19th Parliament · 1st Session
Mr. Speaker (Hon. Archie Cameron) cook the chair at 10.30 a.m., and read prayers.
– I desire to ask the Prime Minister a question regarding a broadcast which I understand from the press that Le proposes to make this evening and one on another evening concerning prices and subjects related thereto. Does the right honorable gentleman propose to make these broadcasts over the Australian Broadcasting Commission network as well as that of the commercial stations? If that is his intention, will his address contain political propaganda or will it merely be a general recital of the facts of _ the economic position? If the broadcast is to contain propaganda and political matter will the Prime Minister see that the_ same opportunity is given to the Opposition to broadcast over national stations?
– I am not aware of the full arrangements that have been made, but I understand that the addresses will bc ‘broadcast over at least some national stations and over certain commercial stations of which I cannot supply a list at the moment. When the question of the broadcasts being transmitted from national stations arose I, myself, took up the question whether, iri the event of some statement in it being regarded as controversial, as it well might be, the same opportunity could be given to the Leader of the Opposition. If these broadcasts contain any such controversial matter, as I have a faint suspicion that they Trill, I shall do everything I can do to .provide a similar opportunity for the Leader of the Opposition.
– Would the Minister for the Interior examine the question of the maintenance of the graves of those who were killed in the Darwin raid and see if it is possible for those in the civilian section to be brought to the same standard as those in the service section, which is under the control of the War Graves Commission?
– I shall look into the matter which the honorable gentleman has raised, with a view to having the civilian graves properly maintained.
– I ask the Prime Minister whether the .Government has in its possession evidence that any organization or individual’ in Australia is engaged in treasonable or seditious activities? If so, for how long has it had this evidence? Are there Commonwealth laws under which proceedings could be taken against those involved? If so, why has no action been taken by the Government?
– There is no information before the present Government which differs in any marked degree from the information that was -before the previous Government in relation to the activities of the Communist party. The honorable gentleman falls into the error of thinking that there should be either a prosecution for high treason or no action at all- This Government does not take that view. There arc many degrees of activity which fall short of provable high treason. They are the activities with which we are proposing to deal in the bill the passage of which is now ‘being deliberately obstructed in another place.
– It has been reported that the administration of Dutch New Guinea desires to purchase £3,000,000 worth of consumer goods from Australia. Towards this end the Governor of Dutch New Guinea, Mr. Stephen van Waardenburg, proposes to visit Australian New Guinea in December of this year: In view of the many trade rebuffs that the Dutch Government received during the administration of the previous Government, will the Prime Minister consider inviting the Dutch Government representative, Mr. Waardenburg, to extend his visit to Australia, so that the very best economic and political relationship will he encouraged between the two countries?
– I regret to say that I am’ not familiar with the arrangements referred to in the report referred to by the honorable member, but I shall certainly take the opportunity of looking at it at once and 1 shall take his suggestion into account. In relation to that topic generally, I have been reminded by my colleague, the Minister for Immigration, that a mission from the Netherlands will be here next week to discuss immigration matters. Those discussions will have a great deal to do with the relations and the goodwill between the two countries.
– My question, which is directed to the Minister for Health, relates to the poliomyelitis epidemic in the Australian Capital Territory and surrounding districts. I remind the right honorable gentleman that some five or six months ago questions were asked in the House ‘by a number of members, including myself, about whether the Commonwealth Department of Health could co-ordinate the operations of the State and territorial health authorities in order to prevent any further spread of the disease. Could ‘the Minister inform the House of what has been done towards that end ? Has the committee referred to during the week made any practical suggestions to minimize the spread of the epidemic? Is it generally believed that the onset of the warm weather will further increase the risk of a widespread epi demic in New South Wales, and particularly in Canberra? Finally, is any view taken by his department as to the number of cases that have occurred in the Canberra district to date?
– The only certain thing that we know about the causation of poliomyelitis is that it tends to occur more in the spring and summer months. That has been its history in Australia and other countries over a period of many years. The committee mentioned by the right honorable member was constituted by the National Health and Medical Research Council, and I shall take an opportunity of giving to the right honorable member the names of the very distinguished men who compose it. Those names will show that some of the most qualified research workers in Australia are engaged on the problem. They are doing their best, but up to the present there is no certainty about the proper measures to take against the disease. The measures taken in Canberra against poliomyelitis have been taken at the instance of the honorable member for Eden-Monaro (Mr. Fraser), who is the chairman of the local hospital board.. The hospital has obtained the. advice of a very distinguished specialist in this subject from New South Wales. That is a very prudent and wise move and it is practically all than can ‘be done. Steps have been taken to induce the schools to close for a while should the epidemic develop to a fairly sharp degree. That will prevent children from mixing, ‘but whether it will be of very great value is doubtful.
– People in country districts in Queensland are very concerned about the quality of glasses being supplied for kerosene lamps. Although the supply position has improved following the action that was taken by the Minister for Supply some time ago, the quality of the glasses is poor and as they frequently explode they are a source of danger. Will 1>he Minister for Supply investigate this matter and endeavour to assist people in country areas in Queensland to obtain adequate supplies of good-quality lamp glasses?
– The Department of Supply does not control the distribution of commodities but some time ago I took the matter of lamp glasses up with Australian Glass Manufacturers Limited and succeeded in obtaining increased supplies to country districts. I regret to hear that some difficulty has arisen in respect of the quality of these glasses. I shall’ look into the matter again and see whether anything can bo done to meet the honorable member’s request.
– In view of , the decision of the Taxation Board of Review in October, 1949, that income tas is not payable on pay made up to employees who are serving in the defence forces, will the Treasurer give favorable consideration to applications for refunds of income tax paid by servicemen in such circumstances? If so, what steps will applicants be required to take in order to obtain such refunds ?
– The matter to which the honorable member has referred ‘has been under consideration by the Taxation Branch for some time. It is not so easy of solution as might appear at first glance. It involves many difficulties and has been referred to the special committee of experts. Whilst the suggestion made by the honorable member may operate favorably in some instances, it would cause injustices in others. The matter is under review.
– Is the Prime Minister aware of the old saying, “ Every dog has his day”? Is he also aware that wealthy graziers and other pressure groups seem to be having a very successful day at present ? Will the right honorable gentleman ensure that in any attempt to rectify the obvious deficiencies which existin our economic structure, worship of wealth and greed shall not dominate Government policy? When does he consider the ordinary man will have his day?
– I warmly agree with the sentiments expressed by the honorable member, and I could not agree with him more about the saying that every dog has his day. It explains two phenomena. One is my position on this side of the table and the other is the honorable member’s presence in the House.
– Has the Prime Minister and the Government given any consideration to the request of the United States authorities for a special allocation of ‘ wool to be made available to them ? What direction, if any, has been issued to the Minister for Commerce and Agri- culture, who is now overseas, as the representative of the Government on the matter? Has any decision yet been reached on the subject?
– As I indicated yesterday, it is not practicable for me to make a statement to the House, either about any supposed request by the United States of America or about the course of the discussions which are taking place in London.
– What is the view of the Government on it?
– On what?
– On the request to which I have referred.
– As I have no statement to make about any request, I can hardly offer any view of the Government on some alleged request. All that l’am able to tell the honorable member is that the Government, through the Minister for Commerce and Agriculture, is dealing with this matter with both eyes firmly focused on the true interests of Australia.
– In view of the serious effect that a shortage of phosphate rock would have upon our agricultural production, such as occurred in Australia during World War II. when we were obliged to import inferior phosphate rock from distant sources at great expense, will the Minister for Supply give immediate consideration to providing an adequate stockpile of phosphate rock from present available sources?
– We have plenty of phosphate rock in Australia at present, and supplies are available to us from Nauru and other places from which it is derived. The honorable member has referred to the defence aspect, and I am able to inform him that consideration is being given to the matter of importing additional stocks of phosphate rock.
– Is the PostmasterGeneral aware that the Western Suburbs District Ambulance, which is an organization serving the whole of the western suburbs of Sydney, has an important scheme to provide two-way wireless communication with its ambulances? I may explain that the scheme will save a great deal of time in the handling of urgent cases. Does the Minister know that the operation of this scheme is held up only by the lack of a telephone line from the head-quarters of the ambulance station to the wireless ‘ organization, a distance of about one mile? Will the honorable gentleman have the matter investigated urgently with a view to seeing whether that line can be provided without delay?
– The honorable member has made personal representations to me on several occasions about the matter to which he has referred, and I am having it investigated. I realize the importance of ambulance work, and the necessity for the telephone in this instance. If it can possibly be provided, it will be.
Use of Helicopters
– I desire to address a question to the Minister for Air, and by way of explanation, I point out that the wet season in north Queensland is rapidly approaching, and a long-range forecast has been issued to the effect that a severe cyclone is due to hit that area this year. Should that occur, it is quite possible that, because of flood conditions, the orthodox ambulance aircraft may not be able to land. Will the Minister inform me whether the Royal Australian Air Force will be able to station a helicopter in north Queensland that will be immediately available for use in an emergency and tinder flood conditions?
– I had the opportunity, when I was in Great Britain and the United States of America recently, to try out various makes of helicopters and to see the uses to which they could be put. I am satisfied that those machines can be used with much greater effect in Australia on rescue and ambulance flights-
– In a cyclone?
– That is interesting.
– But I shall not provide helicopters to enable members of the Labour party to escape from this Parliament. Some of those machines have been ordered for the Royal Australian Air Force, and one of them will ultimately be stationed, in Queensland. Meanwhile, the Royal Australian Air Force and the Department of Civil Aviation will co-operate in any relief work that may be necessary, as they have done in the past.
– Will the Postmaster-General inform me whether it is a fact, as reported, that the Queensland Postal Workers Union was approached by his department, acting under his instructions, with a request to allow its members to work overtime on Saturdays in order to overtake the lag in the installation of new telephone services, particularly in country areas? Is it ako a fact that members of the union agreed reluctantly to work overtime on Saturdys, but that after having worked on four Saturdays, they were informed that no more such work would be carried out because the department had over-spent the amount of money that had been allocated for the purpose? In view of the lag in providing new telephone services throughout Queensland, does the Minister consider that the action of the department in discontinuing Saturday overtime work, and thus breaking faith with the union, was in the best interests of the public? Further, does he consider that the action of the department will encourage the future co-operation and assistance of its employees?
– Whatever action was taken by departmental officers in this matter was taken on their own initiative and not under any personal direction from me. The officers are very anxious to supply the public with new telephones and other improved facilities of all kinds and are doing their utmost to meet the demand. I am unaware of the particular conditions in Queensland to which the honorable member has referred, but I shall have inquiries made and will supply him with an answer to his questions in due course.
– Approval has been given for the installation of four public telephones at places in my electorate. In the areas in question there are, speaking in general terms, neither private nor public telephones. The installation of the public telephones which has been approved is held up at the present time, apparently owing to a shortage of coin containers. Will the Minister inform me when coin containers will be available, and if they will not be readily available, whether some substitute means could be adopted so that those public telephones may be made available for the use of people in my electorate?
– I shall inform the honorable member when it is possible to do something along the lines that he has suggested. As everybody knows, there is a shortage of certain essential equipment connected with the installation of telephones, including the apparatus that he has referred to. We are doing our utmost to overcome the shortages both by encouragement of the manufacture of those particular instruments in Australia and also by importing equipment, but despite all those efforts a very distinct shortage still exists at present.
– I direct a question to the Minister for Labour and National Service concerning the slow turn-round of ships at Australian ports, which has led to a 10 per cent, increase of freight charges. Is it a fact, as has been suggested in some quarters, that the slow turn-round has been aggravated by the red-tape methods of Customs authorities on the wharfs? If so, will the Minister take the matter up with the Minister for Trade and Customs with a view to eliminating this red-tape or bottle-neck ?
– A number of factors contribute to the deplorably slow turnround of ships in Australian ports. The aspect to which the honorable member has referred, though I cannot accept his definition of it as red tape on the part of the Customs authorities, has been investigated already by the Minister for Trade and Customs and a great deal of improvement has been effected in the method of clearing ships by Customs officers as the result of action that he has taken. I shall refer the question to my colleague with a view to obtaining a more detailed reply to the question.
– In view of the dismal failure of the Government, after almost twelve months in office, to put value back into the £1, will the Treasurer inform the House whether the Government intends to make all increases of age, widow, invalid and soldiers’ pensions effective retrospectively to the 1st January, 1950? Will he also, inform the House whether he intends to grant proportional increases of payments in respect of the wives and other dependants of invalid pensioners? Notwithstanding the statement by the right honorable gentleman earlier this week that questions such as this make him tired, I crave his indulgence on this occasion because I am firmly convinced that the people of Australia also are very tired of waiting for this Government to take some action to counteract the dwindling value of the fi.
– I shall deal first with the latter part of the honorable member’s question. If, as the honorable member has stated, the people of Australia are tired of the continued increase of the cost of living, I suggest that the reason for their tiredness is that during the last eight years of administration by the political party to which the honorable member belongs, nothing was done to check the inflationary spiral. I shall not anticipate the provisions of the budget now or make any forecast concerning them, hut I assure the honorable member that age pensioners and all other sections of the community will be more sensibly and generously treated by the present Government than they were by the previous Government.
– I preface a question to the Minister foi- the Interior by pointing out that a lively black-market is conducted in Sydney in “ key money “, not only in respect of houses, flats and rooms, but also in office space. Since a contributing cause of that situation is the acute shortage of office space because a great deal of space that was acquired by Commonwealth and .State authorities during the war is still occupied by them, will the Minister assure the House that the Australian Government has reduced its demands on office space to a minimum, and that it is not holding space for which it has no immediate use?
– In an endeavour to make the maximum amount of office space available to the business community, a committee was recently appointed to investigate the amount of office space held by government departments in all capital cities. Reports have been received from that committee and have been considered, and when a final decision is made it will be possible to release certain space to the business community. The Government does not intend to retain space that is not efficiently used by its departments.
– Is the Minister for Supply aware that although the Queensland shipbuilding industry is acutely short of steel, large quantities of that metal are stored at Newcastle awaiting shipment to Queensland? Will the honorable gentleman inform the House why the shipping companies refused to call for labour to load SS. Babinda for the 5 p.m. shift last Friday, and also for the S a.m. shift the following day? Is he also aware that waterside workers at Newcastle are frequently sent home early because sufficient steel is not available for loading to justify a shift being worked and also because the steel arrives at the wharfs too hot to be handled? Has the Minister seen the statement made by Mr. Weaver, the secretary of the Newcastle branch of the Waterside Workers Federation, concerning this matter, in the course of which he asked that a complete investigation be made of all matters affecting the hold-up of cargo in the port of Newcastle? Will the Minister order an investigation to be made of all aspects of the hold-up of cargo in the port of Newcastle, more particularly in its effects upon the shipbuilding industry?
– Some of the matters mentioned by the honorable member concern the administration of my colleague, the Minister for Labour and National Service, and I shall discuss them with him. Concerning the general matter of steel supplies, it is true that the Queensland ship building industry is short of steel, and it is also true that approximately 75,000 tons of steel has accumulated on the wharfs at Newcastle because of the slow turn-round of ships, which if a state of affairs that is almost intolerable. I shall not attempt to apportion the blame for it at the moment, but after T have discussed the matter with my colleague, I shall communicate with the honorable member.
– Will the Minister for Health give urgent consideration to the need for erecting a modern infectious diseases hospital as an entirely separate unit, and quite apart from the present Canberra Community Hospital, in order that the present isolation block at that hospital may be taken into use to meet the needs of this rapidly expanding community ?
– I shall consider the honorable member’s suggestion and communicate my decision to him in due course.
– Is the Minister for Labour and National Service in a position to inform honorable members whether the full bench of the Commonwealth Arbitration Court has yet fixed a date to announce the result of the basic wage inquiry, which has been before the court for so long?
– I have no information on the matter, but I shall bring the honorable member’s question to the notice of the Attorney-General, who is the appropriate Minister to answer questions concerning the Commonwealth Arbitration Court, and endeavour to obtain some information for him.
– I preface a question to ihe Minister for Health by pointing out that although the activities of the national fitness movement in Queensland ure generally successful and that although the movement is keenly supported in many centres, there is a feeling in some districts that the money made available by the Commonwealth to the Government of Queensland for disbursement is not equitably distributed throughout the State. Will the Minister indicate whether the money is made available by the Australian Government to the Queensland Government under a written agreement, and, if so, do the conditions of that agreement permit any control by the Australian Government over the distribution of the money within the State? Would the Minister also advise the House of the amount of the Commonwealth grant to Queensland for this purpose for the year ended the 30th June, 1950?
– The position concerning the national fitness grant is that it totals annually about £70,000, half of which amount is paid to the States for the purpose of assisting the activities of the State national fitness councils. A quarter of the total is paid to the Departments of Education in the States, and one-sixth is paid to the universities. Other amounts are paid to other authorities. The States themselves subsidize the national fitness pro*gramme to an amount that is practically equal to the amount granted by the Commonwealth, and the practice has been that the control of policy is entirely a State matter, with the proviso that when the annual programme has been drawn up it has to be submitted to the Commonwealth Council for National Fitness and for the Commonwealth Government for approval. Any alterations that are ma.de to the programme during the year are also submitted to the Commonwealth for approval, but it has not been the practice for the Commonwealth to intervene in regard to local control, and I consider that that is a very good practice.
– I direct to the Minister for Health a question relative to the provision of free life-saving drugs to the public. It appears that three lifesaving drugs are used in the treatment of epilepsy from time to time, two of which are included in the present schedule of pharmaceutical benefits. The third drug, prominal, is not, however, contained in the schedule. Will the Minister consider the inclusion of that drug in the schedule?
– As the honorable member has stated, provision was made in the list of life-saving drugs for two well-known treatments for epilepsy. lt has been suggested, however, that those drugs sometimes are not well tolerated by patients, and therefore the expert committee concerned with the schedule has recommended the inclusion of prominal.
– Arising from an answer that the Minister for National Development gave to a question that I asked him yesterday, the answer being to the effect that the Government has no constitutional power to negotiate with local government authorities and other bodies for the purpose of ensuring adequate coal supplies when all too frequent flooding occurs in the Hunter River district. I now ask the Prime Minister whether the Joint Coal Board has power to acquire property or plant in order to ensure adequate coal supplies? If this is so, will the right honorable gentleman negotiate with the board for the purpose of having it connect a link of line between J. and A. Brown’s railway and the Cockle Creek- West Wallsend Old Seaham railway for the purpose of ensuring supplies when floods visit the Hunter River?
– This problem concerns two of my colleagues. I shall discuss the suggestion of the honorable member with them.
– by leave - Following the question which was directed to me yesterday about the payment of overtime to certain officers in the service of the Parliament, and also the speech that was made by the honorable member for Parkes (Mr. Haylen) last night on the same subject, I have had the opportunity of again perusing the correspondence which has passed between you, Mr. Speaker, and myself. I would like to point out, incidentally, that the question of the pay and conditions of parliamentary officers is not one for decision by the Government, but in view of the necessity for funds to be provided for any overtime payment which might be made, it is necessary for the matter to be considered by the Treasury. After due consideration, I informed you that, while not opposed to the principle of overtime, and while recognizing the difficulties in connexion with it, I understood that there was already an element in the pay of parliamentary officers to take account of the unusual hours worked and that I believed that the way to meet the position was to allow time off for excess hours- worked to be accumulated, and added to annual recreation leave. During the time of the previous Speaker these difficulties arose in connexion with the question of overtime and the existing conditions were allowed to continue. A further difficulty was that of differentiation between officers of the Senate and officers of the House of Representatives which would have been involved, in the proposals which you had made.’ , My suggestion was that an independent inquiry be made into the pay and conditions of the officers concerned by some one competent to undertake it with a view to assisting the determination of the question of overtime and reducing or eliminating anomalies and injustices. I suggested that the Public Service Board would be the proper authority to provide such a person. As you will recall, Mr. Speaker, in your latest letter to me you indicated your disagreement with the suggestion that the Public Service Board should be concerned in this matter and I am still pursuing ways and means of adequately and justly meeting the situation. I lay on the table the following paper : -
Overtime for Parliamentary Officers - Ministerial Statement, and move -
That the paper be printed.
Debate (on motion by Dr. Evatt) adjourned.
– by leave - I move -
That the Chairman of Committees shall, on each sitting duy, during the absence of the Speaker, take the chair as Deputy Speaker, and may, during such absence, perform the duties and exercise the authority of the Speaker in relation to all proceedings of the House and to proceedings of standing committees and joint statutory committees to which the Speaker is appointed.
As honorable members know, the reason for the motion is that Mr. Speaker will be leaving Australia in a few days in order to represent this House at the opening of the new House of Commons on the 26th October, in response to an invitation from the United Kingdom Government and the Speaker of the House of Commons.
I suggest that the sitting of the House be suspended at 5 p.m. instead of at 6 p.m. to-day, so that honorable members may have the opportunity of expressing their good wishes to Mr. Speaker and offering him their warm regards and hopes that his stay abroad, though brief, will be happy.
Question resolved in the affirmative.
Twenty-eighth Report of the Commissioner of Taxation.
– I lay on the table the following paper : -
Taxation - Twenty -eighth Report of the Commissioner, dated 16th May, 1949, together with Statistical Appendices.
It will be noted that the report is dated the 16th May, 1949. The Commissioner has informed me that the delay in furnishing the report is due to extended legal proceedings in which the form of the report in certain sections was challenged. The doubts occasioned by those proceedings have now been resolved to the satisfaction of the Commissioner.
As a result of the proceedings in the High Court in the Magrath case, it is not desirable to circulate a copy of the report until the Parliament has given the necessary authorization. I have explained this aspect to the Leader of the Opposition (Mr. Chifley) who has agreed not to oppose the motion in order that the report may be circulated without delay.
Ordered to be printed.
-(Hon. Archie Cameron). - I have received from the honorable member for Melbourne (Mr. Calwell) an intimation that he desires to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely -
The actions of the Minister for Trade and Customs in illegally authorizing and making refunds from revenue of considerable sums of money paid as duty on timber and other commodities admitted to the Commonwealth for home consumption.
– I move -
That the House do now adjourn.
– Is the motion supported?
Eight honorable members having risen in support of the motion,
– The subject-matter involved in this adjournment motion relates to certain illegalities that have been committed and certain irregularities that have been perpetrated by the present occupant of the office of Minister for Trade and Customs (Senator O’sullivan), not acting on his own behalf, but, on behalf of the Government of which, he is a member. All members of the Government are equally responsible for the things that have happened in the administration of the Department of Trade and Customs since the change of government after the 10th December last.
– An important date.
– I remember the date well because it is of peculiar significance in the transactions which took place. On the 17th February of this year the Comptroller-General of Customs issued an instruction to the Collectors of Customs in which he stated that approval had been given f or admission under tariff item. 449 (a) (1) of timbers otherwise classifiable under six other tariff items, provided’ that they were shipped to Australia on or before the 30th June, 1950. A copy of the instruction is available on the files of the department. It is one of the very few documents that have been issued by the department in connexion with this matter. It is far easier to get the most complete details of the armed strength of Russia from the Kremlin than it is to get any information from the Department of Trade and Customs about the details of the transaction to which I propose to refer. Not that it is the fault of the departmental officers. Whatever action has been taken was taken without the knowledge, or against the advice, of the departmental officers. On that date the Collectors of Customs were told that all timbers and certified items would be admitted under a new by-law. The instruction reads -
The Comptroller-General has advised that approval has been given for the admission under Tariff Item 449 (a) (1) of timbers otherwise classifiable under Tariff Items 291 (d), 291 (f), 291 (h), 291 (k), 291 (l), 292 (g) and 293 (a), which are shipped to Australia on or before 30th June, 1950.
Approval has also been given for the admission under Tariff Item 449 (a) (1) of prefabricated houses and prefabricated buildings, e.g. huts, schools, factory buildings, milking sheds, hay sheds, &c, which are shipped to Australia on or before 31st December, 1950.
Now this is the significant and sinister paragraph in the instruction -
The necessary covering by-laws and tariff decisions operating on and from the 10th December, 1949, will be issued as soon as possible.
The instruction that the timber was to he admitted duty free was issued on the 17 th February, and was antedated to the 10th December, 1949, the election date referred to by interjection a few momenta ago by the Postmaster-General. It is perfectly obvious that this whole business is a political pay-off. Why was the 10th
December, 1949, chosen? Why was not the chosen (late the 1st December or the 1st June, 1949, or the 1st January, 1950? The “lOth December was selected, however, and importers were told ‘that they could apply for refunds to the Collector of Customs in the State in which they operated. It might be argued that it is a good tiling to remit duties on timber so that people may build their homes more cheaply, or at less cost; but that by-law was antedated, and importers were asked to apply foi1 a refund of the money which they had already paid in duty on the articles which they had imported and sold to the Australian community. It becomes a matter of complete impracticability for the person who has bought the timber from the importer who has paid the duty to get any benefit at all. The Minister, of course, admits that in a reply which he furnished to the honorable member for Bendigo (Mr. Clarey), who asked certain questions last June. Four questions were asked by the honorable member for Bendigo at that time, the fourth being -
What steps, if any. have been taken by the Government to see that the importers pass these refunds on to the consumer!: of the timber concerned?
The Minister for Trade and Customs furnished this reply, which Ava a delivered in the House by the Minister for Commerce and Agriculture -
As regards importations benefiting by concessions which have been sold at the dutypaid price, it will be a matter for the purchasers or users to approach the importers for a price adjustment corresponding with the duty rebate’, it is known that a number of importers have made these adjustments, but as regards any who do not, enforcement is not practicable.
Nobody has yet been able to discover which particular importers applied for the refunds, which importers who applied for the refunds and received them passed that money on to the persons who bought the timber from them, or which importers applied for the refund of duty and put the money into their own pockets. It is my belief that the amount of money involved in these transactions runs into tens of thousands of pounds and that it has gone into the pockets of the importing interests in this country who weighed in so heavily to put this Government into office. The amount of timber imported into this country in 1948 was about 173,000,000 super, feet. That is a large quantity, but it represents only 12i per cent, of the total amount of timber used in Australia for home consumption. I ask honorable members to keep that figure in mind. The duty imposed under the tariff law, which had been validated by this Parliament, was of the order of 13s. per 100 super, feet. Under the by-law which the Minister brought down, the duty was reduced to a figure which ranged from 6s. to 7s. 6d. per 100 super, feet. There were subsequent occurrences, but I shall pass on from that point. The benefit which accrued to importers by the action of the Minister in antedating his by-]aw is a saving of anything from 7s. to 5s. fid. per 100 super, feet. Considering a period of two months as representing a time during which one-sixth of the total yearly quantity of imported timber would have come into the country, and reckoning the two months’ imports at 6s. per 100 super feet, we find that a sum of money up to £500,000 is involved in this matter.
– That is the heaviest importing season in the year.
– The honorable member for Dalley (Mr. Rosevear), who spent a quarter of a century in the timber industry as a wage-earner, would know a good deal about that. Not only did the Minister remit the duty on the timber used during that period, but he reduced the duty on the timber that was in bond during the same period. He continued these reductions subsequent to the 24th February, 1950, and made them applicable until the 30th June of this year. That Was not to be the last of the story, because* the importers would get a refund on all timber that they sold subsequently, out there was no guarantee that the reduction in the duty would be passed on to the people who would buy the timber to build houses subsequent to the 24th February this year. Not any of the Ministers administering prices control measures were consulted at any stage, and imported timber to-day is dearer in some States of Australia than nativegrown timber. So the people are getting no benefit from the reduction of duty. Those, who are getting the benefit are the importing interests. The Minister subsequently found that there was a difficulty under the general international trade agreement made some time ago. He found that overseas interests were pointing out that the 12£ per cent, ad valorem duty was contrary to the international trade agreement which this Parliament had ratified, because it considerably increased the margin of preference in that agreement for Canadian timber, which is admitted free. The reference I am making to imported timber now relates to foreign timber, that is non-British timber, because Canadian and other timber which 13 grown inside the British Commonwealth is admitted free of duty. Then the Minister decided that he would distribute more largesse to the foreign timber interests at the expense of the Australian community and to the detriment of a large Australian industry in which millions of pounds are invested and many thousands of good Australians are employed. He brought down a by-law on the 8th June, 1950, under which he applied the preferential margins to which Australia is bound by the Geneva Agreement on Trade and Tariffs. Under that by-law, undressed boards are now admitted at the rate of ls. per 100 super, feet and dressed boards at the rate of 2s. per 100 super, feet. Thus the position has gone from bad to worse. On the 10th December last, foreign timber interests paid duty at the rate of 13s. per 100 super, feet on timber imported into this country. In February, that rate was reduced by the Minister to a range of from 6s. to 7s. 6d. per 100 super, feet, and under the by-law of the Sth June last, the rate was reduced to ls. per 100 super, feet of dressed timber and 2s. per 100 super, feet of undressed timber. [Extension of time granted.]
I shall summarize the story of this political wrong-doing. What happened was that without parliamentary sanction, without tariff board authority, without any consultation with Aus tralian sawmillers, without, or, indee;!, in spite of, departmental advice, the Minister for Trade and Customs, for the personal and pecuniary benefit of the. Government’s political friends among timber importers, reduced the duty on imported timber from 13s. per 100 super, feet to a range of from 6s. to 7s. 6d. per 100 super, feet and later to ls. per 100 super, feet of undressed timber and 2s. per 100 super, feet of dressed timber. That was bad enough, but, then, the importing interests, seeing what a racket was operating in this country, decided that ‘ they themselves, had better benefit from it. So they ran up the price of timber on their own Australian agents. They were not going to let their Australian agents reap all the benefit. The price had gone up to the importing interests and, therefore, it must go up to the Australian people who must buy timber with which to construct homes. The argument that home builders are now likely to benefit by securing cheaper homes from what the Government has done since it applied its by-law of the 10th December, is so much nonsense.
The saw-milling interests in Australia are very worried about the whole matter. If the same quantity of timber is imported this year as was imported in 194S, the duty remitted between the 10th December and the 17th February would total approximately £519,000. The position is so bad that nothing less than a royal commission is needed to inquire into all of the ramifications of this business. The House is entitled to know who got the money that was remitted. We are entitled to know how many honest men among the timber importers, having applied for refund, passed it on to purchasers of their timber. We are entitled to know whether any importers were so disgusted with the business and had so much moral decency that they refused to touch the refund, but left, it as tainted money in the hands of the Government. If the Government will not appoint a royal commission to inquire into this matter, then, perhaps, the Senatewill appoint a select committee to ascertain the facts.
– Order ! The honorable member may not anticipate anything that the Senate may do.
– This extraordinary display of governmental patronage and favouritism of its own supporters is nauseating. Struggle as the Government may to prove a case it will find that if it consults the Crown law authorities they will advise it that all that it has done up to date is illegal. A King’s Counsel in Melbourne has given an opinion on this matter.
– Who is he?
– The honorable member can give evidence before the select committee.
-Order ! The honorable member must not refer. to a matter of that kind.
– I was not referring to the Senate.
-Order! There is nothing about a select committee contained in the honorable members submission to me.
– The King’s Counsel to whom I have referred gave the following opinion on this matter : - (</.) that the Minister was in error in classifying timber as goods admissible by By-law under 449 (a) (1), because timber is a class of goods commercially produced in Australia; (&) that the Minister had no power to authorize the By-law to be retrospective and grant refunds back to 10th December, 1949;
The learned counsel also expressed the opinion that tariff by-laws are not effective until they appear in the Gazette. The by-laws under which the Government wrongly made refunds bank to the 10th December, 1949, were not gazetted until the 3rd August last. According to counsel the by-law3 can operate only from the date on which they are gazetted and then only when issued under a tariff item that has already been validated by the Parliament. What the Government did in this instance was to bring down a proposal to the Parliament for a new by-law in respect of its proposals of the Sth June last when those proposals hadnot been validated. It brought down a new by-law on tariff items that had not been validated. According to legal authorities that action also is illegal.
The Government has much to answer for in this matter. Eight members of the ministerial party approached the Minister on this subject and he promised them that he would have an inquiry made and would consult the Australian timber industry on it. However, before those honorable members had returned to their respective States, the Minister issued a statement that he was going to ask the Tariff Board to inquire into the whole business. But that inquiry is to be held not into anything that the Government has done up to date but into the question of whether these by-laws should be continued after the 31st December next. There will be no inquiry into the irregularities and illegalities that the Government has already perpetrated. All that I have said reveals a state of affairs without precedent in the history of the Department of Trade and Customs. No other Minister for Trade and Customs and no officer of that department, present or retired, can remember anything like this ever happening before. It is true that duties are sometimes remitted, but such remissions are made on articles that have actually been imported and are held in bond pending an examination of whether the duty on them should be remitted. Never before has a government been known to issue a by-law providing that duty already paid on goods that have been consumed by the public shall be remitted to wealthy interests all of whom in this instance, happen to be financial and political friends of the Government.
– Order! The honorable member’s extended time has expired.
– I am sure that the House has not been impressed by the effort of the honorable member for Melbourne (Mr. Calwell) to whip himself into a fury over what he terms the malpractices of the present Government. He has made a number of statements, which, as a former Minister, he should know better than to have made. He began his speech in a great fury about the actions of the Government in allowing timber to be imported into this country under the system of by-law admission. Of course, that practice is not new. It has been in operation for years.
– Since federation.
– It was quite generously operated by the previous Government. As the representative of an electorate in South Australia, I made, in the past, applications on behalf of certain persons in that State for by-law admissions, and I was pleased that the then Minister for Trade and Customs saw fit to grant them. To state that this action by the Government of allowing by-law admissions is unusual and evil, and may be described as malpractice, is simply to deny the facts. Apart of the honorable member’s case was to the effect that when those admissions were made, the remission of duty was antedated. That practice, in itself, is not unusual. I am advised by the officers of the Department of Trade and Customs that it has frequently occurred in the past, and I have no doubt that it will frequently occur in the future. I am informed that one of the reasons for the ante-dating of the duty is to. allow persons who had purchased and paid duty on the timber and who obviously had not had time to dispose of it, to meet the competition of other people who had been able to import the timber at the lower rate of duty.
– That is not the case in this instance.
– That is the case, and it is a proper one. That practice has to be followed for the reason that I have just stated. I agree that it is difficult to ensure that all the benefits of a reduction or a remission of duty shall be passed on to the consuming public. However, that experience is not novel to this case. That problem faces any government or Minister for Trade and Customs whenever duties are reduced. But in the instance now under consideration, the Minister has been informed that the price of the imported timber has been reduced as the result of the by-law admissions. I have a letter that was written by the representative of the Timber Merchants Association, in which he points out the reductions that have actually been made. Those reductions, as the Minister for Trade and Customs has very rightly said, have been effected in spite of the fact that the overseas prices of the timber have been rising. There is no question on that point. Had a remission of duty not been granted the price of the timbers to the local users would have been substantially higher. I am informed that, since that remission, the price of Baltic timber of certain sizes have been reduced by 3s. per 100 lineal feet, and that other reductions were made according to the size of the timber. For example, the price of some sizes was reduced by ls. 6d. per 100 lineal feet, and of weatherboard from 2s. 3d. up to 3s. 9d. per 100 lineal feet, depending on the type of board, and the size of the article. Those figures provide concrete evidence that those by-law admissions produced a reduction of cost to home builders in this country, and, therefore, it is ludicrous for the honorable member for Melbourne to impute all kinds of motives to the Government for having acted in accordance with its general policy of reducing prices.
– That is a good one.
– In the case under discussion, there was a reduction of price, and that fact has whipped the honorable member for Melbourne and certain other members of the Labour party into a fury. The honorable gentleman also made certain allegations against the Minister for Trade and Customs, and said that he had taken the action of his own volition. He also stated that the date which the Minister had selected, and wlhich actually coincided with the date of the last general election was chosen solely as a means of compensating certain interests for the support that the Liberal party and the Australian Country party had received from them during the flection. The fact that the date of the remissions coincides with the date of the last general election is purely coincidental, but I inform the House that the Minister for Trade and Customs did not select that date. It was chosen by the Department of Trade and Customs and was recommended to him. The honorable member’s allegations are in line with many other allegations that he makes. I emphasize that the date was recommended by the Department of Trade and Customs.
– I do not believe it.
– I shall not attempt to convince the honorable member because he obviously has a fixed mind on this matter, just as he has a fixed mind on many other matters much to his own detriment and, I believe, to the detriment of the Labour party to which he belongs. In any event, I have stated the facts.
– The honorable member for Melbourne has had his leg pulled. -
– Of course he has. He is acting as the “ stooge “ of the hardwood saw-millers in Australia. He has taken up and is presenting their case. He has accused honorable members on this side of the House of presenting a case on behalf of pressure groups. Yet his action in moving the adjournment of the House this morning is evidence that he has been led up the garden path to present a case on the say-so of interested persons. The fact remains that the practice of by-law admissions is very common.
– I hope not.
– It has been common in the past, and it will probably continue when the necessity arises in the future. I hope that there will always be flexibility in the operation of arrangements to allow special cases to receive concessions such as these. In the granting of tariff concessions on building timber, the Minister for
Trade and Customs has acted within the powers that are provided by the CustomsTariff. It is difficult to believe that the honorable member for Melbourne, who was formerly a Minister of the Crown, isas ignorant of that law as his action in moving the adjournment of the House thismorning suggests he is.
– I know the law, and I have counsel’s opinion on the case.
– One can obtain varying opinions from different counsel. I recall that the Labour party has secured opinions from a. King’s Counsel which were not upheld by the High Court or the Privy Council. However, the fact remains that the Department of Trade and Customs believes that it has acted within the law, and that is the principal consideration in this instance. The Minister is -allowed, and, indeed, is entitled, to act on the advice of his officers. The various concessions were granted by way of customs by-law, the authority for the issue of which is embodied in the Customs Tariff. The concessions that were made in this instance were granted under tariff item 449 (a) (1), which provides for the admission, free of duty under the British preferential tariff rate and at the rate of 12-£ per cent, under the intermediate tariff and general tariff, of goods required for essential purposes and of a class or kind not commercially produced or manufactured in Australia. The timbers which are the subject of this debate are not commercially produced or manufactured in Australia.
– Yes, they are.
– I suggest that they are not.
– The Minister is wrong.
– Where do we produce
Oregon in Australia?
– What I say is correct. The types of timbers to which we have referred in this debate are not commercially produced in Australia. Certain types of Australian soft woods are sometimes used as substitutes for various purposes, but the particular types that I have mentioned are not commercially produced in Australia. Consequently, the Minister’s action was completely in accordance with the requirements of the act. I am satisfied that the country will be pleased that the Minister has shown initiative in doing something substantial to reduce the cost of home building.
One fact which seems to be annoying the honorable member for Melbourne and his colleagues more than anything else is that this Government has had the enterprise to perform many administrative ants that are helping to keep down building costs. Not only has it allowed concessions in respect of imported timber but also it has subsidized the importation of prefabricated houses and has imported coal and steel, commodities that are urgently needed by the country.
– The motion has nothing to do with the importation of coal.
– I am explaining that the Government has taken the initiative in such important matters to the chagrin of the Opposition. The Labour Government did little to overcome shortages during its years of office. Therefore, I am convinced that the Minister for Trade and Customs and the Government have won the approval of the Australian people.
Ifr, Chifley. - The really important point is: Who benefited from the concessions?
– I explained earlier, when the Leader of the Opposition (Mr. Chifley) was not present, how the benefits had been passed on to home builders.
– But, were they passed on in their entirety?
– As I have said, nobody is in a position to police with complete effectiveness the passing on to consumers of benefits that are granted from time to time by way of tariff reductions and other concessions to entrepreneurs engaged in the supply of various commodities and services. However, I have no doubt, that the Prices Ministers of the States have carefully considered these matters with a view to ensuring, as far as is humanly possible, that the users of such commodities and services shall benefit. I believe that the prices of tim ber and the general costs of home building would be very much higher than they are to-day if those concessions had not been granted.
– My point is that consumers may not have benefited from the retrospective application of the concessions.
– The concessions were given retrospective effect over a period of about three months because the authorities considered that much of the timber that had been imported during that period would not have been disposed of with the result that it would have to be sold competitively with timber imported after the date upon which the concessions would otherwise have applied. I believe that the decision was fair and in accordance with custom. The people of Australia will applaud the decision of the Minister for .Trade and Customs to impart flexibility to our tariff system in order to meet needs as they arise and keep down costs throughout the community.
– As the honorable member for Melbourne (Mr. Calwell) has said, tariff charges on imported timbers were eased as from the 10th December, 1949, so as to permit the importation of constructional timber duty-free from British countries and at a duty of 12 per cent, from the United States of America. One outstanding feature of the timber supply situation in Australia has been overlooked so far during this debate. It. is a fact that, as statistics prove, the demand for timber is so great that it will never be adequately satisfied without the aid of imports no matter how earnestly we may attempt to increase production in Australia. That being so, and having in mind the interests of the common man, I submit that the time has arrived when tariff charges on imported softwoods should be abolished. The present demand for constructional timber of all types is estimated to be 1,500,000,000 superficial feet per annum. The total production of softwoods in Australia last year was approximately 193,000,000 superficial feet and imports totalled approximately 211,000,000 superficial feet. Local production of softwoods and hardwoods is inadequate by 500,000,000 superficial feet per annum. The Director-General of the Forestry and Timber Bureau made the following statement in his annual report for 1949 : -
It is necessary to point out that it is far from certain that the present rate of production can be maintained, less certain that existing Australian forest resources can meet in the same measure the future needs of the rapidly increasing population.
Therefore, we may reasonably assume, as a permanent proposition that local production of timber cannot possibly meet the needs of the Australian market.
Presumably the tariff system was instituted for the purpose of protecting Australian industries from foreign competition. But the state of the Australian market to-day is such that it can absorb all local timber and all foreign softwoods that logically and naturally would gravitate to this country. The Minister for the Interior (Mr. McBride) overlooked one highly important fact in his reply to the honorable member for Melbourne. Immediately the tariff concessions were granted, firms in Canada which normally export soft woods to Australia, increased the prices charged to Australian importers by 12^ per cent, so as to bring them to the same levels as those of timber supplied to us by the United States of America. The result was that the net gain to the Australian home-builder was precisely nil.
– That is not so. I dealt with that in my speech.
– It is so. Therefore, the case in favour of the abolition of the tariff on imported softwoods is unanswerable. Even if the tariff is abolished there will be no incentive for Canadian exporters of soft woods to increase their prices to the United States of America level, because exporters in Sweden and in Scandinavian countries generally would have a competitive advantage over them. It is not reasonable to suppose that such diverse and scattered exporting groups would, or could, combine in order to increase the price to Australian1 importers and., ultimately, of course, to Australian home builders.
As an outcome of the motion submitted by the honorable member for Melbourne, (Mr. Calwell) I should like the Government to- consider allowing all timber for the construction of homes to enter this country free of duty. Members of the Parliament, and particularly members of the Australian Labour party, are most anxious that every obstacle in the way of home-building shall be swept aside. If the Australian hardwood millers cannot fulfill the local demand there is no reason why we should continue to buttress them. It is a well known fact that Australian hardwood millers can supply only 66 per cent of the timber that is required for building construction in this country. Undoubtedly their association is one of the pressure groups to which I have previously referred, and I will not “ have a bar “ of them. As members of the National Parliament our first duty should be to safeguard the interests of the common man. To-day, the common man wants, perhaps more than anything else, a home. By all means let us give the timber millers just protection; by all means let us look after the wages and working hours of their employees; but in this home-hungry community we should not go beyond that in any circumstances.
In the short time during which I have been a member of the Parliament I have seen just a little too much of the pressure exercised by various groups who have axes to grind, and whose interests do not coincide with those of the community. So long as I am a member of the Parliament I shall do my duty to ensure that, regardless of the pressure exerted by various interests, the ordinary working man shall get a fair deal. After all, our function is not to listen to the powerful voices of those groups of smug, successful individuals, who are already well consolidated, but who are seeking at every opportunity to improve their positions. It is up to us to endeavour to lift the submerged section of the community and make their lot a little better. Neither timber millers, rayon manufacturers nor any other section of the community should be permitted to use our tariff system to exploit the workers. After all, our tariff system is, to say the least of it, badly in need of a sincere, just and, perhaps absolute, revision.
– It is refreshing to hear such a forthright expression of view from the honorable member for Gellibrand (Mr. Mullens), who has addressed himself very fairly to the matters raised in the course of this debate.
– If the Minister continues to praise me he will “ put me in bad “.
– I have no doubt that the honorable member felt embarrassed at being out of step with his colleague, the honorable member for Melbourne (Mr. Calwell) who is, of course, a former Minister. However, I do praise the stand taken by the honorable member for Gellibrand. In fact, he expressed very clearly the reasons that caused the Government to admit timber for building purposes under by-law. He has appealed to us to revise our tariff schedules.
– Only on timber.
– The honorable member should not deny his previous utterances. However, the fact is that the present tariff schedules were approved by previous Parliaments after proper inquiry by the Tariff Board. Nevertheless, members of the Government applaud the honorable member’s plea for cheaper timber for home-builders. The object of the Government in admitting certain timber under by-law was not only to decrease the price of timber but also to increase the quantity available. Every honorable member knows the difficulties which confront home-builders to-day, and any action that is intended to increase the supply of timber and to reduce its price should have the approval of the Parliament. Indeed, when we were in Opposition we put that point of view to the Chifley Government again and again. The present honorable member for Lalor (Mr. Pollard), who was the Minister for Commerce and Agriculture in that Administration, expressed approval of our representations, but nothing was done.
In contrast with our attitude is that of Labour when it was in office. The previous Government waived the tariff on steel imported for our rail ways. Although a large quantity of steel was imported from Japan for that purpose, no protests were made by the Australian steel industry. Its attitude is in contrast with that adopted by the hardwood millers, who form a powerful pressure-group in this country. Because they feared that the importation of timber for home construction might adversely affect their interests, they enlisted the aid of the honorable member for Melbourne, who submitted the motion that we are now discussing. The honorable member accused the present Minister for Trade and Customs (Senator O’sullivan) of having taken illegal action, but there was no illegality involved in admitting timber under by-law. The plain fact is that the honorable member had his leg pulled by a powerful pressure group, and I am sure that he must now feel sorry that he raised the matter.
The admission of timber for homebuilding under by-law represents an attempt by the Government to honour its pledge to the people to restore value to the £1. Over and over again, members of the Opposition have complained that the Government is not doing anything to restore value to the £1. Now they are acting as spokesmen for a group of merchants that is endeavouring to frustrate the Government’s efforts to reduce the cost of home-building. I take this opportunity to assure a certain member of the Opposition from South Australia who will, I know, take part in the debate, that the timber that will be admitted by the Government will be of different variety from that produced in Australia, and will not compete unfairly with Australian timber millers. The honorable member for Gellibrand referred to the possibility of obtaining Oregon from Sweden, but he should realize that Sweden does not produce Oregon. For years or egon has been admitted under by-law because it is used most extensively in coal mines as pit props. It has qualities which are not found in hardwood timbers, and it is admitted duty free under by-law. Therefore, the suggestion made by the honorable member for Gellibrand that the competition of Scandinavian timber exporters would regulate the price of Canadian timber imported to this country does not apply. We cannot control the price of Canadian timber, but we can control, in some degree, the price charged for Australian timber.
I am sure that Australian homebuilders will applaud the action of the Government in admitting certain timber intended for home construction duty free. Furthermore, the concession has been made retrospective, which is all to the good. The Minister for the Interior (Mr. M’cBride) has cited the actual statistics of the effect which the Government’s action will have on Australian homebuilding, and I am convinced that an examination of those figures will convince any fair-minded person that the Government should be praised and not blamed for its action. I cannot help wondering whether the explanation of the extraordinary attitude adopted by the Opposition in this matter i« not a consequence of its peculiar socialist complex. In saying that, I have in mind the viewpoint expressed by a senior member of the last Labour ministry, who is, happily, no longer with us, that the Australian Labour party did not believe in creating little capitalists. The attitude adopted by the honorable member for Melbourne, who was a colleague of the defeated Minister in the last Government, appears to coincide with that viewpoint. Apparently the Labour party does not want people to own their own homes.
– Order ! The Minis- ‘ter must return to discussion of the motion.
– I admit that my speculations on the reason for the attitude adopted by the Opposition in this matter amount to political criticism. However, now that the honorable member for Melbourne, who jumped into the breach on behalf of the timber merchants a little too hastily and endeavoured to belabour the Government with a piece of hardwood timber, has thrown a boomerang that has hurt him on the rebound. I hope that it will be a lesson to him and when any pressure group comes along and tells him that something illegal has been done by a Minister, when in fact that Minister was acting perfectly within his official ambit and his action was within the law, then he should not waste the time of the Parliament in making criticisms of the kind in which he has indulged.
.- I shall presume to say a few words in connexion with this matter because I am one of the few persons in the House who is familiar with the timber trade. Both Ministers who have spoken, and also the honorable member for Gellibrand (Mr. Mullens), have completely evaded the point at issue, which is, what became of the remissions of tariff that were granted to the timber importers in respect of the period between the date on which the Government actually decided to make the concession and the date to which it back-dated the remissions. Those are the terms of the motion before the House.
– Order! That matter is not included in the terms of the motion, which concern the action of the Minister and not what became of the money.
– That is so. I am glad of your assistance in this matter, Mr. Speaker. I am not questioning that point at all. Some discussion has been allowed about the remissions of duty and a’bout other matters that are not connected with the terms of the motion. The point is that the Minister decided to grant remissions of duty to interests that were importing certain classes of timber. If the Minister had had seme guarantee that those remissions would be passed on to the consuming public I could understand his deciding that in future that particular tariff was to be cancelled and that the timbers concerned should enter the country duty free. The existence of such a condition would have enabled, local vendors of timber to readjust their prices, and the consuming public would consequently have received some benefit from the remission of tariff. That would be a very good thing for Australia. I admit immediately that supplies of hardwood and softwood from Australian sources are totally inadequate to meet the demands of the building industry at present. I also agree with the action of the Government insofar as it provides that while such a state of affairs exists there should be a remission of duty as au encouragement of the importation of timber from whatever sources it can be obtained.
One important fact that we have to recognize is that Australia is not the only country in the world that has a housing problem. Our housing problem arises not from the destruction of homes in war-time but from a lag in the rate of construction. On the other hand, the problem faced by many other parts of the world is not a problem of lag in construction but a problem of reconstruction, as a result of war damage. We are competing in the world timber market with war-torn countries which require the same timbers as we are seeking. I admit that international competition for timber makes it impracticable for the Government to continue to exact exorbitant tariffs on timber that comes from alternative sources of supply overseas, in view of the fact that Australia’s own sources cannot supply our demand. If the Government had decided to remit the tariff as from a certain future date its action would have given fair warning not only to the importers of timber but also to the consumers, and I should have had no complaint to make. My complaint, however, is that the Government back-dated the remission of tariff to a date so far back that it was absolutely impossible for anybody to trace what became of the timber upon which the remissions were granted. That is the point at issue and not the question of whether there ought to be alternative or additional supplies imported from overseas. If it wore only a question of alternative supplies I should admit immediately that the Government’s action was correct. But as the position is, the Government has not only deprived the Treasury of the tariff dues- that should have been paid on the timber concerned, but also by antedating the application of these remissions, given what amounts to a cash grant to the importing interests, because, as I have pointed out, it is now impossible to trace where the supplies on which the retrospective remission was granted went to.
– Corruption !
– I would not say that it is corruption.
– Near enough !
– But I do say that there is no proof that those remissions of duty from the date that was fixed retrospectively have given any immediate benefit to home-builders in Australia. On the other hand, I again emphasize that, because it is impossible to trace where the timber on which the retrospective remissions were granted went to, those remissions amount to a cash grant by the Government to the importers. That is the point at issue. I am not questioning the need for Australia to obtain supplies of timber from wherever it can obtain them. The Minister concerned has admitted in reply to a question in another place that the Government had no means of checking up on whether the concession represented by the remissions had ever been passed on to Australian home-builders.
– One would think, after listening to what honorable members opposite have had to say in connexion with this matter, that they have no doubt that a scandal of very gigantic dimensions exists and requires probing to the bottom. If any matter requires probing to the bottom it is the propriety of some of the administrative acts in the Department of Tra.de and Customs during the regime of the former Labour Government. I exclude from that remark the last Minister for Trade and Customs, Senator Courtice, because I believe that no more honest man than he lives in this country. The whole point at issue in this matter is not whether it is necessary, as honorable members opposite have said, for foreign timber to be imported dutyfree in order to overcome the shortage of building timbers in this country. The point is whether the Minister for Trade and Customs took an unprecedented step in back-dating remissions of duty so that certain persons received a benefit. That is the scandal, if I may use that word, that the honorable member for Melbourne (Mr. Calwell) is trying to establish. He wishes to have an inquiry by a royal commission to determine those matters and to probe to the bottom what he has stated was an unprecedented act. Every raising of sales tax or customs tariff gives a benefit to the possessors of goods who have not paid the increased taxes. Every time sales tax or customs duty is raised there is a vast quantity of material in various stores on which these impositions have not been paid. It is nothing new that such a situation should exist.
Under the previous Government this dating back of tariff concessions and refunding to importers of duty paid was a very common practice. The honorable member for Melbourne shakes his head. When he does that he reveals there is not much in it in respect of this matter.
I have secured from the Department of Trade and Customs a statement of tariff reductions that have been dated back. I have pages of them here, but I shall recite only a few. Tariff Decision No. 47/320 covering veneer separators for batteries operated on and from the 1st January, 1947, but the instruction was not issued until the 14th June, 1947, which was six months later. Tariff decisions Nos. 47/507 and 47/508 covering tubes, tyres and’ batteries operated from the 1st January, 1946, and related to goods shipped to Australia on and before the 31st December, 1946. It was issued on the 1st November, 1947 - two years afterwards. Every importer who brought those goods into Australia at that time was entitled to a refund of the duties which he had paid for two years .back, yet the honorable member for Melbourne says that the action of which he complains is without precedent and that it is scandalous action on the part of the present Minister for Trade and Customs (Senator O’sullivan). Custom decision No. 48/86 covering rayon yarns which operated on and from the 1st January, 1948, and ceased to operate on the 31st December, 1948, was issued on the 27th March,’ 1948, which was three months after the date from which it began to operate. Tariff decision No. 48/163 covering cotton yarns operated from the 1st January, 1948, but was not issued until the 22nd May, 1948. Yet the honorable member has the audacity to indulge in misrepresentation in this Parliament by saying, that when his Government was in office it did none of these things. I have pagesof precedents which I shall not weary the House by reciting. The honorable member’s case has been answered by the instances that I have cited.
The action in question was taken by the Government in an endeavour to. dosomething for the unfortunate individual who is trying to build a home. It was taken in an endeavour to give him, not only cheaper material, but also theright quality of material. I have seen many young ex-servicemen having to put green hardwood timber into their floors and rafters, which will shrink and warp and probably buckle the whole fabric of their homes. Australia needs timber such as baltic pine and Oregon pine which has the reputation of meeting the demands of the home-builder in regard to durability and other requirements.
I think that the Minister, instead of being hounded by honorable members of the Opposition, ought to be congratulated by the House and thanked by every homebuilder in Australia for what he has done. This is only an attempt on the part of the honorable member for Melbourne (Mr. Calwell) and those who support him to embarrass the man who wants to build a home and the Government which is trying to help him. The only real and practical way to put value into the £1 is to reduce the cost of certain items, particularly basic materials. I would stand for the protection of the hardwood saw-milling industry of Australia if I thought there was the slightest danger of foreign competition putting it out of business; but, as the honorable member for Gellibrand (Mr. Mullens) pointed out to-day, the Australian sawmilling industry is meeting only about two-thirds of this country’s requirements. It has been stated that as soon as these people were relieved of the 12^ per cent, duty Canada lifted prices by 12£ per cent, and thus cancelled out the benefits. But Canadian prices have been rising very much as Australia prices have and Canada applied this increase, not only to
Australia, but also to every other country with which it was dealing, irrespective of tariff arrangements.
Despite the criticism from honorable members of the Opposition, I am proud to be associated with such a Minister for Trade and Customs as Senator O’sullivan, who has taken this action for the backing of the Australian home-builder.
.- The Postmaster-General (Mr. Anthony) has made the same mistake in regard to this motion as have previous speakers on the Government side. They have assumed that this is an attack on the Minister for Trade and Customs (Senator O’sullivan) because he made timber available when it was in short supply in Australia so as to meet the needs of the consuming public. That is not the ground of the attack that is made on the Minister. The Minister has been criticized for having acted in regard to the admission of timber in a way that is not in accordance with the Customs ActHe has been criticized for having given a rebate on timber that was admitted into Australia between the 10th December, 1949, and the 17th February, 1950. Honorable members of the Opposition question whether what has transpired is in accordance with the Customs Act and whether the consuming public received the benefit of the remissions. This matter has been raised in order that the interests of the consuming public may be protected.
I remind honorable members that this subject was raised by me in a series of questions that I asked in the House on the 15th June last. One of the questions that I asked was -
What steps, if any, have been taken by the Government to see that the importers pass these refunds on to the purchasers of the timber concerned ?
The reply given to me by the Minister was -
As regards importations, benefiting by concessions, which have been sold at the dutypaid price it will bc a matter for the purchasers or users to approach the importers for a price adjustment corresponding with the duty rebate. It is known that a number of importers has made these adjustments hut as regards any who do not, enforcement is not practicable.
The references by the Postmaster-General to what transpired in previous years are not an answer to what has been put forward by the Opposition. Section 151 of the Customs Act provides that before any remission of duty is made in regard to any goods the Minister shall refer to the Tariff Board for inquiry and report the necessity for reduced duties and shall not take any action until such time as he has received a report from the board.
On the 17th February last the statement was made that duties would be remitted in regard to these timbers and that the remission of duty would operate from the preceding 10th December. At that time there had been no reference of the matter to the Tariff Board and no notification of the application to the Parliament. In fact, up to the present moment, there has been no ratification by the Parliament of this reduction of duties. Although the matter was referred to the Tariff Board for consideration that was not done until July of this year and, up to the present moment, the Tariff Board has not made inquiries into it. Nobody objects to the Minister exercising powers conferred upon him under an act, but the action he has taken is not in conformity with the act and the Opposition is concerned about the possibility that those who have purchased this timber will not benefit from the remissions of duties.
Timber that comes into this country first of all passes through the hands of the importer. It goes from the importer to the merchant and from the merchant to the builder or the carpenter or, in many cases, is bought direct by the public. “Under such circumstances this timber may have been sold and re-sold several times during the two and a half mon tha during which the remission of duty applied and obviously the person who first imported it would get the advantage of the remission. The great bulk of the consumers would not know whether the timber they had purchased -had been subject to a rebate of duty because they would not know whether it had come into Australia before or after the 10th December. I think that the whole matter requires the attention of the House. It is a grave matter that although the Parliament has decided that the duties on specified material shall be a certain amount a Minister should, at a later stage, reduce the duties so imposed. The matter is even graver when that is done without reference to the Tariff Board as is prescribed in the ‘Customs Act. Honorable members, whether on the Government side or the Opposition side of the House, should be concerned at all times to see that the rights and decisions of the Parliament shall not be swept aside or treated lightly by those who administer departments. It is necessary to ensure that the consumers shall be protected and the House should be made clearly aware of what action the Government proposes to take to see that all those who received the remissions of duty in connexion with the importation of this timber during the period of two and a half months shall pass on such remissions to those who ultimately purchase arid use the timber.
– As one of the persons referred to by the honorable member for Melbourne (Mr. Calwell) as having approached the Minister in regard to this matter, I shall not be wasting the time of the’ House if I expound my views to honorable members. This matter should be lightly brushed, aside, because obviously the honorable member for Melbourne has made a mistake. That has been proved by the speech of the honorable ‘ member for Gellibrand (Mr. Mullens), who cut the ground from under the feet of the honorable member for Melbourne when he said that the temporary tariff revision should be made permanent. On the 1.7th February last, the Minister brought down a by-law providing for the temporary reduction of the tariff on imported timber. He did that in a very laudable attempt to increase the number of houses built in Australia through assistance to the timber industry. On behalf of some hardwood timber interests, a number of honorable members waited on the Minister to ascertain whether this was to be a temporary or a permanent arrangement. We did not want the alteration to be permanent, because this country is building up a magnificent timber industry, in which a great deal of capital has been sunk and a large number of men employed. There are photographs before me, which honorable members may see, of the first-class homes that have been built for workers in the timber industry. They would not have been built at great cost out in the bush unless some protection of this sort could have been hoped for. At the moment the Australian sawmillers know that they could not possibly meet the great demand for timber and therefore offer no objection to a temporary reduction of duty, but, if a foreign timber began to be dumped here the future of the sawmillers and the bush timber workers - a most hazardous occupation - must be protected and assured of continuity.
We asked the Minister whether it was a permanent or a temporary measure, and he said that he would allow the timber to enter the country at a reduced duty for a brief period in order to assist our housing programme. He told, the timber interests that this matter would be reviewed from time to time. I shall quote a letter from the timber interests in which their attitude is indicated -
In the first Place we repeat that we appreciate fully the expressed desire of the Government to obtain more timber and cheaper homes for the people, and we assert that that worthy ideal will not be obtained by the reduction of duty on imported timber.
The timber interests were satisfied at that time that the Government intended this reduction to be a temporary expedient. The honorable member for Melbourne has fallen into error, as has the honorable member for Bendigo (Mr. Clarey), in making an issue of this matter, because the Chifley Government approved reductions of duty without reference to the Tariff Board, following the tariff negotiations at Geneva in 1947 under the General Agreement on Tariffs and Trade. That is a reply to the charges of the honorable member for Bendigo, who ako said that no attack was being made on the Minister because he had tried to make home-building cheaper, but that Opposition members were concerned about the retrospective remission of duty. It will be seen from the long motion submitted by the honorable member for Melbourne, which reads -
The actions of the Minister for Trade and Customs in illegally authorizing and making refunds from revenue of considerable sums oi money paid as duty on timber and other commodities admitted to the Commonwealth foihome consumption-
– That is not my motion.
– 1 have a copy of the motion before me and that certainly appears to be correct.
Mi1. Calwell. - No, my motion contains only five words.
– The motion is typewritten, and the honorable member for Bendigo mistakenly said that no attack was being made upon the Minister. The speeches of honorable members opposite have resolved themselves into an attack on this Government for its attempt to improve the housing position.
The Opposition is interested to know what happened to the money repaid to importers for timber imported between the 10th December and the IV th February. The sum mentioned was about £100,000, which was arrived at by taking one-sixth of the year, or two months, as a basis, during which 173,000,000 super, feet at 6s. per 100 super, feet would be involved. The honorable member for Melbourne knows that in New South Wales and Victoria at this time there was a strict scrutiny of timber prices by price-fixing authorities, and that any concession made to au importer would be immediately taken into consideration by them, and would be reflected in the price allowed to be charged. Some extraordinary things have happened in regard to price-fixing in New South Wales. Tremendous pressure has been brought to bear on pricefixing authorities, as the Labour party well knows. A big increase of the price of timber was requested by certain interests, but that matter need not be discussed at present. Because something has been mentioned about action being taken in another place, which may be a serious thing, honorable members of this House should know that the pricefixing authorities relate the price of timber to all the factors of production. They investigate every phase of production and the processing of timber from the felling of the trees through thesawmilling, the transport to wharf or siding in the country, the transport tothe merchant in the capital city and the final purchase by the retailer. Every operation is costed and priced by a corpsof accountants connected with the pricefixing authority.
– This timber was sold.
– I realize that the honorable member for East Sydney (Mr. Ward) knows a good deal about timber,, because he has had more experience than most of us and has been connected with some eminent gentlemen in the timberindustry.
– Is it not a fact that thetimber was sold before the rebate was made?
– Not necessarily.. Timber does not move so quickly. It is supplied to the millers in logs, and must be processed before it can be sold. During the relevant period the Christmasholidays of two or three weeks intervened, and then the timber had to be sawn and’ stacked and had to undergo other operations. Probably not much was sold’ between the 10th December and the 17th February. I consider that the honorable member for Melbourne wasted the timeof the House when he brought up this matter. The honorable member for Gellibrand, although not very well coached,, apparently made some research with theaid of the Year-Boole and learned something about super, feet and other things. Not only did he agree with what theMinister did, but he also said that thereduction should be permanent and that timber should be imported freely toassist the home-builder. It is probably presumptuous of me, being a newcomer to this House, to offer advice to the honorable member for Melbourne, but I suggest that when he brings matters like this before the House he should get some of his own supporters to work in with him and not against him. Probably some of his own group who are giving him support on the Communist Party Dissolution Bill-
– Order ! The Communist Party Dissolution Bill is not before the House.
– The timber industry of this country has done a magnificent job. It must be assisted so that it can continue its good work. It need feel no nervousness because this Government will ensure that it shall not be hindered in any way. When a large amount of capital has been put into an industry and a large number of men are engaged in it, the Government should see that nervousness about its future shall not affect its prospects.
– Order ! The honorable member’s time has expired.
.- It is perfectly obvious to everybody in the House that the originators of the motion were not concerned about timber being imported. They believe that they could embarrass the Government and prove that it was involved in a scandal of the first magnitude. In spite of the strenuous efforts of the honorable member for Bendigo (Mr Clarey) to redeem the position, we all have a very clear picture of the Leader of the Opposition claiming that the only issue was what happened to the rebate of duty. So it is quite clear that the only thing actuating the honorable member for Melbourne (Mr. Calwell) in making his statement was the belief that he had something against the Govern: ment. That belief remained until the Postmaster-General (Mr. Anthony) rose and “ wiped the floor “ with him.
I wish to say a word, on behalf of the local timber industry, which has been misrepresented here to-day, particularly by the honorable member for Melbourne.
-tin. - Tell the House about the “rake-off”.
– The honorable member might have got a share for all I know. The timber interests in Australia would have no objection if 500,000,000 super, feet of timber were imported, as long as the amount was confined to a specific quantity and the rebate to a stated period. It has been claimed that the honorable member for Melbourne is a “ stooge “ for the timber interests. I should be sorry if he were, because that would indicate that even in such a role he puts up a very poor show. It is wrong to say that the local timber interests cannot supply most of the timber required by this country. They supply up to 90 per cent, of our requirements at present, and poor transport is the reason why timber is not available in all quarters. I ask honorable members opposite to say whether they have ever heard of a remitted tax. They probably get rake-offs themselves every time the Commissioner of Taxation gives them a rebate on their income tax. It is wrong to say that the local timber interests object to the importation of timber for a specific period. Plans are being made for the production of sufficient timber to meet Australia’s requirements.
– What has this to do with the motion?
– It has everything to do with it, and if the honorable member had enough brains to realize that he would keep quiet. He may have some knowledge of New Guinea timber but I am talking of Gippsland timber. Capital is readily available to produce this timber if it is assured of adequate protection. Money will not be available to produce timber if there is any uncertainty about the future of the industry.
– Cannot the honorable member say something about the motion?
– The motion indicates that the Labour party thought it could involve the Government in a scandal, but the charge that it fired has proved to be a squib. If the remission of duty is to be called a “ rake-off “r honorable members opposite have only proved thai: they themselves know something of “ rakeoffs “ during their period of office. For the benefit of the country as well as of the House, I say that we can now expect this sort of attack frequently from the Opposition because it is trying desperately to make a case to justify its existence.
Sitting suspended from 12.^5 to 2.15 p.m.
.- The debate has extended far beyond the question that is before the Chair. The desirability of reducing import duties on timber for a certain period, or entirely, has nothing to do with the subject-matter of the motion. It is curious that three Ministers should find it necessary to attempt to justify an act of administration. The Minister for the Interior (Mr. McBride), who represents the Minister for Trade and Customs in this chamber, made one important remark when he said that the departmental officers were in favour of much of the action that has been taken. The Minister used that phrase and I inferred from it that some of the action was taken without the approval of those officers. Does the Minister say that that is not correct?
– -The Government takes responsibility for all administrative acts.
– That point is very important, because the issue is not whether timber should be admitted free of duty or at a reduced duty in order to meet a shortage of timber for housing construction. That is not controverted as a principle provided certain safeguards are observed. The reduction of duty on timber was made retrospective in respect of the period from the 10th December to the 17th February last.
– That is quite a common practice.
– It might be in certain respects, but the honorable member for Melbourne (Mr. Calwell) and other members of the Opposition want to know why the remission of duty was ante-dated in respect of that period. The Minister for the Interior said that at that time certain quantities of timber were held in stock. How much of that timber had not then been sold? What steps have been taken by the Government to ascertain whether any of it was unsold? What persons, or firms, benefited from this concession without the public or retailers obtaining any benefit whatever and without a single home-builder receiving any benefit from it, either directly or indirectly? That is the real issue. We are entitled to have from the Government details of the per- sons, or firms, who gained a benefit from these remissions.
– What about the retrospective concessions that were made by the previous Government?
– I am not aware of the details of any action of that kind that may have been taken by the previous Government. In this instance, the House is entitled to know how much of the benefit resulting from these remissions was gained by the public or homebuilders. If home-builders did benefit, the Government has a complete answer to the motion; but the Minister for the Interior has not said that the public benefited to any degree whatever as the result of these remissions of duty. It is clear that the Government cannot answer that question. We have been told that it is difficult to ascertain details of that kind. I repeat that the House is entitled to know to what degree, if at all, the public or timber dealers benefited from these remissions. If no such benefit accrued to them the remissions cannot be justified. To the degree that the public benefited, the action taken by the Minister for Trade and Customs (Senator O’sullivan) can be justified. I shall say nothing with respect to the technical aspect of the Government’s action. However, if, as would appear to be the fact, the public did not benefit the repayment of these moneys was made for the benefit of certain individuals.
The honorable member for Macarthur (Mr. Jeff Bate) said that the remissions would be taken into account in the fixation of prices of timber. However, after listening to the debate one naturally inquires whether the remissions were actually taken into account in that way. None of the three ministers who have spoken in this debate has said that that was actually done. Did the various State price fixing authorities reduce the price of timber imported during the period I have indicated.? Such action would have been most appropriate in view’ of the large sum of money involved.
– I have given the relevant figures in totals.
– I am not satisfied with the totals. What I want to know is whether the benefits of these remissions were passed on to the public by a corresponding adjustment of prices of timber that was imported between the 10th December and the 17th February last, or in the ordinary flow of business. If that was not done then the action of the Government was entirely unwarranted. In view of the statement by the Minister for the Interior that much of the action that was taken by the Government was recommended by departmental officers we are entitled to ask him to lay the relevant file on the table in order to give an opportunity to honorable members to peruse it. The Opposition is not questioning any concession that may have been given in respect of timber imported during a period of emergency that can be related to the shortage of houses. We are concerned whether the importers alone derived benefit from such a concession. If they did, the remissions simply constituted profit paid to them without any corresponding benefit being passed on to the public. The Ministers who have spoken have not answered that question which is the substance of the submission by the honorable member for Melbourne. The House is entitled to particulars that will enable honorable members to ascertain who reaped the benefit from these remissions or from any proportion of them without any benefit being passed on to the public. Those facts have not been given to the House.
.- It is perfectly obvious that the Opposition is annoyed because the Government has done in a few months what the previous Government failed to do during the years that it was in office. When the Labour Government was ejected from office last December, the construction of thousands of houses which had been built to wall height was held up because timber for roof construction could not be obtained. In addition, many persons held vacant building blocks and were waiting for supplies of materials to commence construction of homes. As the result of the prompt action that this Government has taken, those houses have been completed and to-day are occupied by returned soldiers and widows, whilst on the thousands of building allotments that were previously vacant houses are now under construction or have been completed. The official figures show that in May last almost twice as many houses were in course of construction than the number that was being constructed in May, 1949.
-Order! I ask the honorable member to confine ‘his remarks to the question before the Chair.
– That change has resulted largely from the reduction of import duties on timber and other building commodities. The Government’s prompt action in this matter has enabled progress to be made. The right honorable member for Barton (Dr. Evatt) is grizzling because he says the departmental officers did not approve in some respects of the Government’s action. The day when departmental officers ran this country has gone. Now the elected representatives of the people are running it. During the preceding eight years Labour governments allowed so-called experts to dictate their policy. Because Labour took value out of the £1, one of the great problems that confronts the present Government is to reduce prices wherever possible. By taking the action that the Opposition now criticizes, the Government has reduced .the price of Baltic timber by 3s. a 100 super, feet and weather boards by from 2s. 3d. and 2s. 9d. a 100 super, feet. The ex-servicemen and widows have benefited from the reduction.
– Where is the proof that the remissions of import duty were passed on to home-builders?
– In South Australia, which has a Liberal government, the reduction was certainly passed on. Whether it was passed on in New South Wales I do not know, but honorable members opposite should ask the Labour Government of that State whether its price fixing authorities did their job in that respect. The Minister for Trade and Customs (Senator O’sullivan), in remitting these duties, did not depart, from the practice that has been recognized by the Parliament for a great many years. Obviously, certain quantities of timber would be held in stock at the date on which the remissions were made, and it would be grossly unfair to apply this benefit in respect of timber that might be imported the day after the duty was reduced and, at the same time, deny the benefit in respect of timber that was then held in stock. The Minister acted quite in accordance with practice when he dated the remissions back to a convenient date. It is quite ludicrous for honorable members apposite to suggest that timber is sold the day after the merchant receives it. Such a statement shows complete lack of knowledge of business methods. When a merchant receives timber he must mill and cut it. It is most improbable that timber would leave the factory within three months after the date on which the merchant received it. Therefore, it is quite proper to apply any reduction of import duty to stocks that may be on hand.
It is obvious, as the Minister for the Interior (Mr. McBride) has said, that the honorable member for Melbourne (Mr. Calwell) moved his motion purely as the stooge of the timber millers in Victoria. Representatives of those interests interviewed me and asked me to protest against the remission of these duties. I refused to do so. I pointed out to them that South Australia was screaming out for timber and that building authorities in that State had sufficient finance to purchase all of the timber that millers in Victoria could produce, but those millers could not take up that offer. Indeed, they are not able to meet demands for timber in Victoria itself. In any event, they have nothing to fear in this matter because there is a grave shortage of timber throughout Australia, and to some degree home building is still being held up for that reason. I trust that the Government will continue this policy until’ the supply of timber equates the demands. The allegations which have been made by the honorable member for Melbourne are without substance. He has raised this matter at the request of vested interests who are trying to protect their own selfish activities to the detriment of the ex-servicemen and young people who urgently require homes.
.- This matter is really sensational. Senator O’Byrne, who first raised it, asked a question-
– Order ! The honorable gentleman may not refer to the Senate, to debates that take place in that chamber, or to honorable senators themselves.
– May he refer to a member of another place?
– No, I shall not allow that.
– The first question which Senator O’Byrne asked was-
– Order ! The honorable gentleman may not refer to questions that have been asked in the Senate.
– I want to know why all the necessary precautions were not taken, and why provision was not made to ensure that customers would obtain the advantages of the rebates in respect of goods that were ordered and delivered after the 10th December, 1949 - a most significant date. An answer was actually given to that question, and it was as follows : -
In order to reduce the high cost of housebuilding the Government has thought fit to allow vital building materials to enter this country free of duty. One of the conditions of that concession is that the benefit shall go to the ultimate user, the actual home owner, and that no contractor or other intermediate person shall gain any advantage therefrom.
I have heard a lot of prattle from honorable members opposite about the difficulties of ex-servicemen who are endeavouring to build their own homes. That prattle, of course, has been employed as a smoke-screen to hide corrupt practices that have been used in this matter. Members of the Labour party want to know, and the people of Australia will want to know, who got the £100,000. We contend that the Minister for Trade and Customs (Senator O’sullivan) acted wrongly in authorizing a refund from Consolidated Revenue of considerable sums of money, representing duties that had been legally collected from and paid by importers in accordance with the tariff rates as ratified by the Parliament - not by departmental officers - and as legally payable at the dates on which some timber and other commodities were admitted for home consumption. Did ex-servicemen derive any advantage from the refunding of that amount of £100,000, or did the importing interests, who gave financial support to the Liberal party and to the Australian Country party in the last general election campaign, profit from it? Is this the pay-off? Is this amount of £100,000 their share of the plunder for supporting the Government? I contend that the Minister has acted wrongly in authorizing the illegal repayment of such a considerable sum of money to importers, and in failing to take the necessary precautions to ensure that the concessions would be passed on to the ultimate users of the timber and other commodities concerned. A royal commission should be appointed to probe into the corrupt practices that have been used in this transaction.
– Not long ago a royal commission investigated certain transactions relative to timber.
– Let us have a royal commission into the transaction under consideration, which directly affects exservicemen throughout Australia, who are endeavouring to build homes. They are at the mercy of the importing interests who know that next year the ex-servicemen will be paid their war gratuity. The importing interests believe that they have discovered another field for exploitation, and they will hold the timber until the war gratuity is payable.
– We cannot hear the honorable member.
– The honorable member for Bass (Mr. Kekwick) does not want to hear me. There are none so deaf as those who do not want to hear. The remissions of duty which we are discussing are not the only instance of corrupt practice on the part of this Government. There were corrupt practices in the sale of Hotel Ainslie.
– Order ! The honorable member may not refer to that subject in this debate.
– I venture to say that other matters will come to light in the near future. The importing interests received their rake off in return for the support that they gave to the Liberal party at the last general election. The other rabble, such as the private banks, are also demanding their rake off. By the way, they are becoming quite impatient about the delay, but all of them will be paid off one by one. If they were not to receive spoils from the Treasury, this Govern ment would not last a day. I emphasize that a royal commission should be appointed to inquire into this timber transaction. Forty-five thousand of my constituents will demand to know what has become of the money that has been illegally refunded from Consolidated Revenue . by the Minister for Trade and Customs to pay off certain interests who so ably supported the Liberal party financially at the last general election.
Motion (by Mr. Calwell) put -
That the question he now put.
The House divided. (Mb. Speaker - Hon. Archie Cameron.)
Majority . . . . 22
Question so resolved in the negative.
Debate interrupted . under Standing Order 92.
SUPPLY. (“ Grievance Day “.)
Mr. SPEAKER (Hon. Archie
Cameron). - As it is now past the time which is provided for “ Grievance Day “, Order of the Day No. 1 will not be called on this afternoon. The Committee of Supply will he set down for the next day of sitting.
Debate resumed from the 4th October (vide page 261), on motion by Mr. Fadden -
That the bill be now read a second time.
– In introducing this bill for the second time the Treasurer (Mr. Fadden), is relying, I presume, upon the arguments that he advanced on behalf of the Government when the measure was first introduced earlier this year notwithstanding the opportunities that he and his colleagues have since had to study the operations of the present management of the Commonwealth Bank and to compare them with operations under the former Commonwealth Bank Board. It is possible, of course, that the right honorable gentleman has been so impressed by the present system of control of the bank that he has lost much of the enthusiasm for the measure that he entertained earlier in the year. I do not propose to repeat all that I said when the bill was first debated in this House, but I shall make a few points about the attitude of the Opposition completely clear.
The Opposition will not oppose the second reading of the hill because it provides, amongst other things, for the repeal of the Banking Act which was placed on the statute-book in 1947. We favour the repeal of that legislation because decisions that have been made ‘by the High Court of Australia and the Privy Council have rendered it invalid except in a few small particulars. It would be only kicking a dead horse to argue about the act in those circum stances. No good purpose would be served by retaining it on the statute-book. The Opposition supports the provisions in this bill for the expansion of the activities of the Commonwealth Bank. The former Labour Government was willing to provide the bank with all the extra capital that it needed for purposes of expansion and I understand that there has been a very rapid growth of certain departments, particularly that which deals with industrial finance. After all, it was a Labour government that established the Industrial Finance Department of the bank against the pressure of strong opposition from the parties that now form the Government. In fact, if we roll back the pages of history, we see that there would never have been a Commonwealth Bank if a Labour Government had not established it. Supporters of the Government, following in the political footsteps of those who opposed the establishment of the Commonwealth Bank, must be ashamed to-day when they realize how their predecessors objected to the formation of what has become a magnificent institution as the result of the enterprise, forethought and consideration for the people that was displayed by the Labour party. Had it not been for the existence of the Commonwealth Bank, Australia would have had to pay hundreds of millions of pounds - I almost said that it would have been robbed of hundreds of millions of pounds - to private moneylending interests during World War LI. as well as during World War I. When Australia had to produce funds during World War II. in order to defend itself and assist its Allies, the treasury-bill rate was about only 1 per cent. If we take our minds hack far enough into the past we shall recall that a government in which the present Minister for Health (Sir Earle Page) was Treasurer had to pay 5½ per cent, on treasury-bills.
Because we had a powerful central bank in 1942, the Labour government of the day was able to take steps under the National Security Regulations to employ it as an instrument of government in the interests of national welfare instead of being forced to obey the dictates of private financial interests. I do not think that anybody who sincerely has the interests of the community at heart has ever questioned the value of that action. The bill now before the House represents an attempt to amend the Commonwealth Bank Act 1945, which finally put an end to the intrusion of .private interests into the management of the Commonwealth Bank. I repeat that the Opposition does not object to the repeal of the Banking Act 1947 or to the expansion of the activities of the Commonwealth Bank. It is prepared at all times to agree to the provision of additional finance for the bank, provided, of course, that the Government goes about the job in the proper way. The Labour party approves of the activities of the Mortgage Bank Department and the Industrial Finance Department. I think that the Treasurer will agree that the development of the Industrial Finance Department has been a financial romance. That, of course, is true of all the measures that have been enacted by Labour governments for the expansion of Commonwealth Bank activities. The value of the Mortgage Bank Department has exceeded our expectations. Its work has been of great use to many Australians. I cannot imagine any greater tribute to the economic and financial policies of Labour governments than is implicit in this bill. The Government does not propose to alter the structure of the Commonwealth Bank as it has been developed and strengthened over the years by Labour governments. In fact, it plans to extend the activities of the bank.
The next .point that I wish to emphasize is that the Opposition objects to the proposal to re-establish a board to manage the Commonwealth Bank and thus reintroduce private financial interests into the control of the organization. Our attitude on this issue is uncompromising, and I am sure that our stand will be fully justified when the history of the operations of the Commonwealth Bank Board in the past is written. I do not reflect in any way upon the gentlemen who served on the previous board. I have known some of them and I have the highest respect for their honour and personal integrity, but their outlook upon the functions of a central bank was deplorable. The present Minister for Health established the Commonwealth Bank Board when he was Treasurer in a former government. That act .placed control of the Commonwealth Bank in the hands of men who, though excellent citizens, had not the faintest conception of the proper function of a central bank or of its vital relationship to the economic life of the nation. In fact, most of them knew nothing at all about that phase of Australia’s economy which touched the management of a great central bank and allied the conduct of its operations with those of an ordinary trading bank. One only needs to read the evidence given before the Royal Commission on Monetary and Banking Systems to realize the utter failure of the members of the former bank board to understand the functions of a central bank or to appreciate its importance to the national welfare.
From 1924 to 1941, when the former board operated, the economy of this country desperately needed proper guidance from the Commonwealth Bank. Any one who takes the trouble to acquaint himself with the management of the bank during those years will realize what an unholy mess the board made ,of its job and the damage that was inflicted on our economy in consequence. Some day I hope that some one will take the trouble to publish the history of the bank during that period. I know something of it, because I was a member of this House for a brief period about that time. In 1931 1 was a Minister when the great financial crisis occurred. At that time I had the advantage of working with the best financial brain that this Parliament has ever known. I refer to the late Mr. E. G. Theodore. No matter what criticisms may be levelled at the late Mr. Theodore, it cannot be denied that he had the most magnificent conception of the duty of the Commonwealth Bank and of the part which that institution should play in the national economy. It was a great loss to the public life of this country when Mr. Theodore ceased to be a member of the Parliament.
The tragic happenings of 1931, and the sorry part played by the management of the Commonwealth Bank in those happenings, reveal the complete inability of people drawn from other spheres to understand the duty which devolved on the central bank at that time. I want -to make it quite clear that I am not reflecting on the integrity or on the good intentions of the individuals who comprised the bank board at that time. My criticism is directed at their complete inexperience of banking and their utter lack of knowledge of the financial system, which rendered them quite incapable of grasping the problems that confronted the country. That board was appointed at the instigation of the right honorable member for Cowper (Sir Earle Page), and I believe that he is still a champion of the system of board management. The BrucePage Administration, of which he was such an influential member, went on borrowing until it could not borrow any more, either in this country or abroad, and the policy of that Administration undoubtedly weakened our economy so seriously that when the depression came we sank into misery and degradation.
I shall not indulge in tedious repetition of what I have said on previous occasions about the proposal to hand the management of the Commonwealth Bank over to a board. I content myself now with repeating emphatically that the Australian Labour party is totally opposed to entrusting the financial and economic interests of the nation and the management of the greatest economic machine we possess, the Commonwealth Bank, to private interests. What justification is there for such a proposal? What fault can the Government, or any honorable member opposite, find with the management of the Commonwealth Bank since 1945, when it was transferred from a board to a governor? The bank certainly cannot be criticized on the ground that its operations have not expanded considerably. Indeed, the expansion of the bank’s operations would have been considerably greater but for the physical limitations imposed by the inability to obtain premises and staff. As an indication of the desperate shortage of staff in the .bank, I recall that at one stage it was necessary to request the school authorities to conduct special examinations to encourage children leaving school to join the bank staff. The expansion of a business is always regarded as a criterion of its success, and it is clear, therefore, that no fault can be found with the business side of the bank’s operations.
Can any fault be found with the advice tendered by the Governor of the bank, to the government of the day on financial or economic matters? I do not think that any one who is aware of the factswill suggest that any fault can be found with that advice, either during the term of Mr. Armitage, who has since retired, or during the term of the present Governor, Dr. Coombs. Indeed, Dr. Coombs is generally recognized throughout the world as one of the finest brains that this country has produced, and he has very few rivals, either in this country or abroad. Although he is still a young man it cannot be disputed that he possesses extraordinary abilities, and. those abilities have been devoted to furthering the economic interests of this country. In addition, the Governor of the bank has the assistance of the Advisory Council, which includes a number of brilliant men who are thoroughly qualified to tender advice on all the matters that, arise. Surely no one will suggest that the members of the proposed board will be more capable of advising the Government on matters of national importance than are the present Governor and his Advisory Council. Besides the governing officials of the Commonwealth Bank the Government also has the benefit of the expert advice of the highly qualified officials of the Treasury. Although I do not expect the Treasurer to admit the fact publicly, I feel that the Treasurer must realize the debt that he owes to previous Labour administrations for having assembled in the Treasury such a group of outstandingly able officers. When Labour was in office it always paid great attention to the selection of officers to fill important positions in the Public Service, and when I was Treasurer I did not pay any regard to the personal political convictions of prospective appointees but was concerned solely with their competence. I wanted the highest order of ability. Therefore, I do not think that it can reasonably be contended that the appointment of a board of individuals from outside the bank or the Public Service is necessary in order to supplement any alleged shortcomings of the officials of the Commonwealth Bank or of the Treasury.
Does the Government suggest that the operations of the bank under the present system of control by a governor have not been a success? The other day I noticed some criticism of the fact that the bank had made a profit, after providing reserves, of approximately £7,000,000. What profits do honorable members imagine the private banks would have made had it not been for the competition of the Commonwealth Bank? At least £7,000,000, and probably much more, would have found its way into the fat pockets of private bankers and moneylenders. Had the Commonwealth Bank not been in existence during the recent war the government could not have got the money with which to carry on the war. I believe that the present Government has been able to reduce the amount of treasury-bills held by the Commonwealth Bank. It is clear, therefore, that it cannot be argued that the bank has not operated successfully. It might be contended that part of the bank’s profits have come from the management of the note issue, but it cannot be denied that the Commonwealth Bank made substantial profits from the transaction of purely banking business.
Having placed these matters fairly before the House and the public, as I have done on previous occasions, I am led to inquire now why the Government is so anxious to transfer the control of the bank to a board. Members of the Government say that they propose to do so in order to fulfil an election promise. I do not know of any promise made by the present Government during the last election campaign that it has fulfilled. In any event, the establishment of the proposed board will fall far short of the expectations held by the bankers, who subscribed hundreds of thousands of pounds to assist the anti-Labour parties to defeat us at the last election. It is idle for honorable members opposite to deny .that huge funds were made available to them because I can produce evidence to show the source of the funds, the amount subscribed and the purpose of the subscriptions. Every one remembers, too, that during the election campaign bank officers ran around from house to house in the time of the banks canvassing support for the anti-Labour parties. However, as I have already said, the Government’s proposal will certainly not fulfil the high expectations of the bankers and other persons who were so anxious that Labour should be defeated at the last election.
Earlier, the Government spoke of establishing a small board of four individuals. Now the number is to be increased to ten - nearly “ an Australian eleven”. In addition to the five individuals who will be appointed from outside, the board will include the Secretary to the Treasury and the Commonwealth Statistician, who is also Economic Advisor to the Government. That sounds quite plausible, but let me remind honorable members that the Permanent Head of the Treasury has always endeavoured to give effect to the policy of his ministerial head, who is the Treasurer. I do not know of a Secretary to the Treasury who has not done so. It is clear, therefore, that the Secretary ‘to the Treasury would have to disregard any personal inclinations that he might have when he took his place at a meeting of the proposed board, and would advocate the views of the Treasurer of the day. I do not know what qualifications will be demanded of the five individuals who will be selected from the community. However, if they are selected on the same haphazard principle as that which characterized the selection of the members of the former board I think that it will be a most retrograde step. As I pointed out earlier in my remarks, the members of the former board had not the faintest conception of the organization of banking or of the functions of a central bank. Furthermore, the whole idea of entrusting confidential information of vital importance to the economic security of the country to persons chosen at random from the community is unsound. As an illustration of my contention, consider the position that would arise at the present moment if a bank board were in existence which included five individuals who were not responsible to the Commonwealth Bank, the Treasury or the Government. Most far-reaching proposals to appreciate or depreciate the currency are being considered by the Government. In order to assist the Government in its deliberations and to tender it the soundest advice, the Governor of the Commonwealth Bank and the Treasury - have assembled information of the most confidential character. Another illustration of the extraordinary information which comes into the possession of those responsible for the direction of the nation’s financial policy is supplied by the inquiries that have undoubtedly been made about the £300,000,000 of “hot” or “lukewarm” money which is believed to have found its way into this country recently. I know the difficulties that arise in considering such matters and in making investigations concerning them. People who do not understand these matters expect those associated with the central reserve bank to be able to tell them just how the money came here. A board which included individuals who were selected because they represented interests other than those directly connected with banking would have placed before it information of the kind to which I have -referred, and it would be expected to make recommendations that would be of some practical assistance to our economy. “What assurance has the country that the outside individuals on that board will not make use of the information placed before them, either wittingly or unwittingly, to further their own interests? But apart altogether from the possibility of those individuals abusing their position, it is clear that the national economy will be jeopardized by making such information available to persons who are not responsible to the bank or to the Government.
Even at this late stage I impress upon the Government that in the Commonwealth Bank we have a magnificent institution which, although owned by the people, is not controlled like ordinary departments of the Public Service. Since the bank was removed from the control of a board and has functioned directly under the control of the Treasurer it has operated most efficiently, as is proved by the statistics of its increased turnover and profits. Furthermore, I have not heard any complaints of any kind about the efficiency of the bank. Certainly, the profits which it has made do not find their way into the pockets of investors or speculators, but are returned to the people in many ways.
It is the Labour party’s view that no private interests should be allowed to be associated with the management of the Commonwealth Bank. In fact, it really amazes me that, after ten months in office, the Treasurer and the Prime Minister, who must have had many opportunities to observe the working of the Commonwealth Bank, the efficiency of the officials associated with it, the ability of the men who now operate as the bank’s Advisory Council and the capacity, judgment, standing and prestige of the present Governor of the bank, propose to go out and take somebody off the street to tell the bank and the Government how the economic system of the country should be conducted. I do not use the phrase “ somebody off the street “ in a disparaging sense, but it seems to me almost burlesque that the Commonwealth Treasurer, with his great experience of finance, should suggest that some person associated with private business, who is, perhaps, connected with bed-making or the manufacture of radio sets, should be appointed to advise a great institution on its administration and to assist the Treasurer, who has a far wider knowledge of finance than anybody who is likely to be appointed to the proposed board from outside the bank, in respect of the appreciation of the £1 and what ought to be done regarding other problems of national economy.
The Labour party is against the proposal on principle, quite apart from the other realistic considerations that I have mentioned, because we believe that it is essential that when a great financial institution is operating for the benefit of the people, the officials who are associated with its management should be completely free from any outside financial interests. People with outside financial interests would be put in a position to give out, consciously or unconsciously, financial tips to their associates in the business world. Although they might not do so with the definite object of making money we must realize that in these times, when world currencies are fluctuating or are likely to fluctuate, such information could be of great value to speculators. I read yesterday a statement by a very able economist, who is not associated with the Government, in which he said that appreciation of our £1 to parity with sterling could net speculators £150,000,000. It seems to me that when such huge sums of money are involved it is- not the correct thing bo go out and get builders or manufacturers of radio sets to give the Treasurer advice about how the economic system should function. For those reasons we oppose the introduction into the bank’s affairs of private individuals who would have equal voting strength with the other members of the board, although the bill provides for a casting vote by the Governor. One of the strange aspects of the constitution «of the proposed board is, of course, that it is to have ten members. The Treasurer himself - and I do not intend to make any accusation against the present Treasurer - can very often tip off private people about the policy that he would like them to follow. With a bank board in existence the bank might follow a certain policy on the instructions of the Treasurer, delivered through the medium of the Secretary to the Treasury, and the Government would be able to disown responsibility for the policy because there would be no actual association in the matter between the Governor of the bank and the ‘ Treasurer. For that reason we resolutely oppose any provision in this bill that would permit any private interests or private person to occupy any position of control in relation to the Commonwealth Bank. Such persons might be called upon to make decisions that they were utterly incapable of making reasonably.
I have never been able to see why the man who occupies the position of Treasurer of this country, no matter to which political party he may belong, should not bc considered more capable, in consultation with the Governor of the bank, to make decisions regarding economic matters affecting the whole life of the community, than are people who are brought in from outside for meetings of the board, given a drink and a bit of lunch, and sent home by about 3 p.m., and who can, by their votes on the board, determine, to some degree at any rate, the economic and financial policy of the bank, and its administrative policy in particular. I do not think that anybody could deny that the proposed board will decide the bank’s administrative policy. I shudder, on looking back to the days of crisis in the early 1930’s, to think that this Government intends to re-establish the board system. I shudder also to think that in the event of a national economic crisis such men as those who constituted the former bank board, excellent citizens though they were, would once again be the guardians of the economic life of this country. When I was Treasurer during the early part of the last war the members of the Commonwealth Bank Board had strange ideas about budgeting. When I announced a budget of £100,000,000 they thought the end of the world had come. I should not be astonished if the Treasurer did not soon bring down a budget six times greater than that figure. The bank boards of previous days could have foreseen nothing but utter ruination in a budget of, say, £200,000,000. In fact, I understand that when the budget of £100,000,000 was announced, the board of those days had to have headache tablets in order to get any rest at all at nights.
Mistakes are often made, but there was one action that was not a mistake. I refer to a Labour government’s decision many years ago to establish the Commonwealth Bank. That decision has been completely justified by experience. Another decision that was not a mistake was the decision to abolish the bank board and to place the control of the bank in the hands of a Governor, who would have the advice of the best banking and economic brains available to him. That decision was of immense benefit to this country, and this party will oppose at every stage any attempt to alter it. I particularly refer to clauses 5 and 10 of the bill, which propose, in conjunction with consequential provisions in other clauses, to establish a board similar to the boards that completely failed in the past. I am not speaking only of boards back in the 1924, 1930 and 1939 eras, but of boards that were in existence when I was Treasurer and that were unable to evolve a complete conception of the responsibilities of a central bank in regard to essential financing functions and the economic affairs of the country. For the reasons
I have given we completely oppose those particular clauses.
.- I listened with interest to the Leader of the Opposition (Mr. Chifley) as he stated his case for opposing this bill in the final event, while at the same time being willing to accept the second reading without division. That seems to me an extraordinary point of view to take up and I shall examine it in a few moments. First, however, I should like to say that the major change provided for in the bill corresponds with the major change that I introduced in the Commonwealth Bank’s constitution in 1924. The bill also proposes substantial increases of capital for the bank, and thereby will give it an opportunity to enlarge its functions and play a more beneficent role in the community. When I introduced the change in the constitution of the Commonwealth Bank in 1924 I provided for an increase of the bank’s capital by placing at its disposal half of the Commonwealth Bank Reserve Fund. The remainder of that fund went into the National Debt Sinking Fund. About .two years later I established the Rural Credits Department of the bank, with interest-free capital that came out of the revenue of the Note Issue Department, which enabled tie Rural Credits Department to advance more money at the lowest rates of interest than had ever been known in Australia. In 1945, the present Leader of the Opposition, when he was Treasurer, was good enough to send me a copy of a statement about the actual amount of work that the Rural Credits Department had done. He said that altogether it had made, either directly or indirectly and in association with orderly marketing, advances of something like £280,000,000. In fact, it was the existence of the Rural Credits Department that permitted much of our war-time marketing to be carried out.
It will be recalled that, at the same time, I gave the bank the right to obtain additional capital from the public, if desired, to. the extent of some £20,000,000. In the same way, this measure provides for enlargement of the capital of the bank in connexion with all its activities.
When the Leader of the Opposition brought down his proposals in 1945, when he was Treasurer, I pointed out, quite definitely, that I was in favour of the extension in certain directions of the activities of certain departments of the bank to enable them to function more effectively, although I was totally opposed to his action in trying to nationalize the banking system. The present Treasurer has shown that he has no objection to an increase of the capital of the bank for he has made provision for certain departments to obtain £5,000,000 additional capital during the next five years. I consider that that is a very good thing if we are to have the desired expansion of our economy. There is no question about the bona fides of the parties on this side of the House in respect of the Commonwealth Bank. They have set out to develop the banks. In a speech in 1945, the then Treasurer congratulated me on my efforts to establish the central banking departments of the Commonwealth Bank. Indeed, he quoted the actual terms of my speech in 1924, and said that I had put the case for central banking much more clearly and succinctly than banking authorities had done. He quoted my words with approval, and I shall now quote them again. I said -
The important functions of banking can properly be performed only with the guidance and control of a central bank. Decision and settled policy are essential.
– Why is the right honorable gentleman giving himself a clap on the back?
– I am giving the Opposition the lie to twenty years of propaganda. Everybody knows what the honorable member for East Sydney (Mr. Ward) stands for. The quotation continues as follows : -
Divided counsel and clashing interests ot individual bankers must in the end be fatal to good _ credit _ management, and banking can be raised to its greatest perfection only by the action of a central bank working always for the good of all.
For years that idea was scorned, until Mr. Theodore, as Labour party Treasurer, brought down proposals to create a central bank and make it independent of the ordinary bank. He provided for a board of directors of the character of that which already existed. He provided for members of the board to go out of office every five years in rotation. The original intention was to ensure some continuity by retiring members one by one each year, but Mr. Theodore, whose financial genius the Leader of the Opposition has praised, provided otherwise, I agree with the right honorable member regarding the financial talents of Mr. Theodore, and the higher he praises him the less excusable is his attitude towards this bill, which seeks to establish a board exactly similar to that advocated by Mr. Theodore.
– The Minister wants to cripple the bank.
– That is a lie. I shall answer that allegation with the facts concerning the conduct of the board. The Leader of the Opposition has said that there are three reasons why this bill should be rejected. He stated that there had been a great extension of the activities of the bank under his system since 1945; that it had made great profits and that it had been an economic success since that year. I agree. It is still a great success. It could not fail to be otherwise with the basis that I gave it in 1924, but during the 23 years from 1923 to 1945 what progress was made by the bank? The number of its branches increased from 62 to 280. Its staff increased from 1,800 to 6,300. Its annual profits increased from £400,000 to £951,000, excluding the profits from the note issue.
The right honorable gentleman has made a most unworthy suggestion which implies that anybody who is not a government servant must be dishonest. That is a most serious accusuation. At the beginning of the last war the Government associated bodies of men. from various industries with leading public servants on various boards and they handled hundreds of millions of pounds and there has never been the slightest reflection cast upon their characters.
– There were rackets everywhere.
– The honorable gentleman was in ‘ministerial office for most of that time, so why did not he do something about them? Honorable members on this side of the House have always desired to obtain a balanced viewpoint from every section of the community and I believe that honest men can be found everywhere. Of course, dishonest men are also found everywhere, but to say that it follows that if men are interested in outside commerce they are not to be trusted is to place an unjust stigma on them. I was associated with some of the boards that I have mentioned. For years, men from outside industry with wide experience gave their time to this .country for nothing as members of those boards and I challenge honorable members of the Opposition to point to one action on the part of such individuals which could be regarded as a dereliction of duty or which benefited any concern that they were interested in to the public detriment.
I could have understood it if the right honorable member had made a sweeping objection and said, “ We shall knock this out completely because it is wrong in all its details “. But how can he say that this bill is aimed at crippling the bank when the Government desires to give the institution increased capital? The right honorable gentleman wrote me a letter in 1945 concerning a suggestion of mine for increasing the capital of the Rural Credits Department of the Commonwealth Bank to enable it to function to the greatest possible capacity. I also supported the . present PostmasterGeneral’s proposal that the Mortgage Bank Department should be able to obtain a steady stream of capital to enable people to buy their own homes out of the profits of the note issue. The then Treasurer (Mr. Chifley) said in his letter of 23rd July, 1945, that he disagreed with my propositions and thought that the existing capital was sufficient. I accepted that statement, but the fact is that I did raise this very matter and sought to increase the potential value of this organization to the whole of Australia.
The Leader of the Opposition and his cohorts have said that they will defeat this bill and accept a double dissolution on it if necessary. There has already been a vote on this question. It was taken on the 10th December last. The Government does not mind having another one on it, as well as on the Communist issue, if the Opposition really desires it.
– Why not have a vote on putting, value back into the £1 ?
– The honorable member speaks of putting value back into the £1, but he has been a cover for the Communists for years in this Parliament. They are the people who are destroying the productivity of key industries in such a fashion that the former Prime Minister had to take the most drastic action I have ever seen taken in this Parliament with regard to these matters. He did not even give certain individuals the benefit of the onus of proof.
– Why did one of your colleagues call you the Tragic Treasurer?
– Order ! The right honorable member for Macquarie (Mr. Chifley) was heard in silence. That condition is going to apply to the Minister or some honorable members will not hear him.
– Give the other statesman a go !
– Order ! Who made that statement?
– I am sorry, your honour.
– Leave the chamber !
The honorable member for Reid thereupon withdrew from the chamber.
– The Leader of the Opposition said that he had created an industrial department. He created other departments as well. This bill will authorize the provision of more capital. Honorable members on this side of the House suggested previously that there was not enough capital to handle these matters but now it has been found that the expansion has been greater than was anticipated and therefore the additional capital is necessary.
What will happen if this hill is rejected ? Does the Opposition desire that the housing activities which will be made possible by this ‘bill should be crippled? One of the reasons why this bill is necessary is that the bank may continue with its lending for housing purposes. Is the
Opposition going to throw out this measure for that reason ? That is a question that it will have to answer to people who are homeless and to the public of Australia generally. If honorable members of the Opposition let this second reading go through and want to discus? the bill in committee I am not going to prevent them from doing so. A board handled the affairs of this bank throughout the war years and, I think, until after the armistice with Germany had been signed. During that period it was responsible for raising the sum of £1,500,000,000 in order to meet war debts and it secured the co-operation of the trading banks to a marvellous degree.
The right honorable member for Macquarie spoke of certain regulations which he brought in to deal with the question of special deposits. The fact of the matter is that the present Treasurer, when he previously held that office, secured from the private banks their voluntary co-operation in this regard and they placed their money in the hands of the Commonwealth Bank without any compulsion whatsoever. The right honorable gentleman’s budget papers of 1941 explicitly state that.
Mi-. Chifley. - The Government never borrowed from the private banks during the war.
– No. But it took advantage of the special deposits which were paid by them into the Commonwealth Bank, and I challenge the right honorable gentleman to say that there was the slightest objection from those banks to the impounding of those moneys. They felt that those deposits were useful in raising war loans and combating the spectre of inflation that must arise from the terrific expenditure necessitated by the war.
Mr. Theodore, the financial genius to whom the right honorable gentleman referred, advocated a bank board some fifteen or twenty years ago. He said it was necessary for reasons similar to those which the present Treasurer has given. If that were so then, why should it not be so now? The right honorable gentleman has suggested that ten members are too many. Yet he sat in a Cabinet of nineteen, as I do. Does he think that nineteen are too many? If so, why did he not change that number? There is a biblical saying that in tha multitude of counsellors there is safety. Every point of view should be represented on a board such as this so that justice can be done and decisions made on the widest possible basis and so that the viewpoint of the whole community may be evenly represented.
.- The matter under discussion has brought forth some extraordinary conclusions from the right honorable member for Cowper (Sir Earle Page) who has evaded the main points and discussed side issues. I am not an expert on banking but as an observer of the most important component of our commercial and political life, I feel that time is a factor in regard to this bill which is defeating the ends of the Government. The reappearance of this bill is only made necessary by the fact that it is one of the tin cans that the Government tied on to its own tail at election time, when Government members voiced moving slogans about putting value into the £1 and restoring the Commonwealth Bank Board. No wonder the Treasurer (Mr. Fadden) looks weary after his attempt to embody in the budget the promises which his followers made prior to the last general election and during discussions in this House.
Under this bill an attempt is being made to replace the present form of control of the Commonwealth Bank by board control. What is wrong with the present method of control? As the Leader of the Opposition (Mr. Chifley) pointed out, the present control is most efficient, it has survived the demands of war arid reconstruction and has worked smoothly. The report of the Commonwealth Bank, in the words of the Leader of the Opposition (Mr. Chifley), reveals ti romance of finance and commerce. The bank has performed such sterling service to the Australian people under its present administrative set-up that there is no reason why its control should be changed, It is reasonable to aver that if a thing has been proved to be good and has shown its value throughout the years it should be retained. Institutions that have failed and died are not resurrected. It is well known from bitter experience, especially during the ‘thirties, that the performance of the Commonwealth Bank under its previous administration was incompetent. Its actions have been recorded in the dark pages of the history of the depression. Its control in those days was not imaginative and flexible enough to be able to take reasonable risks or to gamble on Australia Unlimited. I fail to understand why the right honorable member for Cowper (Sir Earle Page) should be so fulsome in his praise of the proposed bank board when he is aware that a similar body was part of a system which in the past was an abject failure. It did not work, and the most that it can claim was, according to Australian standards, the very smallest measure of prosperity. Honorable members would do well to remember the lack of imagination of the board led by the late Sir Robert Gibson.
For no reason other than to honour a welter of election promises, the Government is rushing this bill through the Parliament, and would hazard a double dissolution on the matter It would go to that length .to restore a system that has already been discredited. The only yardstick of future performance is past history, and the past performance of this system of administration was disastrous; particularly so in the days of the depression. On the other hand, the performance of the present administration has been conspicuously good. It has played a great part in the progress of Australia during the last few years. If the Government fears socialism, or a bank that smacks of socialism, why does it hug certain socialist principles so closely to its bosom in these days? A tax on wool and projected controls in other directions prove that the Government is attempting to bolster with these principles the outworn capitalistic system, which is crashing to the ground. Honorable members on this side of the House are honest enough to say that no matter how one feels about certain measures they are essential to Australia’s stability. The perfervid old gentlemen in the suburbs of Sydney who take their opinions from the Sydney Morning Herald, and who fulminate in imitation of their favourite politicians, believe that this hank should have a “businesslike “ control. The administrators employed by the Government are doing ti magnificent job and the final authority still rests with the elected representative of the people, the Treasurer. The Treasurer has a very difficult task at any time no matter what government is in office. The nation believes that it can place more trust in the Treasurer than in any representative of some outside interest who might be foisted on the bank board. Men in thu street cannot learn all about banking by some magic, anil they will be advised by the same officials as are advising the administration at present; so where will the difference lie in that regard? All that the Government i.» trying to do is to turn the clock back and re-establish an out-moded system. The statement of the right honorable member for La Trobe (Mr. Casey), “We shall take them off the street; these fellows get to know these things”, amazed me. I was appalled when I heard him say that, but I have since learned that it is characteristic of him, and that he does not think deeply enough before he makes statements.
The bank board is apparently to be a collection of businessmen. It, is said that it will be a representative cross-section of the. people. If the Treasurer will then be. as he is now, the .final arbiter of the bank’s policy, and if the bank is to be controlled by very efficient public servants, I say that there will be no lack of representation. The Government is seeking special and in some instances sinister representation. It is the judgment of the Opposition, but not of history that a bank board will not work in the best interests of the people of this country. Is the institution of a board made more valid because the late Mr. Theodore considered a bank board to be a good idea? My grandmother thought that it was the height of fashion to wear a bustle, and she looked very charming when she did wear it, but these are modern tiroes, and modern instruments must be used in our modern institutions. The bank to-day needs no bolstering by men taken off the street; it is a great institution and is served by brilliant men. We do not want men on the board who have made their fortunes in business; they may he good majorsgeneral, but they are failures as privates. The right honorable member for Cowper said that the Opposition had protested against only one portion of the bill. It is true that only one portion of it is exercising our minds, because three-quarters of the bill embodies the ideas of the Opposition, and I dare say that the Treasurer would be the first to admit that to be the case. This legislation was introduced only to implement a promise made no the electors. It is wrong for the right honorable member for Cowper to say that the principles embodied in this bill, with the exclusion of the clause that we want eliminated, are not those that we have espoused. With all his charm and eloquence he tried to persuade the House that everything was all right in the past and that again everything will be for the best in this best of all possible worlds. He says that £5,000.000 will be allocated to special sections of the bank and that there will be six banks within the one institution. That has been Labour party policy for the last eight years.
I suggest that this bill is merely a bait to ensnare the people, and that it will not strengthen the bank in the least. It is fundamental nonsense and can be described as a sprat to catch a mackerel. When one remembers the debates that have occurred in this chamber one realizes how tremendous has been the success of the Commonwealth Bank. It is curious that the right honorable member for Cowper should put himself forward as an authority on financial policy because he is known as “ the tragic treasurer “. He was an incompetent Treasurer, as history has proved He must take some of the blame for the debacle when the Commonwealth Bank Board was unable to function because it did not have enough faith in the spirit of Australia during the depression. The story of the bank and of the depression has burned itself into the minds of the Australian people so deeply that I am sure that they will be reluctant to support the Government’s proposals. I have proved by logic that if a thing was bad in the past the chances are that it will be bad in the future, and therefore should not be risked.
The next proposition is that the present form of control has been very successful, and therefore no reason now exists why the banking system should be altered. The Government is not concerned about the socialist aspect of the people owning their own bank; it welcomes that as an additional bolster of our crazy system. If the Government is driven to these lengths to stop inflation then it is certainly tottering. I ask honorable members to consider what would happen if the controls imposed by the Commonwealth Bank were removed. The people interested in the Commonwealth Bank try to explain why businessmen should be put in control. There was such a form of control once, and the nation nearly lost the bank. The “phantom five” members of the board, as they are humourously spoken of, are still unknown. Is the Government going to appoint a great wool man or a great financier? Who are these people who have been hiding their lights under bushels during the difficult war and postwar periods? What is the Government’s purpose, and why is it trying to show that the present system is not efficient?
There is no validity at all in clause 10. This country must have a strong banking system, able to withstand onslaughts from abroad and impacts from inside Australia. The Commonwealth Bank has shown that it can do that. This Government which is just beginning, or just concluding, its career, should realize that in modern times so-called bureaucracy must play a fairly large part. The bank officials are efficient,, and should therefore be left alone. We do not know whether the next administration will be efficient because you cannot make a banker out of a businessman by act of Parliament.
Government supporters interjecting,
– Whenever I hear a guffaw from the honorable member for Henty (Mr. Gullett), I pay tribute to Jonathan Swift, who invented the term “ Yahoo “. This is a serious business, and we shall fight the Government on any ground it chooses, in the House or on the hustings. There should be no Commonwealth Bank Board because such a system has been a disastrous failure in the past and might again fail and bring disaster in the future. There is no reason for clause 10 except that the Government parties are committed to it because it was one of the promises made to the people during the heat of their last election campaign. I venture to say that they wish that they had never made this promise.
– I rise to order, Mr. Deputy Speaker. Has the honorable member for Reid (Mr. Morgan) been suspended from the sendee of the House? If so, for how long has he been suspended ? When may he re-enter the chamber? Can he come back now? If he was suspended, what was the reason for his suspension ? If he may come back, under what conditions may he return? What rights has he? If you have not the information I seek, will you obtain it?
– As Mr. Speaker took the action in the matter to which the honorable member for Eden-Monaro (Mr. Fraser) has referred, the honorable member for Reid (Mr. Morgan) will have to obtain Mr. Speaker’s permission to return to the chamber.
– May I raise a point of order on the same matter, Mr. Deputy Speaker ?
– No; I have given my ruling on it.
– I want to obtain an explanation of a certain matter.
– After the Chair has given a ruling on a point of order, it cannot be further debated. The honorable member has been here long enough to know that.
– Will you, Mr. Deputy Speaker, give me guidance?
-I was not present in the Chair when the incident to which reference has been made happened, and the matter rests between Mr. Speaker and the honorable member concerned in it.
– But you do know the Standing Orders, if I may be so presumptuous as to say so, otherwise you would not have given a ruling.
– Well, the ruling has been given.
– Whilst I admire members of the Opposition as political tacticians, I deplore their lack of honesty in their approach to this measure. In this debate they are following the pattern that they have followed in attacks they have made on certain other bills. They concentra’te on one, or two, provisions in a measure to the exclusion of its other provisions. In this instance they have picked out for attack the clause that provides for the establishment of a board to control the Commonwealth Bank. The history of Labour’s opposition to board control of the Commonwealth Bank goes back to 1945, when the Chifley Government amended the Commonwealth Bank Act in order to abolish the board that controlled the bank at that time. In the interim honorable members opposite have been completely opposed to control of the bank by a board. The average person will have no difficulty in perceiving the reason for Labour’s action in that respect. The banking legislation that was passed by the Chifley Government in 1945 was> a soften ing-up process in preparation for the attempt that Labour made in 1947 to nationalize the private banks. Since 1945, the Commonwealth Bank has been controlled by the Treasurer of the day. and that system of control will continue until this measure is passed. The Banking Act 1947, under which the Chifley Government sought to nationalize the private banks, had rather a sorry history, and not only recorded another discreditable page in the history of the Labour party, but also discredited the right honorable member for Barton (Dr. Evatt) personally.
– In what way was it discreditable ?
– Because of the fact that, although the Chifley Government in which the right honorable gentleman was Attorney-General, had at its disposal the legal resources of the Commonwealth, that legislation was held to be invalid by the High Court and by the Privy Council. One object of this measure is to repeal the Banking Act 1947, as the leaders of the present Government parties at the last. general election promised they would do. Those leaders in their policy speeches promised -
If returned to office, we will repeal the Bank Nationalization Act.
We propose: -
To set up under control by Parliament, a small Board of Directors of the Commonwealth Bank, of which the Governor of the Bank shall be Chairman;
To provide that if the Treasurer disagrees with the Board’s policy, he shall refer the matter to Parliament for its decision. That is, we shall restore the sound principle that great financial decisions shall not be secret, and that the elected representatives in Parliament shall be able to control them.
To provide some much-needed check to inflation of currency, we shall restore Parliamentary control over the Commonwealth note issue.
The Government is seeking to honour that promise under the measure now before us.
– I rise to order, Mr. Deputy Speaker. The honorable member for Reid (Mr. Morgan), who was asked by Mr. Speaker to leave the chamber earlier in the day, has returned. Has he obtained the permission of Mr. Speaker to return? If not, will he be allowed to take his seat at this juncture?
– I ruled earlier that the matter was one between Mr. Speaker and the honorable member for Reid. If Mr. Speaker asked the honorable member for Reid to leave the chamber, I now ask that honorable member whether he has Mr. Speaker’s permission to return.
– I did not think that it was necessary for me to obtain that permission. I was merely asked by Mr. Speaker to leave the chamber, but for what reason I do not know, because I was really supporting the ruling that Mr. Speaker had given. Mr. Speaker must have acted under a misunderstanding. Some other honorable member must have made the remark that prompted the action that Mr. Speaker took.
– As I was net in the chair when the incident occurred, I do not know whether the honorable member for Reid was suspended or was merely ashed to leave the chamber.
– No suspension was mentioned.
– If the honorable member for Reid was not suspended he has a right to remain, but if he was suspended he must leave the chamber.
– I think that Mr. Speaker made a mistake. I expressed regret for anything that I was supposed to have said and I left the chamber purely as a matter of courtesy to the Chair.
– As the honorable member for Reid has expressed regret and has assured me that he was not suspended, he may remain.
– We must always remember that financial decisions made by great financial institutions such as the Commonwealth Bank affect many thousands of people. Therefore, they should be made not by a single individual but by a number of individuals who, as members of a board, would have the opportunity to examine thoroughly all problems that come before them. Board control of the Commonwealth Bank will restore to the people control of not only the trading operations of that institution, but also the control of the central bank in this country. In 1924 the Commonwealth Bank was placed under the control of a board by the Bruce-Page Government. At that time, central banking technique was something new to Australia and was comparatively unknown to banking systems in Europe. However, that technique was developed over the years, including a period of world depression. The system of board control of banking institutions did much to co-ordinate banking policy with Government policy. During World War II. the Commonwealth Bank Board controlled the financial system of this country with remarkable success despite the grave difficulties that arose under wartime conditions. It cannot be said that it failed in any way whatever in carrying out its tasks which included exchange control, loan raising and the financing of the marketing of various commodities.
Until 1945, no. contention arose with respect to the system of board control of the Commonwealth Bank. It is generally recognized overseas that the management of central banks should be entrusted to boards. For instance, the Bank of Canada and the reserve banks of South Africa, India and New Zealand are controlled by boards. Furthermore, although the present British Socialist Government enacted legislation in 1946 to nationalize the Bank of England that institution is still controlled by a board. In most countries it is recognized that if central banks are to be enabled to function efficiently they must be controlled by boards. It is realized that the monetary and financial system of a country cannot be operated successfully except in accordance with a continuing financial policy. Periodical changes of financial policy would have disastrous effects upon a country’s economy. For that reason the Government proposes under this measure that certain permanent public servants who are members of the existing advisory committee will be members of the board to control the Commonwealth Bank. The Governor of the Commonwealth Bank is to be the chairman of the board and the Deputy Governor is to be Deputy Chairman of the board whilst the Secretary to the Department of the Treasury and seven other persons are to be members of it. Of the last-mentioned, two will be public servants who have been named and the other five will be drawn from outside spheres with the proviso that none of them shall be representative of any sectional interests and shall not be associated with any other banking institution. Any one who suggests that it is not wise to obtain the services of such persons to act in this capacity is mistaken. The board as the Government proposes to constitute it will maintain a balance between persons who are familiar with general banking practice and persons who will be capable of safeguarding the complex interests of the general community. Emerson ‘ once said that no single man could be as wise as a group of men after penetrative discussion. The measure provides that if the Government disagrees with a decision of the board, the view of the Government shall prevail. I shall read some of the provisions of the bill for the purpose of refreshing the memories of honorable gentlemen. Proposed new section 9a is as follows: - (1.) The Bank shall, from time to time, inform the Government of the monetary and banking policy of the Bank. (2.) In the event of a difference of opinion between the Government and the Bank as to whether the monetary and banking policy of the Bank is “directed to the greatest advantage of the people of Australia, the Treasurer and the Board shall endeavour to reach agreement.
That is the first step in the procedure that will be observed if a difference of opinion shouldoccur between the Treasurer and the board. The next two sub-sections read - (3.) If the Treasurer and the Board are unable to reach agreement, the Board shall forthwith furnish to the Treasurer a statement in relation to the matter in respect of which the difference of opinion has arisen. (4.) The Treasurer may then submit a recommendation to the Governor-General, and the Governor-General, acting with the advice of the Federal Executive Council, may, by order, determine the policy to be adoptedby the. Bank.
That is to say, the final control of banking policy will remain in the handsof the government of the day. I do not believe that any member of the Labour party can honestly state that that is not a fair and reasonable way of dealing with the situation. The policy of the Government provides for the General Banking Division to continueits operations in fair competition with the private trading banks. One of the principal functions of the so-called welfare group of departments including the General Banking Division of the Commonwealth Bank will be to assist homebuilding. The specific purpose of the Rural Credits Department is to assist to increase the productive effort of the country, particularly in respect of food and other primary products. The Mortgage Bank Department arranges long-term loans for primary producers, and the. Industrial Finance Department, which, incidentally, has been in existence for only four years, has been definitely of great benefit to the industrial section of the community. Proposed new section 64 relates to the capital of the Rural Credits Department, and reads -
The capital of the Rural Credits Department shall be the aggregate of -
the sum of Two million pounds, being the amount of the capital of the
Rural Credits Department immediately prior to the commencement of this section ; and
such sums as are paid to that Department in pursuance of sections fifteen and forty-seven of this Act.
Proposed new section 76 provides for the capital of the Mortgage Bank Department, as follows: -
The capital of the Mortgage Bank Department shall be the aggregate of -
the amount of the capital of the Mortgage Bank Department immediately prior to the commencement of this section ; and
b ) such sums as are paid to that department in pursuance of sections fifteen and forty-seven of this Act.
Provision is made in proposed new section 97 for the capital of the Industrial Finance Department, as follows : -
The capital of the Industrial Finance Department shall be the aggregate of -
the sum of four million pounds, being the amount of the capital of the Industrial Finance Department immediately prior to the commencement of this section; and
such sums as are paid to that Department in pursuance of sections fifteen and forty-seven of this Act.
The Government definitely recognizes the value of retaining the competitive trading section of the bank, and the granting of that additional capital to the various departments is proof of its willingness to ensure continuous and fair competition. The Government has strong objections to the proposal of the previous Government to nationalize banking, because such action would stifle the competition that is now provided by the private trading banks. The additional capital that will be provided for the various departments of the Commonwealth Bank willbe obtained from the profits from central banking business and from the note issue, and it will assist, in a certain measure, to overcome our present housing finance difficulties. The proposed new bank board will have discretion to transfer an amount of £500,000 annually to the trading hank section from the profits of the central bank, and an additional £500,000 a year from the profits of the note issue. In fact, the board will have discretionary power to provide up to £1,000,000 annually for the various departments of the Commonwealth Bank.
Over a period of five years, those departments may receive an additional £5,000,000 in the following amounts: -
I am sure that members of the Opposition agree that additional capital should be made available in order to permit the various sections of the Commonwealth Bank to continue trading operations on a competitive basis. The provisions of this bill will definitely strengthen the Commonwealth Bank as a central bank and as a part of the commercial banking system of Australia.
– I oppose the bill, because it seeks to re-introduce into Australia’s banking system a method of controlling the Commonwealth Bank that operated during those tragic years of the financial and economic depression of the early 1930’s. That method of control was largely responsible for those tragic years.
– It was completely responsible for them.
– I agree with the honorable member for Burke (Mr. Peters). During the depression, the Commonwealth Bank - the people’s bank - was handed over to the private banking interests and to other vested interests in order that they might have an opportunity to grow fabulously rich upon the impoverishment of the multitudes in this community. As one who, like many thousands of Australians, suffered from that terrible reign of private enterprise over the Commonwealth Bank, I am able to speak with authority about the ordeals, the privations and the poverty that were caused by that form of control over the people’s central bank. I recollect very clearly the efforts that were made by the Scullin Labour Government during the years 1929-31 to provide for the people an opportunity to live happy and useful lives, and to engage in productive occupations. However, the Commonwealth Bank, being controlled at that time by the direct representatives of the private banks, was in a position to dictate its terms to the Scullin Government, and to tell it how to administer the affairs of
State. The Commonwealth Bank Board at that time, consisting as it did of the representatives of vested interests, was in the happy position of becoming, in effect, the government of the country. The people who elected their representatives to this Parliament discovered that honorable members were quite impotent to give effect to a policy to promote the welfare of the nation.
No one, not even the Government, can point the finger of scorn at the way in which the Commonwealth Bank has been controlled by the Governor since the abolition of the board. No one who holds a responsible position has been able to cite an instance to show that the Governor has been inefficient, corrupt or incapable of administering the bank in the interests of the people. Why, then, does this Government desire to re-introduce the form of control that was responsible for the financial and economic depression of tho 1930’s? The Governor has carried out his duties ably and loyally to the people and to the Government.
– The private banks put money into the election coffers of the Government parties.
– I suggest, in all seriousness, that the Government probably became so deeply indebted to the private banks, as a result of the enormous amount of money that they expended on behalf of the Liberal party during the last general election cam,paign, that it now realizes that unless it re-establishes the board, and places the private banks in control of the people’s bank, they may expose it. Some one who is associated with the private banks might, in desperation, “ lift the lid off the can “ and tell us exactly what did happen during the last general election campaign.
– The Minister for National Development (Mr. Casey) visited England especially to obtain from private banking interests in that country an amount of £100,000 for the purpose of defeating the Chifley Labour Government, and replacing it with an administration that could represent very adequately the interests of private bankers and other capitalists in England and elsewhere, to which the right honorable gentleman owes much of his political allegiance. So far as I am aware, he ha9 never denied that he went abroad for the purpose of receiving a hand-out of £100,000.
– I have denied it until .1 am sick of denying it.
– I am informed that, sometimes, members of the Liberal party receive funds from people on the distinct understanding that they do not tell any one, even the Liberal party, about the matter.
– That does not happen in the Labour party, does it?
– Order ! It is always recognized in the Parliament that an honorable -member shall accept a denial by another honorable member. I ask the honorable member for Hindmarsh to do so on this occasion.
– Very well ! I accept the right honorable gentleman’s denial. I invite the Government to take the House into its confidence, and announce the names of the persons who will be appointed to the proposed new bank board. The bill provides that the board shall consist of ten members, of whom three are mentioned, namely, the Governor, the Deputy Governor and the Secretary to the Department of the Treasury. Probably only a few senior Ministers know whom the other seven members will be. Some time ago, I challenged the Treasurer (Mr. Fadden) to deny that Professor Hytten would be appointed to the board. Honorable members will recall that the Hytten economic plan provides for a permanent pool of unemployed, equivalent to 10 per cent, of the number of people who are able and willing to work, as a threat against those in employment, so that they may be ground down to the slave-like conditions that were prevailing before the outbreak of “World War II. Up to date the right honorable gentleman has not given rae a satisfactory denial that Professor Hytten is to be appointed to the proposed new Commonwealth Bank Board.
– No thought will be given to the appointments until the Opposition accepts the bill. Then consideration will be given to the appointment of the best men in Australia.
– Did the Treasurer get an application from “Mrs. ‘Obbs”?
– I have received 1,000 applications, some of them from Labour supporters, including former members of this House.
– What happened when a board was in control of the bank previously? The board decided that it would send to the United Kingdom and obtain from the Bank of England, which was then a private bank, the services of Sir Otto Niemeyer.
– Mr. E. G. Theodore was responsible for bringing Sir Otto Niemeyer to Australia.
– The Treasurer is muddled on that point. Mr. E. G. Theodore was not responsible for Sir Otto Niemeyer coming to Australia; the Commonwealth Bank Board was responsible.
– That is not so. Sir Otto Niemeyer was invited to come to Australia by Mr. Theodore, who was then the Treasurer.
– It is of no use for the right honorable gentleman to say that Mr. Theodore was responsible. The only persons who were responsible were the members of the Commonwealth Bank Board, who, at the behest of the private banks in Australia, directed the Labour government of the day to accept from Sir Otto Niemeyer the plan that he was to prepare for its guidance.
– The Premiers’ plan was subscribed to by six Labour Premiers.
– Yes, after the Commonwealth Bank Board had given a direction to the Commonwealth Government. This argument is becoming rather amusing because the Treasurer has become so excited that he is continually buttoning and unbuttoning his coat and jumping about in his seat. If he will be calm and dispassionate for a few minutes, he will recollect that what happened was that the Commonwealth Bank Board said to the Labour Government of Australia, in effect, “ Unless you accept the plan that we are going to prepare, which will introduce a 10 per cent. wages out, and unless you hand over complete control of affairs of state to the private banks of Australia, we will not give you any money with which to carry on the work of government “. Because the Labour Government did not have control over the Senate at that time, it was not in a position to reject that ultimatum. It had to accept the terms that were laid down.
That is why I am opposed to the reestablishment of the Commonwealth Bank Board. No government would be able to rid itself of the incubus unless it had control of both Houses of this Parliament at the one time.
– The Labour Government at that time could have precipitated an election, could it not?
– Yes. One of the greatest mistakes made by the Labour party in its entire history was its decision not to have an election on that issue., Had it gone to the people, there can be little doubt that it would have been returned to power with an overwhelming majority in each House of the Parliament. Then it could have struck off the shackles of the Commonwealth Bank Board.
– We shall have an opportunity to hold a general election very shortly.
– I hope so. If there should be an election soon, thE Labour party will be placed in a position to undo some of the damage that has been done by this Government in its short term of office. For example, we shall be able to guarantee to the primary producers that there will be no appreciation of the Australian £1, an important issue in relation to banking. Furthermore, we shall be able to guarantee that the stupid proposal to impose a wool tax as a means of arresting the inflation of the last eight or nine months will not be carried into effect.
-Order! The honorable member should refer to the bill.
– The Treasurer’s interjections were mainly responsible for my departure from the subject of the bill. I shall return to it. The honorable member for Darling Downs (Mr. Swartz), in trying to say some word! of praise for the actions of the Commonwealth Bank Board before it was wiped out of existence, referred to its conduct during World War II. The honorable gentleman overlooked the fact that the members of the board and the people whom they represented had more to lose during the war than had any other section of the community. They acted decently only because they knew perfectly well that otherwise the Government might be unable to defend their wealth and their positions of power. I venture to say that, had the Labour Government not had the foresight to remove those men from the control of the people’s bank, their behaviour to-day would be entirely different from their behaviour when their positions and their wealth were in jeopardy during the war.
– What about their lives?
– Their lives also were at stake, but the people whom the bank board represented in the main have never sacrificed their lives in time of war. They have relied upon men like the honorable member for Henty (Mr. Gullett) and other honorable gentlemen who have done so much in critical times to defend the country. I have never yet known the son of any banker in a high position to do very much for his country in time of war. There may be some who have fought and I do not deny that there are, but most of the people who have done the fighting have been those whom members of the Commonwealth Bank Board sought to destroy and impoverish in peace-time.
I do not propose to say anything further about the bill at this stage. Instead, I shall listen to the Minister for National Development (Mr. Casey), who, I understand, has a very outstanding contribution to make to the debate. I shall have a great deal to say about the proposal to re-establish the bank board and about various other aspects of the bill in the committee stage. Many clauses require careful explanations, in the absence of which I shall have many pertinent remarks to make. In conclusion, I remind the House that the Opposition has one glorious thought that will be shared with it by the people of Australia, particularly those who suffered during the last economic depression, which was forced upon them by the Commonwealth Bank Board. That thought is that the bill will not become law. All that the Government and its supporters may say about the measure will not be worth twopence worth of snuff because the Senate, fortunately, is in the hands of a decent, sensible party, which will ensure that a measure designed to place the people’s bank under the control of private interests will not be passed.
– This bill was introduced six month ago in April of this year. It was debated then at very great length in this House and at equal, or even greater, length in the Senate. It has been re-introduced by the Treasurer (Mr. Fadden) at the first opportunity. Some of the debates in this House become very wearisome. This is one of them. Everything that could possibly be said from the Opposition point of view has been said, I believe, at least 50 times. Members of the Opposition are merely treading water and going up and down in the same place. I listened to a great deal of the debate that took place earlier in the year and I have heard some of the speeches in the present debate. I have heard no new arguments on this occasion, and I believe that the public has become completely sick and tired of the repetitious discussion. I believe that the public is, in a very large measure, favorable to the proposals in the bill. Therefore, the sooner the bill is passed by this House, and, I hope, by the Senate, the better will it be for Australia.
The Leader of the Opposition (Mr. Chifley) used the same arguments to-day as he advanced on an earlier occasion. He concerned himself largely with advocacy of one-man control of the Commonwealth Bank as opposed to control by a board. The right honorable gentleman is a very recent convert to the principle of one-man control. That was not the policy of the Labour party until he introduced it. It was not the policy of Mr. Scullin in the late ‘twenties and it was not the policy of the present Leader of the Opposition in the ‘thirties.
– The right honorable gentleman has said all that before.
– Yes, and I propose to say it again because I have listened to such wearisome reiteration from the Opposition that I think that some of the facts ought to be rubbed home. The Leader of the Opposition was a member of the royal commission that inquired into the monetary and banking systems in Australia in the late ‘thirties. That royal commission made a series of recommendations, one of which was to this simple effect -
The present method of government of the Commonwealth Bank is by a Board, appointed by the Commonwealth Government, and consisting of a Governor, the Secretary to the Treasury, and six directors . . . We are of opinion that this method of government is generally satisfactory.
The Leader of the Opposition subscribed to that conclusion.
– No. That was only a majority report.
– I repeat that the Leader of the Opposition subscribed to that conclusion. He certainly made reservations in other directions, and made them very pungently, but even in those he stated -
I realize, however, that a government-owned central bank, with ample powers, whose policy is determined and directed wholly toward furthering the interests of the community by men of capacity and courage, is a most important feature of any banking system.
That was an implied personal sponsoring of the bank board system.
-so£ - Not at all.
Mi-. CASEY. - It cannot be considered to be otherwise.
A great deal has been said about the horrors - and they were horrors - of the depression that started at the end of 1929 when the Commonwealth Bank Board was presided over by Sir Robert Gibson.
– The honorable gentle man and his colleagues backed the board’s policy at that time.
– So did Mr. Scullin.
– He had no alternative.
– He did have an alternative, but he rejected it. Sir Robert Gibson’s period of appointment as chairman of the Commonwealth Bank Board came to an end about half way through Mr. Scu’llin’s term of Prime Ministership. Had he been responsible for the horrors that are visited at the door of the Commonwealth Bank Board by members of the Opposition, the simple expedient that Mr. Scullin could have taken was to dismiss him, in effect, by failing to re-appoint him. As a matter of fact, Mr. Scullin went out of his way to re-appoint Sir Robert Gibson, not for a short period but for a term of seven years. If actions mean anything, I submit that Mr. Scullin showed that he did not disapprove of Sir Robert Gibson or of his policy. I believe, therefore, that the apparent conversion of the Leader of the Opposition (Mr. Chifley) to the conviction that the control of the central bank should not be vested in more than one individual is of very recent origin, and, as I have already pointed out, that conviction is not shared by the Labour party in any other country, or, indeed, by any democratic government. The central bank in every democratic country is governed by a board of directors. I have in mind particularly the Bank of England. Notwithstanding the fact that Labour has governed England for a sensible period, no suggestion has been made that the control of the Bank of England should be taken from the present board. The only conclusion that we can draw from those facts is that either the Labour party in every other country is wrong and the Labour party in this country is right-
– That is correct.
– That is a very modest claim. The Labour party in Great Britain has some prestige-
– The right honorable member does not believe in its policy.
– That is not relevant to the point that I am making. I repeat that the Labour party of neither Great Britain nor New Zealand is wedded to the conception of one-man control of its central bank. It follows, therefore, that either the Labour party in other democracies is wrong and the Labour party in this country is the only one that is right, or that any man in this country who is not a public servant is dishonest and is unfit to take his place on the board which is to direct the central bank. Those are the only two inferences that can be drawn from the right honorable gentleman’s argument, and, I suggest they are complete nonsense. The Labour party in this country is not the only repository of wisdom and political sense in the world. Furthermore, the implied slur on all sections of the community other than public servants is wholely undeserving and dastardly-
– They certainly look after their own interests.
– I throw that observation back at certain honorable members opposite. This matter has already been debated at great length and I do not propose to take up much more of the time of the House on the subject. I believe that the public of Australia has entirely lost interest in the matter. It wants to see the Government’s intentions translated into action now.
One honorable member opposite made the point .that time is a factor in this matter. He was speaking of the handicap which the bank is suffering through the lack of capital to increase the activities of its various departments. The original measure was introduced six months ago, and since that time the bank has been deprived of any additional capital.
– In what way is that affecting the bank?
– The bank is obliged to tighten up its policy on advances because of the senseless delay caused by Labour opposition. That is why time is such an important factor. Those who cannot obtain finance to build homes and those industries that cannot obtain advances to expand their enterprises have only one body of people to thank for their frustration, and that is the body led by the Leader of the Opposition. During the last six months the lending policy of the bank has continually contracted.
– Under direction from the present Government.
– It has contracted not because of any direction from the present Government, but because its finances are running out.
– How much extra capital would have been made available to the bank if the bill had been passed?
-(Hon. Archie Cameron). - This running fire of interjections must cease. The honorable member for Wills (Mr. Bryson), who has been interjecting consistently, is not speaking from his place in the House and is entirely out of order. I do not want to have to deal with honorable members, but they must cease interrupting the Minister.
– I do not think that there is anything else that I can usefully add to my remarks. In my opinion, the Opposition has not made out a substantial case against the measure, and I also believe that the time-wasting tactics employed by the Opposition are operating to the disadvantage of the whole community.
Sitting suspended from 4..51 to 8 p.m.
.- The reintroduction of this bill shows the necessity for constant vigilance on the part of those who support the continued existence of the Commonwealth Bank in its present form, in order to ensure that the bank’s splendid achievements since its inception shall not be nullified. Ever since this bill was mooted, some months ago, I have been puzzled about why the Government considers it necessary. I recognize that some of its minor clauses are not controversial, and, indeed, the Labour party supports them. But the main purpose of the bill is embodied in clause 10 which, I think, must be very vigorously resisted by the Labour party if it is to remain the friend of the Commonwealth Bank. The most important provision in the bill deals with the appointment of a Commonwealth Bank Board and that particular clause will meet with vigorous opposition not only from the Labour party in this House, but, I am certain, from the people of Australia. The Government has been particularly shrewd in its approach to the bill, because it recognizes the esteem in which the bank is held by the people. The Government does not like the Commonwealth Bank as it is now constituted because it offers much too severe competi tion to the private hanks that are the friends of the Government. But the Government has not been game to launch a frontal attack upon the bank, because it realizes that it would he politically unwise to do so. Members of the Liberal party, over a course of years, have admitted the efficiency of the bank, and there is not the slightest doubt that if the Government made a deliberate attempt to whittle down the powers of the bank in a frontal attack the political repercussions would be distinctly unpalatable to it. The Government therefore has decided to adopt Trojan horse methods in order to destroy the present importance of the bank in the economic and political life of this community.
By placing the bank under the control of a board the Government can finally achieve its objective, which is the stultification of the bank’s present activity. The Labour party makes no apology for its profound interest in the bank. Had there not been a Labour party there would never have been a Commonwealth Bank. The Labour party recognized as long ago as 1907 that if the country was to progress, control of the monetary policy of the community should be in the hands of the people’s bank. In 1907, therefore, provision for the establishment of the Commonwealth Bank was added to the platform of the Labour party in the federal sphere. We recognized in those far-off days that the control of credit literally meant the power of life and death over hundreds of thousands of Australians, and would decide whether the queues of unemployed would be long or short. Not only did wo recognize that fact but so also did the present Minister for Health (Sir Earle Page), who spoke earlier to-day and admitted that when he introduced his famous, or infamous, Commonwealth Bank Bill in 1924, he had said-
A very great power is exercised by the banks in their control of credit, in their control over business, and in their effect upon wages as well as other conditions.
Nevertheless, in 1924 he placed the bank under the control of a board whose administration undoubtedly affected the economy of the country for very many years. The Parliament has never enacted any legislation more important than the Commonwealth Bank Bill 1911. When the legislation was first introduced into the Parliament the bank was intended to assist the ordinary people in the financing of ordinary business transactions. But it had not been very long established before it was realized that, by its control of the monetary policy, it profoundly affected the nation’s destiny. The value of the bank was amply indicated during the progress of World War I., because it became the foundation stone of the nation’s financial structure and occupied a key position in the -financial policy of the Commonwealth. Indeed, it is difficult to imagine how we could have financed World War I., but for the Commonwealth Bank. It is definitely a truism that the importance of the Commonwealth Bank has grown year by year to such an extent that under present conditions Australia’s economic progress is bound up with its progress.
During the debate in 1911 it was asserted by the antagonists of the bill, the Liberal party of that era, that the Labour party, in establishing the bank, intended among other things to confiscate the savings of the people. But time has proved the falsity of that statement, because the policy and legislation of the Labour party on banking matters have always been intended to safeguard the interests of the people. As a matter of fact in the Banking Act 1945, for the first time in the history of this Commonwealth, we had a provision in a federal act of Parliament that guaranteed the savings of the people in all banks, both public and private. But in 1911 the predecessors of the present Liberal party were opposed to anything of that nature at all, and opposed the establishment of the Commonwealth Bank. . They suggested that the Commonwealth Bank should not control the note issue, and some of them even went so far as to say that the Commonwealth’s bank notes, which they termed “ Fisher’s flimsies “, would in two or three months time be purchasable on any street corner in Australia for 5s. However, we recognize to-day that those statements were the height of absurdity. What I have said demonstrates that Labour’s attitude towards the Commonwealth Bank met the same opposition in 1910 and 1911 as it is meeting to-day.
The Liberal party has long since recognized that it must accept the existence of the Commonwealth Bank, because public opinion is in favour of it, hut that acceptance has been given with a very bad grace and that party has utilized every opportunity to snipe at the bank as best it can. The Labour party makes no apology for opposing the reestablishment of the bank board because it believes that history has an unfortunate habit of repeating itself, and the history of the previous bank board that was established in 1924 by the Bruce-Page Government, from the date of its inception to its demise in 1945, makes very sorry reading for any supporter of banking progress. During the period of the last war the bank operated under the National Security Regulations, but with the exception of that period its history is indeed a tragic one. The Commonwealth Bank Board of that period can be indicted on two main counts ; first, that it did not encourage trading activities ; and secondly, that when serious economic and financial .problems confronted this nation, it decided to dictate, and did very successfully dictate, to the elected representatives of the people. In relation to the first indictment that the board did not encourage the establishment of new business, I know of at least twenty examples in one locality of businessmen who were banking with the private banks in the 1930’s having decided to transfer their accounts to the Commonwealth Bank. When they approached the local manager of the Commonwealth Bank and told him that they had accounts with private banks they were told in quite definite and unequivocal terms that the Commonwealth Bank was not prepared to take business away from the private banks. The bank made no secret of the fact, because not only did local managers tell clients that that waa the bank’s policy in that respect, but Mr. Riddle, who was then the general manager of the bank, also made a public announcement in 1932 which was reported in the Sydney Sun of 22nd November, 1932, in the following terms: -
Addressing a meeting of the Fellows of the Royal Empire Society at a luncheon in October 1932 dealing with the policy of the Commonwealth Bank, Mr. Riddle stated that although the Commonwealth Bank continued to conduct general business, that side of its activities was not pushed.
When a customer of a private bank asked the Commonwealth Bank for accommodation the Commonweath Bank undertook to investigate his position and if satisfied he was entitled to the accommodation private banks were notified and informed by the Commonwealth Bank that if they were prepared to do business they, the Commonwealth Bank, would withdraw from the negotiations. If not, the Commonwealth Bank would make the advances. In nearly every case, said Mr. Riddle, the private banks made the advances.
In other words the resources of the Commonwealth Bank were used in such a way that any business proposal which, upon investigation, it decided was likely to be profitable, was handed over to the private banks. In other words public money was used in the interests of private financial institutions. That happened under the jurisdiction of the Commonwealth Bank Board. Can it be wondered at that the Labour party opposes the reestablishment of the hoard system, when the board to be appointed is likely to adopt a similar line of policy? The Chifley Labour Government recognized that, because in the Commonwealth Bank Bill that it introduced in 1945 it inserted a specific clause to obviate that absurd state of affairs. Section 18 (2.) of the Commonwealth Bank Act 1945 reads -
The bank, through the General Banking Division, shall not refuse to conduct banking business for any person, by reason only of the fact that to conduct that business would have the effect of taking away business from another bank.
So much for the dilatory policy of the last Commonwealth Bank Board in connexion with the encouragement of business and its failure to develop the resources and assets of the bank. Its policy was certainly not a positive, but a distinctly negative one, and we do not wish to see a repetition of that very silly state of affairs. Not only did the Commonwealth Bank Board not encourage business but, what is perhaps more serious, it also assumed the role of dictator and in 1931 succeeded in dictating to the elected representatives of the people.
Memories of the tragic days of the economic depression in the early 1930’s have faded to a great extent in the minds of most people because they want to forget those times. Nevertheless present eco nomic circumstances are such that it is possible that we shall have a repetition of that grim period. I hope that that will never come to pass, but knowing the world as it is I fear that it might. If it does I do not wish the country to have a Commonwealth Bank Board that might adopt the same policy as its predecessor did in 1931. The Scullin Labour Government, faced with a hostile Senate, had to go hat in hand to the Commonwealth Bank Board and seek assistance for the unemployed and the primary producers. The Treasurer of the day, Mr. Theodore; pointed out to the board the difficulties of the Government and asked it to consider requests for financial accommodation. The board furnished its reply in the most impertinent letter ever sent by one publicbody to another. This letter meant untold suffering and misery to hundreds of thousands of decent Australian citizens. The letter which the bank board wrote to Mr. Theodore on the 13th February, 1931, reads -
Dear Mr. Theodore,
With reference to your discussions with the directors of the Bank Board on the subject of the rehabilitation of the financial and industrial position of Australia, when it was agreed that some concerted effort must be made to cope with the situation, and so avoid, if possible, the ultimate disaster which will otherwise eventually face the country, I am requested by my Board to convey to you a resolution of the Board as set forth hereunder - “ Subject to adequate and equitable reduction in all wages, salaries and allowances, social benefits of all kinds, interest and other factors which affect the cost of living, the Commonwealth Bank Board will actively co-operate with the trading banks and the governments of Australia in sustaining industry and restoring employment.”
That was a clear indication that the Government, if it wanted to receive financial accommodation, had to how to the dictates of the board. Everybody at that time knew that the de facto Prime Minister of’ Australia was Sir Robert Gibson and that the de facto Cabinet was composed of the members of the bank board, because they decided the financial policy of the Australian Government.
The people of Australia have not forgotten that experience and it cannot be wondered at that honorable members of the Opposition, who represent a substantial proportion of the people, should take up the cudgels on their behalf and point out what would happen if this bank board were established. Under the bill, the Government proposes to set up a board of ten members. Five members of the board have been named in the bill. They are the Governor, the Deputy Governor, the Secretary to the Treasury, the Economic Adviser to the bank and the Commonwealth Statistician. In addition, the board will have five other members, in the terms of clause 10 (2) of the bill. Why the hesitancy on the part of the Government in giving even the slightest indication of whom those five members will be ? It is quite possible that the Government has something to hide and, because of that fact, the Labour party is actively resisting the passing of the bill. The Labour party considers that the proposed appointment of the bank board is a breach of a firm Labour principle, namely, that representatives of private interests shall not be given control of the people’s bank. The five unnamed members of the board will be men who will represent private interests and whose actions could be detrimental to the Australian people. Apparently, the Government anticipated some criticism along these lines because it inserted a provision which it thought would dispose of the Opposition’s objections. I refer to the new proposed section 26, which reads -
A person who is a director or employee of a corporation (other than the hank) the business oi which is wholly or mainly that of banking shall not be capable of appointment, or of continuing to act, as a member of the Board-
Apparently the Government thinks that bv inserting that provision it can hoodwink the people of Australia. One would think that the directors of private banks are the only people with vested interests in such banks. I have yet to learn that the shareholders with the largest number of shares in a company are directors of that company. Quite frequently directors hold comparatively few shares. There is nothing in this legislation to prevent a shareholder who holds a majority of a bank’s shares from being appointed to the proposed board. In addition, the proposed appointees can be men who may be interested in large commercial undertakings and who may move in the same social circles as the directors of private banks. I am not prepared to leave the fate of the bank in the hands of people who possibly share the same social outlook as the directors of the private banking system and who could, perhaps unwittingly, steer the policy of the bank in a direction which could further the interests of the private banks. The Labour party resolutely sets its face against the proposal for the establishment of this board.
This bill has a number of features which, in my opinion, are reprehensible. It could give to the representatives of private finance a voice in deciding whether the bank should extend its activities in the public interest. Consequently, the public interest would not be considered to the extent to which it should be. It gives to private financial interests an opportunity to take part in decisions concerning where new .branches of the bank should be opened. It might be proposed that a new branch be established in the neighbourhood of a number of private banks and influence might be brought to bear, deliberately or otherwise, on the members of the board not to establish a ranch at the proposed location. The bill also will enable the members of the bank board to exercise a measure of control over interest rates, a matter in which the viewpoint of private banks might be at complete variance with public interest. I have ample evidence to justify my remarks, and I propose to give to the House a number of examples which prove beyond any reasonable doubt that what I have suggested could happen because it happened under the administration of the last bank board.
In 1932 the bank board refused to finance the co-operative housing scheme in New South Wales because the private banks had intimated that they did not intend to do so. In 1924, just after the bank board had been established, the rate of interest for financing primary production began to rise and the Commonwealth Bank raised its interest rate also. From 1923 to 1924 the interest paid by primary producers amounted to £3,000,000. In the next year it rose to £7,000,000. In 1936 the private banks raised interest rates on fixed deposits and immediately the Commonwealth Bank Board took similar action. This action so disgusted a number of people that even the newspapers were forced by pressure of .public opinion, to make a statement about it and the Melbourne Age, of the 25th March, 1936, published this comment -
Whether the reasons are sound or not, the fact that impresses and startles the community is that in matters of such vital importance the Federal Government can be a mere cipher and the great institution which is owned by and acts for the people - the Commonwealth Bank - instead of making policy is forced to follow a course dictated by others.
Even the Melbourne Age recognized that the Commonwealth Bank, in abjectly following the dictates of the private banks, was not safeguarding the interests of the Australian people. The Government’s proposition has for its primary purpose the bolstering of the private banking system at the expense of the enormously successful people’s bank. Under its proposals the Government is abdicating its power and avoiding its responsibilities, lt intends to give power that has been in the hands of the Government since 1945 to a group of men who will not be responsible to the people. That is a retrogressive step. The Government is deliberately excluding itself from participation in the making or changing of monetary policy. That is an act of abdication and, in relation to a number of matters of public importance, if this legislation is carried, it will govern in the future only in a secondary degree. In a selfgoverning community such as ours that is not a very desirable state of affairs. The Treasurer is the person who should have the final voice in the determination of national monetary policy. He has had that final voice for the last five years and I have not heard one word of criticism to the effect that he exceeded his responsibility and did something inimical to the interests of the people of Australia.
Under no circumstances should we allow the making of monetary policy and the determination of the credit policy of this nation to be taken from the representatives of the people and given to a body that is responsible to nobody. I hope that even at this late hour the Government will recognize the foolishness of its legislation and will realize that there is no earthly reason why the present monetary control as exercised by the
Governor of the bank should not be continued in view of the fact that it meets with the whole-hearted acclamation of the Australian people.
.- After listening to the honorable member for Batman (Mr. Bird), I thought that perhaps the House might first consider the suggestion that we consider the problems of to-day in the light of the conditions of to-day. The honorable member for Batman dwelt for some considerable time on the history of the Commonwealth Bank and the events of 1911. It is not necessary for me to remind the House that some 40 years have passed since 1911 and that during that time vast changes have occurred throughout the world, changes which, perhaps, have been greater than any that occurred during the preceding century. Whilst, as the honorable member has suggested, there are lessons to ‘be learnt from the past, honorable members must be careful to apply those lessons only when conditions are similar to those that then existed. Let us contrast the conditions of 1911 with the conditions of to-day. Australia’s population has nearly doubled since then. Our industry has quadrupled itself many times. The national economy has ceased to be largely agricultural and has become a mixed economy which maintains a very strong secondary industry. We have fought two great wars in common with the rest of the world, and we have paid the price for fighting them. We cannot, in a motor car age, use the same old whip that we used during the horse and buggy days. However much we may look back on the past as the good old days, we must realize that they are dead and gone and that present-day problems are facing, us.
I shall now refer to some of the amazing statements of the honorable member for Parkes (Mr. Haylen). Unlike the honorable member who has just resumed his seat, he followed the usual approach of the Opposition when he resorted to the history of the depression days to find his arguments. He suggested that the conditions which produced the depression of 1930 exist in precisely the same degree to-day. No intelligent member of the community accepts that as a fact. Furthermore, when the honorable member spoke of 1911 and of the giants of the Labour party who dreamed of and established a Commonwealth bank, I was reminded that in 1921 the Labour movement adopted the socialist objective which changed the course and structure of the Labour party. From 1921 the course of the Labour party veered sharply to the left.
The honorable member for Parkes dealt with the suggested appointments to the Commonwealth Bank Board. He said that business men, and those representing private interests, should not be included on the board and should have no share in the control of the bank’s policy. That statement indicates a complete absence of knowledge of modern central banking practice and of the movements which have been taking place during the last 30 years, particularly during the last twenty years since the people of the world learned the lessons of the depression. To-day the central bank, as the Minister for National Development (Mr. Casey) has said, plays a large and an important part in the life of the community. It does not, however, make or break depressions, and in the generally accepted sense it has only limited powers. Its .main responsibility is that of controlling the credit and monetary resources of a country to the benefit of that country. That is fairly easy to express as a principle, but is very difficult to translate into practice. If we assume, as we must if we have any knowledge of central banking practice, that the central bank has the responsibility of working for the general good of the community, and ,if we assume that the government of the day has a responsibility to the community which it can exercise through its control of a central bank and of budget policy, then we must accept the fact, which has been accepted in every country other than Australia, that the central bank should include in its management representatives of the economic and business life of the community. “We must accept also that whilst the elected representatives of the people in the last analysis control the policy of the bank the representaives of the commercial and industrial life of the community should have an opportunity to place their opinions alongside opinions which may be purely political.
That principle is accepted in almost all other countries in which a central bank has grown up. It is accepted all the more readily because of the experience of some countries in the years after the first great war when central banking practice in Europe was left purely under the control of governments which acted without advice or check. That was one of the factors which contributed to the depression of which honorable members opposite speak so fluently if so illogically. It has been said by the honorable member for Parkes and others that they will vote against this bill because it proposes to replace the present management of the bank with a board. They spoke of the failure of the board during the depression to do those things which now many of us think might well have been done. The answer to that is that we speak to-day with a knowledge of what has occurred since the depression, a knowledge that has grown out of the agony and suffering of the depression days and of the events that have occurred since then. The people of 1930 did not have that knowledge. It is just as ridiculous for those honorable members to make that suggestion as it would be to suggest that Nelson should have been court martialled for not having used dive bombers at the battle of Trafalgar. It is equally ridiculous to suggest that the lessons that we have learned over the last few years could have been applied to anything that occurred during our past history. The constitution of the Commonwealth Bank Board is detailed by this legislation, and both it and the power of that board to be radically and fundamentally different from the constitution and power of the Commonwealth Bank Board of 1930. In the last analysis the control of policy will rest with this Parliament, that is with the elected representatives of the people.
The honorable member for Parkes displayed a complete lack of knowledge of the provisions of the bill, or a debating dexterity that I had not noticed in his previous speeches, when he said that one of the virtues of the legislation now proposed to be repealed is that it is in the most democratic form and that it vests control in the Treasurer of the day who is the elected representative of the people. The idea of democracy held by the honorable member for Parkes is that all power should be placed in the hands of one man.
– What is the difference under the Government’s proposal?
– There is a good deal of difference. There are 123 members of this House, and the interjection of the honorable member reminds me that when there is a difference of opinion it is ventilated at considerable length and with great vigour in this chamber. If one man is in control of the bank and there are doubts in his mind upon some point, he himself must resolve those doubts without the benefit of advice, criticism or discussion such as we have in this House. That seems to be an essential and striking difference between the two methods of administration. If we must relate the past to the present time, we must think back to the adoption of the socialist objective by the Labour party in 1921 and relate that to the bill. Under the legislation of the Chifley Government all power rested in the hands of one man, the Treasurer of the day. That is consistent with the modern practice of socialism, which entails the dictatorship of an institution or country in fact if not in theory. A central bank is more than a banking institution, because the power it wields can modify depression and so regulate currency and credit as to expand industry and help the nation. The consequences of decisions by a central bank affect the life of every member of the community to a lesser or greater degree. While the elected representatives of the people have ultimate control, they should also have the benefit of the advice, wisdom and knowledge of those who are actively engaged, not in politics but in the business life of the community. The honorable member for Parkes disclosed a rather peculiar attitude when he said., in effect, that the suggestion that businessmen should be appointed to a board to control the central bank is bad because a knowledge of business is bad unless it is combined with a knowledge of special conditions. That is the objective that the Government has in mind in seeking to re-establish the Commonwealth Bank Board under this measure. The proposed board will be composed of representatives of the Commonwealth Bank and representatives of commercial and industrial interests. I fail to understand the honorable member’s objection to that proposal. He has indicated unconsciously that he, personally, approves of the measure, but is not able to say so because he must submit to party discipline.
Another aspect of this problem is that our economy is a mixed economy. It is not wholly planned or unplanned and it is not wholly open or wholly closed. The Government is responsible for the control of monetary policy in the interests of the country as a whole, that is, in the interests of all sections of the community. The alternative to control of the central bank by a board in consultation with the Government in respect of monetary policy, as the bill provides, would be to reduce industrial and commercial activities, and to centralize that responsibility in one man. But we cannot accept the theory that all the knowledge and wisdom required to direct the monetary policy of a country can be found in one man, however earnest, practical and capable he might be. The honorable member for Parkes also said that time is a factor to be considered in this matter. I agree with him. For that reason, the Opposition is doing its best to delay the passage of this measure.
The bill was originally introduced about six months ago. Had it then been passed it would have enabled the Government to mitigate to a great degree the’ unfavorable economic conditions that have arisen in the interim. This proposal has been rehashed many times until there is very little left of it to talk about. However, two principal points remain. The first is that under this measure power to regulate the currency and monetary resources of the country will rest finally in the hands of the elected representatives of the people. That is an open method of determining such policy and will make it extremely difficult for any interests to practise secret diplomacy in the financial world, as happened in the past.
Secondly, as the honorable member for Parkes advocated, the personnel of the proposed hoard will he free from the influence of private banking interests, and will thus be able to work effectively for the well being of the commercial and industrial life of the community.
.- Fundamentally, .this measure is designed to put the Commonwealth Bank, as we know it to-day, back into leg-irons by placing it under the control of a board of ten members who will not be responsible to the people, or to the Parliament. The honorable member for Deakin (Mr. Davis) gave expression to a strange piece of reasoning when he said that he was sure that the members of the board would act in the interests of the country as a whole, when he, himself, does not know whom the Government will appoint to fill five of the positions on the board. The Government has refused to indicate whom it will appoint to those positions. Therefore, it is ridiculous for the honorable member to say that ten men of whom five have still to be named will do certain things.
The honorable member criticized the Opposition for traversing the history of the Commonwealth Bank. He said that we should consider this measure in the light of existing circumstances. It may be quite convenient for Government supporters to take that view, but it is utterly illogical. Harvests are good or bad according to whether the seasons have been favorable or unfavorable. The present is a product of the past and any one who endeavours when considering this measure to separate the present from the past ignores the historical process. I shall deal briefly with the history of the Commonwealth Bank which has become known as the people’s bank. That history may be divided into three periods. From 1912 to 1924 was the period of its birth and early days and during those years the bank was controlled, not by a board, but by a governor. During that period Australia passed throught the critical period of World War I. and at that time the bank financed our war effort to the tune of £350,000,000.. In 1924, the BrucePage Government placed the bank under the control of a board and, dealing with that legislation the Sydney Sun at that time said -
This measure turns the Commonwealth Bank into a bankers’ bank.
That statement was perfectly correct. The bank’s structure and policy were altered and from 1924 to 1945 it was the robot of the private banking interests. That was the second period of the bank’s history and because of its record during that period we do not want the bank to be again placed under the control of a board. The third period of the bank’s history is from 1945 up to the present day, during which it again operated free from board control. When we examine the story of the bank throughout those three periods in relation to financial control generally in this country we find that the institution expanded to the greatest degree and rendered the greatest service to the nation during the two periods when it was controlled not by a board but by a governor. It is for that reason that the Opposition is opposed to this measure. We shall be guided by the results achieved by the bank when it was under what Government supporters describe as “ one-man control “ - that is a misnomer - and not under board control.
Our opposition to the measure is also based on the record of the previous Commonwealth Bank Board during the economic crisis from 1930 to 1934 - Australia’s economic Dunkirk - when the bank failed this country in its hour of need. The test of any government is how it handles its job in a crisis and that observation applies also to individual leaders, or persons, charged with grave responsibility in any sphere. During the economic crisis from 1930 to 1934 when the Commonwealth Bank was under the control of a board it failed the country abjectly and completely. Therefore, the re-establishment of that system of control is not worthy of the slightest consideration. During that crisis those who controlled the Commonwealth Bank made finance our master instead of our servant. They put Australia in a financial straitjacket. They were smug and conservative and were beyond the control of the Parliament. At that time, as the honorable member for Batman (Mr. Bird) has said, it was not the government of the day, or the elected representatives of the people, that controlled this country but a body that was beyond the control of the Parliament. Evidence of that stark fact is provided by the refusal of the then chairman of the Commonwealth Bank Board, Sir Robert Gibson, to make available to the .Scullin Government the requisite finance to carry on the affairs of the country. When Sir Robert Gibson refused to make available the sum of £1S,000,000 to that government, he and the board were the real rulers of Australia.. It was a sad state of affairs when financial interests controlled the country. The responsibility for national financial policy should rest upon the Treasurer of the day, guided by an advisory council and a cabinet of responsible men as well as by the Parliament. The responsibility for our financial destiny, the very lives of our people from day to day, should not be shaped by a board consisting of persons who are not accountable in any way to the people. In a democracy the people should control the financial policy of a country through their elected representatives. Finance is the economic lifeblood which flows through the arteries of a nation, and should be consistently available through loans, credit, cash and our pay envelopes in sufficient quantities to keep us economically and financially healthy. If some one taps a financial artery and draws credit from circulation, the nation can bleed to death economically, just as a person can bleed to death if an artery is severed in his body. That is how important money and credit are to a country. Money must be kept in circulation, and the control of it should be in the hands of the elected representatives of the people.
– It will be under this bill.
– I disagree with the honorable member for Forrest (Mr. Freeth), because the proposed bank board will be similar to the previous bank board. Members of the Government have eulogized the system of board control, even though it failed us in the greatest economic crisis in our history. A. F. W. Plumptre, who was the Assistant Professor of Political Economy in the University of Toronto, in Canada, in 1940, wrote a book entitled Central Banking in the British Dominions. He was not an Australian, and he wrote from the point of view of an outsider who had studied the story of our Commonwealth Bank. At page 101 of the book there appears his opinion of the Commonwealth Bank setup that existed from 1924 to 1945, as follows : -
This much is clear: Sir Robert Gibson who, in the formative years following 1942 was Chairman of the Bank’s directorate, was sufficiently forceful to attract much power into his own hands. Whatever his gifts in other directions it is patent from his many utterances that he never acquired the point of view of a modern central banker; nor was the heterogeneous group of directors, which Governments appointed beside him, sufficiently powerful or well informed to guide him. Unfortunately such a dominant personality at the head of the directorate naturally tended to withdraw influence from the permanent officers of the Bank ; for, continuously confronted with central banking problems, they at any rate would have acquired the appropriate point of view. Possessed of the proper point of view, and of greater influence, their approach to central banking practice might have been less tentative. Recent developments seem to reflect the mergence of a more positive attitude.
That is his summing up of Sir Robert Gibson, whose record as the chairman of the Commonwealth Bank Board has been eulogized by the Government. According to Professor Plumptre, Sir Robert Gibson attracted power into his own hands and became a little dictator. In that role he drew power and influence away from the officers of the Commonwealth Bank, and that was a serious matter. The Leader of the Opposition (Mr. Chifley), who was Commonwealth Treasurer for eight years, did not at any time overrule the Governor of the bank. That is a remarkable fact, because members of the Government continually criticize what they call the “ oneman control “ of the bank by the Governor. They say that we socialists want to grab the people’s wealth through our system of one-man control of the great Commonwealth Bank. We remember the stories that honorable gentlemen opposite circulated during the last general election campaign about our banking policy, and. indeed, we shall never forget them. Some people have not yet recovered from the fright that they received when they heard them. Members of the staffs of private banks went from door to door, and alarmed the people with their prediction that the Labour party would grab their homes, farms, businesses and savings if it were returned to office.
– No one said anything of the kind.
– The honorable member for Gippsland (Mr. Bowden) must have been asleep during the last general election campaign. The Leader of the Opposition said a few months ago -
During the eight years that I was Treasurer, including the period of four years since the 1945 Commonwealth. Bank. Act has been in operation, I did - not at any time overrule the Governor of the Commonwealth Bank. There was never any need for me to do so because I was always able to come to a satisfactory decision. That observation applies in respect of not only Dr. Coombs and Mr. Armitage, who preceded him as Governor of the bank, but even when there was a Commonwealth Bank Board in existence. I have never issued a written instruction yet. I have expressed my views about what I thought should lie done but at no time was it necessary for me to exercise that particular power.
Yet honorable members opposite talk about “ one-man control “ of the Commonwealth Bank, and a financial dictatorship! That is a bogy that they deliberately raised during the last general election campaign to mislead the people into believing that the appointment of a heterogeneous group of directors to control the Commonwealth Bank was desirable. ‘ Of course, the bank functioned most satisfactorily while Mr. Chifley was Treasurer.
-Order ! The honorable member may not refer to another honorable member by his name.
– It slipped out, Mr. Speaker.
– That is an unfortunate habit here.
– I believe that that statement by the Leader of the Opposition should nail the lie that honorable gentlemen opposite have circulated to the effect that the right honorable gentleman dominated, and indeed was the dictator of the Commonwealth Bank, controlled it in accordance with his own ideas, and overruled the decisions of the Governor. As the Commonwealth Bank has functioned with complete satisfaction under the present system of control, why does the Govern ment wish to alter it? We consider that the bank should be free from outside interests, and should be responsible to the Treasurer of the day, whether he be the right honorable member for Macquarie (Mr. Chifley) or the right honorable member for Mcpherson (Mr. Fadden). The Treasurer is responsible to the Cabinet, which is answerable to the Parliament and finally to the people. That is the logical way in which to control the Commonwealth Bank.
The Advisory Council, which was appointed in .1.94.5 when the bank board was sacked, consists of four outstanding men in financial circles. They are not private bankers or the representatives of other financial institutions but public servants. They have met monthly during the last four years. They see the cables that are received in Australia daily about the financial trends in other countries, and from day to day they keep in touch with one another, and with the Treasurer. Financial matters are thoroughly discussed at their meetings, and the Treasurer is advised of their views. Sometimes he may be called to a meeting, and at other times they wait on him as a deputation. All the facts are sifted, decisions are made, the Cabinet is informed of them through the Treasurer, and, ultimately, they are communicated to the Parliament. The annual report of the operations of the Commonwealth Bank is submitted to this House. As a matter of fact, the latest report was distributed to honorable members earlier this week. The operations of the bank throughout the year are watched and studied by the Treasurer, who is able to keep his finger on the financial and economic pulse of the country. What is wrong with that kind of administration of the Commonwealth Bank? Do honorable members opposite pretend to discover any evidence of dictatorship there? I do not suggest for a moment that the right honorable member for McPherson, who has been Commonwealth Treasurer for ten months, has been a financial dictator during that period, yet the bank has been under the administration, not of a board, but of the Governor. The present system of control is precisely the same as that which Mr. Chifley established in 1945.
– Order ! I again remind the honorable gentleman that he should say “ the right honorable member for Macquarie “, or “ the leader of the Opposition “.
– Yes, I shall do so. The present Treasurer has not been a financial dictator, and all the talk about the necessity to establish the Commonwealth Bank Board in order to avoid the dangers of one-man control must not be accepted without careful examination. The House has not even been informed of the names of some of the persons whom the Government proposes to appoint to the board. I look for a more sinister reason for this eagerness to re-establish it. Undoubtedly, the board would short-circuit the effectiveness of the Commonwealth Bank which has functioned with complete satisfaction to the people since the abolition of the previous board in 1945. I propose to ask a series of questions. Why is this change proposed if the administration of the bank at the present time is completely satisfactory? I believe that the Commonwealth Bank has been so successful during the last five years, and has been such a strong competitor with the private trading banks, which backed the Government during the last general election campaign, that the Government must clip the bank’s wings, place difficulties in its way, hamper its operations with leg-irons, or even strangle it, just as it was almost strangled under the administration of the previous board. The Government believes that the operations of the bank should be restricted. The Treasurer, when he moved the second reading of the bill, endeavoured to whitewash the Government’s intentions, and to give the impression that it wholeheartedly supported the expansion of the bank. However, his efforts were designed to have the effect of a smokescreen for the purpose of hiding the real purposes of the Government in seeking to re-establish the board.
Government supporters have criticized the system of what they call “ one-man control “ of the bank, and I have pointed out that their charges in respect of a. financial dictatorship are completely unfounded, and, indeed, are a bogy that has been deliberately raised in an endeavour to mislead the people. My next question is: Has there been anything in the management of the Commonwealth Bank since 1945 that can be criticized? I claim that the answer .is in the negative. Has anything been done during the lastfive years that has not been for the good of the community and in the interests of the sound management of the bank? Again the answer is “ No “. Can it be said that Mr. Armitage, and, later, Dr. Coombs, took any action that was prejudicial to our national welfare? A fair-minded man must answer “ No “ to that question;
– I suppose that the answer would be that the previous Government tried to destroy the private trading banks.
– I am not speaking of them. That subject is not related to this bill.
– The previous Government used the Commonwealth Bank as an instrument to destroy . the private banks.
– The PostmasterGeneral (Mr. Anthony) still believes in Father Christmas.
– Why does the Government persist with this bill, which is designed to give the private trading banks another opportunity to place leg-irons on the Commonwealth Bank because it is so successful to-day? In 1945 the previous Treasurer (Mr. Chifley) introduced legislation to amend the Commonwealth Bank Act, and the bank board was abolished. In the 35 years that the bank had then been in operation, 373 trading branches had been established. When the Labour Government freed tha bank of control by the board, the number of branches was increased considerably. In the years 1946 and 1947, 90 new branches were opened. Yet under the old system of control, only 373 branches were established in 35 years. It is obvious to me that the bank has progressed considerably since the shackles, represented by the conservative board, were removed from it. Those facts speak volumes for the present system of administration, and it would be a sad day indeed if it were altered. We do not know for how long the present economic conditions will last, and we must be prepared to meet the effects of a slump in the prices that are paid overseas for our export commodities. It is only a war, or a threat, of war, that is ^holding the United States of America together economically. Should those conditions pass, the prices of our exports may decline as a result of the restriction of credit. We should be armed economically just as the Government wants us to be armed militarily, and if we bring back board control of the Commonwealth Bank we shall be striking directly at the heart of our economy. The re-establishment of the board would knock aside the props that should maintain our economy in the event of another world-wide depression.
The dire prophecies of doom that were uttered by the present Prime Minister and the present Treasurer in 1945, when the Commonwealth Bank Board was sacked, make one wonder to-day whether they spoke with sincerity. The present Prime Minister, speaking as the Leader of the Opposition, described the Commonwealth Bank Act 1945 as reactionary and unsound. He said that it would weaken the central bank and tend to destroy the currency, and that one-man control of the bank would lead to the subordination of its Governor to’ the Government. That attack was made by the right honorable gentleman on the 21st March, 1945. On the following day, the present Treasurer described the bill as a revolutionary measure. Thus, the leader of one anti-Labour party described it as reactionary and the leader of the other anti-Labour party expressed the entirely opposite view. The Leader ‘ of the Australian Country party also said, on the 22nd March, 1945, that the legislation represented a sentence of death upon private banks, and that it would have an adverse effect on overseas conversion operations, would lead to instability and lack of confidence and would make currency policy the plaything of politics. Not one of those dreadful results has come to pass in the succeeding five years. The Jeremiahs of 1945 were less reliable than was the Jeremiah of biblical days, whose prophecies came to pass.
– That is because the Labour party was not able to nationalize the banks.
– We tried our best to nationalize the banks, but it was proved that we could not do so constitutionally. Those thunderous prophecies failed to materialize, and therefore the leaders of the present Government parties are now unable to advance any arguments with which to convince the people that events have justified, the re-establishment of a conservative Commonwealth Bank Board not elected by the people and not responsible to the people. Unless they can convince the electors on that score, the bill will not be allowed to pass this Parliament.
The manager of a branch of the Commonwealth Bank in a Tasmanian town told me recently that the .business transacted by the bank in that district had increased by 400 per cent, over the last two years. That is typical of the rapid expansion that has taken place under the existing system of control. We do not want the bank to be strangled so that the country will revert to the conditions of the old days, when the private institutions controlled the finances of the nation. The Commonwealth Bank is now free to develop throughout Australia; it can extend its activities to any area where its services are needed.
– -The honorable member only wants to strangle the private banks.
– No. The private banks held the field unchallenged in this country for over a century. The time has come for them to face real competition that will put them on their toes, keep interest rates down and keen credit flowing. Surely it is good for the nation if the people are able to obtain credit from the ‘Commonwealth Bank in days of difficulty when the private banks refuse to extend credit to them.
– Is competition good?
– Then why did the Labour party want to nationalize the banks?
– Nationalization would not have eliminated competition. I am sorry that the honorable gentleman has not appreciated that fact.
The situation in the field of banking to-day is competitive but the private banks want to re-establish a monopoly for themselves. They enjoyed a virtual monopoly before the Commonwealth Bank was released from board control in 1945. T remind supporters of the Government that during the last 50 years the number of private banks operating in Australia has decreased from 56 to only nine. The stronger bunks are gradually squeezing out their weaker competitors with the object ultimately of bringing the whole financial system of the nation into the hands of two or three great private institutions. The legislation that was enacted by the last Labour government was designed to prevent that undesirable circumstance. The nationalization of banking would merely have eliminated the other form of monopoly that private banks had exercised for a century or more. The Commonwealth Bank, if untrammelled, will keep finance flowing throughout the nation. Its General Banking Division, Rural Credits Department, Mortgage Bank Department and Industrial Finance Department will pump life-blood through the veins of industry and commerce. The activities of the bank will keen interest rates at n low level, a condition that is vital to our progress and development. Interest charges crippled Australia prior to World War II. In 1935 the wheatgrowers were saddled with an annual debt of £14,000,000 in interest charges levied by the private banking institutions, and the wool-growers had an annual interest bill of £7,000,000.
– Order ! The honorable member’s time has expired.
.- The honorable member for Wilmot (Mr. Duthie) appeared to be unable to understand why the Government had found it necessary to introduce the bill that is now before the House. After examining the most recent report of the Gover nor of the Commonwealth Bank, I can realize why the honorable gentleman knows very little about the subject. I shall try to enlighten him. After all, the Commonwealth Bank has only six branches in Tasmania whereas it has 246 in New South Wales, which is more than there are in all the other States combined.
– Thanks to a Labour government !
– That may be so. There may be some significance in the fact that a certain Labour Premier of New South Wales some years ago contributed very largely to the development of the Commonwealth Bank in that State.
The Government has introduced this legislation because it has a mandate from the people to do so. There could not be a better reason for its introduction. All of us know that the subject of banking was a key issue at the general election last year, and there can be no doubt about the decision of the people on that issue. The Government has a clear mandate not only to obliterate the 1947 legislation from the statute-book, but also to amend the legislation of 1945 so as to provide for control of the Commonwealth Bank to be vested in a board. Those honorable members who have said that the Government cannot justify the introduction of this bill have overlooked the expressed will of the people of Australia. This is a democracy, and the people have spoken. The Government is merely keeping faith with the people. In fact, the bill should not be before this House to-day. If the will of the people had not been thwarted by the Opposition earlier this year, it would now be law and the proposed Commonwealth Bank Board would be operating. Responsibility for the delay rests exclusively upon the Opposition.
We have heard a great deal about the history of the Commonwealth Bank during this debate, and members of the Opposition have endeavoured to convince us that one-man control of the bank, as opposed to board control, has been successful. Anybody who suggests that the Commonwealth Bank was a failure when it was controlled by a board is not being realistic and is ignoring the facts. Statistics covering the activities of the bank over a period of twenty years from 1922 to 1942 show that it expanded its operations to a remarkable degree during that time. I have taken that period for the sake of convenience, although I realize that the bank operated under the control of a board from 1924 until 1945. The assets of the Commonwealth Bank in 1922 were valued at £134,000,000. Its profits in that year totalled £405,000 and it had a staff of 1,800. By 1942, the value of its assets had increased by £347,000,000 to £4S1,000,000. Profits had increased by £546,000 to £951,000 and the staff had increased to 6,300. Those statistics show clearly that the bank was very successful under board control. This Government is mighty proud of the Commonwealth Bank as a great public institution, and it will not do anything to lower the standard of the hank or interfere with its operations in the interests of the people. I want to dissipate any misapprehension that members of the Opposition may entertain on that score. The proposed re-establishment of the Commonwealth Bank Board has received the approval of the people. Only in recent years has the Labour party placed emphasis upon its support for the principle of one-man control of the bank. A board consisting of eight members was established by the Bruce-Page Government in 1924. In 1930, Mr. Scullin, who was then the Prime Minister, introduced a bill for the purpose of establishing a reserve bank with a board of nine members in control. That bill did not become law.
As the honorable member for Deakin (Mr. Davis), has said, great changes have taken place in Australia during the last twenty years. The technique of banking throughout the world has been altered also. Banking is like other sciences, and banking practices have been improved continuously. In 1935 the Lyons Government realized the need to overhaul the law relating to- banking and, upon its instance, a royal commission was appointed to inquire into monetary and banking systems. The commission presented its report in 1937. The present Leader of the Opposition (Mr. Chifley) was a member of the commission and, in fact, I think it was then that he had his first lessons in banking. Perhaps he got the wrong angle then, as students sometimes do. However, the next development was in 1938, when a bill was introduced to amend the banking law. Unfortunately, the war intervened and nothing further could be done about the matter. However, the Government used its power under the National Security Regulations to interfere in the control of banking, and quite rightly so. Nevertheless, the Commonwealth Bank continued to function throughout the war under the control of a board, and it did a magnificent job. In 1945 the present Leader of the Opposition, who was then Prime Minister and Treasurer, and professed to have a very wide knowledge of banking, decided, as a part of his longterm policy of socializing the community, to dispense with the board. Undoubtedly the most effective instrument that any political party could employ to bring about socialism is the financial structure, which can be manipulated by a government. This remarkable and obdurate man, the former Prime Minister and Treasurer and present Leader of the Opposition, at whose door I lay all the blame for this unreasoning, desire to socialize Australia through control of the nation’s financial organizations, introduced the Commonwealth Bank Act 1945. That act dispensed with the board and entrusted control of the bank to one man.
Undoubtedly the right honorable gentleman’s motive for introducing that legislation was not completely apparent at the time. He had a secondary and subtle intention which he succeeded in concealing from the Parliament and from the people. In any event, after five years of war, the people were weary, and they were certainly not disposed to scrutinize critically the obscure implications of legislation. In pursuance of his plan the right honorable gentleman waited until he had won the 1946 general election, and then made the first serious move to implement his nefarious intention to socialize this country. An arbitrary instruction was given to the Melbourne City Council to bank with the Commonwealth Bank. The Melbourne City Council was a statutory corporation which was answerable only to the citizens of Melbourne, and it was quite free to decide with which hank it would transact its financial business.
Opposition members interjecting,
– Opposition members have been interjecting far too frequently.The honorable member for Bennelong (Mr. Cramer) is entitled to a fair hearing.
– The honorable member for Bennelong has been most provocative.
– I may be provocative, but I am only stating facts.
– Order !
– I call attention to the state of the House.
– Ring the bells.
– Order ! The honorable member for D alley will be silent while a quorum is being formed.
Conversation being audible,
– Order ! The front Opposition bench will maintain silence.
– Surely I can speak to my leader.
– The honorable member will do so in a whisper. I have asked him to maintain silence.
– What sort of domination is this?
– Order ! The honorable member will withdraw that remark and apologize for having made it.
– I withdraw; hut surely a. man can speak to his leader.
– The honorable member will apologize for his conduct.
– Yes, I withdraw and apologize for my conduct.
– No doubt, the intention of the former Government was to compel alllocal-government bodies, and, indeed, all corporations and individuals who were subject to governmental direction, to bank with the Commonwealth Bank. In that way the right honorable gentleman hoped to use the 1945 legislation to crush completely and insidiously the operations of the private banks. Fortunately, the Melbourne City Council challenged that direction, and in the litigation which followed its attitude was upheld. The former Prime Minister and Treasurer, who was very sore at the frustration of his plans, considered the matter for about twenty minutes on one memorable Saturday morning and then issued his famous 42-word pronouncement to the people of Australia to the effect that the private banks were to be completely crushed. The Banking Act 1947 was then introduced for that purpose, and we all know what happened after that. Fortunately for the freedom of this country the intention of the Chifley Government was frustrated by the Privy Council. At the last general election the matter of banking control was referred to the people of Australia, and the then Opposition parties promised the people that if they were elected to office they would introduce legislation to re-establish a board instead of permitting the Commonwealth Bank to remain under the control of one individual.
I suggest to honorable members that the idea of one-man control of the bank was intended to facilitate the Labour party’s plans for socialization. The present Governor of the Commonwealth Bank, who was appointed by the former Prime Minister, was especially chosen because he was of one mind with the right honorable gentleman. I am afraid that the political followers of the right honorable gentleman had no voice in the matter. I recall an address that was delivered by Dr. Coombs to the Constitutional Association in Sydney during the war, the subject of which was entitled, “The Greater Freedom”. The purport of Dr. Coombs’s address was that a man need not go to bed at night fearing that he would not have a job when he arose in the morning.
Opposition members interjecting,
– Order! If the Opposition does not maintain order I shall have to act, although I do not wish to do so on this occasion.
– The purpose of Dr. Coombs’s address was to assure his audience that they need have no fear of unemployment provided they submitted to the controls, which were then the order of the day under the National Security Regulations, as a permanent feature of our economy. I know that Dr.
Coombs is an able man, but I also believe that it is dangerous to place any single individual in control of a great institution, because when the “ right “ government is in power he can be very useful to it. Whilst Dr. Coombs is doing an excellent job now, I cannot say the samefor the job that he did as head of the Department of Post-war Reconstruction. In fact, the greater part of his time and that of his deputy, Dr. Lloyd Ross, who lives in my electorate and who was a member of the Communist party until he resigned from it not very long ago-
– I rise to order. I should like to know what relevance Dr. Lloyd Ross’s connexion with the Department of Post-war Reconstruction some years ago has to do with the measure before the House.
– Order ! So far the honorable member’s remarks are quite in order.
– I mentioned Dr. Lloyd Ross merely to show the relationship between socialism and the control of the Commonwealth Bank, with which this measure deals. What I have been saying bears relation to the general debate because I was referring to matters that occurred about the time that the former Prime Minister decided to implement his plans to use the Commonwealth Bank to socialize this country. There is no doubt that Dr. Coombs and his lieutenant stumped the country selling the idea of socialism to the people. In due course Dr. Coombs, who is, I repeat, an able man, was appointed Governor of the Commonwealth Bank. While he is under the control of people who really believe in democracy in the true sense, as do the members of the Liberal party and the Australian Country party, he can do little harm. However, it is preferable that he should be sitting at a board table alongside men who are prepared to carry out the policy of democracy. It is essential, therefore, that the bank he placed under the control of a board instead of being under the control of a single individual. It is said that since 1945, when the bank was placed under the control of a governor, no great harm has been done, but who knows whether or not harm has been done? I shall pose a certain question to the House. Who is responsible for having made the decision to devalue the Australian £1 in September, 1949? Was it the then Prime Minister and Treasurer, the present Leader of the Opposition? Was it the Governor of the Commonwealth Bank? I do not know. This House does not know. The people of Australia do not know, under one-man control, but under the control that we suggest they would know, and the Government would know. The facts of the matter would be tabled in this House. The Governor of the bank, Dr. Coombs, makes the following statement in the bank’s report for the year ended the 30th June last : -
It would appear, however, that the results devaluation has so far achieved in increasing the dollar earnings of the sterling area do not warrant any measure of complacency.
Some of the effects of the devaluations that are directly related to the Australian economy are covered earlier in this Report. In general they added to the inflationary pressures but to an extent difficult to measure.
The point that I am making is, who was responsible for that one act that has cost the people of Australia so much, and has contributed so greatly to the increased cost of living that we hear so much about at the present time? I do not know whether the Governor of the bank is responsible or not but I suggest that the matter would have been given a very much greater airing, and much more consideration, had the decision been made by a board established in the form in which this Government proposes to establish one. Then, not only would it have received greater attention but in addition the people’s rights would have been protected to a greater degree, and the people would have known the reasons that lay behind and prompted devaluation. The report from which I have just quoted is very interesting and I consider that it is a credit to the Governor of the bank that he has paid a compliment to the trading banks of Australia in the fallowing statement : -
In the administration of credit policy, the Central Bank has had the co-operation of the private banks whose extensive contacts and valuable experience have enabled them to make an important contribution . . .
Although the Governor of the bank saw fit to pay that compliment to the trading banks, I have not heard during this debate one word from the opposite side of the House about the great job that the trading banks do, are doing, and have done for Australia, about their contribution to the development of this country from its infancy. As a matter of fact the greater part of banking business in Australia is carried out by the trading banks, who are giving a magnificent service and are properly and healthfully engaged in competition with the Commonwealth Bank.
– What is wrong with the bank, anyhow?
– There is nothing wrong with the bank. It is a magnificent institution, but simply ‘because it is operating well to-day does not mean that it will always operate well. There is a great need for the re-establishment of the board system, apart from the considerations that I have mentioned. We all know that any great organization anywhere in the world finds it necessary to have a board on which an exchange of ideas and of different viewpoints is possible and the existence of which brings better results in the conduct of a business. Why have the Bank of England and all the other important banks in the world adopted the board procedure? There is no doubt that the best governmental banking system for this country is the Commonwealth Bank under the direction of a board, with the right of active and fair competition in the banking affairs of the country and with allowance within the frame-work of the Constitution for competition from the great trading banks that have done so much for Australia.
– Order ! The honorable member’s time has expired.
– It is a great pity that the honorable member for Bennelong (Mr. Cramer) should have seen fit to import into this debate the personalities in which he has indulged. I consider that he has given us an exhibition of spleen such as is very seldom seen in this House. We on this side of the House always try to avoid attacking men in high public office, but the honorable gentleman went out of his way to try to belittle Dr. Coombs. Admittedly he tried to render his criticism less harsh by saying at the end of his speech that “ Dr. Coombs is a clever man and that as long as an anti-Labour government is in office the Liberal party will be able to supervise him and everything will be well. But he stated very clearly that Dr. Coombs had stumped the country preaching the benefits of socialism to the people.
I am amazed at the arguments that honorable members opposite have adduced during this debate. When honorable members on this side mention the achievements of the present Leader of the Opposition (Mr. Chifley) while he was in office as Prime Minister and Treasurer, we find the Prime Minister (Mr. Menzies) or someone else on th>3 Government benches asserting that he was merely following what had been initiated by anti-Labour governments. In fact, the Prime Minister on one occasion gave me special commendation because of my admission of the good work that had been done before the Chifley Government took office. Yet the honorable member for Bennelong to-night chose to condemn Dr. Coombs and the Leader of the Opposition. When we find a man about whom nobody - except a few people in Sydney - knows anything, and even they are very wrathful at what he did to. them, trying to belittle men like the Leader of the Opposition and Dr. Coombs, I consider that he has come to a sorry pass. I did not expect, when I was asked to speak on this measure to-night, that it would fall to my lot to have to refer to any honorable member in the terms that I have just used in respect of the honorable member for Bennelong, but I consider he did go out of his way to besmirch men to whom he should give credit instead of attempting to belittle them. He spoke about one-man control of the Commonwealth Bank and about the aim of the Government in regard to it. He also spoke about Dr. Coombs and of the allegedly sinister influence which the Leader of the Opposition, while Treasurer, exercised upon him, thereby implying that Dr. Coombs did what he was told by that right honorable gentleman. He said that the Government wished to abolish one-man control and to get rid of a man who would do his best to give effect to socialism. During this debate other honorable members have made use of remarks to the effect that under the bill this Parliament will bc able to exercise control .over the activities of the bank and have implied that that is a democratic provision. The people should understand why the bill was brought down. They were astonished, as were many of our leading newspapers, at its really small and inconsequential nature. I consider that it will not achieve what the honorable member has said the Government has in mind.
Let honorable members imagine how the people outside must feel when they hear Government supporters talking about mandates. The honorable member for Bennelong claimed that the Government was given a mandate to introduce this bill. Last week honorable members opposite claimed the Government had a mandate to ban communism. Previously they had claimed that it had another mandate to abolish petrol rationing, and another to pay endowment for the first child.
– They all were the same mandate.
– My friend says that they all were the same mandate. Years ago I said in a State parliament that the only way to obtain a mandate is to have a referendum on a specific question. I still hold that opinion. When a political party or a coalition of parties goes to the people with a dozen or more different items of policy, some people vote on one item and some on another, and it is beyond my comprehension that it can be claimed that all the people voted for all and gave the Government a mandate in respec’t of every one.
I revert to the matter of one-man control and the proposal to abolish it. We are now debating a measure that affects policy and not administration, because the Governor and his assistants will, under this law as they did before, deal with administration. The Government wishes to be able to determine the policy of the bank. The honorable member for Bennelong asked who was responsible for the devaluation of our £.1 concurrently with the devaluation of sterling. I say straight out that the ex-Treasurer (Mr. Chifley) was responsible for it. I do not know whose advice he had about it, whether he had advice from the Advisory Council of the Commonwealth Bank, or only from the Governor of the bank, or whether he- did it without any advice at all, but he was the man responsible for it. Now the honorable member for Bennelong, who has just left the chamber, says that the Government proposes, under the bill, to abolish one-man control and to pass control over to a board. Let us see how the responsibility will be placed under the bill. Clause 7 (2.) states-
Subject to this Part, the Board shall have power to determine the policy of the Bank or of the Savings Bank in relation to any matter and to take such action as is necessary . . .
The clause also states that when the board decides a policy matter and the Treasurer does not agree with its decision, he may, through the GovernorGeneral, determine the policy. Under the bill the Treasurer will have the same control that he has under the present act. To say that this Parliament is to be given control over the bank is ridiculous. The bill states that if the members of the board do not do as the Treasurer directs he shall prepare a statement of the board’s opinion to put before the House.
That is all that is to be done. No power is being given to the Parliament to alter the policy or to interfere with it in any way. Under the bill the Treasurer of the day will have just as much power as he has under the present act. The difference is that, at the present time, if the Governor of the bank does not give effect to the policy of the Treasurer, the Treasurer has the power to direct him. But under the Government’s proposals a board of ten members will be empowered to decide the .policy of the bank and only then when that has been clone will the Treasurer be able to intervene should he disagree with the board’s decision. This proposal shifts the responsibility from the Treasurer.
One honorable member opposite made the remarkable statement that the passage of this legislation has been delayed for six months. The Minister for National Development (Mr. Casey) said this afternoon that that has meant that people have not been able to obtain the assistance that they have needed. He said that those who were wanting loans for housing and other industrial purposes were not able to obtain them because the bank had not sufficient funds to provide industrial loans. I have yet to hear of the man who wants to build a house and who can get a permit from his State government to build it being prevented from building because the Commonwealth Bank cannot accommodate him. In South Australia the difficulty in building a house is not lack ‘of money but shortage of men and materials and delay in the issuing of the necessary permit.
The Opposition has accepted the Government’s proposal to repeal the Banking Act 1947. The Leader of the Opposition, when a similar bill was brought forward, about six months ago, stated that the Opposition raised no objection to that proposal. The Privy Council put an end to the effectiveness of the 1947 act and its repeal by this Parliament would merely bury it a bit deeper. Honorable members of the Opposition announced that they would not interfere with that part of the bill which deals with the profits of the bank and also agreed that more capital should be made available to it. What they did not agree to was the re-establishment of the bank board. The honorable member for Bennelong (Mr. Cramer) put some good arguments forward until he became personal and I approved of his argument that a lot of good knowledge can emerge from the deliberations of a number of men working together. Another honorable member said that the combined wisdom of a number of men is more profound than that of one man only.
– I said, “ You and I “.
– Not just “you and I “. I say that if we cannot learn from one another our mental faculties must be deficient. Listening to honorable members opposite one would think- that the policy of the bank is framed only by the Governor of the bank. They have said that the Governor of the bank is the man who decides its policy despite the fact that there is an advisory committee. On that committee is a representative of the Treasurer. Three men whom the Government, proposes to put on the proposed board are to-day assisting the Governor in an advisory capacity in formulating the policy of the Commonwealth Bank. The Government’s idea that it has a mandate to place a hoard in control of the bank is a hallucination. I thank the honorable member for Bennelong for saying what an important mattei was banking during the last general election. I agree with him. Honorable members opposite will urge that the Government received its principal mandate because of its policy on communism. I say that it derived most of its support from the banking issue because the banking institutions of this country made their men and money available to put forward their arguments. If it had not been for the financial assistance, direct or indirect, given by the big banking institutions, many of the votes that the Government gained would have gone to Labour candidates. In my own State, men from banking institutions told me that every morning in the week bank clerks had been out and about, influencing people. A lady who had been among small market gardens told me that this class of person had been telling market gardeners that if the Chifley Government were returned their money would not he safe in the bank.
I appreciate the honorable -member’s statement that the subject of banking loomed largely at the recent general election. But what the people were concerned about, in the main, was the nationalization of banking, not whether the Commonwealth Bank’s policy should be controlled by the Governor with the assistance of an advisory committee, with the Treasurer having the final determination in the matter, or whether the bank should be controlled by a board of ten members. I do not think that the people are very concerned about that point, but I can quite, understand why honorable members on the Government side are concerned about it. Many of them are men of my own type, but they realize that they arc representing the big financial interests of this country. There is no question about that. Some years ago, in the Parliament of South Australia, I was a member of a committee of managers that had been appointed to try to compose the differences of the two houses in respect of legislation then before the Parliament. After we had deliberated a leading member of the Government party said to me, “ I must congratulate you on the fight you put up, but my people are giving me hell for not doing something more for them “. He recognized that, whilst a member of the party that then constituted, the Government might be prepared to work in his district and do everything possible for pensioners and others, when it came to a showdown in Parliament his vote went to support the big interests that his party represented and against the interests of the people. I was a member of the Opposition in that Parliament for ten years and never, on any matter of major policy of the party concerned, was there any wavering in a division. Each member would vote with his own party, except, occasionally, when the matter was not of any great consequence. I have seen that happen once since I have been in this House, but it happens very rarely, even on small matters.
I thought that the honorable member for Bennelong was rather offensive, although he may not have meant to he, when he said that the former Treasurer had his first lesson in banking when he was appointed to the banking commission. Did the honorable member think very highly of the judgment of the Liberal Prime Minister of the day who selected for appointment to a banking commission a man who had his first lesson in banking when he took up that position ? The honorable gentleman belittled not only the Leader of the Opposition, but also his own leader of that day. I hope that the Government does not insist on the reconstitution of the bank board. If it does so, its attitude towards making more money available for the Mortgage Bank Department and the Industrial Finance Department is not very genuine. The honorable member has just admitted that even during the regime of the right honorable member for Macquarie as Prime Minister and Treasurer the present Governor of the bank did not do any harm. I am wondering why, if Dr. Coombs is not a fit and proper person for the position, the present Government is retaining him as Governor of the bank. The honorable member says it is because he has done a good job. He also claimed that the Leader of the Opposition was trying to implement his sinister beliefs through the medium of the Commonwealth Bank, yet in the next breath he said he should like to know who was influencing the exchange rate and inferred that it was Dr. Coombs. First he said that the Leader of the Opposition exercised a sinister influence on the bank; then he said that the sinister and dangerous mind was that of Dr. Coombs. He cannot have it both ways. To cap all, he admitted that Dr. Coombs is a clever man who’ did not do any- harm - in which category he ako placed the previous Governor - but claimed that one does not know what might happen in the future. He said that while there is a Liberal government there is no danger and then demanded the reconstitution of the bank board. I cannot understand his line of argument.
– He suffers from blackouts.
– I do not know about blackouts.. We have had them in our State, but not because of Bennelong - I mean Bunnerong. I think that the people who are listening in will suffer some blackouts. They hear a Labour man speak and what he says seems all right; then when an honorable member opposite speaks, his side of the question seems all right and they can only come to the conclusion that they should stick to their own side. That is the conclusion of many people outside; but after listening to the honorable member for Bennelong they will have a few blackouts on this matter and will be unable to understand the issues. I am not concerned about the identity of the five men who are to be appointed to the proposed board. Some of my colleagues have asked whom they are to be, but I am not concerned about that. The Treasurer of the day will decide their identity, and when he does so decide, he will not ‘ place men in the position of being able to formulate policy who have different beliefs from his own. If he did so, he would merely be admitting that his own ideas were not dependable and that he was putting someone else on the board to prevent his own wrong ideas from being put into effect.
It is quite clear that the Treasurer of the day will appoint five men whom he believes will formulate the policy which he considers is in the best interests of Australia. I do not cavil at that, but it shows that the identity of the five men need not concern us at all. Seven persons are to be appointed, two of whom may come from the Public Service, but it is not provided that they shall be public servants. It is laid down that five shall not come from the bank or the Public Service, and that if two are appointed from the Public Service their terms of office may be terminated by the Treasurer at any time. At the discretion of the Treasurer one of the other five members will hold office for five years, one for four years, one for three years, one for two years and one for one year. Each year one will retire. No doubt the man appointed for one year will be the person of whom the Treasurer is most doubtful. The one apointed for five years will be the man in whom the Treasurer reposes the most confidence.
– What an evil mind the honorable member has!
– I have not an evil mind. ‘I am detailing what I believe to be the common-sense view on this matter.
I know that if the honorable member for Hume (Mr. Charles Anderson) had to engage one person for a year and one for a week, he would engage for the year the man in whom he had most confidence. Therefore, what I say is the ordinary plain truth. The threat of a double dissolution on the issue of this bill has been made. I repeat what I said six months ago, that this is a sham fight. The Government would not dream of having a double dissolution on this matter alone. If the Government requires the passage of this measure only in order to obtain power with regard to profits and capital for the Mortgage Bank Department, as the Minister for National Development (Mr. Casey) suggested to-day, I cannot understand honorable members arguing about the board. The Government has only one object in view; that is, to constitute the proposed bank board. Its object is not to increase the capital of the various departments of the bank, but to set up a board which will take responsibility for policy away from the Treasurer. The honorable member for Bennelong said that if there were a proposal to revalue the currency, up or down, that board would consider it and its report would be tabled in this Parliament. I do not know where he got that idea., because I cannot see anything in the bill to that effect. If any disagreement occurs between the Treasurer and the board, and the Treasurer overrides the board, then the matter will be brought here; but I tell honorable members that the only time any such controversial matter will come before this House for discussion will be when the Treasurer orders the board to do something against its wish and the Treasurer’s instruction is carried out. Apart from that, honorable members will have no voice in the policy of the bank. The people listening in and the people throughout the country should realize that the story about honorable members being able to discuss in Parliament any of these financial matters is just a myth, because only in the circumstances I have mentioned is it likely that such matters will ever come before the Parliament.
– Order ! The honorable member’s time has expired.
– Listening to the honorable member for Port Adelaide (Mr. Thompson) one would be led to believe that he has forgotten that this bill has already been accepted by the elected representatives of the people of Australia. This House has already accepted the bill and all its provisions. The honorable member detailed various conceptions of democracy, and told the House what should and should not be done with this bill, but the elected representatives of the people have already accepted it. lt was rejected by another place, a place dictated to–
-Order ! The honorable member must not refer to proceedings in another place.
– Very well. I shall refer to the proceedings of the federal executive of the Labour party which meets and tells its supporters in another place what they have to do.
– Order !
– Having mentioned that point, I shall not refer to it again. The honorable member for Port Adelaide has not given any reasons why the decision already made by this House should be changed.
– What is the other place for?
– It is for no good at all. It can be abolished as far as I am concerned. The honorable member gave no valid reason why the decision of this House should be reversed. He referred to certain clauses insisted upon by the Government as essential if there is to be satisfactory and progressive administration of the Commonwealth Bank. The main clause in dispute seems to have been moulded upon the ideas of a previous Labour Treasurer who was of the firm opinion that provision should be made for a bank board. Boards are in control of all our great modern banking institutions. In fact, throughout the world most large financial institutions are controlled by board. The Labour party is of the opinion that one individual, who is subservient to political control, should administer the bank.
Banking institutions should be freed from the possibility of political attack. In recent history honorable members may find one example of a political attack on a bank. That occurred when the actions of a New South Wales Labour government, after wrecking its own Saving Bank, were responsible for a serious rush by depositors to withdraw their savings from the Commonwealth Savings Bank. That attack failed and a further threat was averted with the removal from office of the government concerned and assumption of office by a non-Labour government. That administration had a difficult job to build up public confidence which had been almost shattered by the political attack on the bank. In the interests of the future of the Commonwealth Bank this Government insists that more than one person shall control the bank and that they shall have certain freedom, of action. The late Mr. E. G. Theodore, the greatest Labour Treasurer, originated the scheme that this Government is now putting into force and which is being blocked by the Labour party. We know that the Labour Opposition in the Senate will hold up this measure because Labour wants the Commonwealth Bank to continue to be controlled solely by one man, that is, by a czar or a Stalin who shall not be open to advice from any one. The Bank of England is still controlled by a board, although the socialist Government of Great Britain passed legislation in 1946 to nationalize banking. That board consists of a governor, two deputy governors and sixteen directors. The Reserve Bank of South Africa is controlled by a governor, a deputy governor and nine directors; the Reserve Bank of India is controlled by . a governor, two deputy governors and ten directors; the Reserve Bank of New Zealand is controlled by a governor, a deputy governor and seven directors, and the Bank of Canada is controlled by a governor, a deputy governor and eleven directors. Under this measure, the Government proposes to place the Commonwealth Ban]. under the control of a board consisting of a governor, a deputy governor and seven directors. Two of the last mentioned will be public servants and the remaining five will be nominated by the Government. Yet, because the Labour party accepts dictation from an outside junta, this legislation was rejected by the Labour Opposition in the Senate when it was originally introduced six months ago.
Labour has employed the same tactics in respect of other legislation because it accepts dictation from interests that are not concerned about the welfare of this nation but, o.n the contrary, have virtually declared war upon Australia. Thus, the will of the majority of the people as expressed by the majority of members in this chamber is being frustrated. Those interests to which I have referred are responsible for under-production of materials essential to our industrial and economic development. They seek to increase the cost of living and to aggravate the disabilities confronting our people. The members of the Opposition are merely agents of those interests, and their attitude towards this bill is clear evidence that they are willing to act as tools of those interests which are determined to wreck our democratic institutions. Under this measure no person who is associated with private banking institutions will be appointed to the proposed board. That provision answers fully the arguments to the contrary that members of the Opposition have advanced in this debate. The Government has already indicated that the members of the proposed board will include two gentlemen who are among the greatest economists in this country. The Government is prepared to place its trust in them although one of them, the present Governor of the bank, who was appointed to that position by the previous Government, and for whom members of all parties have the greatest respect, is known to be steeped in socialistic theories. The Government’s proposal to place the Commonwealth Bank under the control of a board was accepted by the late Mr. Theodore when he was Treasurer in the Scullin Labour Government. The policy of the great Commonwealth Bank was controlled by a board from 1924 until 1945, when the Labour Government became imbued with Communist ideals, abolished the board, and made one man the dictator of that institution. Every great commercial enterprise, every private bank, and even the Australian Labour party are directly controlled by boards or executives. Why then, should the great Commonwealth Bank, which controls the financial and monetary policy of this country, be denied the advantages of direction by a board ? The former Labour treasurer, Mr. E. G. Theodore, favoured the system of control of the Commonwealth Bank by a board. In view of that fact, the present Government should not be criticized by the Labour party because it also favours that form of control. This young Commonwealth should have the benefit of the services of able men to direct the financial and monetary policy of the bank. The Labour party, however, demands that control shall continue to be vested in one man, a. financial dictator.
– Is he not doing a good job?
– There has been no turmoil in the finances of Australia during the ‘ last nine months because the Labour party has not been in office. Had it been in power, the present Governor might not have done a good job. The fact that the right honorable member for McPherson (Mr. Fadden) is the Treasurer may have prevented a repetition of the difficulties that beset this country during the financial and economic depression of the early 1930’s. It is true that the Commonwealth Bank was controlled by a board in those years, but, unfortunately, the Scullin Labour Government was in office at that time, and Australia was overtaken by a world depression that no board or individual could have prevented in this country under the existing . circumstances. Let us forget about the Stalinists. Let us re-esta’blish in respect of the Commonwealth Bank the system of control that is in operation in the other countries constituting the British Commonwealth of nations. Let us get back to the old Labour party, the Scullin-Theodore Labour party.
– Why did not the honorable member support the Labour party at that time?
– I should be pleased to support the old Labour party against the present socialists. The Commonwealth Bank, when it was controlled by a board, functioned most satisfactorily.
– The honorable member was opposed to the Seullin Government.
M!r. BERNARD CORSER.- I was opposed to the influence of the honorable member for East Sydney (Mr. Ward) in the Government.
– Order ! The honorable member for Wide Bay is making his speech perfectly well, and does not require assistance by interjections.
- Sir, I am endeavouring not to be diverted from my theme.
M’r. Cur-tin. - Bigger and better dole queues !
– The honorable member for Watson (Mr. Curtin) has a decent seat now. He can sleep peacefully in it.
– Does not the honorable member for Wide Bay (Mr. Bernard Corser) recall the dole queues during the depression, which the Commonwealth Bank Board failed to avert ?
– Order ! The honorable member for Watson must not interject.
– I thank you, Mr. Speaker, for your protection. Members of the Labour party have expressed great satisfaction with the piesent system of one-man control of the bank, hut we are not prepared to swallow dictation by the Stalinists. Many of the opinions that have been expressed by Opposition speakers in the course of this debate are also voiced by Communist speakers in the Sydney domain. What the Communists advocate on n. Sunday is repeated by members of the Labour party during the following week. They are bitterly hostile to the proposal to abolish the one-man system of control of the Commonwealth Bank by the appointee of the Chifley Labour Government. Their opposition, no doubt, is strengthened by the realization that they will not hold office in this Parliament for many years-
– Do not be silly.
– The explanation is so obvious that the honorable member for Herbert (Mr. Edmonds) must be aware of it. The Labour party, if it considered that it had any prospect of being returned to office in the next six years, would not resist this bill .?o strongly, because it would know that it would have an opportunity, in due course, to abolish the bank board. Members of the Opposition are making a lastditch stand against the re-establishment of the board, in spite of the fact that the people endorsed that feature of our policy at the last general election. This House agreed a few months ago to the re-appointment of. the board, but the Government has not been able to fulfil its pre-election promise because the Senate has accepted dictation from the federal executive of the Australian Labour party and has postponed indefinitely its consideration of the original bill. Indeed, that executive told members of the Parliamentary Labour party that they must vote against that measure. Is that democratic? Members of the Opposition, if they were confident of regaining the treasury bench in the next ten years, would not be hostile to this legislation, because they would know that they would be able to amend it later. However, they recognized that they will sit in opposition for the .next twenty years. They are making the best of what is, for them, a bad situation so that they will be able to tell their Communist supporters that they delayed, the abolition of one-man control of the Commonwealth Bank for as long as they possibly could.
Debate (on motion by Mr. E. James Harrison) adjourned.
The following papers were presented : -
Commonwealth Public Service Act - Appointment - Department of the Treasury - J. C. O’Donnell.
Pharmaceutical Benefits Act - Regulations - Statutory Rules 1950, No. 55.
Trade Marks Act - Regulations - - Statutory Rules 1950, No. 56.
House adjourned at 10.48 p.m.
Cite as: Australia, House of Representatives, Debates, 5 October 1950, viewed 22 October 2017, <http://historichansard.net/hofreps/1950/19501005_reps_19_209/>.