my way there would be no Commonwealth Bank. {: .speaker-KEV} ##### Mr FENTON: -- I hope I shall secure the support of the honorable member in my opposition to this measure. Innovations of this kind tend to encumber administration and cause excessive overhead expense. One has only to look at the Development and Migration Commission for an example. As a former Minister, and one experienced in both State and Federal politics, the honorable gentleman knows that to be the case. He, also, must realize that this new body will merely be a filter through which money will pass; a sort of loan authority. Heretofore the Commonwealth Bank has very successfully handled loan proposals involving millions of pounds, and I should be prepared to trust it in the future. To illustrate the progress of the Commonwealth Bank I shall quote from the balance-sheet of the Commonwealth Bank as at 30th June, 1927. There is shown - Capital Account, £4,000,000; Reserve Fund, £1,217,750, representing a profit of £5,217,750. The Bank commenced operations upon an advance of £5,000, made by the Treasurer of the day. A few months later that advance was paid back, and no further capital has been sought. Further figures from the balance-sheet reveal - Rural Credits Department. - Capital Account, £560,097; ReserVe Fund, £13,000; Development Fund, £13,000; Deposits, accrued interest and rebate, £32,277,337; hills payable and other liabilities, £6,022,533. Savings Bank Department. - Depositors' balances, with interest accrued, £46,479,020. That makes a total of £90,582,740, and when one also adds outstanding credits - General Banking, Rural Credits Department, and Note Issue Department, the total reaches £139,441,652. Those are remarkable figures. Certain honorable members have asked what difference will be made if the Savings Bank department is severed from the other departments. One immediate result will be that £46,479,020 will be struck off the balance-sheet. Quoting once more from the aggregate balance-sheet, the following figures show the bank's assets at the 30th June, 1927 : - Coin, bullion, and cash balances, £2,769,861 9s. 9d.; Australian notes, £7,150,549 5s.; money at short call in London, £4,435,000; Investments: - British, Colonial and Government securities (face value £44,658,433 ls. 2d.). £44,497,592 16s. ; Commonwealth Government securities (face value £9,242,650), £9,234,567 4s. lid.; fixed deposits of other banks, £2,149,000; bills receivable in London and remittances in transit, £3,482,386 5s. lOd. ; bills discounted, loans and advances to customers, and other sums due to the bank, £16,194,993 5s. Id. ; and bank premises, £668,789 18s. 4d. The estimate of the value of the various premises owned by the bank is very conservative. The building it occupies in Sydney alone could honestly be valued at the whole £668,789. The profit of the bank for the half-year ended 30th June amounted to the remarkable total of £944,865. The profit for the full twelve months must have been nearly £2,000,000. Of this amount £159,158 was paid into the reserve fund, and a similar amount was placed to the credit of the National Debt Sinking Fund. Those are remarkable returns for an institution of the age of the Commonwealth Bank. I am prepared to admit that the bank received a considerable fillip during the war. {: #subdebate-21-0-s3 .speaker-KRD} ##### Mr MCGRATH: -- And it helped the country. {: .speaker-KEV} ##### Mr FENTON: -- -That is so. No one can say how much it did for the welfare of the general community. I am almost afraid to think what our plight would have been in those disastrous years had we had no Commonwealth Bank. As things were, the bank afforded us a sense of security, the value of which could not be over-estimated. In my opinion we should be well advised to leave the organization of the bank as it is. No substantial reason has been advanced to justify us in incurring the additional expense proposed in this bill. The bank has time after time proved its value to our primary industries, and I am afraid that if we cut off one department here, and another there, we shall seriously impair its usefulness. We have heard a good deal recently from the honorable member for Forrest **(Mr. Prowse)** about wheat, wool, and other primary products. Even the honorable member cannot forget how effectively the bank supported these industries during the war years. The various trading pools which were then organized were backed financially by the bank, and chiefly on that account were successful in their operations. For many years the Labour party had a policy for developing the bank along lines which would enable it to continue to strengthen our primary industries. When the motion for the second reading of the last bill for the amendment of the Commonwealth Bank was being debated, the honorable member for Bourke **(Mr. Anstey),** who was then the deputy leader of our party, moved the following amendment: - >That the following words be added to the motion : - " and that the bill should contain provision for an extension of the functions of the Commonwealth Bank to provide rural credits for the following purposes: - > >To advance upon broad acres. > >To assist co-operative finance in primary and secondary production. > >To assist in land settlement and development. > >To establish a grain and fodder reserve against periodsof drought." {: .speaker-C7E} ##### Dr Earle Page: -- That was taken from the platform of the Country party. {: .speaker-KEV} ##### Mr FENTON: -- The Labour party had a programme for stimulating primary production long before the Country party was even thought of. I suppose the honorable member for Bourke spent only four or five minutes in submitting his amendment to the House, and the honorable member for Hunter **(Mr. Charlton)** almost as briefly supported it. But he had hardly resumed his seat when the Prime Minister stifled all discussion by applying " the gag." The Treasurer would do well to remember now and again that some of us have more than a slight interest in primary production in this country. I was born on a farm, and obtained my earliest experiences there. Immediately prior to my election to this Parliament I was engaged for seven years in organising the dairymen of New South Wales, Victoria, and Tasmania. Our object was to get them to co-operate in the marketing of their products. I am glad to say that they are now doing something effective along that line. I have always been sympathetic with the man on the land. In my opinion we should be assisting him more effectively by leaving the Commonwealth Bank organization as it is than by altering it in the way proposed by the Government. We do not need to increase the number of its highly-paid officials. Some of its best work was done when it was managed by a governor, without the assistance of a board of directors, such as it now has. I regret that we have been called upon to discuss this measure at such short notice. I understand that the Deputy Leader of the Opposition was not aware until late last evening that the bill would be proceeded with to-day. The Government appears to think that it can introduce a bill one day and have it passed the next; but that can only be done by stifling discussion. I have had very little opportunity to collate the material from which I prepared my speech; but the few figures I have quotedmust have convinced honorable members that the bank is in a sound financial position. Not only has it investedmany millions in various Commonwealth loans, but its total turnover has been no less thau £139,431,652. In the Note Issue Department alone it holds gold coin and bullion to the value of £22,065,071, while its debentures and other securities are valued at £25,134,509. In all these circumstances honorable members should be very careful not to do anything to undermine the institution. Seeing that it has grown in a very few years from a small concern, which had practically only a governor and a message boy, to one which employs several thousand people, we should not tamper with it, lest we do something which will interfere with its effectiveness, and cause public faith in it to decline. The Labour party is proud of the bank, and it will jealously guard it. We fear that the Government, while not having the courage to abolish the institution, may adopt a piecemeal method of crippling it. {: .speaker-KNP} ##### Mr Maxwell: -- Does the honorable member suggest that the Government desires to do anything of that kind ? {: .speaker-KEV} ##### Mr FENTON: -- I do not think that even this Government would be so foolhardy as to attempt to wreck the bank. But there are more ways of injuring an institution than by attempting to close its doors, and the introduction of this bill is one of them. Recently **Sir Ernest** Harvey visited Australia and conferred with the bankers here. I am informed that there is no published account of their deliberations, but no doubt notes were made of the advice given by him and are now in the custody of the Commonwealth Bank and the private banks. It would certainly be interesting to know what was the result of those deliberations. The Treasurer said yesterday that the Government desired more and more to make the Commonwealth Bank a central bank, and I want to know what is meant by that statement. I can safely say that 99 per cent. of the people of Australia desire the Commonwealth Bank to carry out the general banking business of this country. If the Treasurer means that the Commonwealth Bank is to be used as a clearing bouse for private banks, my opposition to the bill 'will become stronger, because no benefit could thereby accrue to ti.3 general community! The purpose of this bill could easily be carried out by a slight amendment of the Commonwealth Bank Bill. The management of the Commonwealth Bank should remain as it is. Private banks are becoming more and more concentrated. A prominent bank manager, who is now retiring from office, told me the other day that the number of banks in Australia has decreased by 50 per cent., because of amalgamations. {: .speaker-KZT} ##### Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917 -- That is a world-wide movement. {: .speaker-KEV} ##### Mr FENTON: -- I desire that any movement in that direction in Australia shall be for the benefit of the people. The Commonwealth Bank was established for the people. Today the money-lenders of London and New York are acting in concert. They are obtaining a monopoly of the money market and they will soon be in a position to fix the interest rates for any loan that is raised. > Our efforts to-day should be towards the stabilization of finance; but the only effect of this measure would be the disintegration of finance. By separating the Savings Bank department from the CommonWealth Bank we shall lessen its influence. The bank has a splendid staff of officers, including land and other experts, who have a thorough knowledge of the banking business. Why, then, establish another department, which will mean the employment of an -additional staff, and be a tremendous expense to the taxpayers of the country? The deposits in the Commonwealth Savings Bank amount to £47,000,000, and those in the various State Savings Banks amount to £160,000,000. That money is provided by people occupying humble positions in the community. There is a population of less than 50,000 in the City of Footscray, which is a workingman's community, and 35,000 of that number are depositors in the Savings Bank. I do not say that the proportion would be as large in every industrial centre. The Credit Foncier system throughout Australia has been built up on the savings of the workingmen of Australia. Any alteration in the present management of the Commonwealth Bank will inflict harm upon the depositors in the savings bank, and upon the general community. The great body of the people of Australia desire the bank to function as it does ar present. During the war the bank functioned with wonderful success, but since then a directorate has been formed consisting of men who had been connected with private banking institutions. It is folly to expect such men to manage our great national institution in the way the people desire. Although I do not say that the Treasurer has become the tool of private banks, I certainly do not view with any degree of equanimity and pleasure the establishment of a commission to control the savings bank department. This bill will mean the extension of departments, the employment of additional officers, and a tremendous expenditure at a time when this country can ill afford it. *Sitting suspended from 1 to 2.15 p.m.* {: #subdebate-21-0-s4 .speaker-KZT} ##### Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917 .- Before I commence my remarks on this bill, **Mr. Speaker,** I should like to know if it will be permissible for me to refer to the Housing Bill, which is so intimately related to it ? {: #subdebate-21-0-s5 .speaker-KFK} ##### Mr SPEAKER (Hon Sir Littleton Groom:
DARLING DOWNS, QUEENSLAND -- Following the practice that is usual when two inter-related measures are on the notice paper at the same time, I propose to allow honorable members to discuss the general principles of both together at the second reading stage, but they will not be in order before the committee stage is reached in specifically referring to individual clauses. I recognize that it is almost impossible to discuss this bill without referring to the related measure. {: #subdebate-21-0-s6 .speaker-KV8} ##### Mr STEWART: -- Paragraph *c* of proposed new section 35aa specifically refers to " the Commonwealth Housing Act 1927." {: #subdebate-21-0-s7 .speaker-10000} ##### Mr SPEAKER: -- Apart from that, the fabrics of the two bills are so interwoven that I propose to allow- at this stage the general principles of both to be discussed together. {: .speaker-KZT} ##### Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917 -- When the Government first announced its intention to em- j bark upon a £20,000,000 housing scheme, I, in common with many other citizens, feared that a seventh competing government authority in homo building was about to be created, and . I early expressed grave doubts of the wisdom of that policy. The Government did not do itself justice in neglecting to announce much earlier, in clear terms, that it did not intend to become a competitor in house building. Having heard the scheme propounded, I am pleased to be able to accord my support to this measure. {: .speaker-KV8} ##### Mr Stewart: -- Probably the Government did not make up its mind until a very late hour. Mr.RODGERS. - I am not prepared to say that; at any rate it is entitled to full credit for the measure that is before us. The Deputy-Leader of the Opposition did not attempt to examine this proposed national housing scheme, or the relationship of the financial assistance that the Government proposes to give to the housing schemes operated by the States. On the contrary, he has chosen to regard this bill as a sinister attack upon that great institution, the Commonwealth Bank, for which his party rightly claims a great deal of credit, which should be passed on in turn to a former member of this chamber, **Mr. King** O'Malley. To correctly appreciate this bill, let us examine what is sought to be done. I propose to show the correlation of this bill and the amending Commonwealth Bank Bill. The latter was declared by the Treasurer to be necessary to buttress and afford financial backing to the Government's housing scheme. That in itself is a sufficient warrant for altering to some extent the constitution of the Commonwealth Bank. Nowhere in this bill is there any proposal to divorce the savings branch completely from the general bank. On the contrary, section 35aa states clearly that the Savings Bank may operate as it did before in relationship to the Commonwealth Bank. {: .speaker-F4Q} ##### Mr Scullin: -- The Treasurer said that it would be entirely separated. {: .speaker-C7E} ##### Dr Earle Page: -- I said nothing of the sort. I said the administrations were to be separated. The honorable member always misrepresents me. {: .speaker-F4Q} ##### Mr Scullin: -- That is an absolute lie, and the Treasurer knows it. {: .speaker-10000} ##### Mr Speaker: -- Order! Mr.RODGERS.- The Deputy-Leader of the Opposition must knOw that the savings branch has at times made a large proportion of its funds available to the general bank. The continuance of that practice is specifically provided for in proposed new section 35aa. Anyone with a knowledge of banking is aware that even a savings bank must keep a substantial proportion of its funds in liquid form, because depositors may in a period of depression or panic make demands upon it for their funds, even as they do upon an ordinary bank. Therefore, I see no likelihood of an undue proportion of savings bank funds being hypothecated for longdated loans. This billwill not in any way divorce the two branches of the Commonwealth Bank except to the extent of separating the managements. Looking at the present costs of administration and the machinery to be provided, I conclude that the Chief Commissioner will probably be the man who to-day controls the savings bank activities of the Commonwealth Bank. {: .speaker-C7E} ##### Dr Earle Page: -- At practically the same salary. Mr.RODGERS.- He will have the assistance of two commissioners, whose emoluments will be limited to £500 a year. This will in effect place the management of the Commonwealth Savings Bank on a similar basis to the management of State Savings Banks. {: .speaker-F4Q} ##### Mr SCULLIN:
YARRA, VICTORIA · ALP; FLP from 1931; ALP from 1936 -- The Chief Commissioner will be an extra appointment. Mr.RODGERS.- I have already expressed a contrary view, for I cannot conceive that the Government would lose the services of the man who is so familiar with the management of the existing savings branch. This is a great scheme to provide Australian citizens, whose incomes do not exceed £620, with homes at cost price on the best terms ever offered to any citizens in the world except our own soldiers, who obtained homes at cost price without having to make any deposit. If there be any objectionable features about the scheme, it is probably the undue liberality of the terms, for an advance of 90 per cent. upon a home is very substantial and generous. The honorable members of the Opposition, however, have not discussed a national housing scheme, although they have frequently asked the Government when it proposed to bring such a proposal before Parliament. They have contented themselves by crying " wolf," and with pointing to the possibility of the Commonwealth Bank being annihilated or emasculated. I am greatly relieved to find that the bill clearly provides that there shall be but one Government housing scheme in each State or territory of the Commonwealth. Upon that condition I support the measure. Had the Government proposed that there should be two State agencies competing with each other in the same field, I Would unhesitatingly have opposed the bill. The Government is proposing to supplement private efforts to provide homes for those not in a position to build them without assistance, and so long as they do that, and money is available at a cheap rate of interest, I shall commend it. This scheme will certainly have a steadying -effect on interest rates in the building world. The Commonwealth is able to supplement the efforts of the States by making money available at a rate not exceeding 6 per cent. From no other agency in the Commonwealth can money be obtained at that rate of interest for the building of homes. The terms of repayment, although not specifically set out in the Housing Bill, will no doubt be governed by the practice in the various States, for, after all, the State authorities are to be the judges of the terms. In respect of houses of stone and brick the loans will probably have a long currency ; for houses of wood the terms will be shorter, and in respect of purchased houses will be governed by the valuation and probable life of the security. Those are the cardinal principles governing the housing agencies established by State Savings Banks. I, however, have had sufficient experience of Government housing schemes to feel impelled to issue a word of warning to the Treasurer. The announcement of a £20,000,000 housing scheme, without any statement of the annual programme, is likely to cause excitement in the real estate market, and a fluctuation of values, with possible inflation of prices of land, building material, and labour. For that reason I hope that the Treasurer will at the earliest possible date, after consultation with the commissioners and the State building authorities, announce the programme that the Government will undertake annually That will have a steadying effect upon speculation. There are men in the various cities of the Commonwealth who have, of recent years, bought up many promising building sites and small estates surrounding metropolitan areas, and are holding them as speculations, waiting for a big rise in values. I hope the Government will stand firm and not allow another boom period to set in. The matter of ready-built homes needs careful attention. There is the greatest danger of astute real estate men putting their heads together and, through the medium of private individuals, dumping properties on the States and Commonwealth under conditions which could not otherwise be obtained. I do not say that Australian citizens are prone to do that sort of thing, but I had a most unwholesome experience in charge of War Service Homes before I closed down on the idea. Owners of many such homes are subject to heavy commitments, high rates of interest and contracts which are disadvantageous to them, and they will make every endeavour to dump their encumbrances on the States or on the Commonwealth. Every man paying a higher rate of interest than 6 per cent., who comes under the category set out in the housing scheme, will be after the cheaper rate and the long terms. On the other hand I consider it only fair to say that I believe this scheme will be a great steadying factor against panics. There is sure to come a bad time for all phases of commercial life and it is at such periods that the weak man goes down first and invariably breaks the market. Properly handled, this scheme will give greater stability to home owning in this country. I observe that before a State Savings Bank can secure the benefit of any Federal Savings Bank money it has to bring its legislation into conformity with the federal housing scheme. The States will then become agents of the Commonwealth for the acquisition, the building, and the guarding of the security. I commend the Treasurer where the Deputy Leader of the Opposition condemns the honorable gentleman, although I am uo advocate of the Commonwealth being a building agency. At one time the War Service Homes Commission employed a master builder to build homes all over the Commonwealth, and, at one period, he had practically acquired, contracted for, or obtained an option over everything except the sea. The Government was led a merry dance undoing what that person had done and in unmaking the bargains he had made. I do not wish to see the Commonwealth enter into an orgy of contractual obligations of that description. The States are in a better position to judge local requirements than is the Commonwealth. They have in their employ careful, wide-awake people, good organizations, and, in addition, their own decentralized savings bank system, which will ensure that a fair moiety of money is spent in the rural towns and districts as well as in the metropolitan areas. I urge the Prime Minister and the Treasurer to give earnest consideration to the utilization of a proportion of the aggregate savings bank's money towards assisting the smaller settlers of the country, to enable them not only to build their homes, but also to finance their farm operations. Those settlers are forced into private channels for their finance, and are compelled to negotiate short-dated loans at high rates of interest, being subjected to the excessive charges associated with frequently recurring renewals, to low advances and low valuations. They, above all others in Australia, need the assistance of Savings Bank funds. I have had a long and intimate association with the struggles of men on the land, and I consider the time is opportune to make a complete review of the system of financing them. Trustee companies, insurance companies, and the like do not afford adequate assistance to our settlers. . Banks will lend only from day to day, the bargain being one-sided. From day to day the rate of interest may change, and the term of the advance is uncertain and too insecure for the farmer, whose time of affluence may not coincide with the time at which the bank desires to recall its money. Private lenders advance money for short periods of from three to five years, and some trustee companies will not advance above 60 per cent, on their own valuations. The Savings Bank Commissioners would be well advised to make available to settlers a greater margin of advance on longer terms at low rates of interest. It is not hard work, or even bad seasons, that distress our settlers. It is the feeling of insecurity brought about by their financial position, by the necessity to arrange renewals of mortgage, and the anxiety as to whether they will tide over bad financial periods. A gap exists in our financial scheme which could very well be bridged now. Provision is made by governments to help the man in the country in all ways except to finance his year of production. Attempts have been made to establish rural credit systems, but governments have not at their disposal adequate machinery to operate such systems. Private banks and savings banks have branches all over the Commonwealth; they have in their employ men able to assess the value of a wool clip or any growing crop that is maturing - men who have a knowledge enabling them to formulate a policy to govern the financing of the years of production of a farm. If savings bank funds and their services were utilized fo: the purpose a great gap would be filled in the financing of the man on the land, who too often has to sacrifice something that should be carried on to the period of maturity. Before hypothecating the whole of the available funds of savings banks- for a scheme for the buildof homes in urban and suburban areas, I urge that the Treasurer should make available to settlers in rural areas loans on long terms and at low rates of interest, with a larger margin of advance than that prevailing. That would be a policy along with the scheme now under consideration, and I hope the honorable gentleman will take the suggestion to heart. I have no faith in government settlements, such as were inaugurated for our returned soldiers. It is impracticable to expect our young men to go on the land and make good, owing for 100 per cent, land, 100 per cent, stock, and 100 per cent, implements, when the cost of production is so exorbitant. I am a believer in the policy of putting young Australian rural workers who have some savings and a certain amount of agricultural experience behind them upon whatever land is available, and making them long-dated loans at a cheap interest rate to enable them to develop the country. In this way, better than in any other, we shall advance primary production in- Australia. We could place a large band of fine young freeholders upon the land we have available, and because they have certain savings and experience behind them, we could reasonably expect them to make good. {: .speaker-KNP} ##### Mr Maxwell: -- Does not the personal equation enter much more largely into the matter when it is a case of settling a young man on the land as against providing him with a dwelling house? {: .speaker-KZT} ##### Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917 -- Certainly. That is the point I am desirous of making. However,' this is a great national scheme with the object of encouraging our people to purchase their own homes, and as such I give it my full support. {: #subdebate-21-0-s8 .speaker-KMQ} ##### Mr MANN:
Perth .- This is purely a machinery measure, and I regret that an impression has been created that the Government housing scheme depends upon our approval of it. The *two* measures are, in my opinion, entirely distinct. The housing scheme does not in any way depend upon the passage of this bill. Assuming for a moment that the housing scheme of the Government is a good one - though I do not concede that - how does it in any way depend upon separating the Commonwealth Savings Bank from the general activities of the Commonwealth Bank? I have listened attentively to the speeches that have been made on this measure, and I have not heard a single argument advanced by the Treasurer or any one else that leads me to believe that the objects of the two measures are intertwined. This bill sets out the sources of income and the avenues of investment which will be open to the newly constituted savings bank; but every one of them is already available to the Commonwealth Bank. Many of them, as a matter of fact, lie along tho lines of ordinary banking practice. It appears to me that we are endeavouring to control the operations of tlie bank in this Parliament, and in doing so we are making a great mistake. The affairs of the bank should be placed in the hands of reliable and experienced men. and we should cease our growing practice of earmarking, by act of Parliament, portions of its funds for particular purposes. The. money available to the bank should *hi* used as its directors think fit. If we interfere with their operations we are undoubtedly hindering the development of the institution and limiting its elasticity. We should make up our minds immediately thai we cannot manage tho bank from this chamber. If there is any special function which the bank should be able to carry out, but has not the power to do so, the Treasurer should tell us ; but that has not even been suggested. The only reason that has been advanced for the passage of this bill is that the directors of the bank have too much to do. But no substantial evidence has been forthcoming to support that statement. What we have to consider is whether by severing the operations of the Savings Bank branch of the institution from its other branches we may not weaken it as a vital force in the community. Every bank depends for its strength and stability upon the funds at its disposal. It is well known that the Commonwealth Savings Bank commenced its operations in all the States, in the face of considerable opposition from the State Savings Bank authorities, chiefly for the purpose of gathering funds to enable the Commonwealth Bank to operate on a large scale. That objective has been achieved, for of the £78,500,000 which has been deposited in the bank no less than £46,500,000 has been deposited in its Savings Bank branches. {: .speaker-KZT} ##### Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917 -- The money already de-, posited cannot be touched. {: .speaker-F4Q} ##### Mr Scullin: -- The whole of the assets' and management are to be transferred. {: .speaker-KMQ} ##### Mr MANN: -- That is so. {: .speaker-KZT} ##### Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917 -- I am talking about the housing part of the business. {: .speaker-KMQ} ##### Mr MANN: -- - The honorable member is doing the very thing that has caused my complaint. We should not confuse the Housing Bill with this one. To do so causes misconception and misrepresentation. It cannot be denied that the whole of the assets and management of the Commonwealth Savings Bank are to be transferred. The proposed new sub-section 35e, which we are being asked to incorporate in the act, reads - >The assets of the Commonwealth Bank of Australia in respect of its Savings Bank business shall be transferred to the Savings Bank and the Savings Bank shall be responsible for the liabilities of the Commonwealth Bank of Australia in respect of its Savings Bank business. {: .speaker-F4Q} ##### Mr Scullin: -- When I made that statement the Treasurer said that I was misrepresenting the purpose of the bill. {: .speaker-KMQ} ##### Mr MANN: -- I have quoted the actual words of the bill. It cannot be denied that a new financial institution is to be established. What I complain of is that it will discharge practically the same functions that the Commonwealth Bank is already discharging. {: .speaker-KZT} ##### Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917 -- Can there be a Commonwealth Government housing scheme based upon a fund guaranteed and provided by the Government without an alteration of the existing arrangements? {: .speaker-KMQ} ##### Mr MANN: -- I feel disposed to saythat there could be, for the Commonwealth Bank has already done a great deal towards carrying out the war service homes scheme. If it could do that, why could not it carry the responsibility of a general housing scheme? Mr.Rodgers. - Under the war service homes scheme it merely controlled moneys which were loaned by the Government. {: .speaker-KMQ} ##### Mr MANN: -- That is exactly what the proposed new Savings Bank will do, and for that reason I can see no justification for altering existing arrangements. There is no need for us to set up a separate institution. It is like using a steam hammer to bend a penny. This proposed new institution is simply to act as a money-lending agency to various public bodies to the extent of £20,000,000. Surely the Commonwealth Bank could itself act as the agency. After all, the bank will not carry the responsibility, for that will rest upon the public institutions which borrow the money. It appears to me that quite a number of the objects for which this proposed new bank is to be established have been included in the bill, for the reason that the Government could not justify setting up a new institution merely to carry out its housing scheme. I have already referred to the fact that nearly half of the deposits made with the Commonwealth Bank come through its Savings Bank branches. It seems to me, therefore, that we cannot sever the Savings Bank branches from the other branches of the Bank without seriously undermining the Bank's prestige as a financial institution. The Commonwealth Bank has been an immense asset to Australia, but only because of the largeness of the funds that it has had at its disposal. These funds have not always been liquid, but they have been a sufficient foundation for the building up of a large credit. By removing six-elevenths of the deposits from the general bank we shall take away a very large measure of its power. There is another reason for objecting to this change, perhaps not so important as the others, but still important. I join with the honorable member for Yarra **(Mr. Scullin)** in protesting, as I have protested before, against the great tendency in this country to increase boards of management and commissions. In many cases boards are established simply to take from this Parliament all its powers and responsibilities. They are becoming a very expensive burden upon Australia, and in many cases are not producing results commensurate with the expenditure that they incure. Much of their work could be better done throughother channels. In this case that does not apply, because this House cannot expect to carry out the functions of the bank; but, at the same time, the bill is undoubtedly the beginning of the formation of another financial institution, and with the tendency that such institutions have always had, it will require an expensive staff, and, shortly, expensive housing. We shall have again the multiplication of costly machinery, which is becoming more and more the curse of this country. . The bill should not be carried, because it is unnecessary, and no good reason has been given for the formation of this new body. At the very least, the proposal appears likely to endanger and weaken the Commonwealth Bank itself. That may be disputed, and I regret that this bill will probably not be discussed under such circumstances as will enableus to obtain opinions from financial authorities in the larger centres. That is one of the disadvantages of being in this remote part of Australia. If there is any risk at all of weakening the authority and financial standing of the Commonwealth Bank, we should hesitate about passing this bill. The housing scheme is not wrapped up with the bill, and can be carried out with out it. Where is the necessity for this legislation ? {: .speaker-KZT} ##### Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917 -- How can there be a national housing scheme unless there be mandatory power to apply for money? {: .speaker-KMQ} ##### Mr MANN: -- The honorable member is persistently ignoring the point that I have made. None are so deaf as those who will not hear. The housing scheme can. be provided for through existing channels. {: .speaker-KZT} ##### Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917 -- Without definite provisions in a bill, we should need a pliable government. {: .speaker-KMQ} ##### Mr MANN: -- The honorable member is making assumptions that are not justified. If it is considered desirable by this House to establish a housing scheme, that can be done by a simple amendment of the Commonwealth Bank Act, to enable that bank to make advances. {: .speaker-KZT} ##### Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917 -- To enable it, but not. to compel it, to do so. {: .speaker-KMQ} ##### Mr MANN: -- The formation of a new financial institution is not required, and is unnecessary. I am also afraid that, if the proposed alteration is carried out, there will be grave danger of weakening the Commonwealth Bank itself. If I have the opportunity, I shall vote against the bill, because it is an unnecessary measure. I regret that I shall not be present when the bill is finally dealt with, and therefore, I wish to make my position clear. I want to know whence comes the demand for such a scheme, and why does it exist? {: .speaker-KV8} ##### Mr Stewart: -- The scheme is the result of a promise made at the last elections. {: .speaker-KMQ} ##### Mr MANN: -- The demand does not arise out of a policy speech. {: .speaker-KJM} ##### Mr Jackson: -- The scheme is a national one. {: .speaker-KMQ} ##### Mr MANN: -- There should be some definite and tangible proof of the demand; but I can see nothing to justify the proposal. I do not agree with the honorable member for Wannon **(Mr.** Rodgers) that the bill will not increasethe number of governmental building agencies, and that there will be only oneagency in each State. The bill provides that money is to be advanced to Commonwealth, territorial, State or municipal authorities for providing or assisting in providing dwelling houses. Each Statehas its own house-building scheme at present, and I have not heard that thoseschemes are insufficient to meet the re1quirements of the people. If they are insufficient, and the States have not the funds to meet their needs, then perhaps the Commonwealth would be justified in giving them financial assistance; but there has been no such demand. I have heard no complaints from the existing government agencies that they are unable to cope with the requirements under their housing schemes. {: .speaker-KZT} ##### Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917 -- There is complaint in Victoria. {: .speaker-KMQ} ##### Mr MANN: -- If that is so, then the Commonwealth Government should give financial assistance to that State to enable it to carry out its scheme. The Commonwealth Government should not introduce a housing scheme. Under this bill the Government is going far beyond that point. It proposes to advance money to municipal authorities for building schemes, and therefore we shall have operating in each State not only one government scheme, as the honorable member for Wannon says, but also municipal schemes financed by this Govern- ment. {: .speaker-KZT} ##### Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917 -- The honorable member is at a disadvantage in not having heard the Treasurer's speech. He made it per- ffectly clear that there would be only one government housing scheme in each State. {: .speaker-KMQ} ##### Mr MANN: -- There have been two or three statements about what the Treasurer has said. I am taking the bill as it stands. It provides that the savings bank can advance money to authorities, including municipal authorities. **Mr. Rodgers.** - Where there is no government scheme. {: .speaker-KMQ} ##### Mr MANN: -- The bill does not say so. The honorable member is reading into > the bill all sorts .of things that are not there. I am treating it upon its merits. One other objection that I have to a government housing scheme is that as a rule - in fact, I know of no exception - it has the very opposite effect from that first intended. A big government housing scheme almost invariably increases the cost of houses, not only those that are built under it, but also those already built. That is the common experience. This scheme, like most government schemes, cannot be economical; because when a lot of building work is placed on the market at one time, it has the effect of increasing the price of material and labour, thus rendering houses far more expensive than they would have been otherwise. That has been experienced repeatedly in connexion with the big building schemes of Great Britain. The purchase of land for these schemes has involved many scandals, such as occurred in tha purchase of estates for soldier settlement. I do not question for a moment the humanitarian motives behind this scheme, nor do I say that on the surface they do not appear to be desirable. My point is, that when put to the test these schemes are bound to fail. In Great Britain miserable cottages at cheap rentals have been pulled down and better cottages built in their place, but the extra cost of the new buildings has necessitated increased rentals, which the tenants could not afford to pay. Consequently, a new house has frequently been occupied by two families, and the consequent overcrowding has been just as undesirable as the tenement which was previously inhabited. This is a great social problem, and cannot be solved merely by sympathetic feeling. It must be studied and dealt with on sound economical principles. Several big schemes of government building which were introduced in Great Britain after the Avar when there was a great shortage of houses, have, I believe, been largely abandoned, and the Government has been compelled to encourage private firms that have devised new and cheap methods of building. In consequence, there have been introduced into a number of schemes new engineering or architectural ideas that tend to* bring about low building cost. Through the private agencies real benefit is being brought to the people who require houses, and the Government energies have been directed towards providing capital for those builders, rather than the advancing of money directly to the purchasers of homes. For the main reasons I have stated, I dp not propose to support any housing scheme, but my views of the merits of the scheme had nothing to do with the proposed amendment of the Commonwealth Bank Act. Whatever opinions honorable members may hold as to the desirability of a housing scheme, they are not thereby committed in any way to approval of the Commonwealth Bank Savings Bank Bill! We have not heard from the Treasurer what view the directors of the Commonwealth Bank take of the measure. So important a proposal by which six-elevenths of the deposits of the bank will be removed from its control should be accompanied by some definite statement by the board of directors as to how the future operations and standing of the bank will be affected. {: #subdebate-21-0-s9 .speaker-JSC} ##### Mr BRENNAN:
Batman .- Apparently the honorable member for Perth and I are not entirely in agreement as to the virtues, or possible advantages of a Government housing scheme. I take one view and he another. My own rests in the first place upon the obvious and general demand, which shows no sign of diminution, for houses for the people. But we may console each other by the reflection that neither of the measures which we are permitted, by you, **Sir, to** discuss together really affects the housing problem very much. The honorable member for Wannon admitted a feeling of concern when some time ago he realized that, as part of its policy, the Government intended to engage in an extensive housing scheme. To-day when he has seen the bill he is quite satisfied that it is harmless, and I agree with him that there is no need for anxiety on the part of himself or any one else who 'shares his views in regard to any housing that this bill will achieve. The honorable member was really concerned because he thought that the Government was about to do what it gave the electors to understand that it would do. When the Prime Minister delivered his policy speech in October, 1925, he said : - >The Ministry proposes to introduce legislation for the purpose of utilizing the machinery of the Commonwealth Bank for giving assistance not only to manual workers, but to others of small means, to acquire their homes on a basis of re-payments extending over a long period of years. That was sufficiently vague, as no doubt it was intended to be, to give the Government a very wide choice of action, but I think it conveyed to the electors the idea that the Government really proposed to put the resources of the nation into a well-considered scheme to relieve the people's pressing need of better housing accommodation. That was in October, 1925 ; we are now in October, 1927. The mountain has been in labour for two years and now, with proper obstetrical accompaniments, it has brought forth this very harmless mouse. One feels justified in saying that the Government realizes that amongst its most active and noisy supporters was a feeling that practical effect should not be given to the promise which the Prime Minister made in his policy speech. During the last two years the Government has had its ear to the ground to sense public opinion, but after a government has sensed public opinion, it has next to consider what is the opinion of those who are mainly responsible for its being in office. Amongst those are not only its financial backers, but also its newspaper supporters. The Government has discovered that the honorable member for Wannon was not the only person who was disturbed by the promise to introduce a practical housing scheme. Other gentlemen, other institutions, and other bodies that have always stood against State activities in the public interest, have joined with him and satisfied the Government that it would not be good electioneering policy in October, 1927, to introduce a genuine, considered, housing scheme. And by a housing scheme I mean one which involves responsibility - the acquisition of land and material and the fixing of the conditions of finance - and not merely the careful advancing of money to other authorities who may, in their discretion, make advances for building or purchasing homes or for the redemption of mortgages upon such terms as they think fit. I conclude therefore that the object of the Government to-day is the same object as National Governments, and those who directly preceded them, had, namely, to discourage the operations of the Commonwealth Bank in its savings branch, and while rending asunder the Commonwealth Bank, it is dissembling its real intention with a vague suggestion that some of the funds of the proposed *new* savings bank shall be available to other institutions for housing purposes. The honorable member for Wannon challenged the statement that the two branches of the Commonwealth Bank had been divorced.I say with great confidence that not only does the bill effect a divorce, definite and complete, of the two branches, but in the clearest possible terms proposes to create two banks. The principal act sets out that charter of the Commonwealth Bank in these terms - {: type="1" start="7"} 0. The Bank shall, in addition to any other powers conferred by this act, have power - {: type="a" start="a"} 0. to carry on the general business of banking ; 1. to acquire and hold land on any tenure ; 2. to receive money on deposit, cither for a fixed term or on current account; 3. to make advances by way of loan, overdraft, or otherwise; 4. to discount bills and drafts; 5. to issue bills and drafts, and grant letters of credit; 6. to deal in exchanges, species, bullion, gold-dust, assayed gold, and precious metals. 7. to borrow money; and 8. to do anything incidental to any of its powers. The bill sets out the powers and constitution of the proposed savings bank in like detail, and creates a new corporation to conduct the business of the new institution-a corporation exercising practically all the powers that were exercised in the first place by the Governor of the Commonwealth Bank and later by the board of directors of the bank, a new corporation with powers in regard to savings business as absolute as those conferred on the directors of the original bank. The funds of the savings branch of the Commonwealth Bank are to be handed over to this new corporation. It is obvious and unarguable that by this legislation we are setting up a new bank and rending asunder the Commonwealth Bank legally established by the Fisher Government in the teeth of exactly the same opposition as was offered to the extension of its operations into the savings business, and in spite of that class of public thought which has never been reconcilable to the existence of the Commonwealth Bank and has never entertained any sympathy for it. I crave the attention of the honorable member for Wannon to a few observations on what he said regarding rural credits. I work in another part of the garden, and I have some experience of advances upon freehold and leasehold and other securities, sufficient and insufficient. The honorable member said that he is satisfied that the granting of rural credits is not the function of a government bank. Mr.Rodgers. - I said that I was satisfied that a government could not operate a rural credit scheme for the benefit of the individual as well as that could be done by a banking institution. {: .speaker-JSC} ##### Mr BRENNAN: -- I accept the honorable member's explanation. The honorable member says there are thousands of eminently desirable young men, applicants for land, who cannot settle themselves on the land because there is insufficient financial credit available for them. That is a tremendous reinforcement of the argument so often addressed from this side of the House in regard to the futility oi: bringing to Australia migrants who *&v.'* to be set upon the land, while our own people cannot be placed on it, because of the unwillingness to provide the necessary finance and the necessary land. The honorable member for "Wannon **(Mr. Rodgers)** knows that there is no mystery as to what rules the willingness of investors to invest money in land or any other class of investment. The test with them is, "Is the venture safe?" The private investor with £1,000 toinvest, who is urged to put it into real estate, asks himself whether the security is safe, whether he will get his money back, with interest. That is a most natural inquiry. The banker rnakes precisely the same inquiry, because he represents the interests of a number of private individuals who ave shareholders in his bank. He represents his management, and is responsible to them to see that he has adequate security for every penny invested. If the prospective primary producer is unable to obtain through banks or private investors sufficient capital to place him on the land, there is no other way of putting him there except by the Government guaranteeing his venture as a matter of public policy, and in doing that it must be prepared to take the losses with the gains, for the ultimate benefit of the people as a whole. {: .speaker-KZT} ##### Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917 -- There is something more to be considered than "Is it safe?" The investor looks for the most profitable security, and secondary industries provide a better and quicker turnover than do primary industries. {: .speaker-JSC} ##### Mr BRENNAN: -- That merely proves that private investors and bankers are looking for more than safety. They are looking for gilt-edged securities and big returns. That is why, if desirable men are to be settled on desirable land, it will have to be done not by those looking /or huge profits and gilt-edged securities, but by those viewing the situation nationally ; those eager to advance the well-being of the people generally. The Deputy Leader of the Opposition **(Mr. Scullin)** was puzzled as to the object of this bill. After listening to the speeches that have been made upon the measure, and after careful perusal of the bill, my opinion is that it has no object except to tickle the ears of the electors with regard to an election promise that will not be fulfilled in substance. I cannot forget, because I was in Parliament at the time, what happened when the original Commonwealth Bank Bill was under discussion. It was subjected to a most ferocious opposition by honorable members opposite, particularly when it was proposed to make it embrace savings bank business. Honorable members opposite said, " You have great State institutions already established in the public confidence. The savings of the people have poured into them, andnow it is propose'd to introduce this unnecessary interference with the operation of those State Savings Banks. That will do nothing but duplicate matters, to the detriment of the country." {: .speaker-KZT} ##### Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917 -- That is quite true. They have mopped up two of them, New South Wales and Queensland. {: .speaker-JSC} ##### Mr BRENNAN: -- Despite such criticism, both State and Commonwealth savings banks have prospered tremendously, and have done an immense amount of good for the people. I cheerfully admit that the funds of the Commonwealth Savings Bank could not be better employed than in the erection of homes, and the redemption of incumbrances on homes. Honorable members who so ferociously attacked the Commonwealth . Savings Bank proposal and the extension of the State Savings Banks, overlooked, for the moment, the fact that Government Savings Banks constituted an excellent example of State social ism, of government action forthe public good. They overlooked the fact that the general banking business of the Commonwealth Bank would itself become an instrument for extending the business of the savings bank. History has shown that a large number of persons and corporations who applied to the Commonwealth Bank for loans were assured that those loans would be available provided the Commonwealth Bank had the whole of their banking, including savings bank operations. As a consequence mutuality has been established between the two operations, the one supporting the other. {: .speaker-KEV} ##### Mr Fenton: -- And now it is proposed to separate them. {: .speaker-JSC} ##### Mr BRENNAN: -- To those who have been associated with the checkered history of the Commonwealth Bank - it has been subjected to very severe opposition - it comes as a matter of regret and disappointment that practically our first action on arrival at the national capital should be a deliberate attempt to rend asunder the operations of the bank. The axiom " Unity is strength," holds good in banking as in other spheres. "A house divided against itself cannot stand," and unquestionably a division of powers in connexion with the Commonwealth Bank indicates future trouble. The multiplicity of commissioners, with the additional expense they necessitate, has been the subject of much just criticism. The appointment of commissioners and commissions is justified in certain cases. I am a believer in the principle,as applied, for instance, to the Public Service and railways; but I am not at all a believer in the principle of creating useless commissions whose operations are likely to divide authority and increase expense. I object to the expense they and the departments which they must inevitably create will incur, at a time when so many solemn warnings are emanating from both sides of the House as to the necessity for economy, and for drastic action in straightening out and keeping straight the affairs of the Commonwealth. If this were a genuine home-building scheme it would be worthy of serious examination, and most probably of the hearty support of both sides of the House. The Commonwealth Bank has an amount of £46,000,000 in the savings of the working people, the very bone and sinew of the nation, and one of our crying needs is the provision of decent, sanitary homes and conditions of living. I should welcome a proposal to make available part of that £46,000,000 for the building of such homes. A very simple announcement could have covered the Government's housing policy. The Prime Minister could have stated that the policy of the Government was to employ a portion of the funds of the Commonwealth Savings Bank, through certain public authorities, for the purpose of building houses. The only vital point in the two bills is that the Government is proposing to do something to disintegrate the Commonwealth Bank. After all, the bank built up its funds with very little government aid, for it commenced its operations with an advance of a paltry £5,000, which was hardly more than sufficient to pay a charwoman and buy some stamps. It operated successfully upon the actual cash which flowed into its coffers through its savings bank branches. I condemn the present proposal because its adoption would damage the bank. Debate (on motion by **Mr. Foster)** adjourned. {: .page-start } page 386 {:#debate-22} ### SUPPLY BILL (No. 2)1927-28 {: #debate-22-s0 .speaker-KFK} ##### Mr SPEAKER (Hon Sir Littleton Groom: -- I have received a message from His Excellency the GovernorGeneral announcing that the Supply Bill (No. 2) 1927-28, having been presented for the Royal Assent, His Excellency has, in the name and on behalf of His Majesty, assented to it. Particular interest attaches to this announcement, for this is the first bill passed in the Federal Capital Territory to receive the assent of His Excellency here. {: .page-start } page 386 {:#debate-23} ### TEMPORARY CHAIRMAN OF COMMITTEES {: #debate-23-s0 .speaker-KFK} ##### Mr SPEAKER (Hon Sir Littleton Groom: -- I have received, with regret, the resignation of **Mr. Robert** Cook as a Temporary Chairman of Committees, and, pursuant to the Standing Orders, I have nominated **Mr. J.** H. Prowse in his place. {: .page-start } page 387 {:#debate-24} ### SPECIAL ADJOURNMENT Motion (by **Mr.** Bruce) agreed to - That the House at its rising adjourn until Wednesday next at 3 p.m. {: .page-start } page 387 {:#debate-25} ### ADJOURNMENT OrderofBusiness -WineBounties. {: #debate-25-s0 .speaker-F4B} ##### Mr BRUCE:
Prime Minis ter and Minister for External Affairs · Flinders · NAT -- I move- That the House do now adjourn. It is the intention of the Government to proceed next week with the Commonwealth Bank Savings Bank Bill and the Housing Bill. On Wednesday the second reading of the Port Augusta to Red Hill Railway Bill will be moved, and that measure may be further considered during the week. The budget discussion may be brought on incidentally ; but it is not proposed to conclude that debate next week. {: #debate-25-s1 .speaker-KXR} ##### Mr PARSONS:
Angus .- It has been suggested that some alteration is to be made in the wine bounty in consequence of the new wine duties that are operating in Great Britain. In connexion with this matter, I have received the following letter from one of my constituents - I have advice from London that the Tarragona and Lisbon wines,not exceeding 26 per cent. (at 3s. per gallon duty), and not exceed ing 42 per cent. (at8s. per gallon duty), are being blended and the resultant blend sold at 8s. 6d. to 9a. duty paid, wood included. Probably a great deal more of this will be done in the future after the next continental vintage, as the British duties which came into operation on the 1st July lust were unknown at the last continental vintage, so there waa no opportunity of preparing the necessary materials for the blend indicated above, and probably supplies of these *were short.* Our wines cost about 9s. 3d. per gallon, wood included, duty paid in England, so that there does not appear to be any margin. In any case, so far as the 1927 vintage is concerned, we paid the minimum prices fixed by the Government for grapes and spirit, and it would be obviously very unfair if any alteration iu the bounty were made applicable to 1927 wines. The heavy bounty claims now awaiting payment are due to the expiration of the 4s. bounty on the 31st August, and it is evident that shipments will slow down and bounty claims do likewise for some time to come. I received a cable from a Londonfirm a day or two ago, in reply to an offer of wine whichIhad cabled them, in which they said that very heavy stocks were held in Loudon, and no one at present was prepared to buy. I should like to say that some of the buyers of grapes from the last vintage paid more than the minimum prices fixed by the Government, notably Messrs Gramp and Sons, of Rowlands' Flat. I have brought this matter forward at this stage, for honorable members should realize that, if anything is done now to jeopardize the business which we have been building up in London, we shall be thrown hack to the point from which we started. The Government need not be alarmed at the amount that will be required to meet the bounty of the coming vintage, for a grave disaster has occurred in the Murray Valley which will greatly reduce the grape crops. I agree with the writer of the letter that I have quoted, when he says that, having made a bargain with the grape-growers, it would be hardly a fair thing for us to turn round now and say, " We intend to make some other arrangement." It is the policy of the British Government to give us a clear preference of 4s. a gallon on our product ; but the wine-makers of Spain and Portugal, with their long experience, have managed to find a way to evade the British tariff imposts, and until all tha loop-holes in it have been blocked we should be wise to carry on the arrangements that already exist for assisting our grape-growers. {: #debate-25-s2 .speaker-K1J} ##### Mr PRATTEN:
Minister for Trade and Customs · MARTIN, NEW SOUTH WALES · NAT -- I noted carefully the remarks made by the honorable member, and I take some exception to his statement that the Government has made a fixed bargain with the winegrowers. In my second reading speech [ made it clear that the Government reserves to itself the right to reduce, or even abolish the bounty in the event of drastic changes being made in the preference granted by Great Britain to Australia. The British Chancellor of the Exchequer in his last budget speech announced further preferences to the Commonwealth. Consequently, in accordance with the de cision of the Government, the position will be reviewed when we receive full information as to the amount of preference that has been accepted by the House of Commons. The question raised by the honorable member will receive careful consideration. Question resolved in the affirmative. House adjourned at 3.56 p.m.

Cite as: Australia, House of Representatives, Debates, 7 October 1927, viewed 22 October 2017, <http://historichansard.net/hofreps/1927/19271007_reps_10_116/>.