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House of Representatives
3 July 1951

20^th Parliament · 1^st Session

QUESTION
- THE PARLIAMENT
QUESTION
- KOREA
QUESTION
- GARDEN ISLAND
QUESTION
- HEARING AIDS
QUESTION
- ARMED FORCES
QUESTION
- SOCIAL SERVICES
QUESTION
- CATTLE
QUESTION
- DAIRYING
QUESTION
- SNOWY MOUNTAINS SCHEME
QUESTION
- NATIONAL SERVICE
QUESTION
- HEALTH AND MEDICAL SERVICES
QUESTION
- COMMONWEALTH JUBILEE CELEBRATIONS
QUESTION
- BUILDING WORKERS
QUESTION
- CIVIL AVIATION
QUESTION
- WOOL
QUESTION
- CURRENCY
QUESTION
- PRICES CONTROL
QUESTION
- TAXATION
QUESTION
- JAPANESE PEACE TREATY
CALL FROM THE CHAIR
QUESTION
- RAIL TRANSPORT
QUESTION
- ROADS
QUESTION
- INTERNATIONAL AFFAIRS
QUESTION
- POLIOMYELITIS
QUESTION
- MOTOR VEHICLES
COAL
ASSENT TO BILLS
PUBLIC SERVICE BILL 1951
- Second Reading
COMMONWEALTH BANK BILL 1951
QUESTION
- THE COMMONWEALTH BANK BOARD
ADJOURNMENT
- Garden Island
- Wednesday, J, July 1951
PAPERS
ANSWERS TO QUESTIONS
- Commonwealth Boards
- Passports
- Repatriation
- Wool
- Housing
- Steel

Mr RIORDAN:
KENNEDY, QUEENSLAND

– Will the Ministeracting for the Minister for the Navy inform me whether it is a fact that a Liberal party member of the House of Representatives was arrested after the House adjourned last Friday by naval guards at Garden Island after he and another unauthorized person had illegally entered that naval establishment to support the press campaign against the lack of security measures there? If that statement is a fact, will the Minister inform the House of the name of that honorable member? Will he also state why the Government has refused to invoke the conspiracy provisions of the Crimes Act, which provides for the imposition of a maximum penalty of seven years’ imprisonment for such an offence?

Mr FRANCIS:

– I have nothing to add to the statement that I have already made about the matter. I merely suggest that the honorable member for Kennedy examine the provisions of the Act to which he has referred, because his interpretation of them is completely wrong.

Later:

Mr Jeff Bate:

– I wish to make a personal explanation, Mr. Speaker.

Mr SPEAKER:

– Does the honorable member claim that he has been misrepresented in this House?

Mr Jeff Bate:

– Two questions that have been asked to-day in this House concern me and reflect upon my conduct. The Sydney afternoon press has named me as the person concerned in the matter. I am that person.

Mr SPEAKER:

– Order ! Does the honorable gentleman claim that he has been misrepresented in this House?

Mr Jeff Bate:

– Yes, in the course of proceedings in this House. On Friday night the representative of a Sydney newspaper telephoned me and told me that there were gaps in the security measures that were being maintained at the naval dockyard at Sydney. As it is well known that there are dangerous enemies in our midst-

Mr SPEAKER:

– Order ! The honorable gentleman is going outside the terms of a personal explanation.

Mr Wentworth:

– I rise to order, Mr. Speaker. I draw your attention to Standing Order 63, which reads -

By the indulgence of the House, a Member may explain mutters ofa personal nature. al though there be no Question before the House but such matters may not be debated.

Mr PEARCE:
CAPRICORNIA, QUEENSLAND

– I desire to ask the Minister for Health a question which is supplementary to the question asked by the honorable member for Oxley. Will the Minister ensure that the old type of vaccine is made available in abundant supplies for use in Queensland ? Although the new virulent type of blackleg is prevalent in the lowlands and flat countries the old type of vaccine is still very effective in certain parts of Queensland and there seems to be a grave shortage of supplies.

Sir EARLE PAGE:

– I shall make certain that supplies of this vaccine are sent to Queensland for the purpose mentioned by the honorable member.

HEALTH AND MEDICAL SERVICES

Mr HOWSE:
CALARE, NEW SOUTH WALES

– Does the Minister for Health know that resident doctors in certain country towns are unable to participate in the free medical scheme for pensioners because of the great amount of work that would be imposed on them? When there is only one doctor in a town that doctor is often unable to participate in the Government’s scheme? So that pensioners will not be deprived of the benefits of this excellent scheme, will the Minister consider using the services of a doctor from a neighbouring town in such instances ?

Sir EARLE PAGE:
CP

– This matter is being examined with a view to ascertaining whether a mileage rate can be agreed upon with the British Medical Association. When investigations have been completed the Government will take whatever action it considers to he appropriate.

Mr BRYSON:
WILLS, VICTORIA

– Following upon the statement of the Minister for Health at the week-end that arrangements had been completed for the provision of free medical services and free medicine for pensioners, and in view of the fact that the Government is spending large sums of money to bring immigrants to this country, will the Minister now give consideration to the provision of free medical and dental services and free medicine to the children of Australia, who are our best immigrants?

Sir EARLE PAGE:

– The Government is already providing free medicine of the life saving and immunizing types to all children as we do to every other person. At the present time that is the extent of the Government’s policy on that matter.

page 783

QUESTION

COMMONWEALTH JUBILEE CELEBRATIONS

Mr J R FRASER:
ALP

– Will the Prime Minister state whether the decision not to bring the jubilee exhibition of Australian art to the Federal Capital was made because no suitable gallery was available? Will the right honorable gentleman investigate the possibility of using one of Canberra’s modern school buildings for this purpose during the school vacation?

Mr MENZIES:
LP

– This matter has not come before me. I was not aware that any express decision had been taken, but I shall certainly be very glad to consider the proposal the honorable member has made.

page 783

QUESTION

BUILDING WORKERS

Mr KEKWICK:
BASS, TASMANIA

– I base a question to the Minister for Works and Housing on a letter received from the Master Builders Association of Tasmania, which inquires about government policy in regard to the payment of building and allied trades workers employedon government works at rates in excess of the federal award. In view of the fact that this association has been negotiating with certain government departments in an endeavour to have them refrain from exceeding the appropriate federal awards, and also bearing in mind the definite inflationary effect of these practices, can the Minister inform me whether it is the Government’s intention to continue to outbid private enterprise for building labour?

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– The Government has no intention of outbidding private enterprise for labour. I point out, however, that the Government is not the only offender in the respect alluded to by the honorable member and also that it sometimes has to get very urgent work done, and it is necessary to obtain labour to complete it. In such instances it very often finds itself in a cleft stick. But it is not the general policy of the Government to outbid private enterprise for labour.

page 783

QUESTION

CIVIL AVIATION

Mr DRAKEFORD:
MARIBYRNONG, VICTORIA

– Can the Minister for External Affairs inform me whether negotiations are proceeding between the United Kingdom Government and the Australian Government for the transfer of Cocos Island in the Indian Ocean to the control of the Australian Government? If such negotiations are in train and are not yet completed, will the proposed transfer of the control of the island result in Australia’s ownership of Cocos Island? If not, which of the governments concerned is or will be responsible for the money now being expended or to be expended in the future for the construction of aircraft runways, aircraft radio requirements and other aviationfacilities on the island?

Mr CASEY:
LP

– It has recently been arranged that the control of Cocos Island, I do not say the ownership, will be transferred from the United Kingdom Government to the Australian Government. If the honorable member wants that answer couched in more precise terms, I shall obtain the information and advise him of it as soon as I can. The construction of an airfield on the main island will be carried out at the expense of the Australian Government. Such construction will include the provision of radio facilities and the like.

page 783

QUESTION

WOOL

Mr SWARTZ:
DARLING DOWNS, QUEENSLAND

– Did the Minister for Commerce and Agriculture see a report in the press of a statement attributed to him that wool-growers who have left the industry had already received their share of Joint Organization profits? As this is not in accordance with the reply of the M inister to a question asked in the House

Hi this subject last week, will he now confirm the fact that growers who have loft the industry will share in the distribution of the remaining profits of Joint Organization, which amount ‘to approximately £60,000,000?

Mr McEWEN:
CP

– My attention was lo-day drawn to two press reports of an answer that I gave to a question asked in this House. The reports to which the honorable member has referred are incorrect. The truth of the matter is that the Government has decided that woolgrowers who have already left, the industry will be paid their full share of the Joint Organization profits as soon as can be arranged. At present there is a balance in sight of about £60,000,000. I checked the Hansard record of my reply to the question asked of rae, and that record confirms what I am now saying. The general policy on the distribution of Joint Organization profits fo other wool-growers who are still in the industry has not yet been decided. But the entitlement of growers to participate fully in their share of the profits is not in question.

Mr LESLIE:
MOORE, WESTERN AUSTRALIA

– My question has relation to the proposed post-Joint Organization wool marketing plan. Is it the intention of the Minister for Commerce and Agriculture to circulate to all woolgrowers the full context of the proposed plan, with details of all its provisions? U not, how does he propose to ensure that all wool-growers will be fully informed of conditions of the scheme prior to exercising their votes? If it is his intention to circulate the necessary information to wool-growers, will he explain whether, and to what extent if any, the proposed plan and conditions differ materially from those submitted to the representatives of the wool-growers and agreed to by them?

Mr McEWEN:

– It is the intention of the Government to put into the possession of every wool-grower who is entitled to vote upon the matter a full and complete statement of the proposed plan. The statement will be circulated at least a month before the vote will be taken, so that individual wool-growers and groups of wool-growers will have an opportunity to study it. It is not the intention of the Government to publish details of the proposed plan in other than a completely formal manner. I do not propose to add to the statement any argumentative matter, but I shall make a statement in which I shall point out in what respects the proposed plan in its final form differs from the requests that have been made by wool-growers.

page 784

QUESTION

CURRENCY

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Is the Treasurer in a position to -state whether the Government proposes to revalue, at an early date, the Australian £1 in relation to sterling? If so, will the revaluation decision be made before the commencement of the next wool season ?

Sir ARTHUR FADDEN:
Treasurer · MCPHERSON, QUEENSLAND · CP

– The answer to the question is “ No “.

page 784

QUESTION

PRICES CONTROL

Mr PETERS:
BURKE, VICTORIA

– Is the Prime Minister aware that, because congressional control measures forbade price “ rollbacks “ or reductions in the United States of America, an indefinite price-freeze has been applied to a wide range of goods in that country, as a prelude to a rigid system of prices control, with the object of averting a disastrous disruption of the nation’s economy? Does the right honorable gentleman believe that Australia is heading for a similar serious crisis that will have disastrous consequences unless steps are taken immediately to prevent the present runaway catastrophic inflation? Will he take action during this parliamentary session to secure power for the Government to follow the lead of the United States of America and save Australia from serious economic troubles?

Mr MENZIES:
LP

– I cannot answer all of the questions that have been asked by the honorable gentleman, but I can assure him that the problems to which he has referred are occupying a great deal of my own thoughts.

page 785

QUESTION

TAXATION

Mr DOWNER:
ANGAS, SOUTH AUSTRALIA

– By way of explanation of a question to the Treasurer I refer to the fact that many amenities and essential services in the Murray irrigation areas of South Australia are dependent on the distribution of profits of community hotels to local-governing bodies. The present tax rates on such distributions are seriously curtailing the activities of these local authorities. Will the Treasurer, when framing the forthcoming budget, give earnest consideration to exempting such annual disbursements from taxation?

Sir ARTHUR FADDEN:
CP

– Yes, consideration will be given to that aspect of taxation during the preparation of the budget. That is one of the many subjects that have been referred to the expert committee on taxation.

– I was on my feet at the time that I did so.

page 786

QUESTION

RAIL TRANSPORT

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP

– I ask the Prime Minister whether the discussions between representatives of the Australian Government and the various Railway Commissioners on the problem of rehabilitating our railway systems have reached the stage at which a full report on this vital matter can be presented to the Parliament? If that stage has not been reached, will the right honorable gentleman inform the House of the basis on which the discussions are proceeding? Is the possibility of the Commonwealth taking over all railways in this country being discussed? If not, does the Government intend to give that matter its attention

Mr MENZIES:
LP

– As the Minister representing the Minister for Shipping and Transport is, unfortunately, unable to be here to-day on account of ill health, I shall convey the honorable member’s question to him and ask him to reply to it.

page 786

QUESTION

ROADS

Mr.FULLER. - If the Government will not agree to pay the whole of the collections from the petrol tax to the States for the maintenance and construction of roads, will the Treasurer favorably consider making immediately an additional grant of £20,000,000 to be expended principally by local government authorities throughout Australia upon the construction and maintenance of roads in country districts?

Sir ARTHUR FADDEN:
CP

– The answer to the honorable member’s question is “ No “.

page 786

QUESTION

INTERNATIONAL AFFAIRS

Mr HOWSE:

– As the Minister for External Affairs, in the statement that he recently made to the House, omitted to refer to the problems of Europe and the rearming of Western Germany, which arc of great interest to Australia, will he make a statement on those vital subjects before the current sessional period concludes?

Mr CASEY:
LP

– Having some knowledge of the business that will be before the House during the remainder of the current sessional period, I doubt whether I shall have the opportunity to do as the honorable member has suggested. However, I shall see whether a statement that will cover in the most precise terms the main points that were omitted from my previous statement can be made. I shall do my best to make such a statement, but 1 cannot promise that I shall be able to do so.

page 786

QUESTION

POLIOMYELITIS

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I ask the

Minister for Social Services to inform me whether the Government is prepared to amend the Social Services Consolidation Act, or the regulations thereunder, whichever is necessary, to enable sufferers from poliomyelitis, who have dependent children, to. receive the same benefits as sufferers from tuberculosis. Willthe Minister also consider the advisability of amending that part of the act which applies a means test to the income of a sufferer of poliomyelitis, even to the extent of preventing him from receiving the sickness benefits that are payable under that legislation?

Mr TOWNLEY:
LP

– The matter of making a payment to sufferers from poliomyelitis at the same rate as is applicable to sufferers from tuberculosis was raised in the House last week, and I stated in my reply that that proposal, inaddition to quite a number of other problems, was under consideration. The abolition of the means test on the earnings of sufferers from poliomyelitis would give rise to a difficult and complex matter, but it also is under review.

page 787

QUESTION

MOTOR VEHICLES

Mr DRUMMOND:

– In the absence of the Minister for Supply, will the Prime Minister inform me whether his attention has been drawn to serious complaints that have been made to the effect that motor cars imported from Great Britain are not accompanied by sufficient supplies of duplicate parts to enable them to be kept on the road? Those cars represent considerable sums of money, and some of them have been laid up for months because spare parts have not been available. Apparently, they are not being imported. Can the Prime Minister inform the House whether there is any truth in the statement that exporters are debarred by the British Government from sending out a sufficient number of duplicate parts for each motor vehicle? I point out that a large number of British motor vehicles have been purchased by persons in Australia who require means of transport, and that the lack of spare parts causes irritation, delay and economic loss. If the information for which I have asked is not at the disposal of the Prime Minister, will he have searching inquiries made, and. if necessary, take appropriate action to improve the position?

Mr MENZIES:
LP

– I shall have the honorable member’s question conveyed to the Minister for Supply, who is not here to-day, and see that he obtains an answer.

page 787

COAL

Mr CASEY:
Minister for External Affairs · La T robe · LP

– by leave - I lay on the table the following papers: -

Second and Third Annual reports of the Joint Coal Board for the financial years 1948-49, and 1949-50.

Report of the Auditor-General and Accounts of the Coal Board for the financial years 1947-48, 1948-49 and 1949-50.

The Auditor-General has been unable to certify the correctness of the Coal Industry Fund account of the board for the years 1947-48, 1948-49 and 1949-50. The account of the board includes the accounts of the operations division of the board which operated certain open-cut mines. The Auditor-General’s inability to certify the accounts was in the main due to the absence, in relation to two open-cut mines, of stores and costing records which would be satisfactory from an audit point of view, and to the absence of provision in the accounts for certain liabilities of the board in respect of re-contouring surface land after opencut operations and the use of equipment not owned by the board. The board stated that this failure of the accounting system was due to pre-occupation with the task of winning additional coal supplies, and the extreme difficulty of obtaining competent clerical staff in the country districts in which the mines were operated. Action has been taken to remedy the matters mentioned in the Auditor-General’s report. Details of that action are set out in the reports which have been tabled. To avoid any misconception, I add that these reports cover the period before the present chairman of the board, Mr. S. F. Cochran, assumed office.

page 787

ASSENT TO BILLS

Assent to the following bills reported : -

Supply Bill (No. 1) 1951-52.

Supply (Works and Services) Bill (No. 1) 1951-52.

Appropriation Bill (No. 2) 1950-51.

Appropriation (Works and Services) Bill (No. 2) 1950-51.

Loan Bill 1951.

War Pensions Appropriation Bill 1951.

States Grants (Special Financial Assistance) Bill 1951.

page 787

PUBLIC SERVICE BILL 1951

Second Reading

Mr HASLUCK:
Minister for Territories · Curtin · LP

– I move -

That the bill be now read a second time.

This bill has a very simple purpose, although at first sight it may appear that a rather complicated method is used to achieve it. The purpose is to permit the standard salaries of the Commonwealth Public Service to be expressed in amounts which are reasonably close to the actual rates that are now being paid. I emphasize at the outset that this bill relates only to the way in which Public Service salaries are stated. It does not affect the amount of those salaries, the way in which those amounts are calculated, or the machinery by which salaries are fixed. As honorable members know, Public .Service salaries are at present expressed as a standard salary, according to a table of salaries contained in the Public Service Regulations. That standard salary is subject to adjustment, upward or downward, according to changes in the cost-of-living index number. In consequence, as honorable members have noticed, an advertisement for a position, or a reference in official papers to a position in the Public Service, usually shows the standard as one figure, and the cost-of-living adjustment as another figure. The actual amount which is received by the public servant is the total of those two figures.

The purpose of the bill is to fix the amount which was actually being paid to each public servant on the 31st December last as the standard rate for his position. The last date on which the standard salary was in fact the actual salary was as long ago as July, 1926. Since then there have been considerable fluctuations of the actual amounts paid, and at present, in the case of adult males in the Public Service, the upward adjustment amounts to as much as £204. For example, if an officer to-day is actually receiving a salary of £482 per annum, it is shown as £278 standard rate plus £204 adjustment. The effect of the bill will be to state the salary, not in that involved way, but simply as an actual salary of £482.

Honorable members may well ask why it was necessary to introduce a bill in order to achieve so simple a purpose. It would have been possible to make the change by means of an amendment of the Public Service Regulations. But, if that course of action had been chosen, the consequential clerical and administrative work would have been extremely involved. Section 29 of the Public Service Act provides that the Governor-General may raise or lower the classification . of any office. In acting under that section, the Governor-General does so upon the recommendation of the Public Service Board after the board has obtained a report from the permanent head of the appropriate department. The procedure that would be consequential upon the use of section 29 would be virtually a reclassification of each position and, under the Public Service Act, a general reclassification requires that each position be deemed to be vacant. Thus, every position in the Public Service would be deemed to be vacant, every public servant would be deemed to be unattached, and it would be necessary to appoint officers one by one to their old positions. Honorable members will readily appreciate that this procedure would involve a great deal of detailed clerical work which would occupy a long time. It is only to avoid that rather involved and laborious process that the Government, after careful consideration and on the advice of the Public Service Board, has chosen the simpler and more direct method of introducing this bill. When it becomes necessary, as in the present instance,, for the salaries of all officers, or of large groups of officers, to be altered at the same date without any change of their relative positions, the provisions of section 29 of the act are inappropriate and the procedure which is envisaged in this bill is much more economical and orderly.

Honorable members who examine the bill will notice that it provides that the salaries of all officers shall be altered from a uniform date by statute. There will be no reclassification in the terms of section 29 of the Public Service Act and no necessity for any of the consequential action of declaring offices vacant. There will be no alteration of the actual rates that are paid to any public servants. The only alteration will be that the standard rate will be declared in the same amount as the actual rate that is being paid to each officer in his respective position. In commending the bill to the House, I again emphasize that it is not a measure for the fixing of salaries, the changing of any salaries, the introduction of any different machinery for the fixing of salaries or the making of classifications. It is designed to achieve the simple purpose of having the actual salaries that were being paid on the 31st December, 1950, declared as the standard salary rates for the respective positions.

Debate (on motion by Mr. Calwell) adjourned.

page 789

COMMONWEALTH BANK BILL 1951

Second Heading.

Debate resumed from the 26th June (vide page 413), on motion by Sir Arthur Fadden -

That the bill be now read a second time.

Dr EVATT:
Leader of the Opposition · Barton

– The importance of this bill is increased by the present inflationary trend in Australia and by the fact that the authority which controls the Commonwealth Bank has the tremendous power of directing the ebb and flow of credit through the private banks. The objection of the Opposition to the measure is that it will hand over to a board .the control and administration of the Commonwealth Bank, which is entirely owned by the people of Australia, in all its branches. If honorable members will examine the bill, they will see that at least five of the ten members of the proposed board will consist of outside representatives, not one of whom will be under any continuous duty to the Australian people as the sole owners of the bank. This involves the entire policy of administration of what are, in effect, the assets of the people. In the view of the Opposition this bill is just as wrong fundamentally as was the original measure that was submitted to the Nineteenth Parliament.

The first point that I emphasize is that the terms of the bill are widely different from the proposals that were contained in the policy speech that was made on behalf of the present Government parties prior to the 1949 general election. That speech foreshadowed a small board, subject to control by the Parliament, with the function of checking inflation by control of the note issue. This bill does not provide for a small board. It provides, in fact, for a large board of ten members. It does not provide for control by the Parliament, except in a very indirect way to which I shall refer later, and the idea of controlling inflation apparently has been abandoned. A fair analysis of the facts shows that the Government has no real or popular mandate for such a measure. The original hill was brought before this House during the life of the last Parliament and was amended in the Senate. Later, the Government placed the bill in cold storage and finally, in March of this year, brought it out solely for the purpose of providing the necessary legal fiction for a double dissolution of the Parliament.

One would have supposed that, during the subsequent election campaign, the bill which had been recited in the decree as the cause of the double dissolution, would have been discussed and debated by the speakers of the present Government parties. Wa3 that so? Far from it! It was never mentioned by the representatives of those parties during the campaign as far as I have been able to ascertain. The fair inference to be drawn from that fact, I think, is that most of those .speakers were instructed not to mention the subject from the public platform. I therefore deny - and I think it is a proper denial - that the people of Australia want control of their bank to pass from the Governor, who is responsible to the government of the day and. therefore the Parliament, to a board such as is proposed under this bill. The main contentions of the Treasurer (Sir Arthur Fadden) in his second-reading speech are not borne out. The speech seemed to me to be somewhat perfunctory. I make that comment with all respect because we know what a hard worker the right honorable gentleman is. However, he treated the whole matter as being too plain to require further argument. I certainly hope that the Government will not adopt that attitude in view of the enormously increased importance of the functions of the bank, having regard to the present inflationary spiral. I submit that the Treasurer’s claim that the Government has a mandate to introduce this bill is misleading. The Treasurer said that the board would he fully responsible to the Parliament. That is quite incorrect. What the board does will never become the business of. the Parliament so long as the board is in agreement with the Treasurer. Under this bill, if the Treasurer does not positively disapprove of what the board does then the matter cannot come before the Parliament although the House may wish to have an opportunity of discussing the decision both of the Treasurer and of the board.

Some months ago, as the Treasurer has pointed out in reply to a question, vital changes were made in the financial policy of the Commonwealth Bank. But Parliament has never been fully informed of the new policy. There is no provision in the bill for informing the Parliament of great changes in policy unless there is disagreement between the Government and the board. The claim of the Treasurer that Professor Giblin, in his recent book, gave a final opinion which was definitely in favour of control of the Commonwealth Bank by a board, was quite incorrect. As the Treasurer admitted, Professor Giblin strongly criticized board control. On pages 199 and 200 of his book, Professor Giblin dealt with the disastrous closing of the New South Wales Government Savings Bank during the depression years. He said that, at that time the board could have prevented the bank from closing but that it actually connived at its closure. The board did not want any more State savings banks. In the great crisis of the depression, because the former CommonwealthBank Board failed to act quickly enough, the closing of the New South Wales Government Savings Bank resulted in the suffering of the depositors of the savings bank many of whom had to sell their savings bank pass books for half their nominal value. The most that can be said by the Treasurer is that Professor Giblin regarded the board as an interesting experiment which was stopped before it was possible to assess its final achievement. How then can the Treasurer claim that the professor’s final opinion was in favour of control by a board ? The Treasurer’s statement on that point is negatived by a study of the book.

Mr Calwell:

– The professor had something to say about Sir Robert Gibson.

Dr EVATT:

– Yes. Particularly in connexion with the closing of the New South Wales Government Savings Bank. The Treasurer has claimed that this bill will leave the broad structure of the

Commonwealth Bank unchanged. That is incorrect. The change that this bill proposes is revolutionary. To-day, the bank has a Governor who is a public servant who can be directed by the Government to carry out a policy in accordance with its wishes if there is a dispute. It is misleading to say that the broad structure of the bank would be the same when its Governor had to share his power with nine other directors. The Treasurer’s statement that collective responsibility will be restored by a board which will ensure the integration of the policy of the bank with economic and financial policy generally seems to me to be meaningless. Either that statement is a truism in the sense that it describes the present law or it is not an argument in favour of control by a board.

The Government is hopelessly split on the question of the revaluation of the £1. There are two opposing pressure groups in the Government. A large section of the Liberal party is in favour of revaluation and the whole of the Australian Country party opposes such a policy. Apparently, the Prime Minister and the Treasurer are in opposing blocs and there is no neutral camp on the Government side of the House. Huge stakes are involved in this matter. Millions of pounds which really do not belong to Australia because its owners are domiciled abroad have been sent to this country by people who are, in effect, currency gamblers who wish to make a huge profit out of a possible appreciation of the Australian £1. That fact makes it vital to maintain the present method of control of the Commonwealth Bank by a governor. The Governor of the bank is not a dictator. He is advised at the administrative level by an advisory committee which consists of high officers of the bank and of the Public Service. He is controlled, if need be, at the governmental level, by the Treasurer. The Treasurer is responsible to Parliament, and in that indirect way the Governor is responsible to Parliament.

It is very important that decisions on bank policy should be made by persons who have no outside interest. Yet, it is proposed in this bill that the skilled technicians should at least be balanced in number - perhaps outnumbered - by persons whose qualifications are not even set out in the bill. All that the bill requires is that they should not have certain qualifications. They are not to be officers of the- Commonwealth Bank, nor- of an; other bank. They are not to be Commonwealth public servants. That is a drastic change which will result in the Governor having only one-tenth of his previous authority. The Labour party’s policy requires the unified control of the people’s bank by the servants of the people, subject to ultimate direction by the representatives of the people. I submit that that is a fair and democratic method of control. The Commonwealth Bank is flu1 people’s bank and private interests have no more right to be represented on the board of directors than the Government lias the right to place its directors in charge of private institutions. The Labour party believes in the direct, continuous and complete responsibility of the administration of the bank, which should be controlled by a governor who is responsible to the Government, and so to the Parliament.

The principle of responsibility will be destroyed by this bill which, if assented to, would reintroduce indirect control of the whole banking system of Australia because the powers of the Commonwealth Bank as a central bank enable it to determine the credit policy of every private bank. The Government has gone to absurd lengths in this matter. I could understand an argument in favour of a board for the purpose of dealing with the central banking activities of the bank. This proposal extends to the trading bank activities of the Commonwealth Bank which are also to he controlled by the board. The worst feature of all is the taking away from the Governor, and the handing over to a board, of the complete control of the Commonwealth Savings Bank, which has a limited charter and which has no great matters of policy to determine. Why should the Governor have his present _ authority diluted practically to the point of powerlessness? At present he has an advisory council, which consists of experts of the Commonwealth Treasury and of the bank, to assist him. That is sound practice. They cannot veto his decision. The Governor has to assume responsibility. Under this hill the Deputy Governor,

Mr. Richardson, who, incidentally, is a very able man, will have the same power on the board as the Governor will have. So that we could have a situation in which the Governor issued ari instruction, between meetings of the board, to the Deputy Governor, and then his junior, the Deputy Governor, can go to the next board meeting and vote against the Governor’s decision. That is the situation to which the Governor will be reduced by this bill. I say that that is sheer administrative irresponsibility, and not administrative responsibility. I make a further point, which the Treasurer himself has been fair enough to make on previous occasions. It is, that this hill has not been introduced because the Government has not confidence in the present Governor of the bank. The Treasurer has expressed approval of the administration of the present Governor, Dr. Coombs. But the Governor’s authority is now to be weakened, and may possibly be destroyed.

N”ow I come to another, more important, matter, which I commend to the attention of the House. Honorable members will recall that during the last Parliament a similar bill that was introduced here contained a provision for the appointment of a board of ten members, seven of whom were to be appointed by the Government. The Treasurer then undertook that among the appointees, in addition to the Governor and the Deputy Governor, would be three persons whom he named. They were Professor Melville, the economic adviser to the bank, Mr. Watt, who was then Secretary to the Treasury,, and Dr. Roland Wilson, who was then the Commonwealth Statistician. Professor Melville no longer occupies his former position. He is now Australia’s representative on the International Bank whilst Mr. Watt has become head of Trans-Australia Airlines. So neither of them can be appointed to the proposed board. Dr. Wilson is now Secretary to the Treasury and will, ex officio, he a member of the hoard. The House is entitled to know what is proposed to be done about that matter, because it is possible that out of the board of ten members the only persons who will be associated with the Commonwealth Public

Service or the Commonwealth Bank will be the. Governor, the Deputy Governor and the Secretary to the Treasury. The other seven members could, under this bill, be appointed from outside either the bank. or the Commonwealth Public Service.

Mr Gullett:

– Hear, hear!

Dr EVATT:

– The honorable member for Henty says “ Hear, hear ! “ He apparently would give away the complete control of the bank, which is owned by the people, to outside persons who have no responsibility to the people. I do not think that he is really serious in that, because we know that he is occasionally facetious in these matters. The proposed board will have tremendous powers, and it is possible that some of the seven members to be appointed by the Government may be connected with powerful business corporations, many of which must be vitally affected by the great decisions of the bank. “What will be the powers of the proposed board? It is of no use to enumerate them in detail, but it will be in charge of the whole central reserve banking system of the country, and will have complete control over the machinery of credit and currency. Price levels and purchasing power will be affected by the important decisions made by the board. To-day the note issue totals £250,000.000. Special accounts deposited with the Commonwealth Bank by the trading banks total £560,000,000, and balances abroad amount to £700,000,000. The board will have control over those items and will be responsible for recommendations regarding exchange rates with every currency in the world. The assets of the Commonwealth Bank now total £1,100,000,000 and those of the Commonwealth Savings Bank total more than £700,000,000. How can the five, or seven, gentlemen to be appointed by the Government to the board, be taken from somewhere outside the bank or the Commonwealth Public Service and display sufficient technical knowledge and skill, as well as complete independence from their private interests, to control the bank as it should be controlled ? That is the problem. It is hard to imagine any appointees associated with great enterprises in some part of the country who would be completely inde pendent in their judgments. Yet they will be able to override the Governor of the bank who now has the authority, subject to the Treasurer. The bill is unnecessary because, at present, if the Government considers that the Governor is wrong in anything, it can override his decision. I have always thought that the purpose of this bill was to enable government policy to be carried out by a board without any matter ever coming to a dispute between the board and the government of the day. The result of the operation of this measure will be that decisions will be made by the board without any reference to the Parliament. It is not true to say that the proposed system -will increase parliamentary responsibility. It will not do so in any real sense. Who will these five, or seven, gentlemen be who will be appointed to the board? They will not be bankers. The bill provides that they cannot be experienced in banking. They will enter the bank’s board room, to join in board meetings, as amateurs, but they will have the power to overrule the experts. Then, when they have finished the board meeting and have made great decisions, they will hurry back to their own private businesses. I say that that will be a shocking way for a great national institution to be conducted.

The late Mr. Chifley’s objections to the previous bill for the appointment of a board were sound. He believed that the Commonwealth Bank should be a people’s bank, and that it should be controlled by individuals with an independent tenure of office, and not connected with some other occupation. He believed they should be full-time officers of the bank. I say that to-day the management of the central bank, apart from the savings bank and trading bank activities of the Commonwealth Bank, is no longer a matter for amateurs. A sound businessman does not necessarily make a good central banker. The whole of the central banking mechanism is endangered by this bill. It is perfectly true that a private bank has a board of directors, but the management of such a bank is, of course, in the hands of its owners, the shareholders who elected the board. So, in that sense, the members of the board of a private bank are responsible to the electorate, the shareholders. But now, in connexion with an asset of tremendous importance owned by the people, this bill proposes a system which will really mean indirect control, by the seven individuals to be appointed to the board by the Government, and they will have power over the financial and economic structure of the country so far as it is involved in credit. As a matter of fact, this legislation, according to the Prime Minister’s policy speech, was originally aimed against the present Governor, with the intention of reducing him to a cipher. But the Government has since expressed confidence in the Governor, who was appointed by the late Mr. Chifley, and that fact makes the bill unnecessary. However, the Government has to go through with this hill because, as I have already pointed out, it was the instrument used by the Government for the purpose of gaining a double dissolution of the Parliament. The late Mr. Chifley strongly objected to the board system of control of the bank. His objection was based upon his experiences in pre-war years, especially during the depression, and on a very positive principle, which I submit, is a sound one, and which I shall restate. That principle is that the Commonwealth Bank, which really belongs to the people of Australia, should not be controlled in any of its departments by persons other than those who assume direct and fulltime responsibility. I do not think that any system other than that will work. The present proposal may be disastrous, because we now have the economic financial and credit position of the country deteriorating, with inflation- » ry pressures which are causing hardship.

According to the bill the Governor of the bank will remain in his position. His status as Governor will not be altered. But at the board level he will have only one vote out of ten. His own Deputy Governor may vote against him at the meetings of the board. It is required by the bill that only three of the ten members of the board must be bank officials or public servants, that is the Governor, the Deputy Governor and the Secretary to the Treasury.

Mr Bowden:

– There is also Dr. Wilson.

Dr EVATT:

– Dr. Wilson . is the Secretary to the Treasury. The Treasurer stated when the previous bill was before the House that Dr. Wilson would be appointed to the Commonwealth Bank Board. That gentleman was then Commonwealth Statistician. He is very familiar with banking problems. Of course, it would not follow that his successor as Commonwealth Statistician would be suitable for a position on the BoardI do not know whether he would be suitable, neither does the House! Honorable members are asked to set up a board: of ten though they know only three of the ten - Dr. Coombs, Mr. Richardson, and’ 1 h: Wilson. It is pertinent to ask who will be the other seven members of the board.. I submit that the identity of those seven persons is of great importance, becausethe Governor will be in the day-to-day position of being liable to have any administrative action of his overruled at theboard level. It is true that matter’s of mere detail would probably not be discussed by the hoard, but it is completely wrong that the bank, which belongs to the people, and which has such tremendous central banking powers under the Banking Act 1945, should he placed in the hands of persons who will not be controllable by the Government and who will not be bound to carry out government directions. Such persons will no doubt he associated with important outside undertakings which must be affected by general banking and financial policy; I submit that all the statements and opinions expressed during past years by the late Mr. Chifley, who had a vast knowledge of banking and was the author of the Banking Act 1945 and the Commonwealth Bank Act 1945, will be borne out by this legislation.

There are two provisions of thebill to which I have not referred, because previously the Opposition agreed to accept them. The first is the projected increase of capital in certain undertakings of the Commonwealth Bank. That provision is still acceptable to the Opposition. The second provision is the repeal of the Banking Act 1947. We have already expressed our agreement with that. The essence of this bill is the proposal for the establishment of a Commonwealth Bank Board, and I ask honorable members to give that careful consideration, because the Opposition intends to’ test the feeling of the House on that aspect.

Mr CASEY:
Minister for External Affairs · La Trobe · LP

– I sometimes think that the Australian listening public must be extraordinarily long suffering. This bill has been debated for hundreds of -man hours during last year and this year. It was introduced in the Parliament in April, 1950, almost fifteen months ago, -and was debated at great length in this -House and in another place. In October, 1950, it was again debated at great length, and now it is being further discussed. The range of subjects of a controversial nature contained in this bill is extremely limited. As was said by the Leader of the Opposition (Dr. Evatt), practically the only controversial issue is whether or not the bank shall be controlled by a board or by a single individual. The discussion of that, issue has gone on and on until I expect that at present only a very few unfortunate individuals in some of the remote outposts of our Australian civilization still have the fortitude to listen to it. I believe that no sensible man makes a speech for the sake of making it, nor does he repeat himself unless he is obliged by circumstances to do so. I feel that I am obliged to repeat what I have said on this measure, as no doubt, the Leader of the Opposition felt obliged to repeat the arguments that have been put forward by previous Opposition speakers almost ad nauseam during the last eighteen months. However, it appears to be incumbent upon us to repeat certain arguments. . The Leader of the Opposition said that the Government had no mandate for this legislation. I remind him that this matter has been made a subject of two general election policy speeches, but, as the right honorable gentleman said with great truth, it did not excite much interest during the last general election campaign. I trailed my coat through four States in connexion with this matter, but I could not raise an argument. The people were not interested in this issue. I believe - that., the average Australian does not care two pence for the intricate techniques of control of the Commonwealth Bank. The Australian people are perfectly willing to leave that matter to those whose business is to concern themselves with the rather intricate and’ recondite matters of central banking.. Therefore, it is not a public issue.

Opposition members have adopted different attitudes about, this subject at. different times, and .1 do not blame them for that. I think it was Ralph Waldo Emerson who said something to the effect that an irritating consistency was the hobgoblin of little minds. I do not blame honorable members opposite for changing their minds. However, I do point out that the attitude of the Labour party before the last war was distinctly different from their attitude to-day. I shall briefly canvass the evidence of their change of opinion, because I do not want to add any more than is necessary to the.tremendous spate of words that has issued forth on this subject. There is evidence to show that before the war the Labour party had no quarrel with the control of the central bank by a board. In the middle nineteen thirties a high level inquiry commission, of which the late and greatly lamented Mr. J. B. Chifley was a member, was set up to investigate banking and monetary policy in Australia. In the report of that royal commission, Mr. Chifley subscribed to the following conclusions : -

The present method of government of the Commonwealth Bank is by a Board, a p po i 11 te, by the Commonwealth Government, and consisting of a Governor, the Secretary to the Treasury, and six directors . . . we ure of opinion that this method of government is generally satisfactory.

I repeat, that Mr. Chifley subscribed to that resolution. He also said in relation to that inquiry -

I realize, however, that a governmentowned 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.

I direct the attention of honorable members to the fact that Mr. Chifley used the word “ men “ in that statement rather than “ man “. That was a very direct and definite sponsoring of the system of control of the bank by a board.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– But not a board composed of outside bankers.

Mr CASEY:

– Not necessarily bankers. There will notbe outside bankers on this board. The outside people will have a long experience and technical knowledge of banking. The Leader of the Opposition (Dr. Evatt), whose mind is logical and reasonable, knows that practically all the central banks in the democratic countries are controlled by boards, the majority of the members of which are part-time lay directors. That applies from the Bank of England down through every democratic country of which I am aware. The only countries whose central banks are controlled by single individuals are those in the Communist countries - three, four, or half a dozen of them. That fact is ignored by honorable gentlemen opposite because it adversely affects their argument. They know that a few years ago the Bank of England was nationalized at the instance of a British Labour Government. Surely that would have been the appropriate moment for that Government to make any changes that it desired to make in the system of control of the bank. The British Labour party is not without courage in these matters. It has secured the passage through the British Parliament of nationalization measures far more radical than that under which the Bank of England was nationalized. But the British Government left the board of the Bank of England intact, after placing a few of its own nominees upon it. I fail to see how honorable gentlemen opposite can laugh that off. Do they believe that they have some fund of knowledge relating to the control of a central bank that is denied to the members of Labour parties in other democratic countries? Do they believe that they know something that nobody else knows? I do not believe that they have such a fund of knowledge.

As the Leader of the Opposition has said, the Commonwealth Bank is a great institution, but in other countries there are similar institutions of equal or greater size that are controlled by lay directors. Limited liability companies in Britain, America and other countries have been controlled, and are now being controlled, by lay directors.

Experience has shown that a man who has spent the whole of his adult life in an industry is not the best man to control that industry, and that he must be assisted by laymen who have a broader knowledge and experience of other fields of activities than he has. It is not too much to say that civilization has been built on the basis of the control of organizations by lay directors who have been sometimes, but not always, assisted by a technical president or chairman. Lay directors can bring to bear upon the problems that confront the industries that they administer a broad knowledge of the requirements of all sections of the community.. That is especially valuable in relation to banking.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– The Minister for External Affairs (Mr. Casey) is talking of private ownership.

Mr.CASEY. - I am talking of both privately and publicly owned institutions.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– The Bank of England is not owned by the British people. The debentures are still held by the original owners.

Mr CASEY:

– The debenture holders were bought out when the Bank of England was nationalized. That bank is now owned entirely by the people of Great Britain. The arguments that have been advanced by the Government in support of this measure have not been countered by the Opposition. They cannot logically be refuted. Ibelieve that the present attitude of honorable gentlemen opposite to the proposal to re-establish the Commonwealth Bank Board is due to the late Mr. Chifley. As we all know, he was a man of strong convictions. I believe that he imposed his views upon the members of his party and made them believe, as he believed himself, that one-man control of the Commonwealth Bank, or dictatorship, was the right course to follow. The Labour party had never believed that until the late Mr. Chifley appeared on the scene. His mind was probably conditioned by the high degree of centralization that he and the Labour party had established in Australia during the war years. With great respect to his memory, I say that what he believed was not necessarily correct. ‘ This is a simple measure. We believe that we have defended logically what we propose shall be done. We believe also that what we propose shall be done will be in line with the experience of all countries other than Communist countries and that it will work in the best interests of the Australian people. I do not believe that the . average Australian is very much concerned about the technique of control of the Commonwealth Bank. I could speak upon this measure for a con.siderable time, as could many other honorable members on both sides, of the House, hut I do not propose to do so. The issue is a simple one, and the sooner it is decided by a vote, the better will it be. I hope that the measure will have a quick passage through the Senate. The simple case that has been put forward by the Government has not been answered. The arguments of the Leader of the Opposition have not run on the same track as those of the Government. We have followed the track of the bill, but the right honorable gentleman has followed his own track. That device is not uncommon in debate. I join other honorable members on this side of the chamber in commending the bill to the House.

Mr DALY:
Grayndler

.- Despite what the Minister for External Affairs (Mr. Casey) has said, I believe that the re-institution of a system of control of the Commonwealth Bank by a board would be a revolutionary action. It would be a retrograde step, because it would not only retard the progress of the bank but also place the bank under a system of control that in the past, despite what honorable gentlemen opposite may say, caused misery and want in this country.

The Minister for External Affairs said that our late leader was responsible for our opposition to the Government’s proposal. Mr. Chifley had good reason to abhor the system of control that is now proposed. In consequence of that system, in the 1930’s many thousands of Australians were condemned to unemployment and poverty and were deprived of the ordinary amenities of life. The former leader of our party fought against the control of the bank by a .board and endeavoured to ensure that the national interest should prevail against the interests of the private banking institutions that to-day seek a reversion to that system. He saw how the Bank was frustrated in its endeavours to bring prosperity to this country and to make itself a real national institution. He fought hard to ensure that the people’s representatives should control the people’s bank. In 1945, he was responsible for the introduction of major banking reforms, the effectiveness of which no member of the Government parties is able to criticize. Neither the Treasurer (Sir Arthur Fadden) nor the Minister for External Affairs has been able to give one example of the bank, under the present system of control, having done anything that was not in conformity with sound banking practice or designed to promote the best interests of the community. Those who control the affairs of this country at the present time have changed their policy. This bill will maintain in operation many of the major reforms that were made by the Chifley Government in 1945. When those reforms were being discussed, the present Treasurer and other members of the Government parties condemned them throughout the length and breadth _of Australia as the first step towards socialism and a police state, but, except in relation to a few matters, this measure is designed to maintain those reforms, which were so vigorously condemned by those who really formulate the policy of this Government. I refer to the private banking and other vested interests of this nation.

Although the Government proposes to adopt many of the banking reforms for which the Chifley Government was responsible, it seeks to make a revolutionary change in the method of control of the Commonwealth Bank by establishing a board to determine the policy of the bank. Ministers say that that system will be preferable to the present system of control of the bank, which they refer to as one-man control. Before I deal with the proposed ‘ method of selection of the members of the board, let me reply to the remarks that were made by the Minister for External Affairs about the Bank of England. He said that the Labour Government of Great Britain, although it nationalized the’ Bank of England not long ago, left the control of the bank in the hands of a board and did not institute a system of one-man control. He implied that the British Labour party considered that hoard control was the best system. I point out to the Minister that, since the time when Mr. Chamberlain was Chancellor of the Exchequer of Great Britain, :.t has been made perfectly clear to the Bank of England that the British Treasury and the British Government must finally determine all important matters of financial policy that may affect the national welfare. The Bank of England is directly responsible to the British Government for policy, and the British Government can, if the occasion arises, dictate the policy that shall be followed by the bank. Under this measure, however, the position will be quite different from that. The Commonwealth Treasurer, at the behest of the private banking institutions that put him and other members of the Government parties into power, will impede the progress of the Commonwealth Bank. He will not be able to wreck the hank, but he will be able to impede its progress, and in doing so he will hide behind the hand-picked men on the board who will be a bodyguard to protect him against the criticism that will be levelled at his actions.

Let me enumerate the questions that must be answered before any change can logically be justified in the present system of control of the bank. First, since the present system of control was instituted in. 1945, has the present Governor of the bank or his predecessor acted in a way that was contrary to the public interest? Secondly, has there been anything wrong with the management of the bank since then? Thirdly, has anything been done under the present system that has not been for the good of the community and the advancement of the bank? No one who has studied the reports of the operations of the bank, which show the great progress that it has made, can lay a charge of inefficiency or incompetence against it, or produce any reasons why the present system of control should be altered.

In 1949, when the bill to nationalize the private banks was introduced, the private bankers of this country sent their officers and- employees, into my electorate and others in an attempt to. ensure that men would be returned to the Parliament who were prepared to put on to a Commonwealth Bank Board nominees of the private banks. Their intention is to destroy the bank, which is the people’s greatest bulwark against private banking interests. The Government now proposes to establish a Commonwealth Bank Board that will be responsible- for the formulation of banking policy in this country. The proposed board will consist of the Governor, the Deputy Governor, the secretary of the Department of the Treasury and seven other members who will be appointed by the Governor-General and who, as another honorable member has pointed out, will, like the man who comes round to cut the lawn, attend to the bank’s business once a month. The bank will be run on a part-time basis by men who will be selected in the main, not because of their knowledge of banking, but as a reward for services that they have rendered in the interests of the Government parties.

Mr Turnbull:

– The honorable member ought to know.

Mr DALY:

– I do know, because I have studied the actions of the Liberal party in patronizing its supporters. For instance, the honours list that was recently announced included knighthoods for members of the Liberal party in New South “Wales and for other party men. .

Mr DEPUTY SPEAKER:

– Order ! I ask the honorable member to confine his remarks to the bill.

Mr DALY:

– If persons whom previous non-Labour governments appointed to the Commonwealth Bank Board -are any indication of the type that the Government proposes to appoint to the new board we may expect that the board will be composed in the main of all kinds of persons from bed manufacturers to polo players. I make no personal reflection upon such men, but I criticize their lack of qualifications to control a bank like the Commonwealth Bank. I have no doubt that the Government will appoint to the new board representatives of vested interests and others who have rendered special service in support of the Government parties. Spoils to the victors has always been the policy of non-Labour governments. Here is a list of some, of the names of directors of private banks who were also directors of various financial or industrial concerns: - H. G. Darling, of the National Bank of Australasia Limited, Imperial Chemical Industries of Australia and New Zealand Limited, Australian Iron and Steel Limited and the Broken Hill Proprietary Company Limited; Sir Frederic Tout, M.L.C., of the Bank of New South Wales, Goldsborough Mort Limited, the Australian Mutual Provident Society and Associated Newspapers Limited ; T. L. Baillieu, of the English, Scottish and Australian Bank Company of Australasia, Electrolytic Zinc Limited and The Zinc Corporation Limited; E. R. Knox, of the Commercial Banking Company of Sydney Limited, Colonial Sugar Refining Company Limited and Perpetual Trustee Company (Limited) ; J. Hubert Fairfax, of the Bank of New South Wales and the Australian Mutual Provident Society, Thomas H. Kelly, of the Bank of New South Wales Tooth and Company Limited and the Perpetual Trustee Company (Limited) ; and Sir Frank Clarke, of the National Bank of Australasia Limited, Goldsborough Mort and Company Limited and the Australian Mutual Provident Society. The lastnamed gentleman wrecked the Cain Labour Government in Victoria at the behest of vested interests. Appointments to the old board were made on the basis of politicalpatronage and went to men similar to those I have mentioned. No doubt the Government will apply similar policy in this instance, justas it included prominent supporters of the Government parties in the recent honours list. Men who are appointed on that basis will impede the progress of the Commonwealth Bank.

I should like to know why the Government intends to appoint to control the bank seven men in addition to the experts who now administer it. Those additional appointees may have no qualifications whatever for such positions. Let us contrast this proposal with the administrative set-up of the bank that was established by the Chifley Government. Under that Government’s legislation the control of the bank was placed in the hands of a Governor, who has had for his col leagues Mr. Richardson as Deputy Governor, Mr. Watt, who until recently was Secretary to the Department of the Treasury, Dr. Roland Wilson, who has been Commonwealth Statistician and is now Secretary to the Department of the Treasury, Mr. Melville and Mr. Armstrong, each of whom had had considerable experience in the sphere of banking. Under this measure the Governmentproposes to replace the present administration of the bank which is performing its duties most efficiently by a board which, as I have said, will work on a part-time basis and will include among its members men who have no knowledge of financial affairs. No safeguard is provided in the measure to ensure that the Government shall not appoint to the board persons who are shareholders in private banking institutions. Probably we shall find that some of the biggest shareholders in private banks will be appointed to the new board. That will undoubtedly be the case if the policy that was followed by the Minister for Health (Sir Earle Page) when he was Treasurer is again applied. That right honorable gentleman practically wrecked the Commonwealth Bank. The Labour party will not countenance such a policy.

Supporters of the Government have said that the. new board will not interfere in any way in the financial affairs of the nation, that it will not dictate to the Parliament and that at no time in the future will the Government be denied finance. They say that regardless of whether or not board control of the Commonwealth Bank is restored the Government will always be able to obtain the funds that it, requires to carry on the administration of the country. Any one who may be inclined to accept that view should not forget that not long ago the previous bank board that was set up by the present Minister for Health dictated to the Scullin Labour Government and applied a policy that condemned hundreds of thousands to want and unemployment. At that time, the board refused to make money available to the Scullin Government because private financial institutions were not making sufficiently high profits. On the 13th February, 1931, Sir Robert Gibson, who was chairman of the Commonwealth Bank Board, wrote to Mr. Scullin, who was then Prime Minister, as follows: -

Subject to adequate and equitable reduction* in all wages, salaries and allowances, pensions, social benefits of all kinds, interest and other factors which affect the cost of living, the Commonwealth Bank Board will actively cooperate with the trading banks and the Government of Australia in sustaining industry and restoring employment.

That is the way in which .Sir Robert Gibson, who possessed no qualification to control the Commonwealth Bank other than that he was a successful business.man, dictated to the government of the day and” to the elected representatives of the people in the Parliament. In brief, the board at that time decided that the people of Australia must pull in their belts in order that the private financial institutions might continue to make high profits. Ultimately, the Scullin Government had to yield to that dictation. Honorable members show by their protests against that statement that these facts hurt them. It is clear that the new hank board will occupy exactly the same position as the previous board occupied and that it will be able to force the Australian people, including the pensioners, to pull- in their belts in order that the interests represented by the appointees to the board may reap the maximum benefits regardless of the sufferings that such action may impose on the great majority of the people. Supporters of the Government may wish to forget the action that the previous board took on the occasion to which I have referred. However, members of the Labour party will not forget what happened in those days and for that reason we shall oppose to the utmost the proposal to restore board control of the Commonwealth Bank. To Sir Robert Gibson’s letter, Mr. Theodore, who was Treasurer at the time, replied as follows : -

The attitude of the board throughout the recent negotiations, and as disclosed in the letter now referred to. can only be regarded hy the Commonwealth Government as an attempt on the part of the bank to arrogate to itself a supremacy over the Government in the determination of the financial policy of the Commonwealth, a supremacy which, I om sure, was never contemplated by the framers of the Australian Constitution, and has never been -auctioned by the Australian people.

It is useless for supporters of the Government to say that they have a mandate to introduce this legislation and thereby impede, if not destroy, the people’s bank. Every one knows that during the lastgeneral election campaign the Government parties said nothing at all about their intention, if returned to office, to restore board control of the- Commonwealth Bank, and, therefore, statements that honorable members opposite make to that effect are merely ballyhoo. The Government intends to follow this course simply in order to ensure that the interests that it represents shall dominate control of the bank. I oppose that proposal and I sincerely regret that at present the Labour party is unable to defeat it as it was able to do some months ago. The people will not be happy to see hoard control of the bank restored and its management placed in the hands of those who will impede its progress and, indeed, will attempt to destroy it.

Members of the Labour party realize fully the effect that banking policy has upon the lives of the people, particularly in circumstances in which they depend to a large degree for a livelihood upon the inauguration of essential national projects. Remembering the suffering that was caused throughout the country as a result of the previous board’s policy and also the fact that that body almost destroyed the hank in the interests of private financial institutions, the Chifley Government instituted reforms in 1945 in the face of the most bitter criticism on the part of Labour’s opponents. Yet, to-day, supporters of the Government extol many of those reforms. For that reason the Government is not attempting to interfere with them. Nevertheless, it now proposes to place the control of the Commonwealth Bank in the hands of individuals who have not had any experience at all in such a sphere. This is a retrograde step and the Government is taking it simply in order to give effect to a policy about which it said nothing to the people during the last, general election campaign. I sincerely trust that Labour will again assume office in the near future and will bc given the opportunity to call honorable member? opposite to account for this attempt to destroy .the present sound and efficient system of control of the bank.

Sir EARLE PAGE:
Minister for Health · Cowper · CP

– Every one knows that honorable members opposite are under the influence of an outside board, the members of which are not elected by the people but are hand picked and have the duty of telling the Opposition in the Parliament what it must do. Consequently, those honorable members are inconsistent in their opposition to board control by the Commonwealth Bank. In this respect, they talk with their tongues in their cheeks. I point out that on three occasions when the control of the Commonwealth Bank was made an issue at a general election the Labour party suffered ignominious defeat. The first occasion was in December, 1931, when all the things about which the honorable member for Grayndler (Mr. Daly) has just spoken were fresh in the minds of the people. Yet, on that occasion the people threw the Scullin Labour Government out of office neck and crop ‘ and practically reversed the numerical strengths of Labour and its opponents in this Parliament. This subject was also an issue at the general election that was held in 1949. The honorable member admitted that fact. What happened then? The Labour party was defeated neck and crop at the general election. The representatives of the Labour party then said, in effect, “We shall force the banking issue to a double dissolution, if necessary”, because they thought that they were safe. They had a majority in the Senate, and they believed that wide the system of proportional representation they could not lose that advantage. The election that followed the double dissolution several months ago was fought on the. issue of banking control, as was admitted by the then Leader of the Opposition, and resulted in the defeat of the Labour party. In Queensland and Western Australia, the voting against the Labour party was so unprecedentedly high that its candidates were able to win only eight out of twenty seats in the Senate, and the Labour party lo3t its majority in that chamber Any honorable member who has read the Constitution is aware that the first duty of a government that has been returned to office after a double dissolution, is to reintroduce the bill that brought about tb> election. That bill was the. Common wealth Bank Bill, and the Government is giving effect to its obligation and its mandate.

I shall now deal with a few matters of history. The reforms of which the honorable member for Grayndler has spoken were suggested by the Commonwealth Bank Board before it was dissolved in 1945, and were based on the experience that it had gained during World War IT.. when contact between the Government and the bank was necessarily very close. Professor Giblin has written that I made a constructive speech, devoid of party political bitterness, on banking legislation that was introduce . by a former Labour Treasurer, Mr. E. G. Theodore, in 1930. The Opposition qf the day allowed that bill to pass without a division, because its members were in general agreement with the principles of the measure. I ask the Opposition to accord similar treatment to this bill. The late Mr. Chifley, when he moved the second reading of the Commonwealth Bank Bill in .1945, quoted, with approval, a passage from the speech that T delivered on the Commonwealth Bank Bill in 1924 when introducing my reforms. He recalled that I said on that occasion -

The important (unctions of banking can properly be performed only with the guidance it uri control of a central bank. Decision and settled policy arc essential .

I ask Opposition members to note the words, “decision and settled policy are essential “ -

Banking can be raised to its greatest perfection only by the action of a central hank working always for the good of all.

What occurred after 1924? The Commonwealth Bank, as the result of my legislation, had decision and settled policy for 21 years. But since 1945 doubts have existed in the minds of many people about the policy of the bank. I venture to say that this bill will, usher in an era. of decision and settled policy for at least 50 years, which will enable the whole financial fabric to become solid. The decisive endorsement of the banking policy of the present Government, shown by its return under great electoral difficulties, which no one knows better than Opposition members, who arranged them, indicates definitely the opinion of the general public about- the wisdom of the steps that wore taken by the Bruce-Page Government in 1924 to establish a central banking system in Australia, and to lay a sound foundation for our whole financial economy. That double electoral decision in 1949 and 1951, combined with tinoverwhelming decision against the Labour Government’s policy of banking nationalization, first, by the High Court of Australia, and later by the Privy Council, should bring to an end the long drawn-out and misleading propaganda of the Labourparty on the banking issue, and especially against my gift to the Commonwealth Bank of full central banking functions, which was the most important basis on which to build, as I shall proceed fo show. Those events set the public seal on the statement in my speech of 1924 that the late Mr. Chifley quoted with approval in i945. The “decision and settled policy “ have been due to three factors that the Labour party has always failed to appreciate, in spite of the fact that they gave stability to the economy. During 1923 and 1924, I introduced a trinity of financial measures which formed, as it were, the three legs of a firm base that has greatly assisted the growth and stimulated the progress of the Commonwealth Bank, whilst proving a financial bulwark in the depression and during the last war.

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP

– Not during the last war.

Sir EARLE PAGE:

– Yes, in the last war, because the board was in control of the Commonwealth Bank until 1945.

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP

– It was subject to government control during the war.

Sir EARLE PAGE:

– The honorable member for Blaxland (Mr. E. James Harrison) is talking nonsense. The statement that is repeatedly made by the Opposition about a gulf between the bank and previous governments is so much twaddle. The three measures to which J referred a moment ago were the establishment of the National Debt Sinking “Fund, the formation of the Australian Loan Council and the incorporation of the financial agreement in the Australian Constitution, as well as the gift of central hanking powers to the Commonwealth Bank by placing its board in control of the note issue and allowing that authority to have continuity of policy by reason of the fact that its members retired by rotation over a seven-year period. It is significant that the Labour party opposed tooth and nail, not merely the banking reforms but also the inauguration of the Loan Council, and the referendum that was conducted to obtain the approval of the people to incorporate the Financial Agreement in the Constitution. Even when that referendum had been carried by a four to one majority in every State, members of the Labour party opposed the actual ratification of the Financial Agreement in this Parliament, in the same way as they are opposing the will of the people regarding the Commonwealth Bank Bill at. the present time.

Where should we have been during’ the last 27 years without the National Debt Sinking Fund, the Australian Loan Council and the Central Bank? Each of those measures reinforces the other two. The National Debt Sinking Fund last ye.ar made available £20,000,000 from “ the Commonwealth and £14,000,000 from I heStates which enabled us to handle the market for the whole of the loan raising and reconversions, and assisted to preserve the market in a satisfactory condition. The existence of those three measures to which I referred a moment ago, and their mutual reinforcement, have saved the people hundreds of millions of pounds in interest payments, which they otherwise would have had to meet in# the last 25 years, and have enabled the Commonwealth Bank properly to develop its full function. The Labour party’s myth that the introduction of control by a. board in 1924 had damaged the bank has been given its quietus by a decisive popular vote, which settles the question of whether a board or one person shall direct the.control of the bank. That myth has also been laid by the continuous progress that was made by the bank under the hoard, as is shown by the following figures : -

Mr James:

– Who was responsible for that?

Sir EARLE PAGE:

– That growth occurred under the management of the board, as the result of the National Debt Sinking Fund, the formation of the Loan Council and the incorporation of the Financial Agreement in the Constitution, together with my gift of central banking powers to the Commonwealth Bank. Two of those measures were considered to be so valuable that they have been incorporated permanently in the Constitution. Yet honorable members opposite have the hardihood ro say that the bank was almost destroyed between 1924 and 1945, when its .affairs were directed by a board. The fact shown by the figures that I have read to the House is that the bank expanded its operations to an enormous degree. That is the queerest form of destruction that I have known in the course of 11,1 y long experience. A. patient could .not secure admission to a hospital on my certificate if his health were as robust as is the financial health of the Commonwealth Bank. The idea that the board was absolutely independent of the Government is another myth of the Labour party.

Two members were common to’ the boards that were established to control the sinking fund and the Commonwealth Bank, namely,, the Governor of the Commonwealth Bank, and the permanent head of the Commonwealth Treasury. They had .complete knowledge of the state of the bank’s finances and of the Government’s needs and resources. Those two men were appointed to the board in order that they would be in the position to advise the Loan Council, and to implement its decisions with a knowledge of all the factors behind government policy, and with all the power of the resources of the bank and of the Government. The effect of that nexus on the whole development of the bank is obvious from a glance at the use that has been, made of sinking fund moneys by the Treasury and the Commonwealth Bank in preparing for all government loans. The Commonwealth Sinking Fund was established in 1923, and the joint Commonwealth and States Sinking Fund in 1924. Since that time the Commonwealth Sinking Fund has contributed nearly £250,000,000 and the joint Commonwealth and State Sinking Fund an additional £145,000,000 or roughly £400,000,000 to pay off debts and to be available to the Treasury and the Commonwealth Bank to set the market in arranging loans for the Government. That huge sum of money was of itself of enormous value, but the handling of it was rendered much more valuable by the formation of the Loan Council and the incorporation of the Financial Agreement in the Constitution in order to prevent competition between Australian Government authorities borrowing money both at home and abroad.

Before the establishment of that body, there was competition between the States for loan moneys. Within a period of three months, the competition between the six States had increased the interest rate from 5 per cent, to 7-J per cent. The Loan Council determined the requirements of the Commonwealth and of the six States, prevented government competition and was in a dominating position in respect of the loan market.

The combined use of sinking fund moneys and the elimination of governmental competition have been variously estimated as being worth anything from 1. per cent, to $ per cent, in the interest return’ on loans over the period of 2S years. The combined debt of the Commonwealth and States is approximately £3,000,000,000. A saving of interest at the lower figure of $ per cent, on this total debt, much of which has been converted and reconverted, would be worth ever £7,000,000 a year and at the highest figure of 1 per cent., £30,000,000 a year. Those two organizations, the National Debt Sinking Fund and the Loan Council, have been given permanent life in the Constitution. The Commonwealth Bank has been fortunate in having had a settled policy for 21 years, that is to say, from 1924 to 1945 and now, in 1951, the Treasurer is providing for another halfcentury of settled policy. It is interesting to note, in this regard, the’ comment made by Professor Giblin at the beginning of his book, The Growth of aCentral Bank, which has just been published -

On t!ie whole, it seems that a large measure of sagacity informed the banking proposals nf 1!<24. The Treasurer consistently refused to provide specific measures for the solution of the immediate financial troubles or the development of central banking. He would leave it all “ to the experts “. No doubt he was perfectly well aware that there were no real “experts” available, and that, if there were, he would notappoint them. His solution was to choose men of proved business competence and leave them to worry it out. They would probably know nothing of central banking but they would learn in time if the job was put on them. Nodoubt they would fumble, hesitate and make wrong decisions on facts insufficiently assertained and theories imperfectly apprehended. But in process of time, their understanding would grow and they would fashion the necessary machinery for accurate information and expert advice. Central banking cannot be introduced fullstatured - it must grow.

Central banking cannot be produced with the ease with which a magician produces a rabbit out of a hat -

By the provisions of the 1924 Act it could be expected to grow pari passu with informed opinion in the community, or at least only a step or two behind.

I can verify that summing up because I visited the United States of America in 1924 and discussed the matter with the twelve governors of the various branches of the Federal Reserve Bank and with Mr. Strong, the GovernorGeneral of the bank. I found that, as in Australia, those officers were steadily feeling their way. When I told them of the difficulties that we were having in Australia, they replied, “ We are only babes in the wood. We have been at work for about only ten years. At present, the Bank of England is the only organization that knows the right method of handling most of these central banking problems and we constantly consult that organization and will do so until we mature and reach full stature “.

What has happened since that time? During the last 27 years the Federal Reserve Bank of the United States has grown to such proportions that it is able to handle, not only the credit system of the United States of America, but also the credit systems of the whole world. That bank, of course, is controlled by a board. I again refer to Professor Giblin’s book, because he was an informed man and we should refer to experts in this matter. He wrote -

It remains true, however, that with the powers given to the Commonwealth Bank in 1924, progress towards effective centralbanking was likely to be slow in ordinary times. It would be only in times of great financial stress that much development of central bank control could be expected. Fate, however, was to be lavish in providing these conditions, first in the depression of 1930-33 and again in the war of1939-1945 and the period of controlled inflation which followed.

The Treasurer quoted the final statement in that book during his second-reading speech. Professor Giblin declared that the board was a highly efficient instrument for central banking at the time when it was dissolved and that its dissolution was a matter for public regret.

The Liberal party and the Australian Country party have always wanted the Commonwealth Bank to succeed and they have watched its growth with interest and approval. They believe that a central bank is essential to a sound economy.

Mr Peters:

– So it is.

Sir EARLE PAGE:

– Yes, but I was hounded for years becauseI had dared to make it a central bank. On the day when Mr. Chifley presented to the Parliament his banking legislation of 1945, I was glad that I had lived long enough to witness the conversion of the Australian Labour party to my view of the importance of a central bank. It was one of life’s ironies that I should survive to bear Mr. Theodore, a Labour Treasurer, and laterMr. Chifley, another Labour Treasurer, bring forward measures designed to strengthen the central bank which the Labour party had condemned for years.

One way of helping the Commonwealth Hank is to make certain that it has enough capital with which to function. The determination of the present Government parties to improve the usefulness and range of the bank is vividly demonstrated by the history of the capital changes that have taken place. The bank was originally constituted by the Fisher Government in 1912 with the power to raise extra capital up to £1,000,000 by debentures. But, in 1924, the Commonwealth Bank Act was amended by the Bruce-Page Government to provide that the capital of the bank should be £20,000,000. In order to convince any honorable members opposite who may be suspicious of any figures that

I may cite, I quote from tlie memorandum which was prepared by Mr. Chifley in support of his legislation of 1945. He said; -

In 1924 the Commonwealth Bank Act was n mended to provide that the capital of the Bank should be £20,000,000, to bo made up of £4,000,000 from the Bank’s own resources together with such sums not exceeding 10,000,000 as might be made available to the Rank by the Commonwealth from borrowed moneys ‘ and further amounts not exceeding £10,000,000, to be raised by the sale and issue of debentures. However, no capital has been provided beyond the £4,000,000 from the Bank’s own resources. In the interim the Bank has accumulated a Reserve ‘Fund which as at 30th June. 1944, totalled £4.130,000. making capital and reserves £8,130,000.

En 1925 I established the Rural Credits Department of the Commonwealth Bank with a capital of £2,000,000, which was free of interest charges because that amount was taken from the profits of the note issue. It was a direct gift to the new organization. I also gave to the department the right to issue further short-term bills in order to acquire another £20,000,000 of capital so as to enable it to handle the orderly marketing of primary produce. It has been a cause for wonder to me that Mr. Theodore did not take advantage of that provision in 1931 when he was talking about a fiduciary note issue because in it he had a means of obtaining £20,000,000 in order to finance the wheat crop. Taking into account those amounts of £20,000,000 for the General Banking Division and £22,000,000 for the Rural Credits Department, the Bruce-Page Government gave to the Commonwealth Bank organization a total of £42,000,000 in capital.

Mr Peters:

– Did the right honorable gentleman suggest to Mr. Theodore that he should take advantage of the right of the Rural Credits Department to raise additional capital of £20,000,000?

Sir EARLE PAGE:

– Yes. I was worried because the Labour Government had not used that provision. In fact, in the speech that I made in this House in 1925 when the legislation for the establishment of the Rural Credits Department of the bank was introduced, I pointed out how the new department could be used in order to finance a wheat crop.

Mr. Chifley divided the bank in 1945. I have always believed that there must be automatic changes in the structure of such a growing organism, just as there is a process of development from childhood to adulthood, and I supported the division of the bank into various compartments. However, Mr. Chifley ended by reducing the total amount of capital of all parts of the Commonwealth Bank to £18,000,000, instead of the amount of £42,000,000 for which the Bruce-Page Government had made provision. Now, by means of this measure, the Treasurer proposes to increase by £5,000,000 the total capital available to the various compartments of the Commonwealth Bank outside the central bank which, of course, has ample funds at present.

Mr Peters:

– - That provision is not being contested.

Sir EARLE PAGE:

– I atn refuting the charge that was made by the honorable member for Grayndler that the Government parties have not the interests of the Commonwealth Bank at heart. Everything that has been done by the parties that are represented on this side of the House has been designed to strengthen the bank, because we believe it to be to the advantage of everybody that the Commonwealth Bank shall be strong and able to withstand the shocks that it must sustain in any financial crisis. I refer again to the book by Professor Giblin because he took about three years to compile, it and had spent a lifetime in studying and practising his theories. He was one of our best economists. Dealing with the relative qualities of a board and a single governor, he wrote -

By the middle ‘thirties, the technical equipment of the Bank was getting into good shape, and among the Bank staff interest in and understanding of central banking were becoming more widely diffused. The Banking Commission gave a very useful stimulus in 193(i and 1937. When the war came, banking problems took a new interest and urgency, and at the same time the increasing co-operation with Government added realism to the Board’s deliberations.

That is the reply to the Opposition charge that the board would not cooperate with governments. Professor Giblin continued- -

There was steady improvement in the quality of the board’s work from the middle thirties on, and when it expired in 1945 it had become a reasonably satisfactory instrument for its purpose. There is litle doubt that had it been continued it would lave soon reached a high level of efficiency.

From a general point of view the abolition of the board is a. matter for regret. For many years the problems of government have become” too complicated for any but the most general overall supervision by Parliament and Ministers; and Parliaments have become, perhaps, less qualified to deal with them. One escape is to throw decision more and more into the hands of the permanent public servant: and, in spite of the popular clamour against “ ibnreaucracv this devolution is often necessary and wise. The other escape is through the setting up of boards, and commissions, which are given a task in .broad terms and left free to carry it out and be judged by the results. Much experiment in this procedure is required before its usefulness can be properly judged. The bank board was an interesting experiment of this kind which was stopped before its final achievement could be properly appraised.

By the time the board was abolished it had become good enough to justify survival, with every prospect of further improvement.

The author was completely detached. He held no brief for either side. When discussing which form of control was the better, he wrote -

There remains the question whether even a com potent board has any technical advantages over a single manager of a complicated business such as central banking. In either case judgment on many matters must be based on the work of experts. There is great virtue in the expert being required to explain his plan arid the reasons for it to a small group who, without being experts, are sufficiently informed in understand the problem. It forces the export to clear has own mind before telling his story, as well as bringing out any error in the conclusions which may be due to want of a sufficiently broad perspective. The wise manager will no doubt try to get the same results by acting as a board himself; perhaps with other members of his staff. He must, however, often be tempted to short-cut the procedure from pressure of work. A board ensures a more thorough examination though at the cost of some delay. It seems that a good board has some though no outstanding nd vantage over a good single manager in technical efficiency.

A board has, perhaps, stronger claims as being more likely to have the confidence of the public. The decisions of a central bank may have a great effect on employment and business, and so be matters of vital concern to the ordinary citizen. Public confidence is therefore very much to be desired. A good board judiciously chosen is more likely to win and hold this confidence than any single man. Nearly everybody would find in such a board at least one nian he could trust to put his point of view effectively.

Mr PETERS:

– That argument disregards the fact that there is an advisory panel under the present system.

Sir EARLE PAGE:

– Professor Giblin pointed out throughout his book that one of the great advantages of having a bank board which included a number of business men was that every member had a broad knowledge of business generally and a detailed knowledge of a particular industry.

Throughout the period of existence of the Commonwealth Bank Board not one instance of corrupt practice was ever charged against any member. No member of the board was accused of having used for his personal advantage knowledge that he had gained as a result of his membership. In fact, there was a rule that no member’ of the board should have an account with the Commonwealth Bank so that there should be no question of his exerting undue influence. Mr. Chifley made no charge against the board when he dissolved it. In fact. he thanked it for what it had done. -I venture to say that better results could not have been achieved under any other form of control during World War II., when the Commonwealth Bank Board secured £1,500,000,000 worth of loans on good terms and financed the handling of hundreds of millions of pounds worth of products.

Mr SPEAKER:

– Order ! The right honorable gentleman’s time has expired.

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP

– It is regrettable that, in a debate of such importance as the one that is now in progress, at least two Ministers should be unable to bring their differing points of view7 into line. First, the Minister for External Affairs (Mr. Casey) said that, in his opinion, the attitude of the Opposition towards this hill was influenced by the theories of the former Leader of the Opposition, the late Mr. Chifley. Then the Minister for Health (Sir Earle Page) said that - there was some board in the background which had told members of the Opposition what they should do.

Sir Arthur Fadden:

– That is right.

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP

– It* is not right. The truth is that the Australian Labour party has observed very closely the two different phases in the history of banking in this country. It is all very well for the Minister for Health to tell his version of the history of the Commonwealth Bank since 1924, but it is a remarkable fact that neither he nor any other Minister or supporter of the Government has dared to offer one word of criticism of the management and development of the Commonwealth Bank under a governor from its establishment until 1924. During World War I., under the control of a governor, it assisted successive governments in a way that enabled Australia to put forward a war effort that was not excelled by any other country. No valid criticism could be offered of the management and control of the bank from the date of its establishment until 1924. The Minister for Health said that the late Mr. Chifley had thanked the board for what it had done when, he dissolved it in 1945. The bank board was not established in 1924 because the bank had failed under the leadership of the Governor. After commencing under the directorship of the Governor, the bank went through five years of war and did everything that was required of it to enable the country to continue. No criticism could be levelled against the hank from the time of its establishment to the time when it was a very flourishing concern. The Minister for Health said that it was necessary to regulate the bank’s development from childhood. The bank had already grown from childhood and was in a flourishing condition when the board was placed in control of it. That board never had. the problems of childbirth that the first Governor of the bank had to deal with. It never had to handle the difficulties that were experienced by the Governor during the 1914-18 war. The Minister for Health has endeavoured to argue that the bank board did not contribute towards the depression. The late Mr. J. B. Chifley was quoted as having said something about the attitude of the bank board but honorable members opposite have not quoted the report of the Royal Commission on Monetary and Banking Systems. At, page 210, in paragraph 543, that, report states -

The proper policy for the Commonwealth Bank, as the depression developed, was one of expansion, using any necessary powers in that direction, and enabling the trading banks, to do their share. As conditions improved, the proper policy was to seek expanding credit, and, if necessary, to contract, using any appropriate powers to bring the trading banks into line. Two of the most important monetary measures taken during the depression were tks expansion of central bank credit by means off treasury bills in 1931 and 1932, and the movement in the exchange rate in January, 1931.. In each case, in our opinion, the depression, would have been lightened, and some of its worst effects avoided, if these measures hail been taken earlier.

That is one of the principal reasons why the Australian Labour party will, always be irrevocably opposed to control of this great institution by a board of any kind. I was tremendously astonished to hear the Minister for Health quote so extensively the views of one whom he called’ an expert when the measure that he was discussing took the control of this bank from the hands of experts and placed it in the hands of casual people. If a great institution of this description requires expert control why does the Government propose to establish a board? Honorable members opposite have said that they wish to remove the bank from political domination. Consequently, the Government has proposed that the institution shall be controlled by a board half themembers of which shall be casual people who will attend board meetings once a month or once a week. Under this bill,, half the members of the board may bc replaced each five years. The bill provides that one member of. the board may be replaced each year. If that does not savour of politics I have yet to learn what does. If one of these five members does not see eye to eye with the government of the day he will try, if he wants to retain his position on the board, to trim his sails in accordance with the point of view of the government. Otherwise, there might be a complete change “of control every five years. Yet the Minister for Health has spoken of the necessity for a settled policy.

It is not correct to say that the bank board that was established in 1924 provided the Government with finance for World War II. In 1941, under National Security (Economic Organization) Regulations, the bank board was. subjected to the will of the Government in its financing of the war effort. On the 26th January, 1943. the* present Treasurer (Sir Arthur Fadden) accused the Australian Government of pursuing a reckless financial policy and said that in the preceding six months 42 per cent, of the Australian war expenditure had been met by the simple device of borrowing against treasury-bills and J.O.Us. from the central bank. Now, both the Treasurer and the Minister for Health have said that the bank board was in -charge of Australian monetary policy between 1941 and 1945. If that is their belief why do they not adhere to the point of view that they expressed in 1943? Why have they now said that the bank board was the great financial body “which assisted the Labour Government throughout the critical years ‘-of war? This is an added reason why the Labour party will oppose the constitution of the bank board to the bitter end. If the Prime Minister (Mr. Menzies) is correct in saying that the nation is faced with war then the country should he geared for war financially by the same method as that which was used between 1941 and 1.945 because that method was proved to be sound. I should like to think that it will not be necessary for the country to be geared for war. Honorable members have no other evidence than the Government’s point of view on that matter.

Between 1911 and 1924 the Commonwealth Bank fulfilled every requirement including the requirements of five years of war. The bank board failed at least to some extent, according to the report of the royal commission, on the only occasion on which the acid test was put <m it in 1931. When another period of “war occurred, the government had to take control of financial policy again. Thus, there are two instances of the bank board having failed this country in a time of crisis. On the second occasion the government had to assert its policy in order to gear the nation for war. I do not think that anybody could forget the leading article which the Sydney Morning Herald published when the Government first announced its intention to introduce this legislation. On the 17th March, 1950, a leading article was published in the Sydney Morning Herald, a part of which read as follows: -

It will be the function of the Governor, !Mr. Fadden asserts, to administer* the bank in accordance with the policy laid down by the Board. Thus, the head of the bank is to . have his own subordinates at each board meeting laying down instructions which he must carry out. In practice either the Governor must dominate the proceedings or else intolerable friction will rise within the bank itself.

That is just common sense. I dp not know what opinions honorable members of the Australian Country party had concerning that measure, but it is certain that some supporters of the Liberal party considered that the Government was taking the wrong course. About the same time as the Sydney Morning Herald published its leading article a Liberal party conference was held and a vicious attack was launched upon the Prime Minister because of that bill. A Liberal party speaker was reported in the Sydney Daily Telegraph of the 28th March, 1950, as having stated that the hill, as framed, would give greater powers to bureaucrats than they had had as members of the advisory council under the Chifley Government. That is another reason why members of the . Opposition oppose this measure. Members of the present Government criticized the Labour Government for setting up bureaucrats to take control of the country’s affairs. Honorable members opposite have said that the Government obtained a mandate for the introduction of this legislation in 1949 and 1951. But the issue was peddled also in 1946, just after new banking legislation had been passed by the Parliament. Either this matter has never been properly analysed by the people or they do not understand it because they voted for the government which introduced the present control of the banking system. The subject of banking was not -to the fore during either of the last two elections. It will be agreed that the late Mr. J. B. Chifley always had the great attribute of honesty of purpose in regard to the future progressof Australia. When’ this Government introduced the Commonwealth Bank Act in 1945 it was bitterly attacked. It is all very well for the Minister for Health to talk about the wonderful progress of the bank now, but do npt let us forget the form of control that has operated since 1941. From 1941 for four years the bank was controlled in accordance with government policy under economic organization regulations and from 1945 up to the present time it has been controlled by a government with the advice of an advisory council. It must be remembered that in 1945 important alterations were made in relation to banking under six main headings. The first was the strengthening of the central bank functions of the Commonwealth Bank. It was when discussing that matter that the late Leader of the Opposition, Mr. Chifley, made favorable comment on the action of the present Minister for Health in connexion with the banking legislation of 1924. The second was the abolition of the Commonwealth Bank Board; and the third was the subordination of the Governor of the bank to the government of the day. This Government is running away from the last principle, as I shall illustrate in a moment. The fourth heading was in relation to the trading banks; the fifth was the abolition of the board that controlled the note issue; and the sixth was the abolition of the currency reserve. “With the broadening of the powers of the bank it became increasingly difficult to constitute a board composed of men who would not have some interests outside the bank that could be affected by decisions of the board. As the Minister for Health has stated, it is necessary that control of the Commonwealth Bank shall be above any suspicion in the public mind. If the Minister for Health and his colleagues are sincere then they should desire to see the bank’s activities extended further. The more they are expanded the more difficult will it be to find for appointment to the board men who have no outside interests that would affect their judgment in relation to matters that may come before the board. Under this measure the Government proposes to appoint to the board men who have no knowledge of banking matters. As the article in the Sydney Morning Herald stated, ultimately we shall have continual friction between the Governor and the five members of the board to be appointed by the Government from outside the bank and the Commonwealth Public Service, or we shall have the Governor dominating the proceedings at board meetings. I. should like to think that we shall have a Governor sufficiently strong to dominate the proceedings, because if that were the position then no great harm would have been done as a consequence of this legislation. If, on the other hand, the other situation envisaged by the Sydney Morning Herald article were to obtain, the position feared by the Minister for Health would develop. “We cannot afford to take that risk. Under the system of control by a Governor assisted by an advisory council, there is no risk at all.-

The bank’s history shows that during the war its control was above criticism. “We agree that the Commonwealth Bank should make decisions on central banking policy, but we say that the bank itself, while performing that function, should bc under a form of control against which no criticism can be levelled. I refer to the form of control that operated between 1911 and 1924, and has operated from 1941 up to the present time. We believe that the Government is running away from its responsibilities. We know that if this country finds itself in a war the Treasurer will not follow the same stable policy as the previous Labour Government followed, because he is opposed to that policy. Unless he follows it, however, there is only one way in which he can obtain revenue and that is by imposing further sacrifices upon the people. We know that the Commonwealth Bank, while following, under economic organization controls, a policy opposed to the policy that the Treasurer espouses, at one stage had advanced £343,000,000 to assist in the establishment; of new industries in this country after the war. We believe that it is necessary for a growing country like- Australia to attract the kind of industries that will help the nation to develop. The only way to do that is to have a people’s bank under a form of control by which the Governor of the bank must follow the will of the government of the day. We believe that the Government is not game to have that kind of policy. We also believe that in the near future conditions in Australia will not be so good as we should like them to be, and that the Government, is evading its responsibilities in respect of governmental .control of finance. At the next general election the Governmen t will make the bank board the scapegoat forbad conditions in the country, although it will have established that board itself in a ; way which I believe the people thought would not be followed.

Mr WHEELER:
Mitchell

.- The honorable member for Blaxland (Mr. Ti. James Harrison) has made his contribution to the most amazing collection of speeches from honorable members opposite on financial matters that I have ever lizard. In the course of his remarks he said that the banking issue was not to the fore in the recent general election. I believe, however, that the Chifley Government’s attempted socialization of the trading banks was one of the main factors that contributed to that Government’s downfall. It was generally accepted by the people, during the 1949 and 1951 general elections, that any tampering ‘with the financial structure of the country would lead only to ruin. Rather than accept ruin for this nation they decided to place the fate of the Commonwealth in the hands of the present Government.

Another amazing speech on financial matters to which I listened was that of the honorable member for Ballarat (Mr. Joshua) recently. He gave us a sound and repetitious drubbing on his pet theory, the capitalist prices doctrine, which, no doubt, is a very good theory, although I do not know whether it will have much affect on the financial outlook of this country. The honorable member for Forth (Mr. Tom Burke) and the honorable member for Fremantle (Mr. Beazley) also have made contributions to the debate. The honorable member for Perth seems to visualize the downfall of the nation because the Treasurer has issued a loan below par. During the war years I made some very happy associations in Western Australia, and I had no idea that that State would ever produce two such “ dismal jimmies “ as the honorable member for Perth, and the honorable member for Fremantle, who are always forecasting times of hardships and despair unless the country is placed in the hands of a Labour government. It seems that their opinions are clouded by the depressing gospel of socialism which obscures their brighter and better vision, particularly on financial matters.

– The Leader of the Opposition (Dr. Evatt) said that the Commonwealth Bank, at the direction of the Government, is restricting consumer credit as a deflationary measure, but the fact is that the bank is continuing to make consumer credit available forthe purchase of motor cars and other luxury goods. All that it has done has been to restrict the activities in this field of private banks and finance companies in order to retain the business itself. Under the advance policy laid down by the bank, private banks are prohibited from making loans for fixed and permanent working capital. By offering and freely advertising hire purchase facilities at low rates of interest, the Industrial Finance Department of the bank is aggressively taking business of that type away from organizations that obtain a large proportion of their funds from public subscription.

I turn to another phase of the activities of the Commonwealth Bank that will assuredly claim the interest of the honorable member for Grayndler. Hundreds of thousands of Australians are without houses, but the Commonwealth Bank and its little brother, the Rural Bank of New South Wales, have embarked upon building programmes that will involve the expenditure of millions of pounds. In cany instances, they cannot justify the erection of their new premises on the ground that there are not enough banking institutions already operating in the localities concerned. It appears that these government instrumentalities believe that if they have more buildings they will be able to attract more business. Apparently the plight of persons without houses does not concern them at all. A very fine brick building is being erected for the Rural Bank of New South Wales in Hornsby, which is in the electoral division of Robertson. Another building of that type is being constructed for this allegedly rural institution in the- “ rural “ area of Crows Nest, which is in the electoral division of North Sydney. The socialist government that is now in power in New South Wales controls building materials. Therefore, the Rural Bank of New South Wales has no difficulty in obtaining bricks. The Commonwealth Bank finances the Rural Bank and, in its turn, is doubtless entitled to certain hand-outs. The Commonwealth Bank is acquiring properties right and left. In a recent report, it boasted that it had purchased 32 properties and acquired 25 vacant sites, upon many of which it is proceeding to build. In this connexion, the Commonwealth Bank has the private banks hopelessly beaten, because it is difficult for the private banks to obtain even permission to make minor alterations of their premises. Let me give an example. Some time ago, the Nowra branch of the Commercial Banking Company of Sydney Limited was in desperate straits with regard to accommodation, so much so that the bank’s clients were forced to wait in the street while other customers were attended to. The bank applied for permission to make structural alterations of its premises, but permission to do so was refused. Other business men in Nowra were also refused permission to alter their premises. But the Commonwealth Bank, having purchased a shop and an adjoining property in Nowra, was given the permits necessary to enable considerable alterations of those buildings tobe made. They were joined to make newbank premises. It is not astonishing that the Commonwealth Bank can obtain business when it enjoys such tremendousadvantages.

I hope that the Commonwealth Bank Board, when it has been, established, will take steps to ensure that the bank’saccounts shall be compiled in a manner that will enable the public to know what profits the bank is making and from what branches of its business it is making them. In the accounts published by the bank at present many items are grouped, and it is impossible to ascertain the real position. The bank makes considerable profits from the Note Issue and from other activities in which, under legislation, it has a monopoly. This gives the impression that it is a super-efficient organization. I do not believe that anysocialist institution can be efficient. When a comparison is made with the operations of other banking institutions of a comparable size, it is found that, on the figures before tax has been deducted, the Commonwealth Bank is not to any degree more efficient than are other banking organizations.

The Treasurer (Sir Arthur Fadden) is faced with the tremendous task of restoring the stability of the money market. I do not envy him his job, but doubtless he will derive some consolation from, the fact that he will have to assist him in his work a board which, it is presumed, will bo composed of men of experience. I should like at least one member of the board to be. a practical banker. Doubtless Dr. Coombs has been doing his best since ho was placed in charge of the Commonwealth Bank, but he has been learning his job at our expense, because at the time of his appointment he had had no practical experience of banking. It will be worth while to remind ‘honorable members, especially the members of the Opposition, that the man who really built the Commonwealth Bank, the late Sir Denison Miller, was trained in the traditions of the Bank of New South Wales, a private trading bank. In his day, the Commonwealth Bank was, as it was supposed to be, a bank in the true sense of the word. It continued to function successfully until the passing of the tragic banking legislation of 1945 which, in effect, made it a political instrument for the implementation of the Labour party’s policy of socialization. Since then, the bank has got into trouble in practically every department of its activities. The 1945 bunking legislation has made our banking system the laughing stock of the financial world. The Commonwealth Bank is a central hank and at the same time a trading hank. In relation to the trading banks, it performs at the same time the functions of a judge and of a policeman, lt is pledged to force its competitors,- the trading banks, out of business. No one can serve two masters, as honorable gentlemen opposite realize. In this Parliament they try to serve two masters, the Parliament and their Federal Executive, but they do not serve either of them successfully. The Governor of the Commonwealth Bank is being called upon to play the part of a financial acrobat. He is being asked, in effect, to cut himself into two parts, each part to serve one of the two divisions of the bank.

The Commonwealth Bank has three functions. The first relates to the Note Issue, the second to the management of the loan market, and the third to overseas exchange. I hope that the Commonwealth Bank Board, upon its establishment, will keep out of trouble in performing each of those functions. This board, to which honorable gentlemen opposite object so much, will have to exercise much care and skill in its work. It will he, in effect, a rescue squad charged with the responsibility of steering the bank away from the financial rapids that it is approaching. Although the establishment of the board will not of itself be a solution of all the problems that confront the ‘Commonwealth Bank, I hope that, as soon as the board begins to function, it will take steps to place the central banking functions under separate control, leaving the Commonwealth Bank to operate as a trading bank, as it was originally intended to do. A former Labour Treasurer, Mr. E. G. Theodore, drafted a measure that was designed to do that, but it was never passed. If those steps are taken I believe that the banking structure of the Commonwealth will be improved considerably.

It is amazing to hear honorable gentlemen opposite allege that this Government has set out to destroy the people’s bank, because the Labour party went a long way towards destroying the bank by the introduction of the wretched 1945 banking legislation. It will be for this Government to restore the equilibrium of the Commonwealth Bank and to place it on a basis upon which it can engage only in fair competition with the trading banks. I believe that when that has been done, the bank will begin to perform the functions that it was intended to perform and will be truly a people’s bank.

Mr THOMPSON:
Port Adelaide

– The remarks that the honorable member for Mitchell (Mr. Wheeler) has made since the sitting was suspended reveal what is in the minds of the Government and its supporters. The speeches that we have heard upon this bill from honorable gentlemen opposite to-day have been remarkable for their contradictions. The Minister for External Affairs (Mr. Casey) said that the Government wants not bankers but laymen on the proposed hoard. The honorable member for Mitchell said that a banker should be a member of the board. What has been said by honorable gentlemen opposite in this debate justifies the suspicions that we have entertained about what is in the minds of the Government and its supporters.

The Minister for External Affairs said that the people are not interested in this matter. He alleged that during the last general election campaign nobody was interested in the question of who should manage the Commonwealth Bank and that they preferred to leave it for decision by the Parliament. That was a remarkable statement, because the reason why a double dissolution of the last Parliament was granted was that His Excellency the Governor-General was informed that the Senate had on two occasions refused to pass this legislation, and that the Government wanted to go to the people upon it. The Minister for External Affairs, who is one of the leading lights in the Government, said that the people were not a bit interested in this legislation. When the first bill under which the Government sought to implement the proposals contained in this measure was introduced, I said, in the course of my secondreading speech, that the Government would not be prepared to fight an election on this issue. Nor was it. But it was prepared, as some honorable members opposite have already indicated, to utilize that measure, which was introduced in the Nineteenth Parliament and failed on two occasions to be passed by the Senate, to obtain a double dissolution and then to make communism the main issue at the ensuing general election. Supporters of the Government believed that they could sway the feelings of the electors on communism and industrial unrest and thus obtain a majority in the Senate. The Government succeeded in obtaining that majority by making not its banking policy but communism the main issue at the last general election.

I was amused to hear the honorable member for Mitchell say that under the system, of control that the Chifley Government introduced, the people’s bank, as the Opposition terms it, was not being used for the purpose for which it was originally established. The Government assumed office on the 10th December, 1949, and, at any stage since then the Treasurer (Sir Arthur Fadden) has had power to direct the Governor of the Bank if he believed that the latter was not doing the right thing. The Treasurer took no such action. If the honorable member correctly stated the position when he said that the present system of control of the bank is wrong and unfair to private enterprise it was the duty of the Treasurer to take action of the kind that I have mentioned. One must conclude from that statement that the supporters of the Government intend that the proposed board shall instruct the Governor on matters of policy so as to give greater power to the private banks. If that is not what the honorable member for Mitchell meant, what did he mean? Although supporters “ of the Government who have participated in this debate have contradicted themselves in many instances, at the same time they have disclosed what is really in their minds.

The honorable member for Mitchell said that it was necessary to restore board control in the interests of the administration of the bank. He implied that the first duty of the board would be to advise the Governor on matters of policy and to ensure that he would carry out that policy. If that is so the board will not actually be responsible for the’ administration of the bank. The honorable member also claimed that members of the Opposition were endeavouring to put over a lot of sob stuff in this debate, but I have never heard such sob stuff as that to which the honorable member himself gave utterance. He cited an instance in which the bank, under its present system of management, has an unfair advantage over the private banks, yet, at the same time, he spoke about the bank being a Shylock. He cited an instance in which, he claimed, it had robbed a company of 3d. a share by underwriting a new issue when the issue could have been effected free of charge, He also asked what had happened to the shares that had not been taken up. He did not produce any figures, but said that in the ordinary course of events persons who were entitled to take up shares might not have done so, the bank in which event would have control of those shares. Then, he made another insinuation which I think was pretty low.

Mr SPEAKER:

-Order ! The honorable member must moderate his language.

Mr THOMPSON:

– I shall withdraw that statement and say that the honorable member branded some official of the Commonwealth Bank and, in effect, alleged that the Governor of the bank had permitted something to be done that was not in keeping with decent banking practice. The honorable member asked whether some white-haired boy in the employ of the bank had gained possession of the 1,000 shares to which he referred. “When he contends that the present system of control of the Commonwealth Bank is wrong and that the bank is robbing the country and it “is not acting in -the best interests of the people he must be bereft of sound arguments in support of the bill.

Mr McMAHON:
Lowe

.- It was a refreshing change to listen to the “ big drum “ of’ Port Adelaide (Mr. Thompson) after the somewhat hesitant and timorous notes of other honorable members of the Opposition. I have not very much to say about any of the remarks or criticisms that were made by the honorable member for Port Adelaide, but I should like to correct a misapprehension under which he appeared to be labouring. He tried to give the impression that the honorable member for Mitchell (Mr. Wheeler) had said that the Government would appoint bankers to the proposed Commonwealth Bank Board. The honorable member for Mitchell may have given that impression, but if he did so, it was certainly erroneous, because proposed section 26 provides -

A person who is a director or employee of a corporation (other than the Bank) the business of 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. .

Therefore, the only argument, from a debating standpoint, that was advanced by the honorable member for Port Adelaide, is completely erroneous. Had the honorable gentleman examined the provisions of the bill, he would not have made such a statement.

The Leader of the Opposition (Dr. Evatt) and some of his supporters dealt in a rather apologetic and maudlin whimper with the provisions of the bill. They repeatedly used the words “ the people’s bank “. What do they mean by such an expression? The words “ the people’s “ are frequently misused. We hear almost every day, but in a different context, of the “ people’s government of Red China “, or “ the people’s governments “ of the various Balkan countries that are now under the domination of Communist Russia. Indeed, the words are used to apply in a dozen different ways, and I am certain that Opposition members do not understand their meaning. What do the honorable member for Grayndler (Mr. Daly) and the honorable member for Blaxland (Mr. E. James Harrison), who used the phrase “the people’s bank mean by it ? I make this positive and categorical statement that if I were to ask them in ordinary conversation what they meant by that expression they would not have the haziest idea. I believe that they are trying to implant a sentimental impression, based upon the notion that the bank belongs to the people, and that, consequently, it is their sacred duty to protect it. In fact, if one considers the Commonwealth Bank as a central bank, one realizes that, far from being a people’s bank, it is supposed to be a bankers’ bank with the responsibility of protecting the credit and looking after the operations of the trading banks. The phrase, “ the people’s bank “, means nothing and has no significance. It is utter nonsense to use such terms in this House and expect us to accept them. We might have accepted some plausible arguments based upon logic and common sense, but we reject arguments that are based merely on emotion and sentimentality.

A bill that was cooked in exactly the same way as the present bill proved to be completely indigestible to members of the Opposition in the last Parliament. [ believe that the same dish will, prove to he digestible on this occasion aud that soon we shall have in Australia a Commonwealth Bank the policy of which will be determined by a board. The bill provides that the Governor of the bank shall be the chairman of the board. That disposes of the rumour that has been circulating in this building to the effect that the honorable member for Mackellar (Mr. Wentworth) is to be the chairman of the board! I should like to be able to compliment him on such an appointment, but the provisions of the bill deny him that honour. Dr. Coombs, the present Governor of the Commonwealth Bank, will be the chairman of the board.

Under the Constitution, the Australian ‘ Government has power to legislate for the peace, order and good government of the country. In the world of finance it has two instruments by which it can give effect to its overall policy. The first of these is known as its fiscal policy, and the second is its monetary and credit policy. By fiscal policy, I mean its ability to tax and to raise public loans and the method by which it disburses the funds so collected. By monetary and credit policy, I mean the policy of the banks and the amount of credit established in the community. Monetary and credit, policy demands continuous technical management. There fore, the Government usually delegates nome of its powers to an independent authority. In* this instance, power has been delegated to the Commonwealth Bank under the Commonwealth Bank Act and the Banking Act. I am certain that the honorable member for Grayndler would be unable to tell us what is contained in either the Commonwealth Bank Act or the Banking Act, or to explain the difference between the two measures, just as he is unable to explain what he means by “ the people’s bank “. The fact is that the monetary and credit powers of the Government and of this Parliament have been delegated to the board for the time being of the Commonwealth Bank.

This bill has only two purposes. The first is to appoint a board to establish the policy of the bank. The second is to provide a means by which the final policy of the bank can be controlled by this Parliament. Ultimate responsibility rests now, as it will rest after the enactment of this measure, in the hands of the Parliament and the executive government. A banking policy can be used for two purposes. First, it can be used for business reasons, to facilitate the processes of production, distribution and exchange. Secondly, it can be used for political or ideological purposes - and attempts have been made by other governments to use banking policy in that w.ay. The Government considers that banking policy should be neutral. It should be used, not for ideological or political purposes, but merely to complement the business activities of the community. Money is not, of itself, a creator of things, hut it is a means by which we can ease the passage of production and distribution. I shall illustrate the part money plays in the economy.- When a governmentdecides to undertake a programme of public works, it employs men and provides them with implements with which to work. The scheme must be financed. The machinery has been provided, but it needs oil so that it can work smoothly. That oil is provided either through central bank finance by the issue of treasury-bills, by the establishment of credit or by taxation. The important point is that monetary and banking policy should be neutral and should not he used for political ends.

This means that in examining any banking system, we should gauge its efficiency and its -value, according to three principles. First, Ave should ask, “ Is it an effective instrument to enable business to be carried on efficiently? Does it gum up the works here and there, cr does it provide the oil that is needed to make the economic mechanism work freely?”. Secondly, we should ask, “Does it provide effective safeguards against abuse by a fanatical Treasurer or an improvident government? “ Finally, we should ask, “Does it provide a means by which the Parliament can control the money mechanism and co-ordinate the monetary and fiscal policies of the Government ? “ It is by those three principles that we should gauge the efficacy of this measure.

I propose to deal in this speech only vith the subject of the management’ of the Commonwealth Bank by a board. In doing so, I hope to submit persuasive arguments to prove that board management is much more to be desired than is single dictatorial management. Clause 7 provides that there shall be a Commonwealth. Bank Board, and clause 10 provides that the membership of the hoard shall consist of a governor, a deputy governor, the Secretary to the Department of the Treasury, and seven other members, of whom two may be officers of the hank or of the Public Service. Proposed new section 9 of the Commonwealth Bank Act, as set out in clause 7, will give the board power to determine the policy of the bank. Proposed section 9b provides that, after policy has been determined, the management of the bank shall be in the hands of the Governor. Therefore, policy will be determined by the board, subject always- to control by the executive government, and the daytoday management of the bank will be carried on by the Governor.

What, then, are the arguments for and against the appointment of a board? The establishment of a board to control the policy of the bank is not contrary to any fundamental policy of the Labour party. From 1911 to 1924, the bank was managed by a governor, and from 1924 to 1945 it was managed by a board. If honorable members opposite will study the debate that took place on the legislation which provided for the establishment of a board in 1924, they will see that not one word of objection to the proposal was uttered at that time. In May, 1930, when the late Mr. Theodore, an eminent Labour Treasurer, introduced a bill for the purpose of establishing an independent it-serve bank, he provided for the management of that bank by a board of directors to be composed of a governor and not more than eight other directors. Mr. Theodore was respected throughout the Labour movement; he also enjoyed the respect of the financial world on account of his banking knowledge. The name of the late Mr. Chifley has been mentioned during this debate. I remind honorable members that Mr. Chifley did not always hold the views that he expressed in this -House in recent years.- In 1936, he was a member of the Royal Commission on Monetary and Banking Systems, which made the following statement in paragraph 575 of its report : -

The present method of government of the Commonwealth Bank is .by a board. . . . We are of the opinion that this method of government is generally satisfactory.

An examination of Mr. Chifley’s dissenting remarks on other points discloses that he did not qualify that opinion with any “ dissent, reservation, or addenda “. When he considered this matter as a technical expert and in a scientific fashion, he was prepared to say, “I believe that board management is the best form of management for the Commonwealth Bank”. But when he considered it as a politician, with his eyes on the trading banks with a view to socialization, he said, “As a technical expert J held one opinion; as a politician I hold a different view”. Those facts indicate that the Labour party and its leaders have no fundamental objection to the establishment of a bank board.

What is the practice in other parts of the world? It is well known that most central banks in other countries do not engage in trading bank activities. They deal only with central banking functions. But the outstanding fact is that, with the exception of the Reichsbank of Germany, the central bank of Finland and the Commonwealth Bank of Australia, central banks throughout the world are managed by boards of various descriptions. What is even more important is that all the really prosperous countries, including the United States of America and Canada, have central banks managed by boards. Thus, we see that board management is not contrary to traditional Labour policy and that all other prosperous countries have adopted this method of control of their central hanks.

The main political arguments in favour of board management were clearly stated in the speech delivered in 1949 by the present Prime Minister (Mr. Menzies) as a joint policy declaration on behalf of the Liberal party and the Australian Country party. That policy declaration included two reasons why the present Government parties support the policy of board control of the Commonwealth Bank. They were stated as follows : -

Great financial decisions, which, if wrong, are wrong on so great a scale as to injure many thousands of people, ought not to be made by one man without reference to parliament; and

A board of experienced and independent men would afford a guarantee that decisions on policy matters would not lightly be” swept away by the political head of the Treasury.

For honorable members on this side of the House, of course, those statements are Holy Writ. I mention them in order to show that I have not forgotten the dogma of the combined Liberal and Australian Country parties. The second statement in that quotation should impress the honorable member for Port Adelaide, who pointed out that, by the Labour party’s method, the Treasurer could control the Governor of the Commonwealth Bank, in a clandestine way if he wanted to do so, and that therefore the policy of the bank could be used for subversive political purposes instead of for the benefit of the people.

Apart from the two reasons that were stated by the present Prime Minister in 1949, there are four sound business reasons why “ the Commonwealth Bank should be controlled by a board. The first is that discussion between business men and technical experts on banking compels the technical experts to clear their minds before they come to the board room for discussion. As honorable members know, discussion is one of the best means of clarifying the mind, both on principles and on facts. We believe that, if the technical men know that they must submit to crossexamination by practical and competent business men, they will make themselves far better acquainted with facts and principles than they would do if they could make their decisions on their own. The Opposition has sought to foster the stupid belief that banking, in some way or other, operates in a vacuum. That does not happen. Banking is not an independent mechanism. It is a reflection of what goes on in the business world. It is desirable that there should be an amalgamation of monetary experts and practical business men so that when decisions are made they will be based on sound business commonsense as well as on technical information. This fact was well illustrated by the Notes Issue Board. Up to 1924 the Notes Issue Board operated, as it were, in a vacuum. Technical experts decided the policy of the hoard. In 1924 the board itself asked that it be amalgamated with the Commonwealth Bank so that it might come in contact with practical businessmen. Professor Giblin has stated that, as a result of this change, very rigid theories gave way to practical realities. The technical men obtained a broader outlook after full discussion with’ businessmen to the great advantage of the Australian community.

The Government’s proposals will permit different points of view to be expressed at board meetings. I presume that when the Treasurer makes appointments to the board he will select men from all walks of life - from rural industry, from trade and commerce, from statistician’s departments, the Treasury and wherever else he can find men of outstanding ability. Such a procedure would permit diversity of views to be congregated. It would provide a. pool of knowledge which could not, under any circumstances, be found in the mind of a single individual.

The board would provide greater accessibility to members of the public than is provided by a Governor. Honorable members have had personal experience of the advantages of being accessible to the public. We are here as representatives of our constituents who make their representations to us in order that we may represent them faithfully in the Parliament. Under the Government’s proposals, the ten members of the board will be accessible to the Australian community. Before a decision is made the opinions of many sections of the community will have been obtained. The public is likely to have much greater confidence in a good board which has been judiciously chosen than in a single Governor because the principle behind the establishment of a board is that it should represent the consumer and producer interests. A board would also be much more likely to retain the confidence of the people than would a single Governor who had been appointed by the executive and who was responsible to the Treasurer who could tell him, as an honorable member has said, to put his books in order or get out.

In addition to the reasons that have been given by the Prime Minister honorable members will find that there are four other sound business reasons why a board is to be preferred to a single Governor. I agree -that a Governor who was a genius could manage the Commonwealth Bank quite efficiently. He could make decisions more rapidly than a board because be would not have to consult any one else. But under the pressure of business a single individual is much more likely to make a hasty and unwise decision on his own than he would be if he had to refer to nine other people. A single wrong banking decision could affect the lives of every Australian. Surely the Government should not leave in the hands of one man the power to make hasty decisions which might catastrophically affect the livelihood of every second member of the community. Banking geniuses are few and far between. I have heard that Sir Montague Norman was a banking genius but he is the only one that I have heard of.

I should like to quote briefly from a book by the late Professor L. F. Giblin entitled The Growth of a Central Bank. The Leader of the Opposition has already referred to pages 199-200 of this book. After listening to the Leader of the Opposition I read the pages to which he referred and if honorable members can draw from those pages the meaning which he inferred then I do nor. understand the meaning of the English language. Professor Giblin’s statements have no relationship to what the Leader of the Opposition said. .Professor Giblin did not argue that there was anything wrong with the attitude of the Commonwealth Bank to the New South “Wales Government Savings Bank. “Would it have mattered if there had been ? All that happened was that the New South Wales Government Savings Bank was taken over by the Commonwealth Bank. The Leader of the Opposition distorted the plain meaning of Professor Giblin. Professor Giblin was Acting Commonwealth Statistician from 1931 to 1932, a member of the Commonwealth Grants Commission from 1933-to 1935, a director of the Commonwealth Bank from 1935 to 1942, and chairman of the Commonwealth Advisory Committee on Financial and Economic Policy from 193S to 1946. Whilst I had a great liking and respect for him I always treated him as a socialist and I think that he was one of the key socialists in the community. He wrote -

As things were, it was not until the middle thirties that the technical equipment of the Bank was - good enough to give a basis on which a competent Board could be built up. Progress thereafter was satisfactory. By the time the Board was abolished it had become good enough to justify survival, with every prospect of further improvement.

On page 353 of his book, Professor Giblin wrote -

There was steady improvement in the quality of the Board’s work from the middle ‘thirties on and when it expired in 1945 it had become a reasonably satisfactory instrument for its purpose. There is little doubt that had it been continued, it would have soon reached a high level of efficiency. .From a general point of view the abolition of the Board is a matter for regret.

There, a socialist who was intimately connected with the working of the Commonwealth Bank Board expressed his regret that the Labour Government, in a. fit of pique and because it wanted to carry out its socialization pledges, should have deprived the community of a valuable instrument for monetary control and reverted to its own” system of dictatorial control by a. governor who was subordinated to the whim of the Treasurer of the day. The arguments are overwhelmingly in favour of a board. For sound common-sense reasons board management is undoubtedly the best means of managing the banking machine. I have said that three tests had to be applied when considering what type of management was likely to be more efficient - management by a hoard or by a governor. I asked first, whether the form of management would be efficient. I think that I have shown that the probability of efficiency would be far greater in the case of a. board than in the case of a governor. I then asked whether a board would be more likely to prevent maladministration or clandestine administrat1 lon of monetary policy for political purposes. I believe that I have demonstrated, from the Prime Minister’s policy-speech, that a board of management would stand between the executive of the day and bureaucracy and that it would represent the people and be much more likely to protect their interests. The Treasurer has provided in the bill for the closest, co-ordination of banking and monetary policy with the fiscal and financial policy of the Government. It has been proposed that final policy decisions shall be made by the Prime Minister and the Executive. Consequently, there is to be an effective co-ordination of banking and monetry policy with the fiscal and monetary policy of the Government. I commend the bill t.f- the House.

Mr JOSHUA:
Ballarat

.- In listening to’ this debate I have failed to hear one real reason why the proposed board should be established. The arguments of honorable members opposite have been based on very airy statements. The honorable member for Lowe (Mr. McMahon) and the Treasurer (Sir Arthur Fadden) have stated that the establishment of a board would give greater confidence to the public. The much-discussed book written by Professor Giblin provides some idea of what might be expected from the proposed board. At page »219 of .The Growth of a Central Bank, Professor Giblin wrote -

When it came to stating the powers desired, the Bank made a poor “showing. It appears that the Board hesitated a good deal over the question of what powers to ask for. It was reluctant to ask. for really effective powers for fear of antagonizing the trading banks- and perhaps frightening public opinion; it also was nervous lest strong powers should be too heavy a responsibility. Its formal demands wore therefore very moderate and not very precise.

Does that provide any reason to have greater confidence in the establishment of a bank board ? The Minister for External Affairs (Mr. Casey) stated that the establishment of a bank board was raised as an important matter on the occasion of the last general election and that it was discussed by Government supporters on that occasion. I do not believe that that is so. In my electorate, in pursuance of my usual policy of dealing with im.porta.ut matters, and considering that there was a question to answer : concerning the proposal to institute a bank board, 1 held a meeting which was attended by many hundreds of people. The late Mr. .J. B. Chifley attended the meeting. I -spoke on banking and explained the position to the people and from that moment my predecessor started to lose his seat in this House. Two Government supporters have said that the establishment of the board would give a stimulus to banking, and have referred to Professor Giblin’s statement to that effect. At page 213 of his book Professor Giblin had a good deal to say about the stimulus given to the Commonwealth Bank by the Royal Commission on Monetary and Banking Systems in 1935. But the stimulus given by the royal commission was not a practical stimulus. It was a moral stimulus, as Professor Giblin pointed out very clearly in his book, but that fact was not made clear by the Treasurer. The commission showed the then board for the first time what it should bo driving at, and it was a moral stimulus to many of the younger members of the bank who believed that the bank might become what it has now become - the dominant controlling influence in the economy of Australia. But there was no practical stimulus given by the commission that we can observe in a study of the working of the Commonwealth Bank for the succeeding ten years. I have examined the history of the bank from 1935-36 onwards and I can see no signs of great improvement or progress as a result of the findings of the royal commission, although the commission undoubtedly produced one of the most valuable documents in the economic history of Australia. The government of the day left the board in office, and the board proceeded to administer the bank, but there was no practical benefit to the people from the commission’s findings.

Some mention has been made of the fact that the late Leader of’ the Opposition, Mr. Chifley, agreed, as a member of the royal commission, that the bank board system was generally satisfactory as a means of controlling the bank. But it must be remembered that nothing was done for the benefit of the bank as a result of the board’s 30 recommendations. It was not until the late Leader of the Opposition himself became Treasurer and Prime Minister that something was done about them. The action that he took constituted the first practical stimulus ever given to the Commonwealth Bank as a result of the findings of the royal commission. He established new departments, including the Rural Credits Department, the Mortgage Bank Department and the Industrial Finance Department He extended the bank and established new branches. He also provided for the control of the bank by a Governor, whose policy was subject to the control of the Treasurer of the day. “We can see the progress that has been made by the Commonwealth Bank from that time onwards. The fact that Mr. Chifley thought at one time that the board system was a suitable method of control of the bank, and that after ten years of keen observation he changed his mind in favour of control by a Governor, subject to the direction of the Treasurer, shows very clearly that he had applied his observation for the benefit of the bank. The progress made by the bank since then shows that the late Mr. Chifley acted for the benefit of the people.

One honorable member has stated that he does not understand what is meant by a “ people’s bank “. That statement displays a low degree of intelligence. The profits of the Commonwealth Bank very largely go into Consolidated Revenue and so are used for the benefit of the people. The remainder of the profits go to increase the bank’s stability by being placed in reserve. The Commonwealth Bank now is a people’s bank because of the action of the late Treasurer, his great drive and his understanding of the needs of the people. During his term of office the bank departed from the practice of demanding the conventional kinds of security for private loans, and made loans to people who had other kinds of security which were quite good. If it had not done so thousands of people would not now have motor cars, and farming and other forms of machinery, which they have been able to obtain because of the bank’s changed policy.

The most objectionable part of the bill is clause 10, which sets out the composition of the proposed board. People who examine methods of organization often consider the question of whether a board would be more suitable to run a business than an individual would be. At times there are some things to be said in favour of the board system.- If the Government were sincere in relation to this measure, and wished to establish a board for the benefit of the people and the bank, then it could have established a board, set out its reason for doing so, and informed the country of the composition of that board. Instead however, it has stated that members of the proposed board shall not be members of the bank’s staff. It could have provided that one member of the bank board would be a member of the bank staff, who could thereby represent hank officers and their families, who number 100,000 people who are very interested in the banking industry, because it is the source of their livelihood. The Government might also have suggested that a representative of industrial interests might also be a member of the board, that another member might represent rural interests, and another might represent the workers. Briefly, it might have tackled the job thoroughly. But what it did was to provide for the appointment to the proposed board of a number of members, including some mystery men. We do not know whom they will be. We are to be left to find out. We have also to find out why this big loophole has been left in the bill, so that seven members may be appointed to the proposed board without the Parliament knowing, in advance of the passage of the measure, whom they are to be. A study of the working of the trading banks will provide the reason why that loophole has been left. The profits of the trading banks are limited because the amount of deposits that they may retain under their direct control is under the control of the Governor of the Commonwealth Bank. They must lodge a certain proportion of these deposits in special accounts with the Commonwealth Bank. That procedure has a limiting effect on the amount of money that the banks can advance, and therefore has a limiting effect on the profits of the banks. The private banks would do anything to take the power to impose that limitation out of the hands of the Governor of the Commonwealth Bank, who is not concerned with bank profits. It has been set forth by very eminent people that the matter of making profits out of banking is entirely secondary for the Commonwealth Bank, and that the good of the people comes first, although profits are no doubt desirable. The Governor of the Commonwealth Bank is not likely therefore to be influenced by the consideration of making a profit from the Commonwealth Bank, or not very much at any rate. But there are other people in the banking industry who are very concerned with profits.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Has the honorable member a working knowledge of banking ?

Mr JOSHUA:

– I have had 30 years’ connexion with banking and I know something of the matter. We can quite easily imagine that when the proposed hoard comes into being it will make suggestions for the unpegging of the special accounts lodged by the trading banks with the Commonwealth Bank. That unpegging will mean the release of some £5,000,000 or more to each of the trading banks. The effect of the release of that money will- be that another £30,000,000 will go baring through the economy of the country, increasing inflation. But that apparently will not matter at all, because it will mean more profit for the banks.

Then there is the matter of interest rates. The Governor of the Commonwealth Bank has authority to fix interest rates, which are a very big item in the profit of any bank. We may expect that the newly appointed hoard will immediately consider some, increase of those rates. It will have plausible stories to tell about how the Government has had to compete with increases of interest rates and of the fact that the Government had to issue its last loan at a discount of 1 per cent. Then it will point to the preference shares on the share market and show how they have dropped in value. All that will sound very well, and every one will say how right the board’s proposal is. But the whole object behind the proposal will be to make more profit for the banks.

I turn now to the exchange rate. As I have said before, I find it difficult to understand the attachment of members of the Australian Country party to the Government. It is in connexion with exchange rates that they will find out for all time how wrong they have been in supporting this Government. The fixing of the exchange rate is in the hands of the Governor of the Commonwealth Bank. He can raise it or lower it, and he does so in accordance with the findings of the expert committee which advises him. It is a most difficult matter. The exchange rate is fixed primarily for the benefit of people in the country so that they can clear . their stocks of produce from overseas. It is also very largely influenced by the need for imports generally. If we must encourage imports further, then there is a case for revaluation of our currency, but we cannot encourage them any more at present because there is a shortage of shipping as well as a shortage of production overseas. If ever there is any sign that imports can be obtained and are not being sufficiently encouraged, then there will be a case for an alteration of the exchange rate, but not before, and all this fancy business about altering the exchange rate in order to reduce the prices of imported goods is so much bunk. The fact of the matter is, although the honorable member for Mitchell (Mr. Wheeler) will not understand me, because he does not understand what the capitalistic price doctrine is, that the price of anything is what can be got for it. If an Australian importer can obtain a certain price for an imported article brought from overseas and get a profitable margin with the exchange rate as at present, he would still be able to get the same price if the exchange rate were altered, but his margin of profit would be greater. That is what lies behind the suggestion for revaluation of our £3. Honorable members opposite who are members of the Australian Country party will find that the alteration of exchange rate will be suggested, but the suggestion will not be based on the -opinions of the experts.

Honorable members interjecting,

Mr SPEAKER:

– Order ! The honor able member for Ballarat has the floor.

Mr JOSHUA:

– The Government ha* not put forward one sound .reason foihaving introduced this measure. Loopholes have been purposely left in the measure. The legislation has been brought before the House on three occasions, which shows the persistence behind the demand for it by some interests. The whole ‘proposal is infamous. It is a sell-out to private interests. It is a. pay-off to the private banks that put the Government on the treasury bench. It is an unscrupulous business deal.

Mr TRELOAR:
Gwydir

.- This legislation, as the honorable member for Ballarat (Mr. Joshua) has said, is before this House for the third time, and an enormous number of words have been spoken on it. It was interesting to contemplate what the Leader of the Opposition (Dr. Evatt) would have to say about the bill when he had to speak on it for the third time. His speech to-day showed that he had exactly the same old arguments to produce as were produced on the two previous occasions. He started by objecting to the establishment of the proposed board, and then went on to give his reasons why the bank should re. main under the control of the Governor. I should say that practically every reason that he advanced against the establishment of the board was a reason why control should be taken out of the sole hands of the Governor. He went on to speak of the value of the assets owned by the Commonwealth Bank. He outlined the responsibilities of the bank, but he did not tell us that under the Banking Bill 1945 the whole of the finances and banking business of Australia were put under the control of the Commonwealth Bank.

The Commonwealth Bank Act 1945 put, the control of the bank into the hands of a virtual dictator who was responsible and subordinate only to the Treasurer of the day. There was no provision in that act, or in the Banking Act 1945, for this Parliament to be made aware of what was happening between the Treasurer and the Governor of the bank. Although those acts were passed in 1945 they were not implemented, except for the appointment of a Governor, until after the 1946 general election. During the general election campaign at that time, the Labour party played down those two bills. The members of the Labour party then said that the people had been told that if those bills came into force banking in Australia would be ruined, but that nothing had happened and nothing would happen. Nothing did happen until after the 1946 general election. Then the provisions of those two acts began to be implemented. The first order to be issued was that all government and semi-government bodies must bank with the Commonwealth Bank. The City of Melbourne contested that direction and, in the High Court, proved it to be invalid. Then came the Banking Act 1947 which is to be repealed by this legislation. It is still in the minds ‘of the Labour party that the private trading banks’ should be wiped out, and that the Commonwealth Bank should become the sole banking’ institution in this country. During the life of the last Parliament the honorable member for Melbourne (Mr. Calwell) told us that that was the policy and objective of the Labour party. Therefore, it is well for us to keep that in mind.

We have been told about the efficient management of the Commonwealth Bank. We have also been told by the honorable member for Ballarat (Mr. Joshua), who quite evidently is not a banking authority, that the Commonwealth Bank is not interested in profits and that any profits that the bank does make are paid into the Treasury. I suggest to the honorable member that the trading banks also pay a lot of money into the Treasury. I shall repeat some of the figures that I gave and some of the matters with which I dealt when a bill similar to this came before the Nineteenth Parliament in 1950. In the three years from 1947 to 1949 inclusive, the Commonwealth Bank made a total profit of £16,967,285. Of that sum the note issue contributed £12,788,989. The notes could have been issued by the Treasury, which could have made that profit without the intervention of the Commonwealth Bank. The Commonwealth Bank’s net profit, therefore, excluding the profit made from the note issue, was £4,178,296. In the same period the private trading banks paid to the Treasury in ordinary taxation, that is in payroll tax, company tax and land tax, £11,060,584. It must also be remembered that the shareholders of the private banks paid income tax on their dividends. Therefore, the Treasury benefited from the private trading banks to a greater degree than it did from the Commonwealth Bank. The Commonwealth Bank pays rates as an act of grace, to municipalities, but it does not pay payroll tax, company tax or land tax.

The trading division alone of the Commonwealth Bank has a capital of £15,749,577. That is approximately the same as the capital of the Bank of New South Wales, which is £15,426,273. The Commonwealth Bank pays no taxes but the Bank of New South Wales is fully taxed. In 1950, the Commonwealth Bank made a profit of £822,843. In the same period, the Bank of New South Wales paid £910,000 in taxation. Therefore, the Treasury benefited from the Bank of New South Wales by nearly £100,000 more than it benefited from the trading division of the Commonwealth Bank. As well as paying taxes the Bank of New South Wales paid dividends to its shareholders, who in turn paid taxes on those dividends. Those taxes increased the value of the Bank of New South Wales to the Treasury. I mention that because honorable members have been told how much more efficiently the Commonwealth Bank can be managed by a governor, as it is at present managed, than by a board. The Bank of New South Wales is managed by a board. The persons who compose the board of the Bank of New South Wales are not bankers; they are men drawn from all sections of industry, as are the directors of private banks throughout Australia. To measure the efficiency of any government enterprise which is competing’ with a private industry, the government enterprise should be debited with exactly the same amount of tax as is paid by the private enterprise. If that is not done the two concerns cannot be compared because there is no common yardstick. I regret that there is no’ provision in this bill for the debiting of government enterprises with such taxes. I have mentioned that twice before in this House and I mention it again because I believe it to be a very important matter. I hope that the Government will consider the insertion of such a provision in the bill, because if government enterprises are to be managed efficiently they must be compared with private enterprises on exactly the same basis.

The honorable member for Ballarat told us that his dissertation on banking during the general election campaign, and on the measures proposed in this bill, brought him into this House. He said many things that led me to believe that he has not studied this bill very carefully. He told us that the exchange rate was fixed at 25 per cent, to help primary producers to sell their products. It is evident that he has not considered what happened at the time the exchange rate was fixed at 25 per cent. During the depression there was an agreement between the banks to peg the exchange rate at 4 per cent. After that had been done the banks found that they had no foreign currency to sell because the holders of such currency were selling it on the black market and getting a better price for it. Then the Bank of New South Wales decided that it was not going to be kept out of the exchange business, so it set the rate at 30 per cent.

Mr Brown:

– Thirty-one per cent.

Mr TRELOAR:

– Yes, the bank was per cent. That was the actual marko’ buying at 30 per cent, and selling at SI rate. Ultimately there was an agreement that the rate should he fixed at 25 per cent. I believe that had the exchange rate been allowed to run free it would not have gone higher than 15 per cent. That should effectively dispose of the argument of the honorable member for Ballarat that the exchange rate was fixed at 25 per cent, to foster primary industry. In the fixing of this rate, neither primary industries nor any other industries were considered. The honorable member for Ballarat told us that the matter of banking was not raised during the last general election campaign. Well, I certainly mentioned it and the honorable member said that he also mentioned it. The Labour party did not raise, the matter. The members of the Labour party could have mentioned it had they so desired, and forced us to answer, bur I am sure that they realized that the public had had enough of their banking .policies. They knew that the Banking - Act 1947 had wrecked the last Labour Government. The members of the Labour party were anxious to say nothing about banking during that campaign because whatever they said would have rebounded against them.

The honorable member for Port Adelaide (Mr. Thompson) placed a lot of stress on the advisory council which acts as an advisory body to the Governor of the Commonwealth Bank. The function of that body is merely to advise; it has no power at all. The Governor is a practical dictator of our- financial policy. It is generally conceded that all power has a tendency to corrupt and that absolute power corrupts absolutely. It is very dangerous to place absolute power in the hands of one person. We are told that, under the present legislation the Treasurer will be able to direct the policy of the Commonwealth Bank. If the Treasurer is to direct the policy of the Commonwealth Bank he will be no longer Treasurer of Australia because he will have all his time taken up with banking matters. The Treasurer must have his advisers in the Treasury as well as in the Commonwealth Bank. It has been said that this measure is a* “ pay-off “ to the banks. It certainly does not look like that to me. It looks to me like a very common-sense project to give this country the benefit of the experience and knowledge of people who have made a success in industry. Such persons bring a breath of fresh air into banking. If it be said that only bankers should be on the board of a bank it might easily be said that only lawyers should be in the Parliament. Heaven preserve us from such a parliament ! There are people of all types in this House who have all kinds of opinions. The ideas of those people assist the lawyers, whom we must have. Lawyers are very useful in the Parliament, but other people may have a wider view. That is the idea behind the provision for a board in this bill.

I do not wish to run my business as the bank manager would advise me, but I should have a lot of confidence in the advice of a body of men who had had wide outside industrial knowledge and experience. I suggest that the prophets will find that after the board has been appointed the persons who compose it will be practical men, men of integrity, and men with a sense of responsibility. It was suggested by the honorable member for Grayndler (Mr. Daley) that irresponsible people would be appointed to the board. I contend that there should be no irresponsible people in this country. Honorable members of this House have a responsibility, mainly to the people of Australia, and I am sure that the men who will be appointed to this board will also be men who will have a sense of responsibility, not to their personal interests, but to the interests of the people of Australia. It may be news to members of the Labour party that in this country there are hundreds of people who are prepared to put the interests of the nation before their personal interests. Australian servicemen are risking their lives in Korea because they have a sense of responsibility and of the fitness of things. The same can be said of people in industry. They too have a sense of responsibility.’ I am confident that the members of the Commonwealth Bank Board will have a sense of responsibility and that the bank will be strengthened if the Governor can seek the advice of men who have a wide knowledge of industry. If the members of the board are public servants, who gradually get into a narrow circle, it is likely that the position of the bank will deteriorate. The establishment of the board will be to the benefit, not only of the bank itself, but also of the people of Australia as a whole. The bank will still be under the control of the Treasurer of the day. If the Treasurer issues directions to the bank, the Parliament will be informed of the nature of those directions and we shall be able to debate the matter. Therefore, we shall be able to ensure that not only the bank but also the Treasurer shall act properly. I commend the measure to the House.

Mr PETERS:
Burke

.- If I were a member of a government that believed as does this Government, that private enterprise has a monopoly of the virtues, I should do with the Commonwealth Bank what the forbears of this Government did with the Australian Commonwealth Line of Steamers and the Commonwealth Woollen Mills. I should dispose of it to private enterprise. But, having done so, I should not refuse to collect the moneys that were due to Australia in respect of the sale. The point I desire to make is that the Government is not honest in its professed desire to promote the interests of the Commonwealth Bank. Most of, if not all, the members of the Government parties believe that there should not be a Commonwealth. Bank. They hold the view that all the virtues are possessed by the privately owned and controlled hanks of this country. I should not mind whether one or a dozen persons were responsible for the direction of the Commonwealth Bank if I believed that that person or those persons were actuated only by a desire to promote the welfare of the Australian people and to develop the bank to enable it to provide a cheap and efficient banking service and thus destroy the influence of its competitors, the private banking institutions. But no honorable gentleman opposite desires the destruction of the influence of private banking institutions. They say that it is a good influence. A private organization faced with competition from other private organizations tries to give the public as cheap and as efficient a service as possible, with the object of destroying its competitors. This Government has the Commonwealth Bank, but it certainly does not want the bank to operate in such an efficient manner and to make its services available to the people so cheaply that it will become the greatest banking system in this country and will drive competing banks out of business. Therefore, when a measure of this kind is introduced by a government that supports the existence of competitors with the bank in which it is supposed to he interested,. I am entitled to regard the measure with suspicion. I become even more suspicious of the Government’s intentions in this matter when I read the clause which provides that the Commonwealth Bank Board shall consist of seven members, at .least five of whom shall be representatives of vested interests in this country. They could be people whose interests ran counter to those of the Australian public. Each of the seven members of the board could be a man whose aim was to promote the welfare of organizations other than the national bank.

Mr Hamilton:

– The Government could appoint the honorable member for Burke (Mr. Peters) as a member to the board.

Mr PETERS:

Mr Gullett:

– I should like to make an explanation, Mr. Speaker. I. may have been the cause of the honorable member for Burke (Mr. Peters) being misinformed at this juncture because, having myself intended to move the closure at 10 o’clock, I indicated to him that that hour had arrived and apparently, he misunderstood my action. In any event, I intended to move the closure.

Mr SPEAKER:

– Order ! I am doubtful whether the same motion can be moved again. Does the honorable member for Burke wish to withdraw his motion ?

Mr Peters:

– Yes.

Motion - by leave - withdrawn.

Mr TOM BURKE:
Perth

.- Mr. Speaker-

Governmentsupporters interjecting,

Mr SPEAKER:

– Order! The honorable member for Burke distinctly moved the closure. I put the question to the House and announced the result. Then it was agreed that the honorable member should be permitted to withdraw his motion. My ruling is that the same motion cannot be moved by any other honorable member.

Mr Gullett:

– I rise to order, Mr. Speaker. I merely took the course that I did in order to save the honorable member for Burke from embarrassment as the result of his having acted in a way in which I knew that he did not intend to act. At the same time, members of the Opposition would act more fairly if they remained seated and allowed the House to follow the course that the Government had the power in the first instance to determine that it should take.

Mr SPEAKER:

– Order! The Chair cannot be influenced by anything that the honorable member has said. I put the motion for the closure and a division was called for. Then it was agreed that the honorable member for Burke should be permitted to withdraw his motion.

Mr.Eric J. Harrison. - Nobody is rising to speak to the question that is now before the Chair.

Mr Tom Burke:

– Mr. Speaker-

Mr SPEAKER:

– Order ! I put the question - “ That the bill be now read a second time “.

Mr Daly:

– I rise to order, Mr. Speaker.

Mr SPEAKER:

– Order ! I have already put the question and if honorable members wish to call for a division they should do so.

Question put -

That the bill be now read a second time.

The House divided. (Mr. Speaker - Hon. Archie Cameron.)

AYES: 57

NOES: 45

Majority . . . . 12

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 6 agreed to.

Clause 7 (Establishment and functions of Commonwealth Bank Board).

Mr MORGAN:
Reid

.- This is the vital clause of the bill. There are more ways of killing a goose than by chopping off its head; it can be slowly strangled. The Government does not contemplate destroying the Commonwealth Bank because the institution is now too well established. However, it is not so long ago that a move was on foot for the issuance of debentures by the Commonwealth Bank in order to raise capital from outside interests. Had that move been made the control of the bank would virtually have been handed over to private interests. That move has been abandoned, but the Government now hopes to achieve the same objective by the indirect method of placing the bank under the control of a board. AntiLabour interests have always been . antagonistic to the bank. We know only too well that when the bank was established

The CHAIRMAN” (Mr Adermann:
FISHER, QUEENSLAND

– Order! The honorable member must confine his remarks to the clause.

Mr MORGAN:

– When the bank was established it was placed under the control of a Governor, the late Sir Denison Miller. Although during the early stages of its existence the bank did not progress satisfactorily it proved its worth to the nation during World War I. All sorts of propaganda have been directed against the bank. All of us recall the references to “ Fisher’s flimsies “. During World War I., however, the bank prospered and rendered outstanding service in the interests of the nation.

The CHAIRMAN:

– Order ! I shall not permit the honorable member to make a second-reading speech at this juncture. He must confine his remarks to the clause which deals with the establishment and functions of the board.

Mr MORGAN:

– From time to time, anti-Labour forces-

The CHAIRMAN:

– Order! The honorable member must confine his remarks to the clause.

Mr MORGAN:

– I submit, Mr. Chairman, that I am entitled to refer in passing to the history of the control of the bank and to point out the disadvantages that will arise if board control of the bank is restored. If that action is taken the bank will again sink into the doldrums as it did when it was previously controlled by a board. After the death of Sir Denison Miller the bank was placed under the control of a board and under such management it contributed to a large degree to the miseries that the people suffered during the depression of the early thirties. That board invariably restricted the activities of the bank. During the post-depression years the Stevens antiLabour Government in New South Wales gave an impetus to the formation of building societies and was prepared to back those organizations financially but the Commonwealth Bank at that time refused to assist them financially with the result that they were driven into the hands of private financial institutions. The only reason that the bank gave foi its refusal to accommodate those societies was that it was not interested in that sort of business. The board which then controlled the bank adopted that attitude despite the fact that the State Government was prepared to guarantee overdrafts of those societies. Events of the past provide an indication of what may happen if the control of the Commonwealth Bank is again vested in a board. The Treasurer (Sir Arthur Fadden) informed, honorable members, originally, that a small board would be appointed, but we have discovered, from our perusal of the bill, that the board will be a large body. Big stakes are involved in these matters. The control of interest rates alone is of the utmost importance. There has been an agitation in Australia and overseas for some time for an increase of interest rates, and .the private banking institutions of this country consider that they have a grievance because the Commonwealth Bank allows them only 10s. per cent, upon their excess investible funds that it holds as special deposits. Those private banks have been agitating for some time for the return of a substantial portion of those funds, or for an increase of the rate that is paid on them by the Commonwealth Bank.

It is important that the Commonwealth Bank should not be placed in the control of persons who are associated in any way with the private banking institutions. Shipping, commercial and industrial concerns are linked with the private banks-

The CHAIRMAN:

– Order! The honorable member may not deal with the personnel of the proposed board at this juncture.

Mr MORGAN:

– I am canvassing the policy that may he adopted if members of the proposed board are associated in any way with private financial institutions. Unfortunately, there is no guarantee that members of the board-

The CHAIRMAN:

– Order !

Mr MORGAN:

– The fixation of interest rates is of vital importance. The following cable message from London was published in the Sydney Morning Herald on the 20th June last, under the heading, “ Interest Rates Up - U.K. Banks Act”:-

British banks are to raise their interest charges on advances to customers. The new rates will apply, with a few exceptions, to all advances, including’ loans to farmers, where the present rate is four and a half per cent or less. Circulars from head offices to branch managers ask for an examination of all accounts with a view to speedy adjustment. Branches are instructed to aim at four and four and a half per cent, on their “bread and butter business”. For the time being, five ner cent, is to be regarded as the new maximum. Among the exceptions will be local authorities and building societies, whose borrowings will be subject to a separate examination.

Mr Roberton:

– Under a socialist government.

Mr MORGAN:

– I am referring to the private banks. Such an agitation is occur ring in various parts of the world, at the instigation of international financiers, and a similar influence is being exerted in Australia. An article entitled “ Vested Interests Demand Higher Interest Rates “ appeared in the Catholic Worker in April last. The Government cannot claim that that publication disseminates Communist propaganda. The article reads as follows: -

Powerful financial interests are bringing pressure on the Commonwealth Government to increase interest rates. Publicly, they declare that higher interest rates would curb the inflationary spiral. Privately they .favour higher interest rates because they mean fatter incomes’ for themselves. These financial magnates argue that the raising of interest rates would induce people to save more money. Since they. would save more, they would spend loss, and, as a consequence, the pressure on prices would be reduced. In addition, they contend that higher interest would check investments as borrowed money would cost more. There is no evidence to prove that this would happen. In fact, most economists do not support this theory.

A rise in interest rates would. mean fatter incomes for the banks, for insurance companies, and for all large financial houses dealing in money. It would mean that every Australian buying a home would find that his interest payments were raised overnight It would mean that every farmer with an overdraft would find that the banks demanded a larger share of his income. An increase in interest rates marks the first attempt by vested financial interests to obtain a stronghold over the Australian economy. Certain Cabinet Ministers make no secret of the fact that they support higher interest rates. If the Government gives in to this pressure, it will make a triumph for vested interests over the interests of the Australian people. It will act as a tax on the ordinary Australian foi the benefit of the private banking system.

That statement is very significant.

The CHAIRMAN:

– Order ! The honorable member has exhausted his time.

Mr FREETH:
Forrest

– I desire to refer briefly to the wording of proposed section 9a (1.), which is as as follows: -

The Bank shall, from time to time, inform the Government of the monetary and banking policy of the Bank.

If there is one thing that has been made clear in this debate, it is that the Opposition is either deliberately or accidentally under the impression, or is trying to foster the impression, that this bill in some way relieves the Government of responsibility for the monetary and banking policy of the bank. The whole truth is, as the Leader of the Opposition (Dr. Evatt) admitted in response to an interjection I made, that there is no legal change in the responsibility of the Government for monetary and banking policy. That is true whether the bank is to be subject to control by a board, or whether it is to be controlled by a Governor, as at present.

The whole point is that proposed section 9a (1.) enables the public to know where the responsibility for decisions on monetary and banking policy lies whereas under the present system of control by a Governor, nobody knows where that responsibility lies, because no one can tell whether a decision on monetary and banking policy is made by the Treasurer of the day or by the Governor. Nobody can say whether there has been a disagreement between the Treasurer and the Governor, because, obviously, the decision is announced as a joint decision, and the

Treasurer’s opinion must always prevail. The Governor will not say whether he has disagreed with the Treasurer on the policy which is to be followed, because his job depends upon his agreeing with the Treasurer. If the Government assumes the responsibility and disagrees with the bank board, the whole country can be made aware pf that disagreement, and the matter can be debated in the Parliament.

– Order ! The honorable member may not discuss in any way the personnel of the proposed board. I remind him that the committee is discussing the establishment and functions of the board.

Mr BRYSON:

– I am endeavouring to discuss the policy that will almost certainly be pursued by the board, and I was about to point out that the Government is departing from one of the planks of its platform at the recent election when it stated that the number of employees of the Australian Government would be reduced and that the expenditure upon their salaries would also be reduced. The Government went further and pledged itself to remove bureaucracies and castigated Labour for having allegedly established a bureaucracy of boards when it was in office. Now, the Government proposes to establish an additional board of bureaucrats to carry the responsibility that it should itself carry. The Government’s proposal amounts, in effect, to a transference of its responsibility to the people for the financial and economic policy of Australia to a group of ten individuals. Obviously, when things go wrong, those individuals will be expected to take the responsibility that the Government should itself bear.

Of course, we have been assured by the Government that the Parliament will still retain control of the situation. However, sub-section (7.) of proposed new section 9a provides a most round-about method for the Parliament to assert its authority in the event of a dispute. When a. difference arises between the proposed board and the government of the day so much time will be occupied in complying with the elaborate provisions of that sub-section that untold harm may be done to the financial structure of the country. I invite honorable members to read the provisions, which are as follows : - (7.) The Treasurer shall cause to be laid before each House of the Parliament, within fifteen sitting days of that House after the Treasurer has informed the Bank of the policy determined under sub-section (4.) of this section -

a copy of the order determining the policy;
a statement by the Government in relation to the matter in respect of which the difference of opinion arose; and
a copy of the statement furnished to the Treasurerby the Board under sub-section (3.) of this section.

Motion (by Mr. Gullett) put -

That the question be now put.

The committee divided. (The Chairman - Mr. C.F. Adermann.)

AYES: 53

NOES: 44

Majority . . . . 9

AYES

NOES

Question so resolved in the affirmative.

Question put -

That the clause be agreed to.

The committee divided. ( The Chairman - Mr. C. F. Adermann.)

AYES: 53

NOES: 44

Majority . . 9

AYES

NOES

Question so resolved in the affirmative.

Clauses 8 and 9 agreed to.

Clause 10 (Membership of board).

Mr CLAREY:
Bendigo

.- This clause deals specifically with the setting up of a board to manage the Commonwealth Bank. I have not heard, during this discussion, any satisfactory argument by honorable members opposite in support of their contention that control of the bank by a board will produce better results, either for Australia or for the bank itself, than the present form of control has done. The honorable member for Lowe (Mr. McMahon) said that one virtue of board control was that valuable discussion would take place. I remind the honorable member that discussions already take place among members of the advisory council, whose duty is to advise and make recommendations to the Governor, on problems that confront him. It has also been suggested that under board control, there will be a helpful interchange of opinions among business men. When the bank was under board control between 1925 and 1945, there was ample opportunity to show whether board control was in fact better than control by the Governor. As honorable members are aware, the Commonwealth Bank was under the management of’ a Governor from its establishment until 1925. In those years the Governor had absolute control and not partial control or limited control as at present. Between 1925 and 1945 the bank was under the direction of a board which consisted of men who had high reputations in the commercial and financial world. Some of them were known to me personally. They included the late Sir Robert Gibson and the late Mr. R. W. Comas, who was prominently associated with William Haughton and Company. In those years the administration of the bank by a board somewhat smaller than that proposed under this legislation, was marked by bungling, short-sightedness and errors in the safeguarding of Australia’s economy that we do not wish to see repeated. When the real test came with the economic crisis of 1930-32, and major decisions were required on important matters affecting the welfare of the Australian people, the Commonwealth Bank Board failed the people and the then government.

The CHAIRMAN:

– Order! The honorable member is straying from the terms of the clause. The matters under discussion are the personnel of theproposed board, the remuneration of members of the board, and the functions of the board generally. The committee has already decided that there should be a board.

Mr CLAREY:

As I have said before, the government of the day refused to accept the advice of the Board. The bank was Australia’s major financial institution. The Government was the custodian of Australia’s economic welfare. The inescapable fact is that it did not suit the private trading banks of Australia for the Government to accept the board’s advice. Our contention is that when a recommendation of the bank is acceptable to the interests that support the Government “the recommendation is approved: otherwise it is rejected. It would have suited the Government, I am sure, but it did not suit the directors of the private trading banks.

The seven other men may represent interests concerned with the gaining of profit. Therefore we say that this board, comprised of five men at least, and probably seven, who have some private interest to serve, would advise the Government again as a previous government was advised by the previous bank board. We say that the Government is recreant to its trust and fails to give effect to its mandate’ from the people. The leaders of the Government parties stated that a small bank board would be appointed, but it is now sought to appoint a larger bank board than before. The Government parties gained votes for their candidates by stating that the proposed board would be responsible to the Parliament. The proposed board will be no more responsible to the Parliament than was the previous bank board; quite rightly, it will be responsible to the Treasurer of the day. We contend that the Government has not received a mandate for the establishment of the proposed board. Prom actual experience of both systems, the Opposition contends that the interests of Australia are better served by a bank run by experts with full responsibility to the Treasurer of the day than by a bank board. We object strenuously to the appointment of the proposed board. As national economic crises loom once again, we fear that with the proposed bank board and the present Government, Australia could fail again. Honorable members who represent country constituencies have seen the ravages that have been caused by -the unwise application of banking policy directed by a bank board.

Sir ARTHUR FADDEN:
McPhersonTreasurer · CP

– From the remarks of honorable members opposite one would think that the bank board system was a new experiment. It is a well-known fact that the bank board system of Australia went into the depression last of all the banking systems in the world and emerged from it more expeditiously and more satisfactorily than did any other system. Nobody claims that the former Commonwealth Bank Board did not make mistakes. But history also proves that every bank board associated with every central banking system in the world has made mistakes. Up to the time of the depression the board system was a new method in Australia. It had not benefited by the effluxion of time, by experience, and by trial and error. The Royal Commission on Monetary and Banking Systems was instituted in Australia and carried out a very searching inquiry.

Therebeing audible conversation,

The CHAIRMAN:

– The honorable member for Wannon (Mr. McLeod) and the honorable member for Canning (Mr. Hamilton) are carrying on an audible conversation. If they do not remain quiet I shall deal with them.

Sir ARTHUR FADDEN:

– That royal commission examined hundreds of witnesses, obtained considerable information and presented a report. Under the heading “ Conclusions and Recommendations “, the royal commission reported -

page 842

QUESTION

THE COMMONWEALTH BANK BOARD

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, who hold office for a term of years and retire in rotation. The Board elects its own Chairman. We are of opinion that this method of government is generally satisfactory.

I think that it will be admitted even by the greatest opponents of the board method, that Professor L. F. Giblin was a recognized world authority on central banking. His book The Growth of a Central Bank was published only a few months ago. He wrote it in the light of years of experience. He had a thorough knowledge of banking in Australia, its circumstances and difficulties, and of the board system of control of central banking. He alsohad had experience of the one-man dictatorship method without a bank board. He stated -

By the middlethirties, the technical equipment of the Bank was getting into good shape, and among the Bank staff interest in and understanding of central banking were becoming more widely diffused. The Banking. Commission gave a very useful stimulus in 1936 and 1937. When the war came, banking problems took a new interest and urgency, and at the same time theincreasing co-operation with Government added realism to the Board’s deliberations. There was a steady improvement in the quality of the Board’s work from the middlethirties on, and when it expired’ in 1945 it had become a reasonably satisfactory instrument for its purpose. There is little doubt that had the system been continued, it would have soon reached a very high level of efficiency.

From a general point of view the abolition of the Board is a matter for regret.

That is the opinion of a man who is most competent to give judgment on this mutter. The honorable member for Perth (Mr. Tom Burke) stated that if some members of the board had banking experience, they would be submerged by the greater numbers of those who were not possessed of banking experience or knowledge.

Sir ARTHUR FADDEN:
CP

The CHAIRMAN:

– I name the honorable member for East Sydney.

In the House:

The CHAIRMAN:

– I have to report, Mr. Speaker, that I have named the honorable member for East Sydney (Mr. Ward) for continued disobedience to the Chair.

Question put -

That the honorable member for East Sydney (Mr. Ward) be suspended from the service of the House.

The House divided. (Mr. Speaker - Hon. Archie Cameron.)

AYES: 53

NOES: 44

Majority . . . . 9

AYES

NOES

Question so resolved in the affirmative.

Mr SPEAKER:

– The honorable member for East Sydney is suspended from the service of the House until 11.40 o’clock to-morrow night, and will not enter any part of the premises.

The honorable member for East Sydney thereupon withdrew from the chamber.

In committee: Consideration resumed.

Mr ROSEVEAR:

– I think my time has now expired.

The CHAIRMAN:

– The honorable member has a few minutes left.

Mr ROSEVEAR:

– Then I do not intend to use the remainder of my time.

Motion (by Mr. Gullett) put -

That the question be now put.

The committee divided. . (The Chairman - Mr. C. F. Adermann.)

AYES: 52

NOES: 43

Majority…… 9

AYES

NOES

Question so resolved in the affirmative.

Question put -

That the clause be agreed to.

The committee divided. (The Chairman - Mb. C. F. Adermann.)

AYES: 52

NOES: 43

Majority 9

AYES

NOES

Question so resolved in the affirmative.

Remainder of bill - by leave - taken as a whole and agreed to.

Bill reported without amendment; report adopted.

Motion (.by Sir Arthur Fadden) - by leave - put -

That the bill be now read a third time.

The House divided. (Mr. Speaker - Hon. AkCjux Cameron.)

AYES: 52

NOES: 43

Majority . . 9

AYES

NOES

Question so resolved in the affirmative;

Bill read a third time.

page 846

ADJOURNMENT

Garden Island

Motion (by Mr. Eric J. Harrison) proposed -

That the House do now adjourn.

Mr CALWELL:
Melbourne

– I desire to refer to the action of the honorable member for Macarthur (Mr. Jeff Bate) in having, in company with at least one other person, illegally entered a defence establishment during the week end. The honorable member has admitted that he entered into a conspiracy with a representative of the press to prove how inadequate and weak were the defences of the naval establishment at Garden Island. He sought, in company with a representative of the press to bring ridicule on his own Government, on the Minister for the Army (Mr. Francis), and on the officers and men of the Royal Australian Navy. No matter how misguided the honorable member may have been as to the purpose he thought ho would serve by exhibiting to the world what he believed to be a completely inadequate security system at a most important naval establishment in this country, his action was most reprehensible. He has sought to defend it, and he believes, quite wrongly I am sure, that it has served the public interest. If what he thought was the position proved to be so, all that ho has done is to tell the world that our defence establishments are not properly guarded and that any sabatoeur or misguided person may enter them at will and do a great deal of harm. That position is bad enough, but the subsequent action of the Minister and of the Government showed lamentable weakness. The honorable member has admitted that he was arrested at bayonet point and placed in a motor car with his fellow conspirator and transported to the Darlinghurst police station. He has said that he was not put in a cell, but was merely interrogated, and that whenhe had established his identity he was driven to his residence in a naval motor car as though he had committed no crime at ail. I know nothing of the details of the interview which the detective sergeants had with him, but rumour has it that the approach to the defence establishment was made in a boat. It was a story of three men in a boat; two of them got ashore, and the third got away. Ultimately, when the Minister for the Army heard of the incident, again according to rumour, he is reported to have telephoned the Prime Minister (Mr. Menzies) and told him the story of one of his own supporters ha ving committed this act against the Government and the people of Australia. The Prime Minister is reported to have said, “ Well, they can stay in the ‘ cooler ‘ for the week-end as far as I am concerned “. It is a pity that the honorable member did not have to bear the consequences of his action, as an ordinary citizen would have had to do. No favour should have been shown to any person who had offended as seriously as did the honorable member. The act which deals with this matter provides for the imposition of very heavy penalties on persons who are found guilty of trespassing on defence establishments. . The very weak action of the Minister acting for the Minister for the Navy in saying, “ Well, we warned him not to do it again, and if any person does anything like that in the f uture, he will be severely punished “ is, to say the least of it, extraordinary. So far there has been no complete explanation of the incident by either the honorable member for Macarthur or any Minister. This morning the honorable member was merely warned inferentially by the Minister, and not by name, that he must not do this sort of thing again. Any person who entersa naval establishment in such a way should be treated as a malefactor and prosecuted with the full rigor of the law. No preferential or discriminatory treatment should he accorded to a member of the Liberal party or to a representative of the press who’, at the instigation of his employers, has set out to ridicule the Government in the way in which this Government has been ridiculed during the last few weeks. We had enough of this sort of thing during the war when Ministers were subjected to vulgar criticism by the same sections of the press which have now sought to prove that our defence establishments in Australia are not as well guarded as they should be. A gross reflection has been improperly cast on the efficiency of the officers and men of the defence establishment. The honorable member for Macarthur has committed an offence for which he should be punished. The Ministry has acted wrongly in the matter, and even at this stage, the two persons who have admitted their guilt should be prosecuted according to the law.

Wednesday, J, July 1951

Mr POLLARD:
Lalor

.This matter goes a good deal further than has been indicated by the honorable member for Melbourne (Mr. Calwell). Not long ago it was announced in the press that acts of sabotage had been committed on H.M.A.S. Sydney. I do not for a moment suggest that the honorable member for Macarthur (Mr. Jeff Bate) was involved in them, but honorable members must not forget that it was alleged that those acts .of sabotage had been committed by a Communist. In view of pending legislation, the people of Australia should not be allowed to believe that an act which could have been carried out by a member of this Parliament might have been carried OUt by a member of the Communist party. Some persons who are members of organizations, that are in the public eye to-day might take advantage of the fact that the honorable member was able to enter a defence establishment; that he was detected and arrested at the point of a bayonet; and that, after having been subjected to interrogation, he was set free by the responsible officer after that officer had been told that he, Jeff Bate, was a good man whose reputation was beyond reproach.

Mr SPEAKER:

– Order ! The honorable member must refer to another honorable member by his constituency and not by his name.

Mr POLLARD:

– In the minds of some members of the public, the honorable member may be in a similar position to that of a former member of the Canadian Parliament some years ago, who, after investigation by a royal commission, was proved to have indulged in sabotage on behalf of the Communist party in Canada with the object of assisting Soviet Russia. In these circumstances, an honorable member of this

House should not have immunity from the ordinary interrogation and prosecution to which any man is subject who is found to be on defence property without authority. That is particularly so at the present time when the press has hinted, if it has not made definite charges, that members of the Communist party were responsible for sabotage -that was recently discovered on H.M.A.S. Sydney. I recall that when Labour was in office and when a former member of the Labour party in this House was court-martialled and strong pressure was brought to bear upon the honorable member for Maribyrnong (Mr. Drakeford), when he was Minister for Air, to have that mau exempted from the processes attaching to his courtmartial and to save him from the consequences, the honorable member for Maribyrnong refused point blank every request of that kind. This is not a laughing matter. It will definitely concern the public during the ‘next six months, when it will probably become a matter of disputation during the referendum campaign that the Government proposes to hold. It will give rise to doubt and probably cause antipathy in the public mind towards a government which on the one hand accuses certain people of engaging in subversive and nefarious activities but, on the other hand, when a member of one of its own parties is found to be upon defence property without authority, apparently lets the offender go completely free without holding any thorough investigation or levelling any charge against him. Having regard to the duty of the Government to allow the ordinary processes of law to be put into operation impartially, it is a disgrace that it failed to discharge that duty, and the public will want to know the reason for its remissness. Personally, I do not believe that the honorable mem-, ber for Macarthur intended to engage in any nefarious practice. I believe he acted as a misguided citizen. But other members of the public against whom certain innuendoes are made are entitled to expect that an honorable member of this House shall be dealt with in the same manner as any other member of the public would be dealt with in similar circumstances.

Mr HOLT:
Minister for Labour and National Service and Minister for Immigration · Higgins · LP

– -The Parliament should preserve a proper sense of proportion in this matter. I do not make that statement with any intention to defend the honorable member for Macarthur (Mr. Jeff Rate) because that honorable member is quite capable of speaking for himself. I make that statement because it would be undesirable and would have unsatisfactory consequences outside the Parliament if through some desire to score a temporary party political advantage at the expense, not of the honorable member for Macarthur, but of the Government, honorable members opposite sought to create the impression in the public mind that something special had been done in relation to the honorable member solely because he was a member of the Parliament which would not have been done in respect of any other wellmeaning citizen who had shown by his past record a desire to serve, and, in fact, had served his country in the armed forces. That is the important thing for the Parliament to bear in mind. It is an essential element of any serious charge which is laid before a court that the person charged has what is technically known as the guilty mind; that is, that he did certain things for the purpose of committing an offence. No one has alleged that the honorable member for Macarthur was engaged in any action of that kind.

Honorable members interjecting,

Mr SPEAKER:

– Order ! If the House wishes to debate this matter it must do so in an orderly manner. It is now after midnight, and I shall be quite happy to go home if honorable members do not want to preserve order. If there are any further interjections I shall leave the chair.

Mr HOLT:

– At worst, what happened has been described as a stunt. At best the honorable member in his own words believed that in view of reports that reached him he was under some obligation to test them for himself so that he would be in a position to make his experience known to the Minister acting for the Minister for the Navy (Mr. Francis).

– The honorable member for Lalor must contain himself.

Mr DRUMMOND:

– As I understand it, the honorable member for Macarthur (Mr. Jeff Bate) in company with some other person, approached an entrance to Garden Island, and was able to proceed for some distance. I am more concerned about the safety of the men who man our ships, and those who work in the dockyard on Garden Island, than in fixing blame on the honorable member for Macarthur. I am concerned to see that the blame is fixed on the person or persons who made it possible for any one to land on Garden Island, and to proceed for some distance without being challenged. If some one is public-spirited enough, particularly a member of this Parliament, to take action in this matter he should not be attacked by the Opposition. The honorable member for

Macarthur effected, an entrance in an open manner. He did not use his gold pass to get through, nor did he resort to any subterfuge. Had he done so, I could have understood the criticism to which he has been subjected, although I doubt whether there would have been any just reason for it. What he set out to prove was that a person could go through the entrance, and he did go through. What should concern this House, and what the Opposition is deliberately evading, is who was responsible for letting any one through the gate in those circumstances. Members of the Opposition should be the last to challenge the motive of the honorable member for Macarthur. I am concerned to know why the Opposition seems to be so eager to divert attention from the laxity of control that permitted the entrance to be made.

Mr RIORDAN:
Kennedy

– The honorable member for New England (Mr. Drummond) made the specious plea on behalf of the honorable member for Macarthur (Mr. Jeff Bate) that the honorable member acted in the public interest. To-day, the Minister acting for the Minister for the Navy, stated in reply to a question, that a certain person had acted indiscreetly. He did not say that the person was a member of this Parliament, but he did say that the Government did not propose to take action against him. The Opposition is concerned at the fact that the Minister informed the Parliament not long ago that it. would be impossible to do the things on Garden Island which a newspaper said could be done. We are also concerned that discrimination has been shown in this case. If a private person had done what the honorable member for Macarthur did, the law would have taken its course and he would have had to defend himself, perhaps against a criminal charge. I deprecate the suggestion that members of the Parliament band together to protect one another. We are the elected representatives of th,people. but there should not be one law for members of the Parliament and another for members outside the Parliament. The Opposition believes tha) if an offence has been committed, whether by the honorable member for

Macarthur or by any one else, the offender should be prosecuted to the full rigour of the law.

Mr JEFF BATE:
Macarthur

– I am amazed at the number of sinister motives which have been attributed to me for what I did. Once again I say that my action was quite simple and straight forward. I wished to see the state of affairs myself, and to make constructive suggestions which, I think, should be made. One honorable member said that I was arrested at the point of a bayonet, which sounds very dramatic. Garden Island is a defence establishment of considerable area, with a fairly long coastline to watch. Because of the common sense of most people, its boundaries are very seldom violated. I know the area, well because it is within view of where I live, and I knew that the part where I entered was not under constant surveillance. As a matter of fact, in that part there are some hundreds of yards of coastline where any one could land from a boat without being challenged. So a person can enter that naval establishment. But that is not the serious matter. To me, one thing is clear. I think that the naval dockyard police were impressed with the genuineness and sincerity of the action. We went in, and having seen for ourselves that we could enter, I was told, “ Well, now you have seen it, you can go away.” I immediately realized that I had a responsibility to report to any police who were there. Within about 30 yards, one of the police appeared. There was no bayonet. The man said, “ Will you please come to the office ? “ Those men are ordinary Australians, and when they learned the object of the visit, they said, “ How can we guard this place when hundreds of men are streaming in all day in ‘buses to do their work. So far as I know, half of them may be Communists ? “

Mr Curtin:

– Men do not travel in buses to Garden Island.

Mr SPEAKER:

– Order ! I will not tolerate any more interruptions from the honorable member for Watson (Mr. Curtin). We are dealing with a very serious matter to-night, and if the honorable gentleman is not prepared to listen in silence, there is plenty of room for him outside the chamber.

Mr JEFF BATE:

– If there is any suggestion that Communists with their passes are going into a defence establishment among the workmen, we realize clearly that this country and this Government must have power to deal with them. Incidentally, I took the trouble to ascertain the legal position regarding the trespass. A section of the Defence Act provides, in effect, that any person who trespasses on a defence establishment shall be liable to a fine of £20. That is the serious offence to which the honorable member for Melbourne (Mr. Calwell) alluded. He knows how the law of trespass is regarded in Australia. A doubt has been raised whether my action was, in fact, trespass, because a motive, or intention, to do harm should be shown on the part of a trespasser. It was obvious to members of the dockyard police that there was no intention on our part to do harm, and I am sure that they were impressed with the sincerity of our action, otherwise, they would not have been so courteous, nor would they have done the job they had to do in such an extraordinary fine manner.

– I am very glad to have the opportunity to make a few observations on this extraordinary discussion. I begin by saying that in no circumstances could I or the Government condone this offence. I say advisedly that the statements made by the honorable member for Macarthur (Mr. Jeff Bate) to-night were of kindergarten standard. I do not qualify that criticism. I propose to remind ‘ the House of all the circumstances which affect this case.

About the time “this Government came into office, a great deal of sabotage was being reported at Southampton and other naval establishments overseas. The Government immediately alerted, our defence organization through the Department of the Navy and the Department of the Army, particularly at the shore establishments of the Navy. The new arrangements have, been checked from time to time. The naval officers and ratings who were associated with security carried out their jobs with 100 per cent, efficiency, and we had no trouble. I want to defend the Navy, without any qualification, against ridicule, foolish acts and silly stunts by either pressmen or the honorable member foi” Macarthur. I have the profoundest regard for the Navy and all those who are associated with it. They have done an extraordinary job of work. For the long period during which I have been privileged to be a member of this Parliament, I have watched defence matters very closely and I consider that the Navy to-day is at the highest peak of efficiency ever attained in time of peace. The Garden Island establishment is a very important part of the Navy’s organization. All our repair work and most of our technical and secret work is dona there. We recently had the unfortunate experience of having the radar equipment on H.M.A.S. Sydney maliciously damaged. Many of its vital parts were clumsily destroyed. I took action immediately after that incident to have the security organization at Garden Island substantially increased, and I challenge any unauthorized person to enter the establishment again. Notwithstanding the observations of the honorable member for Macarthur, I say that nobody could enter Garden Island without permission and no one did.

I shall state the facts of the incident that is under discussion. At about midday on Friday, a pressman from the Sydney Daily Telegraph went to Garden Island armed with a press pass, a bunch of keys and a disc of the type which is issued to workmen who are employed ai the establishment. This man has announced his name in the newspaper, as the honorable member for Watson (Mr. Curtin) would know if he had read the article carefully, as I have done several times. He has not attempted to conceal his name. This man tried to crash his way through one of the entrances by showing his press pass, but he was called back by some of the naval men and naval dockyard police who are doing an excellent job in maintaining thu security of the establishment. He was told that he had no right to enter with a press pass and was asked if he had any other authority. He produced the other pass and was asked where he had obtained it. I have read the police report on this incident. It is in the hands of the Attorney-General and I am sorry that the honorable gentleman is not available to-night because I should like to get the report for him to read to the House. It states quite clearly that the man was taken to the officer in charge and was told that proceedings would be taken against him. At five minutes to twelve, or 2355’ hours as the Wavy expresses the time, the honorable member for Macarthur and the same pressman endeavoured again to enter Garden Island establishment and failed. They were under observation the whole time. It is a simple matter to jump over a fence. Any man could easily do that to enter a football ground, but he would not be there long before police or other officials took charge and tossed him out. That happened on this occasion. Both gentlemen were first taken to the officer in charge. The officer took them to the police station, and the sergeant of police and constables who were present took detailed statements from them, made them prove their identity and informed them that, because they had trespassed on a Commonwealth Defence establishment, the State police could not prosecute and that any action to be taken must be initiated by the Crown Law officers of the Commonwealth. Because of that circumstance, the men were released.

I emphasize the fact that I do not condone the offence in any way. It was a silly, reckless, foolish and dangerous stunt. The men might easily have been shot. Then there would have been a hullabaloo! I contradict the honorable member’s claim that it would be possible to enter the Garden Island establishment from the shore. There are strong points at appropriate situations all over th- peninsula. They are so placed that the whole perimeter of the island, all of the island and the approaches by water ara under observation by the men who are placed there to protect it. That fact was proved when these men tried to get into the establishment but were promptly arrested. I have acted as I have done because I believe that the incident was a cranky, dangerous stunt and a silly indiscretion. I warn all persons clearly that if similar incidents occur again the utmost rigour of the law will he invoked without any reservation. I say this because I believe that we have an obligation to ensure that th.-> defences of Australia shall be properlysafeguarded. I want not only to protect the ships and their delicate equipment, but also to make certain that nothing will happen to the men who serve in the Navy when they go to sea to defend this country. They must not be interfered with by silly indiscretions. There is much more that I should like to say, but I shall not pursue the matter further because of the lateness of the hour. However, I support the observations of my colleague, the Minister for Labour and National Service. I repeat that I do not condone the offences that have been committed. If there is any repetition of them, the law will be exercised with the utmost rigour.

Question resolved in the affirmative.

page 853

PAPERS

The following papers were presented : -

Coal Industry Act -

Report of the Auditor-General of the Commonwealth on the Accounts of the Joint Coal Board, for years 1947-48, 1948-49 and 1949-50.

Second Report of the Joint Coal Board, for year 1948-49.

Third Report of the Joint Coal Board, for year 1949-50.

Public Service Act - Appointments - Department -

Civil Aviation - C. Beech, L. C. Bechtel, A. A. Blaxland Hays, A. G. Burgoyne, F. H. Creedy, bt. W. Cronin, W. W. Dodsworth, M. J. L. Eddie, H. E. Fraser, R. J. Harrigan, R. G. Harris, L. B. Hooper, P. M. Jones, T. Jones, C. 0. Mason, 0. deV. O’Reilly, R. R. Richards, C. R. Strickland, W. m. Thomas, R. M. Whitecross, F. h. Williams, J. L. S. Williams, C. W Yeoman.

Interior - D. A. Ellison, J. C. Macartney,

W. R. Bien. E. M. Upton.

Labour and National Service - m. N.

Oxlade.

National Development - C. A. J. Inman.

Stevedoring Industry Act - -First Annual Report of the Australian Stevedoring Industry Board, for year 1949-50, together with financial accounts.

War Service Homes Act - Supplemental agreement, made 1st May, 1951, between the Director of War Service Homes and the State of Western Australia.

House adjourned at 12.43 a.m. (Wednesday).

page 854

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Commonwealth Boards

Mr Fuller:
HUME, NEW SOUTH WALES

r asked the Prime Minister, upon notice -

How many federal boards and commissions and similar authorities are there?
On what dates were they established?
What is the personnel, and what salaries ure paid to the members of such boards, commissions and similar authorities?

Mr Menzies:
LP

– The information requested by the honorable member is being obtained and will be made available as soon as possible.

Mr Keon:
YARRA, VICTORIA

n asked the Prime Minister, upon notice -

What are the names and salaries of all employees, temporary or permanent, employed by the Government in all departments, boards, commissions, &c., on public relations, publicity or propaganda work by press, radio or otherwise, or on work of a similar kind which was previously performed by the Department of Information ?

Mr Menzies:
LP

– The information requested by the honorable member is being obtained and will be made available as soon as possible.

Mr Keon:

n asked the Prime Minister, upon notice -

What was the number of employees of all categories employed by departments, boards, commissions and authorities, respectively, at the 3lst December, 1949, and the 31st May, 1051?

Mr Menzies:
LP

– The information requested by the honorable member is being collated and will be made available as soon as possible.

Passports

Mr Cremean:
HODDLE, VICTORIA

n asked the Minister for Immigration, upon notice -

How many applications for passports were received from persons desirous of attending a peace festival in Berlin this year?
How many of such applications were approved ?
What were the names of the persons, and the organizations each represented, in the passports so approved?

Mr Holt:
LP

– The answers to the honorable member’s questions are as follows : -

Applicants for passports are not required to state the purpose of their journey abroad, unless they specifically request that their passports be made valid for a Communist country. In the latter event they are required to make a statutory declaration regarding their business in the Communist country. This declaration is submitted for the comments cf the Security Authorities and if they have no objection the passport is made valid for the country desired. In no case has any applicant for n, passport stated in his application that he intended proceeding to the Berlin Youth Festival, and in no case has a passport been made valid for Communist territory, to permit the bearer to proceed to the festival. From sources other than passport applications, the Government has received information regarding Australians believed to be proceeding as delegates to the festival. This information is circumstantial and in none of the cases is there conclusive proof that the persons concerned intend to proceed to the festival. I have already stated that action will be taken against any such person in respect of the passport issued to him if he travels with it to any one of the countries for which it is stated to be not valid.

Repatriation

Mr Ward:

d asked the Minister representing the Minister for Repatriation, upon notice -

What pension and allowances are paid by the Commonwealth to a totally and permanently incapacitated ex-serviceman, his wife and dependent children?
What would be the reduction in the family income in the event of the exserviceman’s death?
Would the family’s difficulties be lessened by the death of the husband and father?
Will he take up with his colleagues the question of a review of payments to war widows and dependent children so that this anomaly may be removed?

Mr Francis:
LP

– The Minister for Repatriation has supplied the following information : -

The war pension payable to a totally and permanently incapacitated ex-serviceman, his wife and dependent children is as follows: -
1. Member, wife and one child aged 151/2 years -

All pension payments are free of taxation.

Member, wife and two children aged 151/2 and 141/2 years -

All pension payments are free of taxation.

Member, wife and three children aged 151/2, 141/2 and 13 years -

All pension payments are free of taxation.

Member, wife and four children aged 151/2, 141/2, 13 and 111/2 years-

All pension payments are free of taxation.

In the event of the ex-serviceman’s death, family income would be as follows: -
1. Widow and one child aged 151/2 years -

Reduction in Family Income. - £4 per week. Free medical benefits and hospitalization are available and all pension payments are free of taxation and of means test.

Widow and two children aged 151/2 and 141/2 years -

Seduction in family income. - £3 16s. per week. Free medical benefits and hospitalization are available and all pension payments are free of taxation and of means test.

Widow and three children aged 151/2, 141/2 and 13 years -

Reduction in family income. - £3 12s. per week. Free medical benefits and hospitalization are available and all pension payments are free of taxation and of means test. id) Widow and four children aged 151/2, 141/2, 13 and111/2 years.

Reduction in family income. - £3 8s. per week. Free medical benefits and hospitalization are available and all pension payments are free of taxation and of means test.

From the financial viewpoint, the family’s outgoing of living expenses would obviously be reduced in the event of the ex-serviceman’s death. It might be pointed out, however, that the family income would not be reduced by the whole amount of the ex-serviceman’s pension since the payments to his widow and children would be increased and, in addition, free medical benefits and hospitalization are available to them.
The Governor-General in his Speech at the opening of Parliament on 12th June, 1951, indicated that the Government is keeping a close watch on the rates of pensions and allowances payable under the Repatriation Act.

Immigration.

Mr Holt:
LP

t.- On the 26th June the honorable member for Bendigo (Mr. Clarey) asked the following question: -

Can the Minister for Immigration state whether departmental investigations have been made into complaints upon unsatisfactory accommodation upon some immigrant ships If so, what was the result of the investigation and, if accommodation has been found to be unsatisfactory, what steps are being taken to prevent similar happenings in the future?

I informed the honorable member that I was awaiting a report in relation to the vessel Pro tea in regard to which complaints were made recently and that when the report was received I would ascertain what action could be taken by the Government to ensure that the accommodation provided on ships bringing immigrants to Australia are such as we con sider reasonable and satisfactory. I now advise the honorable member as follows : -

A report made by a senior officer of the Department of Immigration, who travelled on Protea from Fremantle, has now been received. The officer in question reports that he made a thorough inspection of the ship from stem to stern. Whatever the conditions were on the ship prior to her arrival at Fremantle, he found nothing which gave reasonable cause for complaint. The food was prepared in spotless kitchens, the storerooms and pantries contained only wholesome-looking provisions and the dormitories and cabins throughout the ship were clean and tidy. The food supplied on the voyage was the subject of criticism by passengers. This was probably due to the fact that the ship carried migrants of various nationalities whose taste in food differed noticeably. The reporting officer from his own observations considered that helpings of food were plentiful andthat fresh fruit was freely distributed. He formed the opinion that the complaints made were in some measure due to the fact that hot and then stormy weather was encountered during the voyage. Although some persons complained that the ship carried too many passengers - the total carried was 1,058 - she was licensed by the Italian Government to carry 1,1.00 persons and there were some empty berths. This complaint was evidently due to misrepresentation by certain agents who secured bookings from migrants eager to reach Australia, who found that whereas first-class accommodation was offered only dormitory accommodation was available. The criticism has been directed not at the conditions on ships carrying assisted migrants, but has been confined to foreign-owned ships carrying aliens who pay their own way. Some time ago the Department of Immigration took steps to ascertain whether action could be taken under Commonwealth law to compel owners of foreign ships to provide better conditions on their vessels. The navigation authorities advised that all such ships would carry Safety Convention Certificates issued by the countries in which they are registered and that these certificates must be recognized by the Australian Government. The DirectorGeneral of Health stated that there was no provision in the Quarantine Act under which foreign ships could be compelled to provide adequate toilet or other facilities in their vessels. In the circumstances, there is no legal power which could be exercised by the Commonwealth. While the Commonwealth is not ina position to exercise any direct control over overseas shipping companies registered in foreign countries, which either provide unsatisfactory service on their vessels or charge excessive fares, the Government is anxious to ensure that migrants who make their own arrangements and pay their own way to this country are not exploited, and it will, through its representatives overseas, discourage any abuses of the nature raised by the honorable member by issuing warnings where practicable and by any other means open to it.

Wool

Mr Fuller:

r asked the Treasurer, upon notice -

How many applications have been lodged under the Wool Sales Deduction Acts seeking full or partial relief from their provisions, and how many applications have been approved?
What was the total amount of relief sought and the total amount granted?
How much has been collected under these acts from wool-growers to the 31st May last?
How much additional revenue is expected to bo raised under these acts between now and the 30th June next

Sir Arthur Fadden:
CP

– The answers to the honorable member’s questions are as follows : -

Four thousand and fifty-seven applications were lodged and relief was granted in 2,770 cases to the 22nd June, 1951. Decisions on 51 7 of the applications lodged are suspended pending receipt of further information from the applicants concerned.
The total relief sought amounted to £1,703,551. Of this amount £718,234 has been allowed in the applications so far dealt with. It is not tobe taken that the difference between these two amounts necessarily represents relief refused. 3 and4. The total amount collected to the 30th June, 1951, was approximately £109,500,000.

Housing

Mr Ward:

d asked the Minister representing the Minister for National Development, upon notice -

Has he seen a recent newspaper report that a young Australian mother who recently gave birth to triplets will, upon her discharge from hospital, return to live in a small tin “ humpy “ with her husband and three other children ?
Is it a fact that the housing problem daily becomes more desperate?
Will he take up with his colleagues the question of drastically reducing the inflow of migrants until such time as the housing problem is solved?
If not, should the building of hostels, &c. to accommodate now arrivals receive priority over the work of providing for thepeople already resident in this country?

Mr Casey:
LP

– The answers to the honorable member’s questions are as follows : -

No.
No.
The immigration programme was initiated by the previous Labour Government and has been supported and extended by the present Government in the full knowledge that it would present initial problems to, and strains on, the economy. Both governments agreed, however, that the value of the programme to Australia would far outweight these temporary incontinences. Former displaced persons, for example, now constitute 12½ per cent. of the labour engaged in the brick and tile industry, 10 per cent. in the timber-getting and sawmilling industry and 20 per cent. in the steel and cement industries. In addition, many thousands of immigrants arc contributing indirectly to housing by their work in transport industries, road construction, electricity undertakings and water conservation and reticulation. Several thousands of migrants are actively engaged on building houses.
The building of hostels for the accommodation of immigrants has not been undertaken at the expense of housing for the Australian people. Migration reception and holding centres are largely converted war-time service camps. Most migrant workers’ hostels are built of imported prefabricated Nissen huts, and their erection makes only a small demand on local building materials. It is contemplated that future hostel construction will take the form of imported units which will make an even smaller demand on local materials and labour. Workers accommodated in these hostels are employed in basic industries. They are helping to ease shortages in industries connected with housing, defence preparations and development generally.

Mr Keon:

n asked the Minister representing the Minister for National Development, upon notice -

Since the signing of the Commonwealth and State Housing Agreement, how many houses have been completed or commenced in (a) the capitalcities (b) the provincial cities, and (c)other rural towns and areas of each of the States?

Mr Casey:
LP

– The Minister for National Development has supplied the following information : -

The number of houses completed and under construction at the 30th April, 1951, in each of the States was as follows: -

Coal.

Mr Menzies:
LP

s. - On the 14th March, the honorable member for Shortland (Mr. Griffiths) asked a question relating to the membership of the Joint Coal Board. The Government does intend that a new member will be appointed to fill the vacancy on the board caused by the death of Mr. Jack. This matter has been under review by the Minister for National Development since his assumption of that portfolio and discussions have already taken place with the New South Wales Government. However, it is not anticipated that any announcement will be made before Parliament rises.

Profit-sharing.

Mr Ward:

asked the Prime Minister, upon notice -

Is it a fact that during the 1949 federal election campaign, he stated that, in the event of a Liberal and Australian Country party government being returned, it was proposed to introduce a scheme of profit-sharing!
Has the Government now abandoned such a proposals

Mr Menzies:
LP

s. - The answers to the honorable member’s questions are as follows : -

No.
The Government in its policy statement at the 1940 elections expressed its approval of such schemes as profit-sharing and stated its intention to give them every encouragement. The Government has in no way altered its policy on this matter.

Steel

Mr O’Connor:
MARTIN, NEW SOUTH WALES

r asked the Minister representing the Minister for Trade and Customs, upon notice -

What was the total number in tons of steel produced in Australia for the year ended the 30th March, 1951?
Of the total production, how many ton* were exported?
To what countries did we export steel and in what quantities?
Was steel imported into Australia dunn/* that year; if so, from what countries and what was the quantity in each case?

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The Minister for Trade and Customs has furnished the following reply: -

Production of pig iron in Australia for year ended the 31st March, 1051, 1,281,882 tons; production of steel ingots for year ended the 31st March, 1951. 1,387,200 tons. The foregoing figures do not include direct castings nor Western Australian production, the statis tics for which are not yet available foi this period. However, the proportion of direct castings and West Australian production is very small in relation to total Australian production. 2 and 3. Owing to the wide variety of iron and steel products, ranging from ingots and blooms to plates and sheets, wire and miscellaneous steel products of various kinds, the tonnages of steel exports for any period cannot usefully be expressed as aggregates of the total quantities recorded against the many statistical items involved. The tonnages given below have, therefore, been expressed in terms of the crude steel equivalent on the basis of the conversion factors originally established by the “Entente internationale de l’Acier” “, and commonly employed where overall comparisons of steel trade or consumption figures are under consideration : -

Yes.

Cite as: Australia, House of Representatives, Debates, 3 July 1951, viewed 22 October 2017, <http://historichansard.net/hofreps/1951/19510703_reps_20_213/>.

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House of Representatives 3 July 1951

QUESTION

THE PARLIAMENT

Mr SPEAKER:

QUESTION

KOREA

Dr EVATT:BARTON, NEW SOUTH WALES

Mr CASEY:Minister for External Affairs · LP

QUESTION

GARDEN ISLAND

Mr LAWRENCE:WIMMERA, VICTORIA

Mr FRANCIS:Minister for the Army · MORETON, QUEENSLAND · LP

Mr RIORDAN:KENNEDY, QUEENSLAND

Mr FRANCIS:

Mr Jeff Bate:

Mr SPEAKER:

Mr Jeff Bate:

Mr SPEAKER:

Mr Jeff Bate:

Mr SPEAKER:

Mr Wentworth:

Mr SPEAKER:

Mr Jeff Bate:

Mr SPEAKER:

Mr Jeff Bate:

Mr SPEAKER:

Mr Jeff Bate:

Mr SPEAKER:

Mr Jeff Bate:

Mr SPEAKER:

Mr ROSEVEAR:DALLEY, NEW SOUTH WALES

Mr FRANCIS:LP

Mr WARD:EAST SYDNEY, NEW SOUTH WALES

Mr FRANCIS:

QUESTION

HEARING AIDS

Mr JAMES:HUNTER, NEW SOUTH WALES

Sir EARLE PAGE:Minister for Health · COWPER, NEW SOUTH WALES · CP

Mr BERNARD CORSER:WIDE BAY, QUEENSLAND

Mr TOWNLEY:Minister for Social Services · DENISON, TASMANIA · LP

QUESTION

ARMED FORCES

Mr GRAHAM:ST GEORGE, NEW SOUTH WALES

Mr FRANCIS:LP

Mr CLARK:DARLING, NEW SOUTH WALES

Mr MENZIES:Prime Minister · KOOYONG, VICTORIA · LP

QUESTION

SOCIAL SERVICES

Mr FITZGERALD:PHILLIP, NEW SOUTH WALES

Mr TOWNLEY:LP

Mr THOMPSON:PORT ADELAIDE, SOUTH AUSTRALIA

Mr TOWNLEY:

QUESTION

CATTLE

Dr DONALD CAMERON:OXLEY, QUEENSLAND · LP

Sir EARLE PAGE:CP

Mr PEARCE:CAPRICORNIA, QUEENSLAND

Sir EARLE PAGE:

Mr DRUMMOND:NEW ENGLAND, NEW SOUTH WALES

Sir EARLE PAGE:

QUESTION

DAIRYING

Mr W M BOURKE:FAWKNER, VICTORIA

Mr McEWEN:Minister for Commerce and Agriculture · MURRAY, VICTORIA · CP

QUESTION

SNOWY MOUNTAINS SCHEME

Mr BLAND:WARRINGAH, NEW SOUTH WALES

Mr CASEY:LP

QUESTION

NATIONAL SERVICE

Mr CHAMBERS:ADELAIDE, SOUTH AUSTRALIA

Mr FRANCIS:LP

QUESTION

HEALTH AND MEDICAL SERVICES

Mr HOWSE:CALARE, NEW SOUTH WALES

Sir EARLE PAGE:CP

Mr BRYSON:WILLS, VICTORIA

Sir EARLE PAGE:

QUESTION

COMMONWEALTH JUBILEE CELEBRATIONS

House of Representatives
3 July 1951

Dr EVATT:
BARTON, NEW SOUTH WALES

Mr CASEY:
Minister for External Affairs · LP

Mr LAWRENCE:
WIMMERA, VICTORIA

Mr FRANCIS:
Minister for the Army · MORETON, QUEENSLAND · LP

Mr RIORDAN:
KENNEDY, QUEENSLAND

Mr ROSEVEAR:
DALLEY, NEW SOUTH WALES

Mr FRANCIS:
LP

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

Mr JAMES:
HUNTER, NEW SOUTH WALES

Sir EARLE PAGE:
Minister for Health · COWPER, NEW SOUTH WALES · CP

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND

Mr TOWNLEY:
Minister for Social Services · DENISON, TASMANIA · LP

Mr GRAHAM:
ST GEORGE, NEW SOUTH WALES

Mr FRANCIS:
LP

Mr CLARK:
DARLING, NEW SOUTH WALES

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

Mr FITZGERALD:
PHILLIP, NEW SOUTH WALES

Mr TOWNLEY:
LP

Mr THOMPSON:
PORT ADELAIDE, SOUTH AUSTRALIA

Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

Sir EARLE PAGE:
CP

Mr PEARCE:
CAPRICORNIA, QUEENSLAND

Mr DRUMMOND:
NEW ENGLAND, NEW SOUTH WALES

Mr W M BOURKE:
FAWKNER, VICTORIA

Mr McEWEN:
Minister for Commerce and Agriculture · MURRAY, VICTORIA · CP

Mr BLAND:
WARRINGAH, NEW SOUTH WALES

Mr CASEY:
LP

Mr CHAMBERS:
ADELAIDE, SOUTH AUSTRALIA

Mr FRANCIS:
LP

Mr HOWSE:
CALARE, NEW SOUTH WALES

Sir EARLE PAGE:
CP

Mr BRYSON:
WILLS, VICTORIA

Mr J R FRASER:
ALP

Mr MENZIES:
LP

Mr KEKWICK:
BASS, TASMANIA

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

Mr DRAKEFORD:
MARIBYRNONG, VICTORIA

Mr CASEY:
LP

Mr SWARTZ:
DARLING DOWNS, QUEENSLAND

Mr McEWEN:
CP

Mr LESLIE:
MOORE, WESTERN AUSTRALIA

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

Sir ARTHUR FADDEN:
Treasurer · MCPHERSON, QUEENSLAND · CP

Mr PETERS:
BURKE, VICTORIA

Mr MENZIES:
LP

Mr DOWNER:
ANGAS, SOUTH AUSTRALIA

Sir ARTHUR FADDEN:
CP

Mr DUTHIE:
WILMOT, TASMANIA

Mr CASEY:
LP

Mr MENZIES:
LP

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP

Mr MENZIES:
LP