10th Parliament · 1st Session
Mr. Speaker (Hon. Sir Littleton Groom) took the chair at 3 p.m., and read prayers.
Mr.CHARLTON.- Is it a fact that the Federal Capital Commission proposes to hand over the transport services of the Territory to private enterprise? Seeing that all the States have found it necessary to control tramway services, and that the ‘bus service in the Territory may be regarded as taking the place of a tram service, will the Prime Minister make representations to the Commission that it should continue to control that service?
– Some time ago the Federal Capital Commission invited tenders for a ‘bus service to cover certain specified routes in the Capital Territory. No satisfactory tender was received, but subsequent negotiations have resulted in a very much better offer, which is now under consideration by the Commission. As I have been absent from Canberra for a few days, I do not know the exact position, though I think that no decision has been made. The Government, however, does not propose to represent tothe commission that such action as may be proposed should not be taken. It is obvious, in connexion with the establishment of a new city like Canberra, that unless private enterprise is permitted to assist in coping with the traffic problem, it will be impossible to provide satisfactorily, essential services.
– In view of the appalling discrepancy between the original estimate of £4,660,000 and the later estimate of £14,000,000 for the Murray River works, will the Minister forWorks and Railways (Mr. Hill) supply a full report, including a detailed statement, showing the estimated cost of each orignal proposed work ; the present estimated cost of such works, and the estimated cost of proposed works not in the original approved scheme; or, as the case may be, the class and cost of additions to the original proposals?
– I shall go into the matter to see how farI can make the information available.
– Has the Minister for Works and Railways noticed that, during the last fortnight, on three different occasions for periods of nearly a day, telephonic communication between Sydney and Newcastle has been seriously interrupted, resulting in their complete isolation from each other. The interruption recurred yesterday. Will the honorable gentleman see that communication is restored ?
– I have not been informed that such a breakdown has occurred ; but I shall cause investigation to bc made, and, if there is still trouble, have it rectified as soon as possible.
– In view of the statement in the budget that the Government proposes to make available a sum of £100,000 to instal automatic telephones in country centres, thus giving small groups of settlers a continuous service, and of the statement that four such installaions are now operating, will the PostmasterGeneral (Mr. Gibson) intimate where country automatic telephones are in use?
– One is at Springvale, in Victoria, and another elsewhere in that
State; but I shall obtain exact information on the subject, and give the honorable member what he desires.
Despatch to the Solomons.
– Is it a fact that the British Government requested that the cruiser Adelaide should be sent to the Solomon Islands in connexion with the late uprising there? Will the right honorable gentleman make a statement to the House on the subject ?
– It was my intention to give the House some information to-day with regard to the matter. An urgent telegram was received from the British Admiralty early on Sunday morning, stating that a massacre had taken place, and forwarding a request from the High Commissioner of the Western Pacific that a cruiser or other warship should be despatched immediately for the protection of the inhabitants of the islands.In view of the urgency indicated by the Admiralty’s telegram, the Commonwealth Government took immediate steps to despatch the cruiser Adelaide to the Solomon Islands, at the same time communicating with the British Government on the subject. A reply has since been received from the British Government, stating that it entirely endorsed the request of the High Commissioner for the Western Pacific - the requept. apparently, having come through Admiralty sources by reason of the urgency of the case- and thanking the Australian Government for its action. The Adelaide was despatched on Monday last. A further cable has been received from the British Government, stating that it is still in communication with the High Commissioner for the Western Pacific, and that it will, upon the receipt of further information, communicate with the Commonwealth Government, indicating what action it wishes to be taken in regard to the cruiser Adelaide.
– Has the Commonwealth Government, in concert with the State Governments and the pastoralists of Australia, taken any definite steps either to resuscitate the Australian Meat.
Council or to create another body that will assist to rehabilitate the export meat trade of Australia?
– During the last two days a conference on this subject has been held in Canberra. The conference was presided over by the Minister for Markets and Migration (Mr. Paterson), who has informed me that the proceedings have been extremely satisfactory, but it has not yet been definitely decided what action should be taken.
– Has the Minister for Trade and Customs given considera tion to the request that the manufacturers of tractors in Australia should be paid the motor bounty which they are at present denied because their tractors are not constructed entirely of Australian materials ?
– The matter has been engaging the attention of the department, and I hope will be considered by the Government during this session.
– Has the Minister for Trade and Customs yet received the report of the Tariff Board on the proposed bounty on copper ? If so, when will it be made available to honorable members, and when does the honorable gentleman expect that the Government will be able to make a definite decision on the matter?
– The report on the application for a bounty on copper was recently received, and will be considered by the Government at a not distant dato. I am unable to give the honorable member information as to whether practical results will follow, as that is a matter of Government policy, and cannot be dealt with in an answer to a question.
– Statements have appeared in the press to the effect that the Department of Trade and Customs has refused to accept the declaration of certain British manufacturers of iron and steel that their products contain 75 per cent. of British labour and material. Will the Minister for Trade and Customs inform me of any difficulties or objections that the department has raised in such cases?
– The honorable member asked me a similar question last week. Briefly, the position is that Parliament passed an act which required that iron and steel goods entering Australia from Great Britain must contain 75per cent. of British material and/or labour tobe entitled to the application of the British preferential duty. There has been a good deal of suspicion since the act was passed that some of the iron and steel entering Australia from Great Britain has noi complied with that law. When I wasin London I inquired fully into the matter, and found that reputable British manufacturers of iron and steel products desired that the Government should give effect to the law in both its spirit and letter. I am seeing that that is done. The declarations referred to by the honorable member are being investigated in respect of the productions of some manufacturers in Britain who are called re-rollers, and who handle ingots, blooms and bars received from the Continent, as some of these importations are thought not to comply with the requirements of our act. The full duty will be charged on such material until the importers can prove that they are complying with the law.
– Is it proposed, under the amended regulations governing allowance postmasters, to grant these officers annual holidays?
– Allowance postmasters give only a part of their time to the work of the department, and their payments vary from £10 to £200 per annum. They are at liberty to arrange their hours as they please. It is not proposed to grant them annual holidays.
– Is any change contemplated in the regulations governing the granting of holidays to semi-official postmasters ?
– Arrangements were made last year under which semi-official postmasters are granted a fortnight’s holiday annually on full pay.
– Some ambiguity appears to exist repecting the meaning of the sections of the Fresh Fruits Overseas Marketing Act,which governed the taking of the recent poll of fruit growers to determine whether or not they desired their export products to be controlled. Seeing that a majority of the growers were against control, does the Government intend to take another poll or to abandon the measure?
– Another poll could not be taken under the act unless the measure were amended.
– I am afraid that the Minister is confusing the regulations made under the act with the provisions of the act itself. Seeing that the growers who are interestedin the marketing of their fruit, both inside and outside of Australia, are in doubt as to the position, will he state definitely whether the Government intends to abandon the measure ?
– The purpose for which the poll was taken was to determine whether the growers desired the industry to be controlled or not. The decision was adverse in the ratio of 59 to 41; consequently the act will not be brought into operation.
– I have noticed statements in the press concerning the annual report of the Tariff Board. Is the Minister for Trade and Customs able to inform me when copies of the document will be available? And why was it available to the press before being given to honorable members?
– The report was tabled in the House last week, and a few spare copies were available before being printed. No information respecting the contents of it appeared in the press until after the report had been tabled.
– Are any efforts being made to improve the trunk line telephone service between Canberra and Melbourne and other Victorian towns beyond Melbourne?
– The present service is sufficient for the requirements. Yesterday repeaters were installed at Goulburn, which should give a very much improved service between Canberra and Sydney.
– On several occasions I have asked that steps should be taken to sell or otherwise dispose of 30,000 tons of coal which are at present stored on certain land, possession of which is required to permit the winding up of au estate. Is the Prime Minister able to inform me whether anything has been done in the matter?
– I shall obtain the information, and let the honorable member have it.
– A fortnight ago, I asked yon, Mr. Speaker, whether anything could be done to improve the acoustic properties of this Chamber, and you promised that enquiries would be made. Should the architects report that the acoustics cannot be improved, will you, Mr. Speaker, consider the adoption of one of the following three alternatives - (1) A teacher of elocution to be employed by the Government, and members to be compelled to take lessons from him; (2) all members to be compelled to speak from a rostrum; or (3) each member to be provided with an acousticon?
– In accordance with the promise I made when the honorable member asked the question on a previous occasion, I arranged for a. special investigation of the acoustic properties of the Chamber. Three experts were thus employed on Friday last, and as soon as their report is availableI shall advise honorable members what remedial action, if any, can be taken.
– Having regard to the many complaints regarding the acoustic properties of this chamber, the lack of telephonic facilities, the lavish expenditure of money, and the mistake made by this Parliament in transferring to Canberra at all, will the Prime Minister refer to Cabinet the desirability of asking the people to decide by referendum whether this mistaken project should be abandoned altogether ?
– The reply is in the negative, and the strength of the negative is reinforced by the general satisfaction felt by members of Parliament and public servants with the transfer of the seat of Government to the Commonwealth’s own Capital city.
War Service Homes Commission - Taxation Branch
asked the Minister for Works and Railways, upon notice -
What are the details of the new classification of the War Service Homes Commission, and what are the names of the officers, positions occupied, and salaries ?
– Details of the classification, as desired by the honorable member, will be made available in the Library.
asked the Prime Minister, upon notice -
– I understand that the date, 1st July, -1927, has been printed in the first question in error for 1st July, 1924. If that is so, the answer to the question is “ Yes.”
asked the Minister representing the Minister for Defence, upon notice -
Will he furnish the names and ranks of permanent and citizen members of the Air Force who have lost their lives as the result of accidents while flying on service during the years 1925, 1926, and 1927, together with the amounts of compensation and pensions paid to dependants in each case?
– The particulars desired are as follow: -
asked the Minister for Trade and Customs, upon notice -
When is it anticipated that the Government will fulfil its intention in regard to the fixation of permanent lights on the Fitzroy and other important passages of the Barrier Beef, which under the existing conditions present a grave menace to shipping facilities.
– I am not in a position to indicate any date at the present moment. Certain preliminary survey work has been carried out in connexion with the erection of beacons for daylight navigation on one or other of the principal passages in the Barrier Reef to facilitate movement of oversea shipping to and from Townsville and Cairns. It has been found, however, that the erection of a satisfactory beacon on the outer edge of the reef will be a matter of some engineering difficulty, and undoubtedly fairly heavy expense. In view of this, and of the fact that there are essential requirements in the way of coastal lighting which call for urgent attention, it has been decided that consideration of the question of marking a passage in the reef shall be deferred until these more pressing requirements shall have been met.
Tendering of Rent
asked the Minister for Home and Territories) upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Home and Territories, upon notice-
– The replies to the honorable member’s questions are as follow : -
asked the AttorneyGeneral, upon notice -
– The answers to the honorable member’s questions are as follow: -
asked the Prima Minister, upon notice -
– The information is being compiled, and will be supplied as. early as possible.
– On the5th October the honorable member for Angas (Mr. Parsons) asked the f ollowing questions : -
I am now able to furnish the honorable member with the following information : -
– On the 30th September the honorable member for Oxley (Mr. Bayley) asked the following question : -
What was the quantity and value of paper imported into the Commonwealth during the past twelve months under the following headings: - (a) Machine finished; (b) writing, and (c) account book?
I am now able to supply the honorable member with the. following information: - The statistical records are not so arranged as to provide the desired information under the specified headings. The importations of the papers in question, namely, printing and. writing papers, during the , year 1926-27 wereas follows : -
The quantity of the last three items is not available. Account book paper is included in writing and typewriting paper - plain.
– On 30th September the honorable member for Denison (Sir John Gellibrand) asked the following questions : -
I am now in a position to inform the honorable member as follows : - 1. (a) Approximately £75,000; (b) £2,375; (c) £2,350; (d) this expenditure is included in the above figures.
– On the 7th October the honorable member for Fremantle (Mr. Watson) . asked the following question, upon notice -
Whether the Minister for Works and Kailways 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?
I am now in a position to supply the following information: -
The provision of Commonwealth funds, if any, for the maintenance of the road in question is a matter for consideration in the first instance by the Health Department, from which department no proposal has yet been received. The honorable member’s question hasbeen referred to the Health Department for advice and on receipt of further information he will be duly informed.
– On the 6th October the honorable member for Perth (Mr. Mann) asked the following question, upon notice -
I am now in a position to supply the following information : - 1. (a) Six Australian tenders were received, three for Australian material and three for British. (b) Nine British tenders and one American were also received.
Australian, £203.909; £209,000; £224,400; £220,000; £321,200; £330,000. British (including duty)- -
The Broken Hill Proprietary Company Limited (£203,969).
Mr.HILL. - On the 7th October the honorable member for Wimmera (Mr. Stewart) asked the following question, upon notice -
Have the fourteen locomotives for the Oodnadatta line, contracted for by Thompson & Co., of Castemaine, been delivered?
Were the engines delivered within the contract time?
Were the engines built to the specified standard?
Were they tested and passed as satisfactory by the department before delivery was accepted ?
Is it a fact that some have developed serious mechanical defects, and are at present being extensively overhauled; if so, how many?
What is the estimated cost of the repairs per locomotive?
At whose cost are the repairs being made ?
I am now in. a position to supply the following information : -
Yes, subject to a satisfactory running test of 2,000miles.
No serious mechanical defects developed. Certain defects were discovered during the running tests and these were all corrected by the contractors at their own expense.
See answer to 5.
See answer to 5.
The following papers were presented : -
Canned Fruit Bounty Act - Return for 1926-27.
Cotton Bounty Act - Return for 1926-27.
Defence Act- Control of Defence Areas Regulations -Statutory Rules 1927, No. 109.
Export Guarantee Act - Return showing assistance granted up to 30th September, 1927.
Iron and Steel Products Bounty ActReturn for 1926-27.
Papua and New Guinea Bounties Act - Return for 1926-27.
Power Alcohol Bounty Act - Return for 1926-27.
Shale Oil Bounty Act- Return for 1926-27.
Sulphur Bounty Act - Return for 1926-27.
. - I move -
That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-21, the following work be referred to the Parliamentary Standing Committee on Public Works for investigation and report, viz.: -
Sydney General Post Office - Extension of the installation of mail-handling appliances.
This question was previously referredto the Public Works Committee for investi gation and report, but, because of certain alteration to, and the enlargement of the scheme to meet present and prospective requirements, involving additional expen diture, it is considered necessary thatthe committee should carry out further in vestigations in order that the Government may be fully informed before submitting any recommendation for the approval of Parliament. I lay onthe table the plans and specifications of the proposed work.
Question resolved in the affirmative.
. -I move -
That, in accordance with the provisions of the Commonwealth Public Works Committee Act1913-21, the following work be referred to the Parliamentary Standing Committee on Public Works for investigation and report: - Maroubra, New South Wales - Automatic telephone exchange.
The proposal is to erect a building on a. site in Storey-street, Maroubra, which is Commonwealth property, and toinstall therein an automatic telephone switching system, having an initial equipment for 1,400 subscribers’ lines, and an ultimate capacity of approximately 7,000 subscribers’ lines. It is proposed that the initial equipment shall be capable of extension to the ultimate capacity named, and thus enable requirements in the proposed automatic exchange area to be met for twenty years after the proposed date of opening. The area which will be served by the proposed Maroubra automatic telephone exchange comprises the southern portion of the present Randwick exchange area and a small portion of the adjacent Mascot exchange area. The exchange is necessary to meet the rapid development due to the sale of Crown lands, and to obviate further unnecessarily high expenditure on external plant.
The installation of the proposed exchange will enable the Postal Department to provide a cheaper and more efficient service to subscribers in the extreme limits of the areas mentioned. It is estimated that at the date of opening, 1,000 subscribers’ lines, yielding an annual revenue of approximately £11,328 will be connected. At the end of five years from the date of opening it is expected that the number of subscribers’ lines will be 2,100, with an estimated annual revenue of £23,780. The building will be a simple brick structure with concrete floors and ceilings, designed on fire-resisting principles. It will consist of a switch room, 100 feet long and 37 feet wide, with adjoining battery power, air conditioning, and mechanics’ rooms. A complete air conditioning vacuum cleaning, and compressed air plant will be installed. The estimated cost of the project is as under : -
The financial items are set out in the following statements: -
Regarding item 6 of thestatement, the difference of £402 between sub-items (i) and (ii).is an amount which will have to be written off in the departmental ae-, counts as representing the proportion of the capital outlay on the original assets which is irrecoverable, and includes depreciation due to wear and tear, and labour in installation. 1 lay on the table plans and specifications of the proposed work.
– I am glad that the proposal has been introduced; but I cannot understand why, instead of erecting the exchange in Storey-street, the department has not utilized the land now vacant at the site of the post office at Maroubra Junction. There a large block of land was purchased at £40 a foot, and the little post office erected on it occupies only a small portion, of it. If the department allows that land to lie idle, it will assist in piling up the cost of government. Fortunately, the matter will be referred to the Public “Works Committee. I hope that the committee will inspect the site of the present post office, and see if it cannot effect a saving by recommending the utilization of the vacant land.
Question resolved in the affirmative.
– I move -
That the hill he now read a second time.
This being a bill for the construction of a railway in a State, the Constitution requires that the consent of the Parliament of that State be obtained. The Parliament of South Australia, by the North-South Railway Agreement Act 1926, has given such consent; but a technical, question has arisen owing to a provision in the act that in certain contingencies the consent may be null and void. It is not clear that those contingencies can now arise; but it is desirable to have the matter placed beyond doubt. The point is being looked into further and the Prime Minister (Mr. Bruce) is in communication with the Premier of South Australia regarding it. Under the agreement of the 18th September”, 1925, between the Common wealth and the State of South Australia, provision was made for the construction of a line from Oodnadatta to Alice Springs, a railway from Port Augusta to Red Hill, and the laying of a third rail from Red Hill to Adelaide, giving a 4 ft. 8i in. gauge line on the State 5 ft. 3 in. gauge railway. Thy. agreement was ratified by the Commonwealth Parliament, by the Railways South Australia Agreement Act 1926, assented to in February of that year, and also by the South Australian Parliament during the same month. The railway to Alice Springs was authorized by this House in February of last year under the provisions of the Oodnadatta to Alice Springs Railway Act, 1926, and that particular work is now in hand. When the bills ratifying the agreement and authorizing the construction of the railway to Alice Springs were before the House, I spoke at length on the measures, and outlined the advantages of the various proposals. In pursuance of the agreement of September, 1925, I now submit the bill for the construction of the railway from Port Augusta to Red Hill. This line will be of the 4 ft. 8£ in. gauge, the standard gauge adopted by the Commonwealth and the States, linking with the present Kalgoorlie to Port Augusta railway, and extending it as far as Red Hill. When the third rail, also included under the agreement of September, 1925, is provided from Red Hill to Adelaide, the trans-Australian trains will be run from Kalgoorlie right through to the Adelaide central station. Briefly, the agreement of the 18th September, 1925, provides - 5. (a) The Commonwealth will at its own expense contsruct a railway on a 4 ft. 8i in. gauge from Port Augusta to Red Hill. 6. (a) The State will at the expense of the Commonwealth, during the construction of the railway from Port Augusta to Red Hill, lay a third rail on the 5 ft. 3 in. railway from Red Hill to the central railway station in Adelaide, so that there will be a continuous railway on a 4 ft. 8i in. gauge from Port Augusta to Adelaide.
As I have already mentioned, after the signing of the agreement a measure was passed by this House early in 1926 for the building of the railway from Oodnadatta to Alice Springs. In the ordinary course, a bill for the railway from Port Augusta to Red Hill would have been introduced at that time, but in view of the third-rail proposal from Red Hill to Adelaide, it was thought well to refer the question of the railway from Port Augusta to Adelaide to the Parliamentary Standing Committee on Public Works, the reference being made by the motion submitted in this House on the 29th January, 1926. The report of that committee was subsequently submitted to honorable members. The decision of the committee was as follows : - .
After considering the matter in all its aspects, the committee agreed to recommend that the proposal for the extension of the Trans-Australian railway worn Port Augusta to Red Hill, and the laying of a third rail to provide a railway of 4 ft. 8½ in. gauge on the South Australian 5 ft. 3 in. railway between Red Hill and the Central Railway Station, Adelaide, be approved.
Amongst the reasons for the railway, as shown in the report of the Parliamentary Standing Committee, are that it -
Trans-Australian railway to be conveyed from the point of loading to the market in the same vehicle, thus affording arrival of stock in better condition. Under existing conditions, live stock for Adelaide has to be transhipped at Port Augusta into 3 ft. 6 in. gauge trains, and again at Terowie into 5 ft. 3 in. gauge trains.
The provisions of the bill to which I am addressing myself, and now before honorable members, are similar to those of the Oodnadatta to Alice Springs Railway Act passed by this House, and will enable the Commonwealth Railways Commissioner to do all things necessary for the construction of the railway.
– Does this work conform with any part of the findings of the royal commission on the unification of gauges ?
– Yes. The railway will be to the standard gauge, with 80-1b. rails and fastenings, well ballasted, and capable of carrying heavy and fast traffic.
The length of the railway from Port Augusta to Red Hid], as shown on the plans and statement submitted to the Parliamentary Standing Committee on Public Works, was 83 miles 16 chains, but, as the result of further surveys, the location of the line has been slightly varied- about 38 miles from PortAugusta - and the length of the railway is now82 miles 26 chains. The deviation does not mean a reduction in the costas originally submitted, as the country in the new location is heavier, but the shorter length of railway will mean a lower maintenance cost. The plans I have submitted to the House show the railway in its new location.
The necessary surveys have been completed, and on the bill being passed by this House steps will be taken to have the works put in hand so as to remove the inconvenience to overland passengers, and avoid the breaks of gauge at both Terowie and Port Augusta.
The estimated cost of the railway from Port Augusta to Red Hill is £735,000, which does not include rolling stock. The rolling stock to serve the section from Port Augusta to Adelaide is estimated to cost £104,250, and the cost of laying the third rail between Red Hill and the Central Railway Station is estimated at £380,000- making a total of £1,219,250.
– The South Australian Commissioner gave a much higher estimate.
– Which he modified very considerably later. The bill before the House gives the cost of the railway from Port Augusta to Red Hill only, but the honourable the Treasurer will also make provision, as may be necessary, for the expen diture on rolling stock and on the third rail from Red Hill to Adelaide, and the sums necessary for these works will be provided for and submitted to this House with the Estimates, in the usual way. There is no need for a bill to authorize the work of laying the third rail, which will be carried out under the agreement with the South Australian Railways Commissioner of the 18th of September, 1925, by arrangement with the Commonwealth Railways Commissioner and at the expense of the Commonwealth.
The Commonwealth Railways estimated annual revenue from the railway between Port Augusta, Red Hill and Adelaide, is £101,00,0. The annual working expenses are estimated at £64,000, including the Commonwealth’s proportion of expenditure in working and maintaining the Red Hill to Adelaide line and allowing for the South Australian proportion of Commonwealth expenditure between Red Hill and Port Pirie crossing, the annual interest charges on the same basis are estimated at £78,000, leaving an estimated annual loss on the working of the Commonwealth trains and traffic between Port Augusta and Adelaide of approximately £41,000. Against this it is estimated that by the building of this line the financial results .on the transAustralian railway will be improved to the extent of £35,000, and, with the extra traffic which will come from the Oodnadatta to Alice Springs railway there will be a gain of £13,000. It is therefore estimated that the line will actually show a profit, after paying working expenses and interest, of about £7,000 per annum.
Apart from the immediate financial aspect, however, there is to be considered the national necessity for the railway. As I have pointed out to the House previously, the trans-Australian railway, constructed and equipped at a cost of - over £7,000,000 sterling, is between two narrow-gauge systems. It can never fully serve the purpose for which it was constructed, nor give to the people what it was intended to give, until the railway connexions on either side enable the Commonwealth trans- Australian trains to run from Perth to Adelaide without break of gauge. The trans-Australian railway has been open for public traffic for tell years, and right from the inception the traffic has been greatly restricted by the breaks of gauge. For the transAustralian railway to be of real value in linking the east with the west, and for defence purposes, its extension to Adelaide is essential. Only by extending the railway to Adelaide, and afterwards giving a standard-gauge railway from Kalgoorlie to Fremantle, can the trans-Australian railway serve the purpose for which it was constructed1’’ and give a return commensurate with the outlay. Members will probably know that during the recent session of the Western Australian Parliament both Houses in that State agreed to a resolution, reading : - “That, in the opinion of this House, the time has arrived when the Federal policy of extending the standard railway gauge should be consummated in Western Australia.”
The extension referred to was the section from Kalgoorlie to Fremantle.
It might here be stated that the Uniform Railway Gauge Commissioners, in 1921, advised the Government that the section between Adelaide and Port Augusta was the most undesirable of any of the sections of overland travel, and that was the section that first should be taken in hand. The Royal Commissioners recommended that the connexion between Adelaide and Port Augusta should be via Red Hill, and the bill now before the House fits in with the recommendations of the Royal Commissioners. The work that the bill before the House seeks to authorize is really a part of the work recommended by the Uniform Gauge Commissioners.
The railway from Port Augusta to Red Hill and on to Adelaide will be of much benefit to the pastoralists in Central Australia, for by the construction of the railway to Alice Springs, and the provision of a direct line from Port Augusta to Adelaide, the transport of the stock will be greatly facilitated. The railway which the House is now asked to authorize will be of great benefit to the Commonwealth generally. There is now a considerable quantity of rails, fastenings, and sleepers as well as fourteen 4-ft. 8iin.gauge locomotives, and other plant and equipment available on the transAustralian railway, which could be used in building this railway, and a sufficient provision is being made on the loan estimates to enable a start to be made with the work as soon as the authorizing bill has been passed.
I listened the other evening with a. great deal of pleasure to the honorable member for Wannon (Mr. Rodgers) when he was speaking about the opening up and development of the Northern Territory. The honorable member suggested that two things were urgently required, one the installation of water services, and the other a transport service. Any one who has been in, and studied the position of, Central Australia, will readily realize that it would be quite impossible to open up and develop that area without an adequate connecting link between Alice Springs and Port Augusta. The stock at present coming from north of Oodnadatta passes through Quorn, thence to Terowie, and on to Adelaide. That route necessitates the transhipment of stock at Terowie. An even greater disadvantage to pastoralists is the charging of two local rates: the Commonwealth local rate, Oodnadatta to Quorn, and the South Australian local rates from Quorn to Adelaide. When the line is completed from Port Augusta to Red Hill, we should be able to charge a through rate for the carriage of stock from Alice Springs which will not be greatly in excess of the aggregate of the two local rates now charged, while it will give a service of an additional 300 miles.
– ‘Would it be possible to supply honorable members with a locality sketch of the area 1 It would be of great assistance.
– I have some big maps, which could be made available to assist honorable members
Debate (on motion by Mr. Charlton) adjourned.
Debate resumed from 7th October (vide page 386), on motion by Dr. Earle Page)-
That the bill be now read a second time.
.- I have given a great deal of : consideration to this bill, and while I believe that the Government has considered sections of it, I am of the opinion it has not given very serious consideration to other portions of it. I am not by any means a pessimist - Australians generally are not pessimists - but we need to restrict abruptly the financial policy of this Government. I believe in housebuilding, but our business at this moment is to conserve the financial resources of the country. Why cannot the Commonwealth Bank continue operating as it is at present ? Its savings bank business has been most successful, and there is no justification for assuming that it will not continue to be so. No reason has been advanced for severing it from the general activities of the bank. I know that it is proposed that there should still be some measure of cooperation, for one director of the proposed new commission is to be a director of the Commonwealth Bank. But apart altogether from that, the general conditions of the country do not warrant us in embarking upon a big housing scheme. It is well known that our wheat harvest will be extremely small compared with that of last year, and it is possible that the whole of the resources of the Commonwealth Bank, as it is at 2>resent constituted, will be required to help our agriculturists to find bread and butter during the coming year. The conditions which face us are almost unprecedented, and it would be a tragedy for us to do anything that would impair the power of the Commonwealth Bank. House building is dangerous enough at any time, but I am frankly alarmed at the proposal that under this scheme up to 90 per cent, of the value of houses built or purchased may be advanced. What a glorious opportunity such a large advance would offer to “ jerry builders “ and speculators to make their fortunes. ! We have already had a sad experience in purchasing houses under government auspices, and I feel sure that the launching of this scheme will create a feeling of unrest and discomfort throughout the country. Reference has been made in this debate to the financial conditions which exist here and abroad. I have referred to the unsatisfactory conditions in which our agriculturists find themselves, but let me also remind honorable members of the state of the metal market. Prices of out metals are low, and production costs are high. One has only to glance casually at almost any newspaper to confirm these statements. The market for agricultural products also has a falling tendency. From one point of view it is regrettable that this tendency is not more pronounced; for as things are, our agriculturists may find that they will be obliged to pay very high prices for the seed wheat and flour which they require this year. .The only suggestion of a silver lining in the clouds which hover over us is to be found in the condition of our pastoral industry. But even the wool clip will be considerably smaller than that of last year, although it may happen that the ‘prices will be sufficiently high to make the returns to the growers for the two years almost equal. Against that, however, we must place the severe losses which our flocks have suffered. It is estimated that the Commonwealth will lose this year about 16,000,000 scheep Personally I should not be surprised if the total losses were nearer 20,000,000, foi* sheep are still dying daily. Honorable members should not run away with the idea that the drought has broken. In the face of all these facts we must expect the balance > of trade against us this year to be heavier than it was last year. Another disquieting feature of the situation is that taxation is still increasing, for the freight charges on our railways are rising appreciably. Every honorable member who knows- anything about the conditions of our primary industries should require the Government to call a halt in public expenditure and to husband all its resources. The last thing we should be doing is to launch out in expenditure in new directions. Such action is likely to win more blame than praise for the Government.
– Surely the honorable member does not suggest that the Government should abandon its policy?
– In the circumstances, I certainly suggest that it should delay embarking upon this housing scheme. I have had experience of every drought that has occurred in our northern districts during the last 50 years, and I know what faces the people. We shall need not only the resources of the Commonwealth Bank, but also those- of every other bank and financial institution to see us through. In addition, we shall need personal thrift. The Government should set the country an example by living within its means. Public borrowing should cease except for the construction of essential and reproductive work. That statement should be thundered in the ears of this Government, for it is taking risks which it has no business to take. I go so far as to say that it is reckless in its borrowing. We are now conducting our deliberations away from the throbbing life of a big city, and are somewhat out of living touch with the people. It is all the more necessary, therefore, that “ we should act carefully, and with a greater sense of responsibility. We shall not mend matters by creating a panic, and I am the last one who .would attempt to do so, but we must have the courage to face the facts, and to suffer individually as well as jointly for the good of the nation. Only by so doing shall we weather the storms that are ahead of us. Perhaps I shall be asked, “ How shall we be able to find work for the unemployed if we cease borrowing ? “ I know that many men are out of work in Australia, and that it is our duty to provide employment for them, but only reproductive and essential work should be put in hand. If we could close the doors of our Arbitration Court for twelve months we should confer a wonderful blessing upon our people. If we would make up our minds to take our coats off and go out to work as brothers we should pull through. It is of.no use for us to talk about it. Let . us determine to do it. Many reproductive works could be put in hand. In South Australia, for instance, the money that is being made available under the Migration Agreement is being ear-marked for expenditure on water conservation schemes.
There is on the west coast a large extent of country which, though settled 60 or 70 years ago, remains almost undeveloped. That territory has a great future; its rainfall is irregular, but it will be productive four years out of five. Water conservation, however, is absolutely imperative. By opening up the lands on the west coast and elsewhere that give promise of immediate productivity we can find work at satisfactory wages and solve the unemployed problem. But we all must work, and we cannot afford to embark on undertakings that are not immediately required. I am dead against the proposed division of the .Commonwealth Bank’s activities and before I vote for the bill I shall require an assurance that it has the unanimous approval of the directors of the bank. We should be jealous of this institution.
– The best advisors are dead against this bill.
– That is not so.
– I would wipe the Government out. of existence if I found that it was misleading us in regard to the attitude of the directors of the bank.
– The Government is cutting off the bank’s right hand.
– I am very fearful of this bill, and the Government will incur my keenest and strongest opposition if it interferes with the bank for any reason that is not absolutely essential. The scope of the bank could be extended with advantage to country people, but many activities that would have provided opportunities for borrowing money with certainty of a decent return have been forgotten or neglected disgracefully. I repeat that the present crisis requires that all of us, whether we be Labour men or Liberals, shall give of our best in thought and action, night and day, to uphold and advance the country.
.- I am opposed to the bill because I believe that it will weaken the Commonwealth Bank and reduce its status. I am authoritatively told that to-day it is the tenth largest bank in the world, but if its assets are divided and its administration is interfered with, it will lose its prestige as a great financial institution. There is no need for the appointment of three commissioners to control the savings bank department. This Government has shown in many ways its antagonism to all forms of State enterprise. Looking back over the history of the bank we find that members of the Labour party alone had the temerity to advocate its establishment; the interests that to-day support the Government were then, as now, bitterly hostile to the bank and did everything possible to thwart the efforts of the Labour party to bring it into being. After the second reading of the bill had been moved in this chamber by the then Prime Minister, Mr. Andrew Fisher, Sir Joseph Cook, who was the Leader of the conservative opposition, said sarcastically on the 15th of November, 1911, “ This will mean sovereigns for everybody!” He endeavoured to throw cold water on the proposal and to arouse suspicion. Mr. Glynn, another prominent member of the Opposition, said: “I do not think there is any urgent necessity for the bill, even if there is any necessity at all.” Mr. Massy Greene, who posed as a financial authority because he had served for some years in private banking institutions, said on the 21st of November, 1911 : -
Iu approaching the subject I should like to say at the outset that the deeper we get into it, the more we read about it, and the more we study it, the more doubtful we should be. We should hasten very slowly.
The then honorable member for Wentworth (Mr. Kelly) opposed the measure, and Mr. Fairbairn, who represented Fawkner, said, “There is no great need for the Commonwealth Bank.”
– Who was the member who said that all of us would be able to get overdrafts?
– An endeavour was made to cast suspicion on the proposal by suggesting that Labour members and their friends would all get money from the bank. The late Lord Forrest said “As there is no great urgency for this measure I should like to see the Government postpone it altogether.” Mr. Alfred Deakin, one of the leading representatives of the interests that are behind the present Government, sought to throw a damper upon the proposal, and moved that it be referred to a select committee. Sir Robert Best said that no substantial benefit or advantages could be gained by passing the bill.
– Andhow their forecasts have been falsified!
– Time has falsified the gloomy predictions of our opponents regarding many advanced proposals made by the Labour party. Sir John Quick who then represented Bendigo, said that he objected to the scheme embodied in the bill. All the gentlemen I have quoted endeavured to kill the measure. They did not want a. Commonwealth Bank to be established, because they knew that it would interfere with the high interest rate and the profits of the private trading banks.
– It has not done so.
– Not to the extent that it should, because it has been unsympathetically administered and hampered, and those in control of it knew that the policy of the present Government was that the bank should not compete unduly with the private trading banks.
– An analysis of the statistics for the period when Sir Denison Miller was Governor shows that the private banks made bigger profits after the Commonwealth Bank was established.
- Sir Denison Miller was Governor of the bank for only a brief period while a Labour Government wa3 in office. During that period the bank made steady progress and substantial profits. Labour went out of office in 1916 and the present Treasurer has admitted, as previous Treasurers of the same party have admitted, that the policy of the Nationalist Government is that the bank should not compete unduly with the private trading banks. The Labour party’s policy, on the contrary, is that the bank should continually seek new business and confer its benefits upon an ever increasing number of people, acting as a check on the rapacity of private trading banks. The bill now before us is designed to remove the control of the savings bank business from the Board of Directors of the Commonwealth Bank. There is no need for that step. The Savings Bank is to be placed under the control of a Chief Commissioner and two part-time commissioners. This must mean increased cost to the Savings Bank. The Treasurer said that the financing of the housing scheme from Savings Bank funds would place too great a burden upon the direc tors of the Commonwealth Bank, but it is clear that that would not be so. It is not as if the Savings Bank will build houses; under this scheme the Savings Bankmanagementwill not build one house. It will merely make loans available to existing State housing authorities who will be responsible for the interest and repayment of the principal. The financing of the housing scheme is to be an ordinary loan transaction and could be effectively controlled by the Board of Directors of the Commonwealth Bank. I would like to know whether the present Board of Directors have stated that they could not do the work. Presumably the commissioners will meet at least once a month and the two parttime commissioners, who are to be paid not more than £500 a year, will devote their talents principally to their other interests, sparing possibly one hour or two hours a month for the work of the Savings Bank. There is no necessity for that at all, because the work could be effectively carried out by the present administration, of the bank. The Treasurer when introducing the bill said that under the present proposal the Savings Bank funds would be used to assist persons of small means to provide homes for themselves. He did not explain, as he should have explained, that the bank does not intend to build houses or to lend money to individuals. On the eve of the last Federal elections, the Government promised to make £20,000,000 available to the people of Australia to enable them to build homes, and it stressed the fact that a great national housing scheme would be of great advantage to a young country like Australia, especially if commodious and well ventilated houses were provided at a minimum of cost. At that time everybody thought that the Government intended to build homes on liberal terms for the people, but it has now been ascertained from the Treasurer that the Government intends only to make loans available from the Savings Bank department of the Commonwealth Bank to a number of Stateinstitutions that are already building homes. The Treasurer in his second speech, said -
Action was taken by the Government in 1924 to enable the bank to function as a bank of reserve, discount and exchange. It will be realized that the function of a central bank is to act as a bank of reserve to stand behind the other financial institutions.
I should like to know from the Treasurer when is it intended that the bank should function as a bank of reserve?
– It is already doing so, and in many respects very satisfactorily.
– What effect is that having on the ordinary trading function of the bank and its capacity to make loans direct to farmers to tide them over periods of drought and to enable them to put in new crops? Is that one of the reasons why numerous Queensland farmers have been refused ordinary overdrafts to tide them over the harvesting period? This Government is concerned more with making the Commonwealth Bank a bankers’ bank than with making it a people’s bank. The Treasurer claimed great credit for establishing the rural credit department of the bank. When that department was established, it was thought by a great many primary producers that they would be able to obtain loans on property, but to their disappointment they soon ascertained that provision had been made only for loans to pools for the marketing of crops. I have no objection to such loans, but they have always been made by the Commonwealth Bank and by private trading banks, and were advanced by the Commonwealth Bank under then existing legislation. In a young country like Australia it is essential that primary producers should be able to obtain loans from the Commonwealth Bank for a period up to twelve months while stock are being fattened and crops are growing. Unfortunately, this is not possible at present. The managers of branches of the Commonwealth Bank would be more liberal in providing overdrafts and loans to farmers if they were given the discretionary power that is exercised by private banking institutions at local centres; but they are hampered in their operations because every action taken by them has to be approved by the authorities at Sydney. They have been informed that it is not the policy of the bank to seek that class of business, and frequently accounts are refused because of instructions that business must not be taken from other banks. The Commonwealth Bank, if it were absolutely free in its operations to-day, could double its business within the next five years; but while the present Government is in power, the bank is to continue to be a bankers’ bank instead of a people’s bank. Three years ago the members of the Labour party in. this Parliament decided to give the Government a decision from Parliament along the lines of a real rural credits department of the Commonwealth Bank, and accordingly on the 9th July, 1924, the then Deputy Leader of the Labour party (Mr. Anstey) moved the following motion : -
That this bill be referred to a select committee to consider the advisability of extending the functions of the Commonwealth Bank to provide rural credits for the following purposes : -
1 ) 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 in periods of drought.
Could a people’s bank have a more laudable object than that ? It certainly should have been acceptable to honorable members, particularly those of the Country party who profess to be solicitous for the welfare of the primary producers. Yet a Minister moved the closure to prevent the motion from being further discussed.
– The closure was operating before the motion was moved.
– Had that motion been carried, a true rural credits department of the Commonwealth Bank would have been established, and loans would have been made direct to farmers. Strange to say, not one member of the Country party or the Nationalist party supported that motion. Just before the last Federal election the Treasurer introduced the Commonwealth Bank Rural Credits Bill providing for loans to pools. There was no great clamour for the measure, because the farmers who were conducting the pools knew that under legislation then existing the Commonwealth Bank had power to grant such loans. What the farmers wanted was a rural credits’ department to make advances direct to them. The Government’s policy didnot permit of the bank carrying out its proper function.
– Does the honorable member think that the late Sir Denison
Miller or any director of the Commonwealth Bank would have permitted government interference with the bank’s activities ?
Mr.FORDE. - When the Commonwealth Bank was established, its policy was to obtain whatever business was offering. The Treasurer during the last four and a half years has frequently stated that it is not the policy of the Commonwealth Bank to compete unduly with private trading banks. I know of actual instances in my electorate where farmers who, upon approaching the Commonwealth Bank for a loan, were told that it was turned down by head office, and that they should apply to a private trading bank. In many cases ample security was offered.
– Can the honorable member prove that st atement ?
– I shall not mention the names of individuals, but if any honorable member visits a country district, and gets into touch with the men on the land, he will find that they have been refused loans on good security because the local bank managers are not allowed to use their discretion. They submit applications to head-quarters in Sydney, and the reply given is that the bank’s policy is to decline the class of business offered. Consequently the bank is not allowed to function as it should in the interests of the men on the land, because, if it did, it would unduly compete with the private banks, whose chief shareholders are friends of the Government. That is why the Commonwealth Bank has not been allowed to operate as was intended by Labour. A farmer finds it impossible to obtain advances on the liberal terms intended, although the Commonwealth Bank Act, 1911, provides -
The bank shall, in addition to any other powers conferred by this act, have power -
To make advances by way of loan, overdraft or otherwise;
To discount bills or drafts;
To issue bills and. drafts and grant letters of credit;
To do anything incidental to its powers.
Section 53 of part VI. of the 1911 Act provides - .
The bank may from time to time issue debentures in such amounts as it thinks necessary, but so that the total amount thereof current at any one time shall not exceed one million pounds.
I submit that under sympathetic management the bank would have been of much greater service to the country. It has made steady progress, I admit ; but it could have trebled its business long ago if there had remained in power the Labour Government that introduced the measure, and if the bank had been sympathetically fostered and encouraged to go out after new business. The act was sufficiently wide in itself to permit of advances being made to rural settlers. The Treasurer and his party, however, were not free and unfettered. They feared the influence of the big financial interests concerned with private trading banks. When the Government said it was necessary to extend the powers of the bank, a definite amendment in that direction, which was submitted by the Opposition, was defeated by the Government and its supporters. I desire to see a liberal policy pursued by the banks, particularly in those parts of Australia that are now being developed. The local managers should not be forced into the position of having to act as agents for the private trading banks. The Country party put the position clearly on the 13th October, 1924, when, in an official statement, it said : -
The Bruce-Page Government took the bold step of converting the Commonwealth Bank into a bank for the bankers.
The people on the land in Queensland are crying out because it is too much a bankers’ bank, and not a producers’ bank. It is certainly not a bank for the people in the way that Labour intended it should be. Since the death of the first governor, Sir Denison Miller, and the appointment of a board of directors, the bank has been hamstrung. It has become more and more conservative every year, and it is not carrying out the functions for which it was established. Over it is the hand of the private banking institutions which are represented by the present Government, the members of which are unsympathetic towards all State institutions, whether State insurance departments or State or Commonwealth banking institutions. It would be a retrogressive step to pass the present bill, and an unjustified blow at the prestige of the Commonwealth Bank.
– I do not regard the measure as
One of the first importance, but it contains a number of provisions which perhaps deserve discussion and a certain amount of criticism. It is obviously a machinery bill connected with the Government’s housing scheme. Speaking generally, I welcome the attitude that the Government has adopted in not, attempting to do this work through the Commonwealth Bank itself. At the time of the last election, having read the Prime Minister’s Dandenong speech, I was under the impression that it was intended that the housing scheme should be carried out through the bank itself. That appeared to me to involve inevitable overlapping, which would have been disastrous. I am glad to see that that has been avoided by the present scheme. I ought to say in fairness to the Prime Minister that he made it clear in his speech that he proposed to eliminate overlapping as far as possible; but I did not understand that there was any such scheme in his mind as that proposed by the bill. Therefore, I approach the proposal of the Government with kindly feelings. It is obvious that the State organizations proposed to be utilized are those which are most suitably equipped for the work. They have had years of experience, and they are far more familiar with local conditions than are the Commonwealth Bank authorities. What is as important, perhaps, is that they have a considerable knowledge of the people likely to require consideration in the matter of housing. Instead of the money being made available in the particular way contemplated, which seems to me to be rather roundabout, I personAlly would prefer to have the funds supplied direct to the States, subject of course to proper safeguards, to be used under the terms of present State laws. The present bill will naturally involve the States in amending measures, and that necessity could be dispensed with if the money were simply lent to the States in such a way as would not involve further legislation by them. However, I bow to the inevitable and accept the Government’s decision as to the general method by which it is proposed to make the money available. On the important question of the amount of money to be earmarked, it might be held that it is not desirable to set aside, for instance, one-half of the net profits of the savings bank as a savings bank reserve fund. Indeed it might be contended that it is not wise to lay down too definitely the means by which the money is to be made available to the savings bank. But the Treasurer should be in a good position to say what is the best way to obtain it; and we have the comforting thought that, in case of emergency or difficulty, what Parliament has done it can undo. The separation of the savings bank department from the general bank does not seem to me to bc an important change. It may be claimed that the Commonwealth is establishing by this bill a savings bank that will act in opposition to, and in competition with, the State Savings Banks. That seems to be absurd, because ever since the establishment of the Commonwealth Bank it has had a savings bank department, which was established under section 5 of the act. The fact that this department is now to be separated from the main bank will not result in more competition in future than has obtained in the past. Further, ‘the separation is more apparent than real. A certain looseness of thought is shown in the clauses providing for the separation. This measure is part of the Commonwealth Bank Act; it is not an entirely separate bill. Had it been intended to make the savings bank department a totally separate’ institution, one would have expected a bill that was not attached, as it were, to theCommonwealth Bank Act. A similar course was adopted in regard to the rural credits department, and we are now to have these three departments loosely grouped together under the Commonwealth Bank Act. One commissioner is to be a director of the Commonwealth Bank.No doubt it is very desirable to provide for some liaison ; but that in itself indicates that there is not anything like complete separation. Then honorable members will find that the staffs are to be interchangeable. It is a little difficult to conceive of two institutions, which are quite separate, having staffs which are entirely interchangeable. It is further provided that the proposed commission mav appoint the Commonwealth Bank as its agent for the carrying out of any of its powers and duties, and may delegate to the hank the power of appointing sub-agencies. There, again, one finds a close connexion^ at any rate, between the two institutions” which it is suggested are really, being separated by the bill. One can only surmise that the Treasurer cast many a “longing lingering look behind “ when the Govern ment decided upon the separation. The clause dealing with governing boards of advice, clause 7, reads: - “Subject to the agreements referred to in sub-section (2) of section thirty-four f of this Act, the Governor-General may, on the recommendation of the commission, appoint a board of advice in each State and in London.”
– That is a misprint ; “ and in London “ should not be there.
– -I am glad to know that. I had intended to criticise the provision for the establishment of a board of advice in London, although, when we had a bill to amend the Commonwealth Bank Act under consideration several years ago, I was one of the first, if not the first, to suggest that there should be a London board of advice. Such a provision was inserted in the bill in another place, and I believe the board of advice in London has worked well, and the 1924 act, which made that provision, has proved very successful.
– Do you say the provision was first suggested in 1924?
– It was first inserted in the Commonwealth Bank Bill of 1924.
– I remind the honourable member that one of the conditions of an agreement between the Queensland and Commonwealth Governments, made in 1920, was that a board of advice should be established.
– There was no board of advice in London until after the passing of the 1924 bill. However, as the words to which I have drawn atattention were inserted in error, I shall not labour the point. It appears to me that what might have been a desirable facility for the Commonwealth Bank is not in any way suitable or necessary for a savings bank, such as is proposed. Its work has no vital connexion with what occurs on the other side of the world, and, just as the previous parliament deleted the provision for boards of advice in the various States, so I hope the present government will delete the suggested provision. Surely, if we have three commissioners, and the principal work of this savings bank is to be the lending of money for the building of houses, it is not necessary for boards of advice to be scattered all over Australia, involving the country in considerable expenditure. I am entirely in agreement with honourable members opposite in their desire to keep down expenses to the very lowest point. Would it not be possible to fix the salary of the ‘ chief commissioner in this bill? The Commonwealth Bank Act set out what, every director should receive for his services, but did not , fix the salary of the governor. It may be contended that this chief commissioner is to hold a position analagous to that of the governor of the Commonwealth Bank. He is to be the chief executive officer and is to spend all his time in the work, but there is nothing to indicate that he is to be a member of the civil service. Seeing that the salary of the chairman of the board of directors is fixed in the act, I consider it desirable that the salary of the chief commissioner should be fixed in this bill.
There is in Clause 7, probably due to a printing error, a reference to the Commonwealth Bank instead of to the Savings Bank, though it is obvious that the Savings Bank was intended. I now come to what appears to me to be the vital clause of the bill, Clause 35aa, which sets out for what purposes and in what ways the bank may invest any moneys held by it. Similar provisions have been in the Commonwealth Bank Act since it was first passed, while others are now inserted for the first time. Six paragraphs in subsection 1 of proposed new section 35aa declare how the bank may invest money held by it,, and paragraph g amplifies these by the addition “ in any other prescribed manner. I object very strongly to that provision. If it is agreed to the’ other six paragraphs are unnecessary. Such a provision gives the Minister an. absolutely freehand, and I consider that the way in which these moneys should be made available should be determined by this House, and not by a Minister.
– Is not that last clause to be construed ejusden generis?
– That is very possible, but it would raise questions of law, and might result in actions at law. As this House is merely enlarging the scope of the savings bank and the methods in which it may apply its money, that should be done definitely, without leaving it to the Minister to prescribe methods as he might think fit.
Paragraph d reads -
In advancing money for the erection of warehouses or storage facilities intended for the warehousing or storage of primary products.
That provision appears to have no real connexion with the bill, and I fail to appreciate why it was inserted. If money is to be advanced to provide warehouses and storage facilities, why should we not go further by permitting advances for the erection of wool sheds, stables, conservatories for growing fruits, and any plant, or machinery used in connexion with the primary producing industry ? The Rural Credits Act already allows assistance to be given to the primary producing interests, while in addition huge financial pastoral institutions throughout Australia cater for the needs .of the primary producer. There is already vigorous competition between the various private houses, and this ensures the protection of the interests of . the primary producer. The entry of the Commonwealth Savings Bank into this arena would merely involve it in what was considered by the private establishments to be bad business, and the Commonwealth Bank would be hit where private concerns would refrain from accepting business.
– The making of advances is a highly technical business.
– I agree with the honorable member. The men in “charge of the huge institutions to which I refer have devoted their lives to its study. It must be admitted that the primary producer has to devote so much of his time to the work of production that he cannot be expected to be as astute in financial matters as is the city business man, but, in his interest, I consider it inadvisable and unprofitable for the Government to compete with private institutions in this matter.
This is really a machinery bill, and I have refrained from discussing its housing aspect, as this is not the housing bill., I have said enough to indicate that while so much of the measure deserves support, there is room for improving it. I give the Treasurer credit for the introduction of the previous bill, which has worked very well. It is possible that this also may work well; but there are certain details in which it may be improved, and I hope that improvements will be incorporated in the bill during its committee stage.
, which was characteristically breezy and forcible. I quite agree with the honorable member that it is the duty of the Government to pay a considerable amount of attention to the conditions which are prevailing’ in connexion with unemployment - with what the honorable member terms “bread and butter questions.” What the honorable member had in mind principally was the experience through which agriculturists in his own State have passed. He was taking exception to the proposal that the funds of the Commonwealth Savings Bank should be used to assist people to own their own homes, instead of for relieving the disabilities of suffering agriculturists, and finding work for our unemployed. Idi) not take the honorable member’s view, so far as the Savings Bank funds are concerned. He has lost sight of the fact that the Commonwealth Bank, and other ordinary banks, can make advances for the purpose of assisting settlers who have been the victims of bad seasons and financial reverses resultant therefrom. Our savings banks were instituted to enable persons to deposit savings which are the result of their personal thrift, paying them, a small rate of interest on the amounts so deposited. Such savings, as a rule, are small in the beginning, but they remain in the bank until a sufficient amount has accumulated to enable the depositors to invest them at a better late of interest elsewhere. In these circumstances, and quite apart from the Government having declared that its policy was to make provision for savings banks deposits to be used for house building and purchasing. I consider this proposal to be sound in principle. The bill has been introduced to redeem the promise that the Prime Minister (Mr. Bruce) made in the policy speech which he delivered at Dandenong prior to the last election; but it has intrinsic merits of its own.If I have any objection to it, it is that it is a good deal wider in its scope than might have been expected from either the Dandenong speech of the Prime Minister, or subsequent statements on the subject. Why does the Government propose to advance money only to State organizations or State instrumentalities, and not directly to the customers of the bank whose money is being used ? Some good reason may have actuated it in placing this provision in the bill, but it does not seem to me to be sound business to encourage customers to do business with the Savings Bank up to a certain point and then to turn them over to some other authority for further business transactions. By so doing a certain amount of responsibility is avoided, it is true, but the Government might further consider the matter and possibly arrange that, if desired, depositors may obtain advances direct from the bank. I should like also to ask if there is any serious reason why the persons who are now entrusted with the control of the Commonwealth Savings Bank cannot be entrusted with this additional responsibility? They are competent officers, and if they had the assistance of expert valuers in the proposed housing branch of the business, I can see no reason for taking the work out of their hands, extra work in any case will fall on the officer of the bank, who is to be chairman of the commission. I feel perfectly sure that, given the expert help that I have suggested, the present officials to the bank could be trusted with this extension of the business. It is only necessary, so far as I can see, that prior to making advances the authorities con cerned should satisfy themselves as to the value of the security offered and theamount that might be prudently advanced upon it, and generally take the ordinary precautions of business.
– Could not the War Service Homes Commission conduct this business ?
– Our war service homes activities, in their early stages at least, were not such as to establish public confidence in some of those entrusted with the administrative work. No reason so far has been advanced why the present officials of the Commonwealth Savings Bank should be superseded. They should be better able than any other persons, to transact this business. It has been suggested that an advance of up to 90 per cent. of the value of the security offered is too high.
Mr.Foster. - It would be impossible for a private institution to make such an advance and to remain solvent.
– Does not everything depend upon the value of the proffered security and the character and repute of the. applicant ? It is well-known that valuations for loan purposes are always made upon a conservative basis, and I do not suppose that the Commonwealth Savings Bank would be more likely than any other institution to err on the side of over-valuation. In these matters a great deal depends upon the type of the applicant, his ability to pay, and his personal character and reputation. The Government, in extending the business operations of the Commonwealth Savings Bank in this direction, is supplementing the activities of existing state agencies; but its principal object, I take it, is to make the resources of the bank available to persons who are in receipt of higher permanent salaries than those who can be accommodated at present. It is largely a supplemental scheme. Under existing State legislation no persons in receipt of a salary exceeding £400 per annum is able to obtain an advance to purchase a home, and no person may obtain an advance of an amount exceeding £900. It is proposed in this measure that the salary range shall be increased to £600 per annum, and the amount of the advance to £1850. These alterations would greatly widen the circle of eligible applicants. I take it that the persons to whom advances would be made would, generally speaking, be in assured positions in the public service or in private employment, in Avhich case it seems to me that a margin of 10 per cent. is not nearly so great a risk as the honorable member for Wakefield has suggested, and the risk would decrease with every payment of principal and interest.
– The honourable member would not like to make such an advance if he were engaged in private business.
– That is quite true ; but the object of the Government is to meet special circumstances, which it would not always suit private firms to entertain. Very careful inquiry would have to be made before advances were granted, for millions of money will be involved in the scheme. I am quite satisfied that the bona fides of applicants would be carefully investigated, and that there would be very little financial risk.
– Does not the honourable member think that that provision should be struck out of the bill?
-I take it that it is a permissive provision. The authorities administering the funds will not bc obliged to advance up to 90 per cent. If the clause were struck out the main object of the bill might be defeated. Weare not contemplating an ordinary transaction. The tendency of private financial institutions and the established banks is to discontinue this class of business. As a matter of fact there is a serious proposal in banking circles in New South Wales to further limit the advances upon house property, and some banks will not advance at all upon such security. At present advances are limited to about 60 per cent. of the valuation. The bill proposes to increase that limit to 90 per cent. In New South Wales State Savings Bank advances on house property may be made up to 90 per cent. of the valuation. The Commonwealth Savings Bank cannot expect to compete successfully against the State institutions if the latter advance to a greater proportion of the valuation and require a smaller deposit. With proper safeguards anadvance of 90 per cent. is not dangerous. I hope that the proposal to appoint three commissioners will be further considered, but I think that a remuneration of £500 per annum for part-timecommissioners engaged in work involving an expenditure of £20,000,000 is too small to attract the right kind of men.Rather than pay such a small salary to the commissioners, I would prefer that the savings bank branch should continue to be administered by the board of directors which has already so successfully managed the Commonwealth Bank’s affairs.
– After reading this bill one must be impressed with the fact that it proposes the creation of another commission. Recently the Government sent Mr. Collins to London to study financial matters. Prior to that, a board of directors had been brought into existence at considerable increase of the administrative costs of the Commonwealth Bank, and now the Government proposes the creation of another body to eat further into the profits of the bank. This Government is creating a record in the appointment of boards and commissions which draw large salaries from the Commonwealth. Parliament is becoming a mere factory for the making of boards and commissions, each of which surrounds itself with a large staff. What is the need for the appointment of a new commission to handle the affairs of the savings bank? Has the board of directors of the Commonwealth Bank failed in its duty? I should welcome a proposal that would increase the savings bank business, which has been neglecetd.
– The figures do not show that.
– It is true that the savings bank holds £47,000,000 of the savings of the people, but this branch of the Commonwealth Bank’s business could be improved. In many districts the onlyprovision for doing savings bank business is in small post offices. The New South Wales State Savings Bank, on the other hand, has fine premises throughout the State, and is striving after new business.
– There are more post offices than savings banks.
– I am aware that there are about 3,000 agencies throughout the Commonwealth collecting money for the Commonwealth Savings Bank, but in many of those offices the savings bank business has to wait if the officer in charge is engaged on postal work. If the purpose of this bill were to improve the banking facilities of the people, I would welcome it, but that is not the case. The bill is mixed up with the Government’s housing scheme. One of the promises made by the Government during the last election campaign was that it would legislate for the building of houses for the people. This legislation will not lead to the laying of one brick upon another, because unless the State Governments avail themselves of it, no work will be done. The Commonwealth is merely to” act as a lender in respect of work to be done by the States authorities. That is all that the Government’s housing scheme amounts to, and surely the Commonwealth Bank could lend money to the State authorities without so much fuss. The fact is that the Government has sidestepped its promise in regard to housing, although that was one of the prominent planks of its election platform. More houses are urgently needed. What is the sense of bringing in more migrants when we cannot provide them with homes ? One effect of this bill will be to cripple the Commonwealth Bank. To-day it is the foremost bank in the Commonwealth, but if its assets are reduced by £47,000,000 its status will be lowered and its operations restricted. If this legislation is to pass, provision should be made requiring the Savings. Bank balance sheet to be included in that of the Commonwealth Bank. If that is not done the bank will take second place to the bank of New South Wales. There would be more justification for these proposals if the Government said, in effect, to the State authorities, .” We will lend you 90 per cent- of the cost of all houses you erect.” But what the Government says in this measure is : “ If you build houses f or people, come to us and we will lend you the money.” How generous ! The money in’ the Savings Bank belongs to the workers, and the people to be assisted with those funds are those who deposited them. The Commonwealth Government does not propose to provide houses for the people. Will the four State labour Governments apply to the Commonwealth for money when the deposits in the State Savings Bank are at their disposal?
– They have used all their money.
– It is merely in circulation ; it does not leave the country. If £1,000 is paid by a Savings Bank to a builder, it is distributed and redeposited again within a fortnight.
– The State Savings Banks have used all the money that is at their disposal.
– But as fast as the money is lent, it is collected again.
– At any rate, the State housing authorities require more money than is at their disposal now.
– I should like to see the Commonwealth Savings Bank competing with the State institutions by paying the same rate of interest. Why should it pay & per cent, less than the State Savings Bank? For the same service the same rate should be paid. Tho Savings Bank should be regarded as a buttress of the Commonwealth Bank. The latter has stood behind the producers and has given financial stability to tho country, and any attempt to cripple it will be vigorously opposed by me.
.- As tlie Savings Bank Bill and the Housing Bill are so closely related, honorable members appreciate your permission, Mr. Speaker, to discuss them together. During the last election campaign the Prime Minister announced that the Government would introduce legislation to enable the people to obtain homes on easy terms, and the two measures now before us are a fulfilment of that promise. Some honorable members are doubtful whether it is a Com monwealth function to engage in the building of houses. The Main Roads scheme introduced by this Government was similarly questioned, but the fact remains that the people in the country districts greatly appreciate the thousands of miles of roads that have been built as the outcome of that legislation. Those honorable members who have said that the proposals now before us will not lead to the building of one home would have been equally critical if the Government had asked them to agree to the creation of a big constructing organization. Tha census of 1921 revealed that only 40 per cent, of the people in the Commonwealth own the homes in which they are living, and it is quite unlikely that the proportion has increased since that date. Honorable members will agree that some effort should be made to improve that state of affairs. Every honorable member of this House must appreciate the splendid work that has been done by State institutions, but there is undoubtedly still plenty of room for development. The method proposed by the Government is to utilize the funds’ of the Commonwealth Savings .Bank, supplemented by Commonwealth loan money, to make available to the people’ £20,000,000 for housing, for the discharge of mortgages, and for the erection of warehouses for the storage of primary products. Each of those objects meets with, my enthusiastic support, but there is room for debate on the proposal to convert the savings bank branch of the Commonwealth Bank into a separate institution. The Treasurer has not made out a good case in support of this drastic proposal. His explanation is that the housing scheme would impose a heavy burden on the board of directors, and he referred to the difference between short and long-term credits. I do not think that honorable members will be at all satisfied with that explanation, and it does not seem to be a good reason for establishing what to all intents and purposes will be a second Government trading bank. The honorable member for Yarra (Mr. Scullin) and the honorable member- for Capricornia (Mr. Forde) have stated that the separation of the savings bank branch is likely to weaken the Commonwealth Bank. I believe that the bank is big and strong enough to stand against all its competitors, but I cannot understand why the Government needlessly seeks to separate the savings bank department from the parent institution. It would be quite as easy for the Government to amend the Commonwealth Bank Act so as to give the board of directors the powers necessary to enable it to make loans to State Governments for housing purposes. A more simple process would be to lend the money direct to the States. It may be interesting to honorable members to know what the State agencies are doing in the direction of housing the people. The other day I was fortunate enough to obtain a copy of the report of the State Advances Corporation of Queensland, wherein itwas explained that in that State 60 per cent, of the people own their own homes. That percentage is much greater than that applying in any of the other States. Since the Queensland scheme, known as the Workers’ Dwelling Scheme, was introduced in 1910, no less than £5,316,000 has been advanced to 14,000 applicants. Some 12,420 completed dwellings have been provided, and of that number 5,482 have been paid for in full by the applicants. Originally, the maximum advance was £200, but it has since been increased to £416. It is only fair to state that the homes, with few exceptions, are built of timber and with iron roofs, and their cost usually does not exceed £629. During the last financial year the Queensland Government advanced to applicants for homes the substantial sum of £907,000. That is a record for housing operations during any year in that State. .In the bill before the House provision is made for advances to any State or municipal authority, but these may not be made until legislation operating in the States is extended to conform with Commonwealth housing legislation. That is the most important provision in the bill. I have no fault to find with the provision of a maximum advance of £1,800, based on 90 per cent, of the valuation.
– The Queensland Workers’ Homes Act provides for an advance based on 95 per cent, of the valuation.
– I agree with the honorable member for Dalley that the Queensland Act contains liberal provisions. Splendid work has also been done under the War Service Homes Act. Recently I had an opportunity of seeing much of that work, and I think that the fair deal that the returned soldiers are receiving both in regard to values and purchase terms is greatly to the credit of the administrati ve officers of the War Service Homes Commission. But it is possible that State authorities may, under this legislation, look entirely to the Commonwealth Government for money with which to finance their housing schemes, and if that occurred there would be little increase in building under existing conditions. I quite agree with the Treasurer that when the Prime Minister’s policy speech was made it was not contemplated for a moment to duplicate the work of or to compete with existing State authorities, but this House will surely want to know whether the majority of the State Governments are willing to bring their housing legislation into conformity with Commonwealth legislation. I take it that the Treasurer must have had some indication to that effect from the States. State Governments are frequently short’ of money, and if they can obtain, say, £1,000,000 from the Commonwealth for the building of homes, it isnot likely that they will finance their own schemes to the extent that they would otherwise have done. I think that some provision should be inserted in the bill compelling State Governments in particular to maintain. their present advances for homes, so that the advantages of this legislation shall not be lost. I hope that the Treasurer when replying will state, first, whether the board of directors of the Commonwealth Bank have been consulted, and have approved of the divorce of the savings bank business from the other business of the Commonwealth Bank; and, secondly, whether he has received some assurance from the States that they will not slacken their efforts to provide homes under their existing legislation.
The capable speeches which have been delivered on the Commonwealth Bank Bill and the Housing Bill by honorable members have rendered it unnecessary for me to say very much, but I do not wish to vote on the first measure without making a few observations. I am one of those who are entirely opposed to divorce of the savings bank business from the other business of the Commonwealth Bank. The Treasurer in his second-reading speech gave two reasons for proposing such a drastic step. The first is that the carrying out of the objects of the housing legislation would place upon the directors of the Commonwealth Bank a substantially added burden; and secondly, that the operations and outlook of the savings bank business are entirely different from those of the other two sec tions of the Bank - the rural credits branch and the general business branch. We are told that the directors of the Commonwealth Bank will be overburdened if we place upon them the duty of. administering that housing legislation. Let us examine for one moment the duties that would be imposed upon them. The objects of the bill are clearly and definitely set out. In making an advance from the fund prescribed under the bill to any applicant authority, there is no responsibility resting upon the directors beyond that of satisfying themselves that the scheme proposed to be financed complies with the requirements of the housing act. Any intelligent officer of the bank is capable of doing that. He could in a moment or two read the provisions of the act, and it would be themost simple thing in the world to examine the scheme of the applicant to see whether it complied with the act. It is extraordinary that of the proposed three commissioners who are to manage the savings bank business one is to be a director of the Commonwealth Bank. In addition to his ordinary duties as director of the bank, he will have to do his share administering the new institution. Why in the name of common sense should we impose upon one of the unfortunate directors this additional burden? Why not distribute the work among all the directors and let the bank remain as it is? Let us examine the duties of the directors of the Commonwealth Bank Board. They have been in control, not only of the general business of the bank and rural credits department, but also of the savings bank department, which has been administered most efficiently. These men have been efficiently investing £47,000,000 of the savings of the people. What would be their additional duties if they were asked to overlook advances under the housing scheme? The Commonwealth Government would say to them, “You have invested that £47,000,000 in certain directions, but you must now invest in another way half of any increase over the amount that you have been investing. That appears to me to be the only additional duty to be imposed on the present directors. The second argument advanced by the Treasurer is that he wishes to separate the savings bank department from the general bank, because savings bank business is different in its operation and outlook from that of. the other sections. It is obvious - and it is often the obvious that overlooked - that the directors have been administering the savings bank department from its inception. That argument would apply ever since the directors took office three years ago, and I am not aware that they have made representations that they are overburdened with work and cannot carry out the obligations imposed upon them.
– Possibly they have not been consulted in the matter.
– I cannot find a tittle of evidence to show that the directors would have any additional strain placed upon them by the proposed extra duties. It would be strange if, having efficiently discharged their duties. in the past, they could not undertake the slight extra responsibility that would be imposed, except in the case of one of the directors who in addition to the duties attaching to his position as Commissioner of the new savings bank would still have to discharge his duties as director of the Commonwealth Bank. A good deal has been said about the general scheme of housing. Several references have been made to the policy speech of the Prime Minister, and it has been remarked that these measures are merely to give effect to the policy enunciated at Dandenong. I listened to the Prime Minister on that occasion, and I have refreshed my memory by reading the report of bis policy speech. I find that the reference to housing was of a most casual character. Although it .seemed to involve a great deal, when boiled down it was merely a statement that the Government’s policy was to facilitate, so far as possible, the acquistion of homes by the people; to prevent, so far as possible, the exploitation of home-seekers by unscrupulous persons; and to extend the facilities, not only to manual workers, but to all people of limited means. The Prime Minister went on to suggest that the scheme would be brought in by means of legislation for the utilization of the machinery of the Commonwealth Bank. He was careful to point out that no at tempts would be made to duplicate the machinery existing in the other .States. He- indicated the source from which the money was to be derived ; but he made it abundantly clear that the only thing the Commonwealth was to do was to make the existing State institutions more efficient by providing them with additional funds where necessary. There was no suggestion of an intention on the Government’s part to take up the business of home building on its own account.- The Prime Minister distinctly laid it down that if the State authorities found themselves short of funds to carry out their various housing schemes, and came to the Commonwealth Savings Bank for assistance, they would receive the money they required. I wish to emphasize one point, and it is important as bearing on the duties of those who will administer the act. It seemed to me that the honorable member for Lang (Sir Elliot Johnson) was labouring under a mistaken idea regarding the terms of the bill. He seemed to be under the impression that the Commonwealth has to satisfy itself as to the soundness of the valuations with respect to the various advances. That is -not so. A careful perusal of the measure will show that all the commission has to be satisfied of is that the scheme submitted by the applicant authority accords with the provisions of the Housing Act. It is the applicant authority that has to be satisfied as to the valuations, inasmuch as it alone assumes full responsibility, not only for the interest to be paid to the Commonwealth, but also for the repayment of the loan. Not a scintilla of responsibility is to be assumed by the commission. I can quite understand the remarks of honorable members opposite to the effect- that there has been much ado about very little. So far as I know the State authorities who handle housing schemes have not complained that they are short of funds.
– No application has been refused on those grounds.
– Not so far as I know. The Victorian State Savings Bank, through the Credit Foncier system, is carrying out an excellent housing scheme. If such authorities find themselves short of funds, and can satisfy the commission that their schemes comply with the provisions of the housing bill, we are going to be generous enough to hand over to them the necessary money. That being all our scheme amounts to, why should we resort to the roundabout method provided in this measure? Suppose a particular State had a scheme on hand for which it needed money. It would be necessary for that State to raise a loan. Why could it not make provision for such a scheme in its application to the Loan Council, which, I should think, could obtain the money on terms just as favorable as those available to the Commonwealth Treasurer ?
– Already housing schemes have been provided for in the various applications considered by the Loan Council.
– All of which shows that the bill is unnecessary. I quite agree with the honorable member for Boothby (Mr. Duncan-Hughes) that boards of advice are not necessary. Why should a board of advice be set up in any State? On what is the board required to give advice? Again I emphasize that all that has to be made clear by the applicant authority is that its scheme conforms with the requirements of the Housing Act. As to the 90 per cent. valuation, I do not care if 100 per cent., of the valuation is to be advanced, because the responsibility for the payment of interest and the repayment of the principal restswith the borrowing authorities. As I am totally opposed to the separation of the savings bank department from the Commonwealth Bank, I shall vote against the second reading of the bill. If we are to carry out the housing project, I believe that the present board of directors will be able to do the work most efficiently.
Sitting suspended from 6.17 to8 p.m.
.I am wholly opposed to the proposal that the savings bank branch of the Commonwealth Bank should be severed from the Commonwealth Bank. As I was not in the House when the Treasurer made his speech last week on the second reading, I have read the Hansard report of his re marks very carefully, and have sought in vain for any solid argument in support of the bill. It is true that the honorable gentleman gave one or two alleged justifications for his action. He said that the housing scheme would cast a heavy burden upon the board of the bank. The honourable member for Fawkner (Mr. Maxwell) this afternoon dealt very effectively with that statement. The board of directors of the Commonwealth Bank has not very onerous duties to perform. Under the power conferred upon it by the Commonwealth Bank Act, the board is consulted by the governor of the bank on the settling of certain matters of policy, and no doubt its approval is sought with regard to the granting of large advances, but the principal work of administration is performed by the governor and the deputygovernor. The Treasurer also advanced as a reason for separating the savings bank from the general trading branch the argument that the manner in which funds may be invested varies with the origin of the funds, the origin of the savings bank deposits being different from the origin of the funds of the general trading branch. By some remarkable reasoning the honourable gentleman arrived at the opinion that, for that reason, the savings bank branch should be under a different authority from that governing the general business of the bank. It is quite clear that the real object for separating the savings bank branch from the Commonwealth Bank is to provide justification for the Housing Bill. It has already been pointed out by honourable, members on this side of the House, and also by the honourable member for Fawkner (Mr. Maxwell) that the Housing Bill does not provide a housing scheme, but merely provides means by which funds may be made available to certain authorities prescribed in the bill. Yet even that is largely a pretence. Certain authorities are named in this proposed legislation as authorities to which the Commonwealth Savings Bank Commissioners may make advances for housing schemes. Among those authorities are municipal authorities, State governments, and authorities in charge of Commonwealth territories. But anyone who analyses the possibilities of the operation of the proposal must arrive at the conclusion that the only au- thorities that can benefit by the proposal are the State governments and the authorities in charge of Commonwealth territories. At present no municipal authority in Australia has any housing scheme to which ordinary borrowers may apply, and it is not likely that, if a State government, failed to avail itself of the proposal, it would permit any local authority under its jurisdiction to do bo. This is therefore merely an attempt to make more important than it really is the so-called Housing Bill, which we are to consider later. If we examine the bill now before the House, we find that it provides for separating the savings bank department of the Commonwealth Bank from its other departments and sets up commissioners to control it. These commissioners are to exercise the functions that are outlined in the bill. There is a reservation protecting rights existing under agreements between the Governor of the Commonwealth Bank and two of the States relating to the transfer of State Savings Banks to the Commonwealth, but I draw attention to the inadequate nature of that protection. Queensland is one of the States concerned, and its agreement with the bank was made in 1920. In return for certain conditions and concessions set forth in it, the Queensland Government handed over the control of the State Savings Bank to the Commonwealth Bank. In the very bare clauses which allegedly protect the interests of Queensland and Tasmania - the other contracting State - inadequate provision is made for the preservation of the rights of the parties concerned. The Treasurer may imagine that the bill does everything that is needed, but, in my opinion, it does not. Under that agreement 70 per cent, of the annual increase in depositors’ balances is to be made available to the State Government. Those balances are to be notified quarterly and, when there is an increase, 70 per cent, of it is now made available to the State Treasurer. This money is made available as a 25 years’ loan, carrying interest at not more than 1 per cent more than the highest rate payable on deposits. In the event of there being any decrease in deposits, the State Treasurer has to make good the deficiency. I do not know that the Queensland Government has been called, upon during the currency of the agreement to make good a deficiency. There have been quarters in which withdrawals exceeded deposits, but the Commonwealth Bank has allowed a settlement to stand over until the succeeding quarter, when there being an excess of deposits over withdrawals, it was set off against the preceding deficiency. So far as that part of the agreement is concerned, I have no doubt that the proposed authority under this bill can carry out all the obligations of the Commonwealth Bank, but there are certain matters in regard to which I doubt that it can carry out those obligations. There is one matter which, in my opinion, is vital, though it may not be regarded as very important by some honorable members. X am not sure that it concerns Tasmania, but it certainly concerns Queensland. Where profit is made by the savings bank branch of the bank, that profit must be divided equally between the Commonwealth Bank and the Queensland Treasurer. Similarly if a loss is made, it is borne equally. In the bill, however, specific reference is made to the profits earned by the savings bank branch, and it is provided that these profits are to be dealt with in the same manner as the ordinary profits of the Commonwealth Bank - 50 per cent, of them is to be credited to the reserve fund of the bank, and 50 per cent, is to be credited to the national debt redemption fund.
– -That provision would be subject to the agreement already existing between the Commonwealth and the States.
– No doubt that is so ; but I do not know whether the Treasurer has taken that into account.
– The position will remain as it is to-day.
– To-day 50 per cent, of the funds credited to the Commonwealth Savings Bank are due to the transfer to it of the Queensland Savings Bank business. There is approximately £47,000,000 worth of deposits held at present by the savings bank branch of the Commonwealth Bank, and about half of that money represents Queensland deposits. Of the annual increase in those deposits 70 per cent, is already hypothecated under the agreement to which I have referred, and of ohe remaining 30 per cent, the Queensland Treasurer must be consulted as to its disposition. If due allowance is made for the application of the Queensland agreement to the business of the savings bank, it will be found that the funds left to the discretion and administration of the proposed new authority will be very limited. If the same argument is applied to the Tasmanian portion df the funds, the amount available will be seen to be still smaller. It is ludicrous to suggest that the existing Commonwealth Bank administration cannot adequately deal with those deposits. Provision is made in the bill for an advisory board. I imagine that the Treasurer has had to make provision for the advisory board because the setting up of such a board was one of thu conditions of the agreement between the Queensland Government and the Commonwealth Bank. That board consists of the Treasurer of the State, and the Governor of the Commonwealth Bank. Though called advisory, the board is in reality more than that, as it has the power to determine certain vital matters. It has to advise the Governor upon the question of the rate of interest to be paid to depositors, upon the maximum amount of deposits that may be received to the credit of any individual account, and upon the investment of balances after the 2-eturn of 70 per cent, of the excess deposits to the State. My understanding of the spirit of the agreement is that the advisory board is really a consultative board, and that the Governor of the Bank will not act upon any vital matter under the agreement without the concurrence of the Queensland Treasurer. I was the Premier and Treasurer of Queensland who negotiated the agreement with the then Governor of the Commonwealth Bank, the late Sir Denison Miller. The agreement was to have a currency of 25 years, the Queensland’ Government to have the right to extend it for a further 20 years. As the agreement involved the surrender of a very great power, it was not entered into lightly by the Queensland Government, an endeavour being made to safeguard the State in every possible way. Can it be regarded as likely that the
Queensland Government would have surrendered its savings bank business and entered into this agreement if it had thought that, within a few years, a Commonwealth Treasurer would separate the savings bank department from the other departments of the Commonwealth Bank, and have it administered by a set of commissioners of his own nomination? The agreement would never have been entered into had such a possibility occurred to those concerned. The Commonwealth Treasurer may say that the present Treasurer of Queensland has been consulted, and has approved of this ; but I point out that the agreement was ratified by the Queensland Parliament. The agreement is embodied in a Queensland statute, anc the Queensland Parliament was, therefore, a party to the agreement. My own opinion is that before the Commonwealth Treasurer would have been justified iti proposing so fundamental a change ir. the constitution of the Commonwealth Savings Bank authority, a fresh agreement should have been entered into with the State authority, and the agreement should be ratified by the Queensland Parliament. The Treasurer has embodied in this bill a statement of the duties of the bank with regard to advances for rural purposes. A Rural Credits Act was passed by this Parliament in 1925, as an amendment of the Commonwealth Bank Act. Now the Treasurer seeks to extend the provision for rural credits. At the time the Rural Credits Bill was under consideration, °the charge was levelled at the honorable gentleman and his Government, that what was being done was no more than a pretence; that the Commonwealth Bank authority, under the Commonwealth Bank Act, could make all the advances contemplated by the bill. Indeed, the bank was already engaged in that class of business. I had had personal experience as Premier and Treasurer of Queensland which justified that criticism. The Commonwealth Bank had already been making advances to societies, co-operative organizations, and companies. It is true that in most cases it did not make any considerable advance without obtaining a -guarantee from the State Government or some other substantial guarantor. But I do not think that the passing of the Rural Credits Act has made any difference in the way the advances are made, for, if any considerable amount is required for a long period, the guarantee of the State Government is still required.
– The advance is made absolutely against the produce.
– That is a restriction, which, in my opinion, has worked mischievously. The Commonwealth Bank might have been able to give a greater degree of relief if the Rural Credits Act had not been passed.
– The Director of Agriculture in Queensland does not think so.
– When the Rural Credits Bill was before this Parliament, the Queensland Council of Agriculture made representations to the Treasurer that his proposal was by no means sufficiently comprehensive, and that it was too restrictive with regard to the power of the bank and the term of the proposed loans.
– It has been said that the act has proved beneficial to the primary industries.
– That is a very general statement. If the Treasurer wishes to contest my statement of the attitude of the Queensland Council of Agriculture, I shall produce a memorandum which I have by me, which sets out the council’s objections in 1925. It points out that advances were to be made for a duration of twelve months only, whereas some applications made to the Commonwealth Bank prior to that time were for loans of fifteen years’ duration, and some loans had been actually made for that period.
– The honorable member misunderstands the purpose of the Rural Credits Act, which was purely to provide for the more orderly and regular marketing of produce.
– The Treasurer suggests that I do not fully understand the purposes of that act. That may be so; but I know some of its limitations. Advances made under it are limited to a term of twelve months. For the purposes of financing the harvesting of a crop, that might be a sufficient term.
– Because the security materializes in that time.
– That is so; and the funds advanced on that security can be returned to the bank. But, prior to the passing of that act, it was urged on behalf of States like Queensland, that such an advance was not sufficient. I am not suggesting that the difficulties were peculiar to Queensland. I remember, however, a case prior to the passage ofthe act, in which an application was made to the Commonwealth Bank on behalf of certain maize-growers, who wished to form a co-operative organization and establish a pool. They asked for an advance of £70,000 to erect silos and drying and cleaning machinery. The Commonwealth Bank made the advance on receiving a guarantee from the State Government. The Queensland wheat-growers - and their difficulties are no different in kind from those of the wheat-growers in other States - desired funds to finance a pool for the marketing of their crop and to erect wheat sheds at different places. For such a purpose a loan for a period of twelve months would be of no earthly use. They obtained their loan for the period of fifteen years, and it was covered by a guarantee of the State Government. I could enumerate other similar instances. I remind the Treasurer that the representations made to him by the Queensland Council of Agriculture were to provide for advances to cover the financing and marketing of crops, and the, processing of products such as fruit, and especially the establishing of factories where cooperative societies were operating, to erect cleaning and drying plants, and to provide mechanical loading and handling appliances, and the assistance of transportation. The advances were required for much more comprehensive purposes than those set out in the Rural Credits Act, and for much more comprehensive purposes than those set out in the present bill. The honorable gentleman has referred to the representations made to him by the Premier of South Australia with regard to the limitations of the bill. Apparently, he has endeavoured to cover that application, but the bill does not by any means provide for the sum total of assistance that is required if . a full measure of support is to be given to primary industries.
– But this is a Housing Bill.
– That is true, but there are provisions in the bill relating to rural advances. The Rural Credits Act of 1925 is more or less a mockery and a sham. It was, I think, intended to satisfy agitation in certain rural districts; but as for affording real relief to the primary producers it is only a humbug; it provides no real measure of reform. The same criticism may justly be directed against this measure. It, also, is a mockery and a sham, and only makes a pretence of carrying out the pledge of the Government to people who are expecting a greater measure of practical support in acquiring homes. I understand that the Treasurer before he came into office frequently advocated economy in administration, and severely criticized the government of the day for not ticking radical reforms in its financial methods. Since his accession to office he has claimed credit for having brought about a great measure of financial reform. Personally I do not think that he has effected a solitary reform worthy of the name. In the speech in which he moved the second reading of this bill, he stated that this Government had continuously endeavoured to improve the machinery of the Commonwealth Bank. He pointed out that it had created a board of directors, which he said had had the effect of improving the exchange position, and had caused the bank to win the confidence of the private banking institutions. He stated that the passing of the Rural Credits Act in 1925 had made a vast difference in the marketing of our primary products. I venture to say that none of those claims are borne out by the facts. In my opinion, the appointment of a board of directors has diminished the usefulness of the bank. It is, moreover, absurd to claim that the directors are responsible for the improved exchange position. I do not think for a moment that they would have made such a. claim. Everyone knows that the improvement of the exchange position today compared with that of 1924 has been considerable; but the board of directors of the Bank had little or nothing to do with the improvement. The Government, together with the directors of the private banks may have had something to do with it; but the chief factors making for the-improved exchange position have been economic.
– It is the result of a direct act of policy adopted by the directors of the Commonwealth. Bank that the exchange position of the bank has improved.
– I disagree with the Treasurer. If the Treasurer finds that my statements arc not based on demonstrable facts, I shall be pleased to listen to his rebuttal of ;:h:rn and recognize his superior knowledge. In my opinion the directors of the Commonwealth Bank had little or nothing to do with the improvement of the exchange position. It is said that the adoption of a certain policy by the Commonwealth Bank directors had a malarial bearing on the improvement of the exchange position. I take it thai, the allusion is to their action in agreeing to certain proposals which emanated from the United Kingdom for a return to the gold standard; but that was rather the decision of the Common wealth Government than the decision of the Commonwealth Bank directors.
– There was a decision by the Commonwealth Bank directors to make available Commonwealth notes in Australia against advances in London.
– That had been under consideration by the Note Issue Board long before the directors of the bank were appointed. Mr. J. J. Garvan, the chairman of the Note Issue Board, gave some very sound opinions upon the subject, and his advice was largely followed.
– But his advice was not adopted until the board of directors of the Commonwealth Bank were appointed.
– But it was not given effect to because the board came into existence. It was the advice of Mi1. Garvan and the then governor of the bank, Mr. James Kell, that was accepted and acted on. As a matter of fact the board of directors of the bank has been only a cipher in regard to the control of the exchange position. Those controlling the associated banks - I say it with sorrow - have had ten times as much influence as the directors of the Commonwealth Bank in this matter. That is not as it should be, but it is so. It is quite evident that the Govern ment has been for some time insidiously whittling away the prestige and power of the Commonwealth Bank. One would be foolish to ignore the fact that the private banks areantagonistic to the idea of an Australian national bank. It must be recognized that they think that the more fully the Commonwealth Bank functions the less powerful the private banks become, and to that extent lose strength, and suffer loss of standing. The Commonwealth Bank was established to carry out many functions which so far it has not been permitted to perform.
– What were they?
– The founders of the Commonwealth Bank intended that it should provide additional banking facilities, exercise a greater measure of control, if not sole authority, over local and foreign exchanges, and dominate the fixing of discount and bank rates in Australia. It was intended that it should become the controlling factor in managing Government loan issues in Australia, and to some extent loan issues overseas, controlling the note issue and carrying out a policy of directing the savings of the community into channels which would permit them to be used for the welfare of the whole community.
– Does the honorable member suggest that the Commonwealth Bank alone could have enabled usto float our big war loans and other redemption loans.
– The Commonwealth Bank could have managed those issues. I am firmly of that opinion.I think the bank could have managed the whole of the loan issues which have been floated by the Commonwealth, and, to a very large extent, those also which have been floated by the State Governments. Some organization is needed for this purpose, and in my opinion no institution was in a better position than the Commonwealth Bank to create such an organization. This is public service which the bank should have been per mitted to render. What has happened in connexion with the loans floated in Australia is that the private banks have been asked to aid in managing and controlling these issues, and to some extent in underwriting them, if underwriting it can be called. As Premier and Treasurer of Queensland I was present at a conference in Melbourne, called by the Commonwealth Treasurer. I think it was prior to the floating of the first Australian loan for civil purposes, the amount of the issue being £10,000,000 Representatives of the private banks were invited to meet the Commonwealth and State Treasurers and discuss the matter with them. They were specifically asked to underwrite the loan and manage its issue. After much haggling they agreed to invite subscriptions, for which service they were to receive 10s. per cent.; but if the loan were not fully subscribed, the Commonwealth Bank was to find the balance And they called that underwriting ! The loan business has been handled on very much the same lines ever since. That was not underwriting in the ordinary sense of the word. The banks did not undertake to raise the amounts required; they merely promised to receive subscriptions through their various branches and hand them over to the Treasury.
– They undertook the liability for the balance of the loan and to find the money for the Government if the flotation were not successful.
– They did not accept any responsibility for the raising of the money; if there was any shortage the Commonwealth Bank had to find the balance. The Treasurers had offered them 20s. per cent. to underwrite the loan fully; they refused that, but they accepted 10s. per cent, for the more limited services I have mentioned. Of course, I recognize that the banks approach these transactions from a commercial point of view, and are not influenced much by sentiment. It is true that the Treasurer is able to utilize the services of the extensive organizations of the private banks, but if the Common wealth Bank had been allowed to develop in accordance with the original conception of it; if branches and agencies had been established wherever there was justification for them - which means wherever business was to be done - it could underwrite any amount that it was practicable to raise in Australia. There would be no organization in a better position to judge what funds were available for investment in Commonwealth loans, and having that knowledge the bank could undertake to raise the money at minimum charges. Moreover, the bank would enormously enhance its prestige by doing that class of business. Such business is done by State banks in other countries; and it could be very usefully done in Australia by a national institution such as the Commonwealth Rank. Unfortunately that institution has been moribund for the last few years ; certainly since the end of the war its operations have been limited and its usefulness curtailed.
– Have not the directors power to establish new branches?
– I believe that under the original act the governor of the bank has power to establish additional branches, but that has not been done.
– The branches have increased since 1924.
– That increase has been very limited. At any rate the number of branches existing in each State is very small, and the reason given is that the Commonwealth Bank does not seek business as the ordinary private trading banks do. I cannot understand why the Commonwealth Bank should not establish a bank in every community where banking business is done ; it should have the lion’s share of the deposits, and not merely the crumbs that fall from the rich man’s table. I assert, and thoroughly believe that the scop 3 of the Commonwealth Bank’s operations is virtually dictated by the associated banks. So far from tb Commonwealth Bank controlling the discount rate and the bank rate and the conditions upon which loans are raised, those things are controlled by the associated banks. I know that to some extent the Commonwealth Bank is consulted by them; it may be said that it co-operates with them, but its voice in their councils is very small and weak. The real power is exercised by the Bank of New South
Wales, the Bank of Australasia, the Union Bank, the National Bank, and the Commercial Banking Company of Sydney and the other great trading banks. They control the banking policy and also the monetary policy of Australia. Not only is their influence paramount in fixing the discount rate, the local exchange rate, and the bank- rate, but also they rule in more abstruse monetary matters. If the Commonweal:h Bank had been allowed to develop it3 true functions and had been sympathetically administered - I do not wish to reflect on the present governor or his predecessor - if a wise policy had been adopted, and if the power that could be exercised by the Commonwealth Bank had been fully realized by those who are in charge of it, it would have been infinitely more powerful than it is ; it would be the determining authority in fixing the discount rates, and would have a far greater influence in controlling the overseas exchanges also. I know that overseas exchanges are subject to factors that cannot be governed from Australia, but had the Commonwealth Bank realized the ideals of its founders, it would be occupying a position iu which it could be a powerful factor in influencing those exchanges, and in determining the monetary policy of Australia. It would also vastly assist the Treasurer to meet his obligations and in arranging for. the flotation of public loans within Australia. Of course, thi ideas of the Labour party tire wholly at variance with those of the Government party in regard to what should be the ultimate aim and object of an institution like the Commonwealth Bank. In our community are vast credit resources, and presumably the policy of this Government is that those resource? should be controlled, organized, and, to a large extent, utilized by the private hanks. But the policy of the Labour party is that the credit resources and the paramount monetary power should be controlled by the national bank. It is within the capacity of the Commonwealth Bank to organize and regularize the credit resources of the community, for, after all, one has to recognize that those resources are only the surplus earnings or accrued savings of the community, and or.e, cannot get away from the fact that at least 90 pe:* cent, of them are at present controlled by private institutions - banks, insurance companies, public trustee companies, and like organizations. By the command of these enormous resources of credit, those institutions wield a tremendous power over the whole community ai-d to a large extent dictate the financial policy of the country. By expanding or contracting credit they can, and do, bring to bear a vast influence upon trade and industry. They may consider that when they contract credit, causing vast embarrassment to individual industries, they are actuated wholly by public motives, but there is no doubt that they have that power.
– If they do anything detrimental to trade they injure themselves.
– I know that, but how often is it said,, by pastoralists for instance, that the banks are exorcising an unjustifiable stringency?
– Sometimes they do it very properly.
– That may be so, but although they may consider that they are actuated by public interest, their policy does not always benefit the public, and in any event such a vital power should be in the hands of a public and not a private authority. I have heard criticism of governments for incurring too much capital expenditure, and particularly for expending too much from loan fund, and we have been warned that an undesirable reaction, bringing in its train depression and restriction of industry, will result. Do honorable members recognize that although governments may be expending millions of pounds upon public works, such as harbours, railways, and roads, and in making advances to- farmers, the private banks also are authorizing the expenditure of sums many times greater upon picture palaces, breweries, theatres, town buildings, large city structures, and upon other things; and that this expenditure will not bear as much justification as the disbursements upon Government enterprises ?
– That expenditure gives employment to labour.
– Critics of the excessive expenditure of capital invariably load the blame upon governments. My argument is that in many other directions there is great expenditure of capital for. which governments are not to blame, and that such expenditure is less justifiable than some government expenditure. Admittedly, a bank would not advance £50,000 to a brewery company without good security; but, however good the security, the building of a new brewery, economically considered, may not be altogether in the interest of the community.
– The banks are taking the lead now in curtailing such advances.
– The lead would have been taken much earlier if the Commonwealth Bank had had a greater influence than the private banks in dictating monetary policy. I listened in vain to the speech of the Treasurer and others who have spoken in favour of the bill for any justification of the proposed change. The Commonwealth Bank as at present constituted can carry out all the functions proposed to - be carried out by the new board of commissioners, who will administer the savings branch alone. Surely it will not be contended that the authorities directing the Commonwealth Bank desire to surrender the control of the savings funds. The Treasurer has been silent upon that point. He should enlighten the House as to whether there has been a consultation between him and those who control the bank.
– I am not . referring to the board of directors, because I assume the board to be more in a nature of an advisory body. The Governor is the man who has power of life and death over the bank, and I ask the Treasurer whether that gentleman consented to the surrender of tlie savings bank to a separate commission. If so, what are his reasons for considering that the present staff of the Commonwealth Bank cannot cope with the savings bank business? If more complex business is to be done by the savings branch, all that is required is the promotion of officers to attend to that business. If more advances are to be made from the savings funds for housing, or any other scheme, surely there are on the staff of the Commonwealth Bank men capable of managing that business . as efficiently as it will be managed by a board of commissioners. When the Savings Bank in Queensland was taken over by the Commonwealth Bank by virtue of the agreement made in 1920, provision had to be made for the payment of compensation to the Commissioner of the State Savings Bank, who was a highlypaid and efficient officer. The other officers of the Queensland savings branch were taken over by the Commonwealth Bank, but there was no room for the Commissioner, because the Governor of. the Commonwealth Bank considered his officers quite capable of administering the savings branch; accordingly, he paid nearly £10,000 to buy him out of his office. That, no doubt, was an equitable arrangement between the Governor of the Commonwealth Bank and the former commissioner ; but to-day we have a proposal to set up a separate commission to take charge of the Commonwealth Savings Bank business, which is no greater in respect of the amount of funds available than that which in Queensland had been administered by a commissioner. The funds that will come under the control of the proposed commission will be less than the total amount in the savings branch, because half of them have been already hypothecated under agreements with the Governments of Queensland and Tasmania. The bill proposes the appointment of a” chief commissioner at a salary which will be not less than £2,500, and two part-time commissioners who are to receive £500 a year each, to do what one commissioner in Queensland was doing, and who, as I have said, was bought out of office at a cost of £10,000 because the Governor of of the Commonwealth Bank considered that his officers could manage the business more satisfactorily. The position is absurd and I think that the Treasurer would be well advised to reconsider the proposal and to let the bill drop altogether. The housing scheme may be carried out efficiently without disrupting the Commonwealth Bank and splitting it asunder.
Mr. Gr. FRANCIS (Kennedy) [8.46].- I have much pleasure in supporting the measure, lt is one of many measures which the Government, has introduced to carry out its election pledges. The bill is greatly desired by the people because it will make it possible for them to obtain homes under reasonable conditions.
I have listened to the remarks of the honorable member for Dalley (Mr. Theodore) and I gather shortly that he does not understand the position. Remembering the position of Queensland when the honorable member for Dalley was Premier and Treasurer of that State, and considering what then happened, one can thoroughly appreciate the fact that he has little knowledge of financial matters. The Treasurer (Dr. Earle Page) has stated that the. object of the bill is to separate the transactions and objects of two distinct branches of the Commonwealth Bank - the general banking branch and the savings bank branch. Since this is an age of specialization, one can fully appreciate the fact that there must be satisfactory reasons for taking such a course. The Treasurer has certainly shown great wisdom in handling the finances of the Commonwealth, and I have no doubt that he will be able to give satisfactory reasons for the bill. I should like to ask him to inform the House whether he consulted the bank authorities before he introduced it.
– It Avas introduced on the advice of the directors.
– Although I do not profess to be a financial expert I can yet see one distinct advantage in the bill, in that it will secure that the savings of the people shall be invested to a greater extent in. country districts. Country people contribute largely to the funds of the savings bank, because their investments are small and they prefer smaller returns for safe investment. The Commonwealth Bank operates as an ordinary banking institution and its funds are largely invested in enterprises in the capital cities, and in overdrafts to big mercantile concerns. Country enterprises are perhaps not quite so safe as metropolitan enterprises, but at least they encourage settlement in the country, and lessen the abnormal concentration of people in the capital cities. By reason of the proposed separation of the savings bank department from the ordinary branch of the Commonwealth Bank, the savings bank funds Will be largely used to enable people living in the country to acquires homes in the country on reasonable terms. Honorable members opposite object strongly to the bill,- their fundamental objection being that its. purpose is somewhat different from what was intended when the Commonwealth Bank was originally established. The members of the Labour party claim credit for the establishment of that bank, but we all know that Mr. King O’Malley forced it upon them whether they liked it or not and that they accepted with fears and forebodings. They now seem to suggest, that this institution has become sacrosanct and should not be altered or interfered with in any way. I would remind them that this is the age of evolution, a subject which they are always prating about. This bill is an evolutionary measure. The Commonwealth Bank when established served its purpose, but as time went on it was necessary to have a rural credits department, and now to bring about greater efficiency and better results, it has been found necessary to concentrate more upon the savings bank business.
– The Labour party, when it was in power, carefully refrained from establishing a rural credits department.
– That is so. It is merely an electioneering cry of the members of the Labour party, and if they are not tired of it, the people obviously are, as the recent elections in New South “Wales bear witness. Honorable members opposite say that there should be only one head of the Commonwealth Bank. They objected three years ago to the establishment of a board of management, and one would have thought from their moans and groans at that time that a disaster was imminent similar to that which befell Queensland when’ the honorable member for Dalley (Mr, Theodore) became Premier and Treasurer of that State. The Commonwealth Bank has certainly progressed under the control of the board of directors. The honorable member for Dalley spoke of what the private banks would do if this bill became law; but whether this measure were or were not passed it would in no way restrict or affect the operations ©f private banks. Those institutions would still be able to extend or restrict margins of credit. After all, banks, commercial houses, and people generally de pend upon one thing ; it is not money, but credit. According to Jobson’s Investment Digest, in 1926 the Commonwealth Bank held in gold coin and bullion £41,298,000; .the Bank of New South Wales, £16,837,000; and the Bank of Australasia, £7,220,000. Judging by those- figures the apprehensions of the honorable member for South Sydney (Mr. E. Riley) seem to be unjustified. Obviously he is an alarmist, and has not considered the real position. The members of the Labour party contend that the separation of the Savings Bank means the emasculation of the Commonwealth Bank; but to the investing public it matters little which department of that institution holds deposits so long as the savings of the people are available for investment. Money remaining at interest in a bank is a liability to the institution, because the interest due to depositors has to be met. Banks, like other things, are affected by changing conditions, and -have to be brought up to date. The object of this measure is to bring the Commonwealth Bank up to date. That bank, like every other bank, has been founded upon the confidence of the people. Public confidence is the foundation upon which all financial institutions must rest, and it is the lack of that confidence that is causing the State of Queensland, so richly endowed by nature, to suffer so badly to-day. As an ordinary bank, the Commonwealth Bank, like any other financial institution, will make advances mostly to mercantile houses in capital cities; but the Savings Bank will use its funds mainly for the benefit of the country people who suffer many privations and lack of social amenities because of living in the out-back country. By extending its operations we shall confer a great benefit upon our rural population in the out-back districts. The honorable member for Fawkner (Mr. Maxwell) has suggested that the Prime Minister in his policy speech did not make any definite announcement respecting the proposal embodied in the bill. I have a copy of the Prime Minister’s - policy speech, and a portion of it reads : -
The Government proposes to introduce legislation for the purposes of utilizing the machinery of the Commonwealth Bank, giving assistance not only to manual workers, hut to those of small means, to acquire their homes on a basis of repayment extending over a long period of years. The savings of the people entrusted to the Commonwealth Bank could be utilized for no better purpose.
I am thoroughly in accord with the right honorable gentleman. He further said -
In giving effect to these proposals, the Government will not duplicate, the existing machinery provided by theStates, but will fill in the gap that now undoubtedly exists.
Honorable members on thic side of the chamber went to the country in support of the Prime Minister, feeling confident that the promise wouldbe redeemed. The electors expressed their approval of the policy, and that it was satisfactory to them is indicated by the present representation in this Parliament. The Commonwealth Bank has made a profit of something like £10,000,000 in connexion with governmental activities. As the national bank it has saved the country large sums in connexion with our war expenditure. The Opposition expresses warm regard for this institution: but the attacks they made upon Mr. Garvan and others are calculated to weaken rather than strengthen it, because numbers of persons who otherwise would be willing to invest their funds in it are afraid that if they did so their private banking affairs might be discussed in Parliament. One honorable member suggested that the Commonwealth Bank should advance money at1½ per cent. interest. I shall leave it to honorable members opposite, with their tremendous capacity for finance, to justify that claim. It is said that power has been taken away from the bank; but no reference has been made to one specific power of which the bank has been deprived. On the other hand, a number of new powers have been granted to the institution. Honorable members opposite contend that the bank will merely advance certain moneys out of Savings Bank funds. They have evidently overlooked the fact that under proposed new section 35f -
The Savings Bank may, with the approval of the Treasurer, enter into an arrangement with the proper authority controlling any Savings Bank constituted under the laws of a State for the transfer to the Savings Bank, upon such terms and conditions as are agreed upon between the Savings Bank and the pro per authority, of the whole or any part of the assets, liabilities, and business of that Savings Bank.
The honorable member for Dalley when Treasurer of Queensland, entered into such an arrangement with the Commonwealth Bank, and he might have, but he did not tell us what a difficult and involved procedure it was. Who would suggest that it is not essential that one of the three commissioners should be so closely in touch with the general Dank as to be one of its directors? Obviously, that official will be relieved, pro tanto, of his duties as a director of the Commonwealth Bank to the extent of his responsibilites as a commissioner of the Savings Bank; but he will, by virtue of his position, have an intimate first-han d knowledge of the general operations of the bank, to the great advantageofboth department’. The honorable member for Boothby (Mr. Duncan-Hughes) referred to the proposed new section 35aa, paragraph g, which provides that the Savings Bank may invest any money held by it”inany other prescribed manner.” After all, it is usual to insert a drag-net provision like that. There must be some discretion vested in the officials of the bank, and a provision of that nature will be found in practically every measure in Australia relating to investment funds. I am glad to support the bill. I regard it as a definite step forward in meeting one of the pressing needs of the people, and that is the owning of their homes.
.- The honorable member for Capricornia (Mr. Forde) referred to the work and policy of the bank, and his remarks could be construed into a reflection upon the late governor and the present directors, although I realize that he had no intention to cast any slur upon their administration. I am satisfied that, if any Treasurer of the Commonwealth, or any Prime Minister, had dared to interfere other than by legislation with the work of the institution, either when there was a single governor or when there was a board of directors, the bank authorities would have approached Parliament and the Government would have been put out of office. Can any member point to a solitary amendment of the Commonwealth Bank Act, during the past few years, that has reduced the status of the institution, or taken away one tittle of the powers originally granted to it by statute? I know that there were objections to the appointment of the board of directors. Honorable members opposite particularly took exception to that; but control by a board provides greater safety than control by an individual. Although we might be able to obtain the services of a first-class man as governor - as we originally did - there is always an element of danger in such control. A man trusted by all sections of the community might suddenly develop mental trouble; and it is wise to guard against that and similar contingencies. Rather than whittle away the powers of the bank, an attempt has been made to make it a central as well as a trading bank. The honorable member for Dalley (Mr. Theodore) was rather censorious in his remarks concerning the associated banks of Australia, which, when the war broke out, handed to the Treasurer £10,000,000 of gold and took notes for it. It would be absurd to suggest that the Commonwealth Bank alone could have undertaken the huge financial responsibilities created by the war. One only needs to consider the amount of the deposits in the associated banks and in the Commonwealth Bank to realize how futile the efforts of the latter would have been had it not been for the assistance and co-operation of the private institutions. The greater portion of the funds of the Commonwealth Bank are in the Savings Bank department. In 1925 the funds invested in the Savings Bank totalled some £45,000,000, of which £22,000,000 came from Queensland under the special arrangement to which the honorable member for Dalley has referred. Only a small sum has been placed
– Don’t be gloomy.
– I have no desire to be regarded as a pessimist, but I consider that when one believes that there is danger ahead he should have the courage to say so. Only too many are ready to* tickle the ears of the general public, and to take money out of the pockets of one section and put it into the pockets of another in the form of grants. That cannot go on for long, and it is time that we endeavoured to put our house in order.
Worker and employer alike should put their shoulders to the wheel in the endeavour to maintain the fine conditions that have hitherto prevailed in Australia. That cannot be achieved if the nation persists in its policy of continually borrowing. Such a policy cannot produce other than an evanescent prosperity. We must produce wealth, and as we produce wealth so, I hope, we shall improve the conditions of our people.
I cannot understand why the Commonwealth Government is not able to mind its own business. Every one of the States has made sound, well-conducted arrangements for the provision of housing for its people, yet the Commonwealth now proposes to intrude into tlie business. Commonwealth efforts in that direction have not been at all well conducted. The Commonwealth Bank undertook the building of homes for soldiers, and Ave certainly cannot be proud of the result. Australia
Avas robbed of over £1,000,000 as a result of .that experiment, and, although efforts were made to sheet home charges of criminality against some individuals, they failed. If the Commonwealth had money to spare I could understand the bill, but that is not the case. It is apparent to any sane man that, Avith prevailing conditions, the cost of labour and the extraordinary prices paid for property, house property Will drop at least 25 per cent, in the near future. Yet it is proposed to build houses to cost up to £1,800, and lend 90 per cent of that amount; also to purchase homes up to that amount, at bank valuations. If that is done the losses will be enormous. I shall certainly move to strike out the 90 per cent provision. I would not mind so much if the cost of the homes Avas to be £500 or £600, but it is madness, under existing conditions, to advance- 90 per cent, of the value of an £1,800 property. If the Commonwealth wishes to enter this field there is no need to create a special commission. The Commonwealth Bank has carried out the work of the savings bank department quite satisfactorily up to the present time, and there is no need to bring into existence this new department, with its additional expense. I have always been opposed to the efforts of this government to interfere Avith State activities, and I oppose this scheme. There are many mat- -ters under the Constitution which, though perhaps a little dangerous to handle, come more properly within our purview than does this subject.
– -You supported the policy of the Government during the last elections.
– The honorable member is so remarkably clever at jumping to conclusions that he recently spoke at length upon a “ credit “ that eventually proved to be a debit. Up to the 31st December, 1926, the Common wealth Savings Bank had in its care the sum of £45,241,000, representing th,: savings of the people. That is a very large sum to propose to take away from its control. If a sound argument could be advanced for the creation of this new department I should support it, but I sec no reason for the step, and I shall not support it. If Ave pass this bill and the Housing Bill, with its provision for a 90 per cent, advance, Ave shall be doing something that Will jeopardize the savings of the people, and considerable losses will accrue that will have, to be wiped off. I shall oppose the bill.
.- We have heard a good deal to-night about the general relations of the Common wealth and .Savings Bank, and as ‘,o whether the Government is doing anything to jeopardize that relationship. I do not think that has much to do with the bill now before us. The question is, “ Is the time opportune to take the step?” If it were my own private business I should rather defer the matter, in view of the general financial position prevailing ia Australia, and its future financial prospects. At the last elections I promised to support the platform of the Government, and this housing scheme is a plank of that platform. I am compelled ‘ to honour the pledge given to my electors. Even though one might change his opinions, he must still honour his pledge given to his constituents.
– You were not pledged to divide the bank and make two banks out of one.
– I Avas pledged to support a housing scheme, and I am glad that the Government introduces it in this form instead of proposing to build houses on its own account. If the Government came down with a huge housing scheme, desiring to establish a new institution to handle the proposition, honorable members opposite would welcome it with both arms. The object now is to provide those who need cheap houses with an opportunity to acquire them. If that is effected, what does it matter whatthe means are? The Government is endeavouring to build up a fund which will provide the people with money at a reasonable rate. That fund will be handled by those already in the housing business, such as the States Savings Banks, people having years of experience behind them, and who know exactly how much to lend on a proposition. A greatdeal has been said about lending 90 per cent. of the value of the home. That is a matter concerning the person who bor rows the money. If the State Savings Bank of Victoria advances 90 per cent. of the value of a home to a person, that is their business. They have to repay the loan to the Commonwealth. That being so, I do not see that there is very much at which to cavil.
– Why should there be any 90 per cent. at all?
– I do not know, bat it would not matter to me if it were 100 per cent. It is the concern of the person borrowing the money. The authorities upon whom it is proposed to place the responsibility of lending this money are thoroughly experienced men who may be relied upon to act prudently. Power is given to the Treasurer to borrow moneys to lend to the Savings Bank for housing purposes. I sincerely trust that there will be no need to borrow any money. We should cease public borrowing in Australia for any other than reproductive works. I realize that the Government is aware of the wisdom of this course, and it may be relied upon to act discreetly, and to protect the Commonwealth from financial disaster. It has been pointed out during this debate that this year our wool clip will be smaller than usual, that we have lost 16,000,000 sheep, and that our wheat crop will be disappointing. We are not manufacturing any of our products for export. As a matter of fact, we are only able to sell them locally because of the cost of protection accorded the manufacturers. Our wealth comes from our primary products, and if these fail us we shall be in. a serious plight, for there must necessarily be unemployment in our big cities. It is complained sometimes that the Treasurer obtains too much money from’ the Customs revenue, but he must get money from somewhere to carry on the services of government. I regret that this bill has been brought on just now, but I am quite sure that the Government will manage the business in the best possible way. It is provided that half of all the new deposits made with the newly constituted Savings Bank, together with 25 per cent. of certain repayments, shall constitute the funds from which housing loans may be made.
– Queensland will require 70 per cent. of the new deposits.
– But only of those made by her people. Tasmania also has an agreement under which she will be entitled to a certain proportion of the new money deposited in that State. She was the first of the States to hand over her savings bank business to the Commonwealth, and it is only fair that the agreement made with her should be honored. There is no suggestion that the agreements that have been made with these States should be repudiated. It is proposed to separate the Savings Bank business from the other activities of the Commonwealth Bank. I presume that the board of directors of the Commonwealth Bank, realizing the amount of detail work that there must necessarily be in managing the Savings Bank under these new arrangements, have requested the Treasurer to separate the two institutions. I hope that we shall have some light upon that point when the Treasurer replies to this debate.
– The Board of Directors of the Commonwealth Bank do not wish to manage the housing scheme.
– The honorable member for Maribyrnong (Mr. Fenton) is disappointed that the Government does not propose to constitute another large public department. He would like to see the Commonwealth Bank handle the whole of this business itself; but I am quite satisfied that the Government is adopting the best method of fulfilling its pledge to the people.
– Does the honorable member consider that he is pledged to vote for a proposal to separate the Savings Bank from the other branches of the Commonwealth Bank.
– I am pledged to assist the Government to give effect to its promise to introduce a scheme to promote the building of houses for the people. If the Government considers that this is the best way to redeem its promise, I consider that I am pledged to support it. The Government has done a great deal to strengthen the Commonwealth Bank and to make it a national institution. I trust that it will very soon be a real central bank. I can see no reason why it should swallow up the business that the private banking institutions are at present conducting. Its object should surely be to buttress and help the private banks, and so make the finances of the country more stable. I hope that it will ultimately become an institution like the Bank of England, I well remember when the Hon. King O’Malley first introduced the proposal to establish a Commonwealth Bank. It was not creditable that he was denied the honour of introducing the original bill. He told the farmers in his electorate that if a Commonwealth Bank were established they would be able to get cheap money on long terms, and so would be assisted in their efforts to develop the country. As a matter of fact, the farmers discovered that the Commonwealth Bank was the most difficult from which to obtain money. It remained so until this Government set up the rural credits branch, and made it possible for settlers to obtain a little more accommodation to tide them over a few months, and enable them to take advantage of rising markets. I shall support the bill, and I trust that it will soon be placed upon the statute.book
.- The honorable member for “Wilmot (Mr. Atkinson) has told us that he has always been favorable to the establishment of a national bank; but I invite him to refer to Hansard of the 22nd November, 1911. I feel sure that if he refreshes his mind by looking at the report of the debates of that period, he will be surprised. Every honorable member who was then in opposition to the Labour party resisted the passage of the original Commonwealth Bank Bill. One of the most prominent antagonists of the measure was Sir Joseph Cook. He stated that the proposal to establish the Commonwealth Bank was simply a move to set up a Labour party bank to supply the followers of the Labour party with cheap money, and added that it would permit them to work on big overdrafts. He gave the measure his benediction by saying that ‘ the caucus would direct the bank. Those remarks were endorsed by practically every honorable member of the Opposition of the day, including the honorable member for Wilmot.
– What was said about “ Fisher’s flimsies “?
– Even worse things than were said about the Commonwealth Bank. The bank being upon a sound basis could not be ridiculed as the “ flimsies “ were, but the gentlemen who at that time criticised the bank and the note issue are now stewing in their own juice. The honorable member for Wilmot both stewed and bubbled to-night. In order to ascertain the motive which prompted the introduction of this measure, one must consider the political point of view of the Government and its supporters. Even if no word of condemnation were uttered by honorable members on this side of the House the bill is already torn to shreds by the speech of the honorable member for Fawkner (Mr. Maxwell) . He “ placed his finger in the place and said ‘ thou ailest here, and here ‘ “. He said that the Government had no scintilla of warrant for the introduction of the bill other than a desire to reduce the Commonwealth Bank to a position in which it would appear ludicrous in the eyes of the community. The bank was established by the Labour party in spite of opposition that persists even to this day. The so called “ wild cat of the Labour party “ survived the most strenuous period in the financial history of Australia and proved to be the bulwark of our nation, but when it could have saved the Commonwealth millions more pounds it was not allowed te do so. Every cormorant in the country was allowed to have his pound of flesh from the suffering community. The moneys borrowed in Australia were not raised through the .Commonwealth’s own instrumentality, but the banks and commission agents were given opportunity to suck as much blood as possible from the public, and they did it. Loans floated through those channels cost this country £211s. per cent., and those floated through the Commonwealth Bank only 5s. 9d. per cent. Why did not the Nationalist Government utilize the Commonwealth Bank? What justification had it for applying to private institutions for the money? They dared not refuse to lend it when they were asking the young men of the community “Does this cap fit you?” and “Whatdid you do in the great war “ ? But while they were trying to shame our young fellows into patriotism they were charging £211s. per cent. for merely raising the money that was required to pay the expenses of thewar. The honorable member for Swan (Mr. Gregory) referred to the failure of our repatriation effort so far as it relates to the settlement of returned soldiers upon theland. Who was responsible for the robbery of the Commonwealth and those soldiers who to-day are working on over-capitalized fruit-growing properties ? Large losses have to be wiped off, but they cannot be wiped off the interest ledger; the general communityhas still to payfrom5½ to 6 per cent. on the money that was “borrowed for the purchase o’f those properties. Who has received the amountsthathavebeenlost?
– Thesameold gang !
– And the same old gang iswaitingfor the CommonwealthBank tobe crippled. Although resisted at its inception,it hasgrown and thrived vigorously and is a credit to the Commonwealth.But honorable members opposite havebeen unceasingin their hostility to it. First, they endeavoured to emasculate it by appointing a board of directors selected from the elements that control the associated banks. Some honorable members have asked whether the Treasurerhas conferred with those directors regarding the proposal to appoint a new commission. Possibly he has done so, and I suggest that he would get from them no other reply than “ Yes, appoint another commission; give a couple morejobs to our fellows.”
– The honorable mem berShould not measure other people’s corn by his own bushel.
– I am speaking in the interests of the workers, who have to produce the interest before it can be handed on in the name of the taxpayer. If the honorable member suggests that I was ever a party to appointing managers or directors to government jobs, or that I ever smooged to any body orany interest, he tells a despicable lie. No such charge can be laid at the door of any honorable member on this side of the House. The Government stands condemned out of the mouth of the honorable member for Fawkner. His training has fitted him to analyse evidence and to place his finger on the weak spot, and his scathing condemnation ofthis bill cannot be answered by the Government. Is the Common- wealth Bank board to actasaback-stop to the associated banks.? Its activities should be in the interest of the Commonwealth as awhole and not inthe interest of a few who manipulate the finances of the country. Sir William Irvine said that “ finance is government, and govern- ment is finance.” Ifthe present Government isbackingup the big financiers, they control thecountry. First, theCommonwealth Bank wasemasculated by the appointment ofaboardofdirectors and now it isbeing further reduced bythe creation of another commission,that swill haveno work to do. This body will handleaminimum of money, for most of the funds of the bank shave beenalready hypothecated.Thehonorable member forFawknerpointed outthat the commission will have very little optionor scope;. it has only to besatisfiedthat the act is being complied with. Thereal responsibilityforthebuilding , ofhomes will devolve uponthe State housing authorities.A housing scheme is anathema to honorable members, opposite, butwe oftheLabourparty are determined to dothejobwhen the opportunity comes to us, asit assuredly will. The re actionary influences maydisruptthe Labour partyfrom timeto time by specious methods of advertising which bluff the people, : but when we returnto power weshall raise legislative edifices that will stand to our everlasting credit, and cannot be defiled.Will anybody criticize , what the LabourGovernment in South Australia did to provide houses forthe people?
– I am glad to hear that. Has any body any criticism to offer of what the commercial element did in the way of housing? Yes. The measures adopted by the Government which preceded the last Labour Ministry in tha South Australian Parliament did no’; meet the requirements of the situation. The fund for the erection of workers’ homes was always impoverished. But when the Labour Government came into office it was not satisfied with the previous activities of the department and it took the unprecedented action of arranging for the building of 1,000 homes. The Government already possessed the requisite ground on the Adelaide foot hills: it was in a most salubrious environment, and had been used as a military camping area. Tenders were called for the job and the contract was let to one of the commercial community.
– He has lost all his money and is a poor man.
– I do not swallow that story. I bet Joe Timms could buy and sell me now and still have a lot of money to spare. The Labour Government inaugurated its scheme with a contract for 1,000 homes, but its ultimate objective was 5,000 homes. The scheme was likely to prove successful ; the contractor was doing a good job and producing the goods, but he was cutting right across activities of the Builders and Contractors’ Association. The quantity of business available to them was being reduced, so the National Bank stepped in andput the acid on” Timms. The associated banks in this way tried to stop the housing scheme.
– I do not expect the honourable member for Wakefield to admit that, but it is my deduction from the facts. Timms ostensibly “went through the mill” and gave up his contract, but the Government proceeded with it and, despite the efforts of interested parties to hamper its progress, the scheme has been finished and is a great credit to the State.
– 1,000 homes in two years. The previous Government built 1,200 in twelve months.
– I have not the figures with me at the moment, and in order that I may answer the honourable members interjection I ask for leave to continue my remarks.
Leave granted; debate adjourned.
Bill returned from the Senate without amendment.
Motion (by Mr. Bruce) proposed -
That the House do now adjourn.
,- I wish to draw the attention of the House to a peculiarity in respect of the business paper for to-morrow. On the 14th March last I gave notice of a motion which appeared on the business paper on the 24th March. At that time, in consequence of a motion moved by the Prime Minister (Mr. Bruce), the consideration of all private business was suspended. When Parliament met at Canberra my notice of motion was first on the business paper. I now find that first on the business paper for to-morrow is a notice of motion by the honorable member for Bass (Mr. Jackson). The Prime Minister stated last March that at the first opportunity private members’ business would be restored’ to the notice paper. As my notice of motion does not appear on the notice paper for to-morrow, I should like to know why in this instance the privileges of members of this Parliament have not been conserved?
– I think that it will be recognized that the honorable member has been deprived of his opportunity because of the rule regarding the placing of notices of motion on the notice-paper. Honorable members, at various times, give notice that, on a certain date, they propose to move a particular motion, and it appears on the notice-paper of that date in the order in which notices have been submitted. When a notice of motion is not reached on the particular day for which it has been given, it is carried forward to another day, but any other notice of motion for that day takes precedence. Since Parliament assembled at Canberra, the honorable member for
Bass (Mr . Jackson) gave notice of a motion for the 13th October; consequently it appears first on tomorrow’s notice paper. I am sure thatthe honorable member for East Sydney will recognize that in this case the usual procedure has been followed, and that no right he possesses has been interfered with.
Question resolved in the affirmative.
House adjournedat 10. 5 p.m.
Cite as: Australia, House of Representatives, Debates, 12 October 1927, viewed 22 October 2017, <http://historichansard.net/hofreps/1927/19271012_reps_10_116/>.