House of Representatives
10 March 1959

23rd Parliament · 1st Session

  1. House of Representatives
  2. 23rd Parliament
  3. 1959

Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.

page 407

MINISTERIAL ARRANGEMENTS

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– During this week and, I think, probably next week, the Minister for External Affairs will be engaged at a conference in Queensland. During his absence from the House I shall attend to his parliamentary duties.

page 407

QUESTION

DIPLOMATIC RELATIONS WITH RUSSIA

Dr EVATT:
HUNTER, NEW SOUTH WALES

– Can the Prime Minister, who is also acting for the Minister for External Affairs, tell the House whether any discussions or negotiations have been, or are, taking place with the representatives of Russia, in relation to the possible resumption of diplomatic relations with this country?

Mr MENZIES:
LP

– In other places over the last year or two, informal references have been made to this subject. I myself had a call the other day from the Soviet Deputy Foreign Minister. We did not discuss this matter. It was a courtesy call, and we had a conversation which related to developments in the Soviet Union and developments in Australia. The question of diplomatic relations was not referred to. I do not think I can say more than that at this stage.

Mr WENTWORTH:
MACKELLAR, NEW SOUTH WALES

– My question follows on that asked by the Leader of the Opposition. I ask the Prime Minister whether, in view of the circumstances under which diplomatic relations between Australia and Soviet Russia were severed some years ago, and in view of the restrictions placed by Russia upon the freedom of all diplomats inside Russia, will he now assure the House that, before any arrangements are made for the resumption of these relations, Australia will insist on two minimal and reasonable conditions, namely, first, that the numbers in the Soviet Embassy will be restricted to those commensurate with the proper discharge of diplomatic functions and, secondly, that the members of the diplomatic staff be afforded no greater privacy, freedom of movement, or opportunities for local contacts, than are afforded Australian diplomats inside Soviet Russia.

Mr MENZIES:

– I think perhaps it may be worth while to remind the House that so far as I know there never has been a formal severance of diplomatic relations between Australia and Russia. What happened was that, after certain events in Australia, the Soviet ambassador withdrew, taking with him his staff, and the Australian mission in Moscow was told that it was desirable that it should go, and it went. That is the simple history of this matter. Should there be a resumption of physical representation in each place at any time, the Government will, of course, have in mind all steps that are proper to protect Australia’s interests. But I think that it would be very unwise at this time to be answering hypothetical questions on that matter. It is something which, if it happens, should happen on appropriate terms; that is all. And there is nothing more that need be said about it now.

page 407

QUESTION

TELEVISION

Mr FAIRHALL:
PATERSON, NEW SOUTH WALES

– My question is addressed to the Postmaster-General. Can he say whether the Government has yet reached a decision on the means by which television will be extended to country areas? If so, will he indicate whether it is to be by individually licensed stations, by booster or relay stations to extend the coverage of existing metropolitan stations, or perhaps by a combination of the two methods? When is it likely that applications for country television licences will be invited?

Mr DAVIDSON:
Postmaster-General · DAWSON, QUEENSLAND · CP

– This is a subject of great interest to many honorable members, and one in respect of which I have answered many questions in recent times. As has been indicated in previous statements, no decision has yet been made on the extension of television to country areas, which I have described as the third phase of television development. Therefore, I can make no statement as yet as to the means which will be adopted for the extension of this medium to country areas. However, as I indicated in this House, I think the week before last, I have been preparing a case for submission to the Government as to the conditions and the time for the extension of television to country areas, and I expect the matter to be referred to the Government for decision quite shortly. I assure the honorable member that as soon as I am in a position to do so I shall make a full statement to the House so that everybody will be advised of developments.

I should like to say at this point, Mr. Speaker, that it has come to my notice that certain interests apparently have been responsible for statements to the effect that the Government has decided on some form of extension of television to country areas by the use of booster stations and other such measures from city areas. I want to state quite definitely that no such decision has yet been taken. I repeat that this is a matter upon which Government policy has still to be determined. The extension of television to country areas is being carefully considered, and very shortly I hope to be able to advise the House and the country just what form that extension will take.

page 408

QUESTION

PUBLIC SERVICE

Mr GALVIN:
KINGSTON, SOUTH AUSTRALIA

– I ask the Prime Minister whether he approves of the recent action of the Public Service Board, which has resulted in several Commonwealth departments dismissing married ex-servicemen, some with over fifteen years’ service. These men were employed in a temporary capacity, and have been dismissed owing to the recruitment of junior personnel. Is the right honorable gentleman aware that amongst the men dismissed are exservicemen who were trained as clerks under the rehabilitation training scheme conducted through the Repatriation Department, and that they hold the necessary educational qualifications but, because of disabilities due to war service, they cannot pass the medical examination? If the Prime Minister does not agree with the action of the Public Service Board, will he take immediate steps to ensure that these men are not forced soon to apply for the unemployment benefit?

Mr MENZIES:
LP

– 1 am not aware of the facts of this matter but I shall ascertain them, and 1 will pass them on to the honorable member as soon as possible.

page 408

QUESTION

SALK VACCINE

Mr MACKINNON:
CORANGAMITE, VICTORIA

– I ask the Minister for Health whether he is in a position to state whether there is any evidence of the continuing value of the Government’s poliomyelitis vaccination campaign and the use of Salk vaccine.

Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

- Mr.

Speaker, considerable evidence of the value of Salk vaccine was supplied in the last half of last year when there was a sporadic outbreak of poliomyelitis in Victoria. Sixtyfive cases were notified. Amongst those were twelve children who had been vaccinated, and 42 who had not. There was also one other case in which vaccination and the incidence of the disease occurred on the same day, so that case has to be neglected for statistical purposes.

It is estimated that if the incidence of the disease had been the same in the vaccinated children as in those who were not vaccinated, there would have been not twelve but something like 180 cases amongst them. It is considered that about 90 per cent, of persons who are vaccinated with Salk vaccine are rendered immune to poliomyelitis. This figure is rather higher than the figure of 75 per cent, to 80 per cent., which was claimed to be the likely figure when the vaccination campaign was inaugurated.

page 408

QUESTION

APPLES

Mr BARNARD:
BASS, TASMANIA

– I ask the Minister for Trade whether he has any knowledge of a proposed organized move by British fruit importers to purchase Tasmanian apples from the 1959 crop at greatly reduced prices, which would have the effect of causing Tasmanian apple growers to seek from this Government guaranteed advances against future consignments. If the right honorable gentleman has some knowledge of this matter will he have further inquiries made, and will he give an assurance, so far as he is able to do so on behalf of the Government, that the growers will be protected?

Mr McEWEN:
Minister for Trade · MURRAY, VICTORIA · CP

– I have no knowledge of the matter mentioned by the honorable member, but I shall have inquiries made and shall advise him of the result. If any situation that is adverse to the interests of Australian primary exporters can be bettered by government action, the honorable member can rest assured that the Government will do what it can to help.

I may observe at this point that it has come to my notice in the last week or two that some offerings of Australian fresh fruits to Europe have not sold because offerings from other quarters have been priced lower than ours. This situation may force us to adjust our quotations.

page 409

QUESTION

ABORIGINES

Mr ASTON:
PHILLIP, NEW SOUTH WALES

– In answer to the honorable member for Wills about a fortnight ago, the Minister for Territories said that seventeen aborigines in the Northern Territory had been granted citizenship. Does this figure include all the persons of aboriginal descent who have become citizens during the term of the present Government?

Mr HASLUCK:
Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– The honorable member for Wills put a question on notice regarding citizenship for aborigines in the Northern Territory. I am afraid that, perhaps reading the question rather carelessly, I understood it to refer to aborigines who had been granted citizenship under the Welfare Ordinance, and gave the answer that seventeen had become citizens. Subsequently in debate the honorable member for Wills used this figure in a way that showed he had understood it in an entirely different sense. As the error is great, I welcome the question now so that I may correct the error.

Mr Ward:

– You organized this question!

Mr HASLUCK:

– There is no harm in doing that. When an error of several thousands occurs, surely a Minister should take steps to see that it is corrected.

As honorable members are aware, the old system in the Northern Teritory was similar to the system in the States. Aborigines applied for exemption from the Aborigines Ordinance and when they were granted exemption they had a form of citizenship which, however, could be revoked. When this Government took office, 293 aborigines had such exemption from the Aborigines Ordinance. In the early years of office of the present Government, the total was increased by 286, In 1952, the Government drastically amended the whole of the legislation affecting aborigines in the Northern Territory so as to make a complete change in the definition of an aboriginal. As a result, by one single action, in 1953 no fewer than 1,900-

Mr Ward:

– On a point of order: I ask you, Mr. Speaker, whether by any stretch of the imagination you could regard this as being a question without notice when the Minister obviously comes in with a written reply.

Mr SPEAKER:

– Order! I regard the Minister as being in order.

Mr HASLUCK:

– In October, 1953, by one single act of administration, 1,900 persons of aboriginal descent obtained citizenship. To-day in the Northern Territory there are approximately 2,400 persons of aboriginal descent who, if they lived in the States, could obtain citizenship only by applying for exemption, but who in the Northern Territory have irrevocable citizenship as a result of the passage of the Aborigines Ordinance. The difference is a difference between a figure of seventeen, as used by the honorable member for Wills in debate, and an actual figure of 2,400 who have citizenship.

page 409

QUESTION

MINERAL RIGHTS IN NORTHERN TERRITORY

Mr RIORDAN:
KENNEDY, QUEENSLAND

– I desire to address a question to the Minister for Territories. It concerns the case of a widow who is the owner of freehold land, including all mineral rights, adjoining Rum Jungle in the Northern Territory. I cannot mention the lady’s name, Mr. Speaker, because if I did you would tell me to sit down. But she is a keen lady. She lives at Ravenswood in Queensland. The Minister knows this case very well because about eighteen months ago he had a lot to say about it in the press. Did the Government prevent this lady from working the mineral deposits on her own land? If so, why? Did the Government grant any other person, body or corporation, the right to mine this lady’s land? Is any person, body or corporation working the mineral deposits on the land? Will the widow be granted the right to mine her own land? What is the present position concerning this case? I direct these questions to the Minister because of the great public interest in the matter.

Mr HASLUCK:
LP

– The honorable member has referred to what is popularly known as the Keane case. It is the subject of legal discussion at present, so I am precluded from expressing an opinion on the legal aspects. My understanding of the position is that the next move in establishing rights or obtaining any rights that Mrs. Keane might claim to have lies with her or her advisors. If she is prepared to take the move that is open to her, the case can be decided in the way cases are usually decided when legal issues are involved.

page 410

QUESTION

MARGARINE

Mr BANDIDT:
WIDE BAY, QUEENSLAND

– I direct a question to the Minister for Trade in the absence of the Minister for Primary Industry. Is the Minister aware of the recent rise in the price of margarine? If so, is he aware of the reason for this price rise? Will the Minister inform the House what effect, if any, this price rise is likely to have on the consumption of butter in Australia?

Mr McEWEN:
CP

– I have been informed that the price of table margarine has been increased by 4d. per lb. as from the beginning of this month. My advice is that this has arisen from an increase in the world price of copra which in turn flows, I believe, from lower production in the Philippines. Clearly, the narrowing in the price margin between butter and table margarine must operate to the advantage of the sale of butter, and I am sure that the dairying industry and the Australian Dairy Produce Board will not be slow to know this and take advantage of the legislation passed by the last Parliament which made funds available for both research and sales promotion in Australia. I feel sure that the Australian dairying industry will gain from the situation.

page 410

QUESTION

TELEVISION

Mr DAVIES:
BRADDON, TASMANIA

– I direct a question to the Postmaster-General. In view of the fact that no provision is made for reception of television programmes by thousands of residents on the north-west coast of Tasmania when the Hobart studios are opened early next year, will the Minister give consideration to carrying out experiments in the use of a booster or microwave link on King Island to improve reception from Melbourne on the north-west coast of Tasmania? Such reception at present is about 40 per cent. Further, when the Hobart studios are operating, will the Minister consider establishing a micro relay channel from Mount Wellington at Hobart to Mount Sedgewick on the west coast of Tasmania to serve residents in that area who already suffer greatly because of their isolation?

Mr DAVIDSON:
CP

– The question of the reception of television signals in the northern part of Tasmania is one to which reference has been made in this House previously. I can only refer the honorable member to the statement I made a few minutes ago concerning the further extension of television and the plans which will be considered by the Government. They will take into account the position that the honorable member has outlined, in commonwith the situation in all other country areas, in Australia. Consideration will be given as to how far the present services can be extended in those areas.

page 410

QUESTION

IMMIGRATION

Mr TURNER:
BRADFIELD, NEW SOUTH WALES

– Is the Minister for Immigration aware that in the screening of intending migrants from overseas, inordinate delays too often occur, running in some cases into years? Will the honorable gentleman look into this matter?

Mr DOWNER:
Minister for Immigration · ANGAS, SOUTH AUSTRALIA · LP

– I do not think the honorable member’s question is based on completely correct premises. It is quite true that, in the interests of Australia and of getting the best types of migrants that we can, a fairly elaborate screening process has been instituted by this Government in our posts overseas. In isolated cases, in which I know the honorable member for Bradfield is interested on behalf of his constituents, the process might occasionally appear to take longer than the honorable member would desire. But I can assure him that these matters ave treated with all possible expedition, and when there is any delay it is for very good reasons and is in theinterests of this country.

page 410

QUESTION

AIRCRAFT PRODUCTION

Mr BIRD:
BATMAN, VICTORIA

– I address a question to the Minister for Supply. In view of the uncertainty existing in the minds of those associated with the aircraft industry, because of the absence of a plan for the future, can the Minister state whether the Government has finally decided what is to be its attitude on the question whether the industry is to continue or to expire?

Mr HULME:
Minister for Supply · PETRIE, QUEENSLAND · LP

– This matter is at present being considered by the Government, and I am unable to give the honorable member any details at the present time.

page 411

QUESTION

SPANISH IMMIGRANTS

Mr MURRAY:
HERBERT, QUEENSLAND

– My question is directed to the Minister for Immigration. In view of the undoubted success of the introduction of Spanish migrants, particularly Spanish Basques, to the canefields of northern Australia, can the Minister say whether any arrangements have been made to bring in more of these migrants?

Mr DOWNER:
LP

– As the honorable member for Herbert says, the introduction of Spaniards to Australia by this Government last year, more or less as an experiment, has proved a marked success. We brought to these shores .150 of them, recruited specifically to work in the canefields, and no doubt the honorable member has had some practical experience of them in his own part of Queensland. So favorable have the reactions been to these Spaniards that the Government has arranged for 350 more Spaniards to enter Australia this year. Of these, 250 will be unskilled male workers. The remaining 100 will be domestic workers. I have no doubt that the housewives, public institutions, and other interested bodies of Australia will welcome this good news, and that when these good ladies arrive they will be rushed with the alacrity with which children rush hot cakes when they come out of an oven.

page 411

QUESTION

OVERSEAS TRADE BALANCES

Mr PETERS:
SCULLIN, VICTORIA

– I address a question to the Minister for Trade. Our trade deficit for the last eight months amounted to £23,000,000, but there was a favorable trade balance of £50,000,000 for the same months in the preceding year. Does the right honorable gentleman consider that the trade agreements he has entered into with Japan and other countries have anything to do with the continued deterioration of our trade balances? If not, what are the reasons for Australia’s continued trade disabilities?

Mr McEWEN:
CP

– Most honorable members have read the papers and have learned of the fall in the price of wool sold under the auction system. This fall in receipts for wool is the principal cause of the decline in the value of Australia’s trade earnings overseas.

page 411

QUESTION

AUSTRALIAN MILITARY UNIFORMS AND BLANKETS

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

– Can the

Minister for the Army say whether there is any truth in the reports that the Army is considering replacing woollen clothing or blankets with clothing or blankets made from cotton or some synthetic material?

Mr CRAMER:
Minister for the Army · BENNELONG, NEW SOUTH WALES · LP

– There is no intention whatever of replacing woollen blankets or clothing with articles made from materials other than wool, or with articles that do not have a major wool content. When 1 say “ major wool content “, I am thinking particularly of blankets, to which I believe the honorable member was mainly referring. I remind honorable members that nothing is too good for our soldiers and so they get woollen blankets. The honorable member may have in mind some experiments which are at present going on in relation to a composite compact sleeping kit for tropical warfare. The composition of the kit has not been finally determined at the moment, but it may include a very light blanket which will consist of 88 per cent, wool with 12 per cent, nylon to strengthen it. I can assure the honorable member .that the Department of the Army has no desire to avoid using wool and, apart from those in the sleeping kit that I have mentioned, Army blankets will remain as they are.

page 411

QUESTION

ABORIGINES

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Has the

Prime Minister been able to give any further consideration .to a request I made last year that, when the Budget is being prepared, some consideration be given to allowing aborigines residing on mission stations to benefit from the social service legislation in the same way as other people?

Mr MENZIES:
LP

– The honorable member will be glad to know that for some short amount of time I have had a special Cabinet committee, of which I am a member, looking into that very matter and I hope that we shall arrive at useful results.

page 411

QUESTION

TAXATION

Mr FORBES:
BARKER, SOUTH AUSTRALIA

– In addressing a question to the Treasurer, I refer to the practice of replying to requests for the removal of anomalies in methods or rates of taxation by the statement that the matter will be considered when the next Budget is under discussion. As most members now have some hundreds of these replies, could he, if only for the sake of variety, direct his department to produce a reasoned and reasonable answer to future requests?

Mr HAROLD HOLT:
Treasurer · HIGGINS, VICTORIA · LP

– My distinguished predecessor, who established a remarkable record of tenure in the office which 1 now hold, maintained, I think, a very convincing and persuasive practice on these matters. He had compiled a document which set out all the representations which had come to him for taxation relief. This document was by its very dimensions enough to convince people of the difficulties and complexities of the problems confronting any Treasurer who set out to vary the current taxation rates. Of course, h h the practice, inside the Treasury, and with the Treasurer himself, periodically to examine representations of all kinds in relation to taxation matters. No time could be more appropriate for a final review, prior to the Budget decisions, than the weeks leading up to Cabinet discussions on the Budget. At that time, the Treasurer has an awareness of trends, economic and financial, in the current year and in the year for which the Budget is to be framed. He is able to decide what recommendations, if any, he can p .it to his colleagues for taxation relief. Unfortunately, over the last year, largely for the reasons indicated by the Minister for Trade, namely, a serious decline in the prices received by Australians for their wool and metals, we have not enjoyed such buoyant revenues that taxation relief has seemed to be possible. But hope springs eternal, and I can assure the honorable gentleman that, whatever the standard form of reply may be, serious consideration, in the light of the country’s economic circumstances, will be given to these requests at the appropriate time.

page 412

QUESTION

MR. SPEAKER

Mr DALY:
GRAYNDLER, NEW SOUTH WALES

– I ask the Leader of the House whether it is a fact, as reported, that the Government recently sought to replace Mr. Speaker with an honorable member who would be prepared to accept dictation from the Government in the conduct of this Parliament. If this is a fact, is the Minister aware that the action contemplated by the Government was contrary to all the tradi tion and practice of parliamentary procedure? Is it also a fact that the honorable member for Balaclava was the member selected to replace Mr. Speaker for this purpose, but that the plot failed wl.en he was deserted in the hour of crisis and secured only thirteen votes out of a possible 83?

Mr HAROLD HOLT:
LP

– It seems to me that the honorable member is reflecting on a decision of this House. I believe that this Parliament, in its wisdom, has made a selection from which we can all derive some satisfaction, including my colleague from Balaclava. We trust, Mr. Speaker, that you will enjoy a successful period of office for the remainder of the life of this Parliament.

page 412

QUESTION

AIRCRAFT PRODUCTION

Mr FAIRBAIRN:
FARRER, NEW SOUTH WALES

– My question to the Minister for Defence is supplementary to that asked by the honorable member for Batman. When discussions are held to decide what fighter aircraft will be made in Australia to replace the Avon Sabre, will consideration be given to producing the English Electric Company’s new supersonic fighter known as the P1B or “ Lightning “, especially as that company is already producing Canberra bombers at Fisherman’s Bend in Victoria?

Mr TOWNLEY:
Minister for Defence · DENISON, TASMANIA · LP

– Due consideration will be given to the points raised by the honorable member. I am sure he will appreciate that the advice which comes to the department on these matters is received from professional and technical experts who are employed in the various service departments.

page 412

QUESTION

POPULATION

Mr BRYANT:
WILLS, VICTORIA

– Is it a fact that last week the Prime Minister announced with some pride that the population of Australia had reached 10,000,000? Is the Prime Minister aware that full-blood aborigines were not counted in this total and were thus disregarded as people as well as being disregarded as good citizens? Does he not consider this to be an affron to coloured peoples throughout the world?

Mr MENZIES:
LP

– Speaking from recollection, I think that under the Constitution, in calculating the population aborigines are not included. However, if they are included, the population of Australia reached 10,000,000 a fortnight or three weeks ago. Meanwhile, without going into that argument I am sure that all honorable members will regard the achievement of a population of 10,000,000, which is estimated to be our population to-day, as a remarkable landmark in the history of Australia. This represents a rapid increase in the growth of population, including migrants, to which the policies on both sides of this House have powerfully contributed.

page 413

QUESTION

EXPORT OF KOALAS

Mr KILLEN:
MORETON, QUEENSLAND

– Has the Minister for Trade any authority to prevent the export of koala bears from Australia? Has his attention been directed to a proposal to send four koala bears to the United States of America? As these little animals, if exported, will undoubtedly be condemned to death, will the Minister use any authority he has to reprieve the animals and earn not only their gratitude, but also that of the majority of Australian people?

Mr McEWEN:
CP

– I am quite sure that authority to regulate the export of Australian fauna does exist, but I am equally sure that it does not repose with the Minister for Trade. I am sure that well-defined policies exist and that these policies will be applied when dealing with any application that may be made.

page 413

QUESTION

CHILD WELFARE IN CANBERRA

Mr J R FRASER:
ALP

– I ask the Minister for Health: Has the Department of Health considered the possible need for the establishment of a child guidance clinic in Canberra? If this matter has not been considered by the department, will the Minister have inquiries made as to the possible need to establish such a clinic which, it has been represented to me, is an urgent necessity?

Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

– I do not think that consideration has been given to the establishment of either child guidance or marriage guidance clinics in the Australian Capital Territory.

page 413

QUESTION

STATE ROAD TAXES

Mr ANDERSON:
HUME, NEW SOUTH WALES

– I direct a question without notice to the Treasurer. Has the right honorable gentleman’s attention been directed to the promise made by the Premier of New South Wales to reduce the registration fees of intra-state hauliers by 50 per cent., at a cost of £1,000,000 per annum? Is this in accord with the Premier’s protests at the recent conference of Commonwealth and State Ministers regarding the inadequacy of funds supplied to New South Wales by the Commonwealth, or is it due to a desperate, last-ditch forlorn hope?

Mr HAROLD HOLT:
LP

– I am reluctant lo accept the invitation implied in the last part of the honorable gentleman’s question, particularly in view of the manner in which the Premier of New South Wales contributed to the discussions at the conference that was held here last week; but the Premier of New South Wales did indicate at that time, when this matter was before the Premiers conference, that the tax in question was one which many people found irksome and which he got no satisfaction out of imposing. He was seeking some Commonwealth assistance in the event of his forgoing the revenue derived from the tax. We made it quite clear on the part of the Commonwealth that the rate of tax imposed was a matter for the Premier himself, and for the Premiers of the other States should they choose to make any move in regard to it. We said that the decision on whether the tax was retained or not was entirely a matter within his own jurisdiction, and that the Commonwealth could accept no greater obligation in regard to the revenue which a State decided to forgo in this way than it could in regard to any other impost which a State might or might not levy. Apparently, for reasons which seemed good to him, the Premier has adopted the course to which the honorable gentleman has referred. Perhaps the imminence of an important event in the political life of New South Wales has some bearing on that decision.

page 413

QUESTION

LA PEROUSE

Mr CURTIN:
KINGSFORD-SMITH, NEW SOUTH WALES

– Has the Prime Minister received a request from the Randwick Historical Society seeking Commonwealth action to preserve the many historical remains on the La Perouse peninsula in New South Wales, and to improve the area so as to meet the requirements of the many persons who embark there for Kurnell, on the opposite side of Botany Bay, in order to visit the site of the first landing of Captain Cook in Australia? Does the

Government view the proposition favorably and, if so, will the Prime Minister take steps to arrange a conference with the New South Wales Government on the matter?

Mr MENZIES:
LP

– I am not aware of having received a communication from the Randwick Historical Society on this matter, but I will find out whether I have.

page 414

QUESTION

TAXATION

Mr CLEAVER:
SWAN, WESTERN AUSTRALIA

– To the Treasurer i address a question without notice. Will the right honorable gentleman advise the House whether any steps have been taken to have the income tax instalment scale more accurately compiled, in view of the fact that tax refunds in 1955-56 totalling approximately £60,000,000 represented almost entirely excess instalment credits? ls th. present scale designed to collect in most cases more tax at the source than will be later assessed?

Mr HAROLD HOLT:
LP

– In addition to the kind of consideration which, as I indicated a few minutes ago, is given to taxation matters by me and the Treasury a special review is shortly to be made. Honorable members will be aware that the Prime Minister has announced publicly the Government’s intention to constitute a committee to go into various taxation matters. Consideration has been given to the terms of reference of that committee and the manner of its composition, but no finality has been so far obtained on these points. However, when considering taxation matters in general, and in particular the matters that should go before that committee, I shall have in mind the query which the honorable gentleman has raised, and see how it can most suitably be dealt with.

page 414

FOREIGN AFFAIRS COMMITTEE

Motion (by Mr. Menzies’) agreed to -

That Mr. Chaney, Mr. Drummond, Mr. Joske, Sir Wilfrid Kent Hughes, Mr. Lucock, Mr. Mackinnon. Mr. McColm and Mr. Wentworth be members of the Joint Committee on1 Foreign Affairs.

That, until such time as the five remaining, vacancies for members of the House of Representa:tives on this committee are filled by members of the Opposition, Mr. Aston, Mr. Failes, Mr. Forbes, Mr. Haworth and Mr. Wheeler be members of the committee.

That the foregoing resolution be communicated to the Senate by message.

page 414

GOVERNOR-GENERAL’S SPEECH

page 414

QUESTION

ADDRESS-IN-REPLY

Debate resumed from 26th February (vide page 402), on motion by Mr. Browne -

That the following Address-in-Reply to the Speech of His Excellency the Governor-General be agreed to -

May rr Please Your Excellency:

We, the House of Representatives of the Parliament of the Commonwealth of Australia, in Parliament assembled, desire to express our loyalty to our Most Gracious Sovereign, and to thank Your Excellency for the Speech which you have been pleased to address to Parliament.

Mr COPE:
Watson

.- First, 1 should like to take this opportunity of congratulating you, Mr. Speaker, on your reelection, unopposed, as Speaker of the House. The fact that you were unopposed indicates that the Labour Opposition considered that you had carried out your duties in the past in a very efficient and unbiased manner. To put it in more general words, you have given a fair go to all honorable members, irrespective of party affiliation. I should also like to congratulate the honorable member for Gippsland (Mr. Bowden) on his election, unopposed, as Chairman of Committees and Deputy Speaker of the House. Although at times his demeanour disclosed traces of indigestion, I am sure that he in turn will also give a fair go to honorable members. But I must confess that I would prefer to see both of these gentlemen occupying seats on the Opposition side of the House. I also congratulate the newly-elected members on their maiden speeches, which were of a very high standard indeed. We are all looking forward to hearing many more contributions by them, particularly those on the Opposition side of the House.

I was rather surprised to learn that the honorable member for Paterson (Mr. Fairhall) had been dropped from the Ministry. He always gave me the impression that he was one of the most capable of the very poor lot that occupied the Government front bench during the last Parliament. At least his ability has been recognized by his election as chairman of the Public Works Committee, which undoubtedly is, with the exception of the Public Accounts Committee, the most important committee functioning in this Parliament. I was somewhat astonished to learn that the Liberal party had failed to re-elect the honorable member for Deakin (Mr. Davis) to the Public Accounts Committee. His wise counsel and forthright views were always very much appreciated by the previous committee, and his omission will be greatly regretted by the newlyelected body.

During the course of this debate I listened quite attentively to the honorable member for Moreton (Mr. Killen) who, in his usual supercilious way, claimed that the Opposition was very weak and devoid of any talent. As yet, I do not think the honorable member for Moreton has set the House on fire or done anything outstandingly constructive. Judging on past performances, he is doomed to remain forever a backbencher. I also listened quite attentively to the honorable member for Wentworth (Mr. Bury) who, congratulating the honorable member for Werriwa (Mr. Whitlam) on his election to the Opposition front bench, said that this honorable member was just a flower in the Opposition desert. The honorable member for Wentworth reminds .me of a towering, frustrated beanstalk, sticking out from the barren cabbage patch opposite.

Mr Ward:

– He looks like “Bugs Bunny “ to me.

Mr COPE:

– The honorable member took the words out of my mouth. I was just about to say that when the honorable member for Wentworth does make one of his exciting speeches in this House, he is just like “ Bugs Bunny “ eating a nice, juicy carrot.

The Governor-General’s Speech, as we all know, is a pronouncement of Government policy; but on this occasion it paid very scant attention to urgent matters of public importance. It contained no concrete proposal for dealing with the acute unemployment position or for overcoming the critical housing shortage. In the Speech, which contained about 3,500 words, only 22 words were devoted to the employment position in Australia at present. I shall read those 22 words. They are -

During 1958 employment opportunities continued to increase. There are some problems affecting particular localities, but employment generally is at a high level

Let us analyse the present unemployment position. The figures show that approximately 82,000 persons are registered as unemployed, with well over 30,000 on the dole. But the figure of 82,000 does not truly indicate the number of people out of work, because there are many thousands who, on becoming unemployed, do not register with the Department of Labour and National Service, knowing that it is futile to try to obtain work through that channel. There are many thousands who, on becoming unemployed and having a few pounds saved, do not bother to register but prefer to search for work themselves.

The electorate of Watson, which I am honoured to represent in this Parliament, is the greatest industrial electorate in Australia. To make my point, I should like to cite some of the industries that are established in my electorate. I shall name only a few, as I do not want to bore the House with too many of them. The following industrial establishments are situated in the Watson electorate: -

Australian Consolidated Industries (which include the Australian Glass Manufacturers, Australian Window Glass and Crown Crystal Glass), Imperial Chemical Industries, Australian Paper Mills, General Motors-Holden’s, British Motor Corporation, Email Industries, Metters, Luke Muras, Lister Blackstone, Standard Telephones and Cables, Ever Ready Battery Company, Federal Match Company, Schweppes Cordials, Malleys, Australian Iron and Steel, Bradford Kendall, Britstand Machinery, Alexandria Spinning Mills, John Danks, Reichold Chemical Company, Wormald Brothers, Akubra Hat Mills, Australian Felt and Textiles, Peters Ice Cream.

I thought that the honorable member for Hume (Mr. Anderson), who is interjecting, was Sabrina bursting into song. The list continues -

Sweetacres Confectionery, Parke Davis, Burroughs Wellcome, Bailey’s Tannery, Whiddon Fellmongers and Woolcomb’ers, F. W. Hughes Fellmongers and Woolcombers, Kirbys Spark Plugs, Taubman’s Paints, Wrigley’s Chewing Gum, Kelloggs, Mark Foy’s Mills, Rheem Mcllwraith Industries, Wunderlich^, Resch’s Brewery, the major portion of the Eveleigh Railways Workshops, Sunbeam Corporation, Fleming’s Food Stores, ‘Gordon and Gotch, Australian Rope Works.

And these establishments may interest some honorable members -

Australian Soap Manufacturers, Murray Brothers Timber and Furniture Manufacturers, Smith Brothers Timber and Furniture Manufacturers, Qantas Workshop, T.A.A. Workshop, A.N.A. Workshop, Reckitts Blue, Sun Gravure, Bradford Dye Works, Austral Bronze, Selby Shoes, Hansman Shoes.

Those are only a few of the industrial establishments in my electorate. I suggest that the employment situation there can be taken as a barometer of the employment position for Australia as a whole. Because of the high percentage of secondary industry there, it reflects the position throughout Australia.

What is the position in the Watson electorate? Very few jobs for unskilled or semiskilled workers are offering. But only about two years ago, it was a common sight in my electorate to see signs outside these industrial establishments advertising vacancies and offering employment for skilled and semi-skilled workers. All the signs now read, “ No vacancies at the present time “. I invite any honorable member who thinks that 1 am exaggerating to make his own personal survey in the electorate or to accompany me through it and let me show him the situation. I extend that invitation particularly to the Minister for Labour and National Service (Mr. McMahon).

Being thrown out of work has farreachmg effects on a person, Mr. Speaker, lt means loss of dignity, frustration and a feeling of not being wanted. Many of those who are put off get themselves heavily into debt by borrowing money from relatives and friends and by mortgaging furniture and other personal assets - and sometimes even are forced to visit the pawnbroker in order to get a few shillings to enable them to survive while they are on the dole. Is it not strange that at the present time we need so many things in Australia? We need more schools, more homes for the people, better irrigation, flood mitigation works and roads. We need all these things, and yet we have unemployment in our midst. Strangely enough, it was very easy to find money in war-time. Why can it not be found in peace-time in order to develop Australia and provide employment for the people? There is no substitute for full employment, Mr. Speaker. This phrase simply means a job for every man, woman and child in Australia who wants work.

I think all honorable members will recall those glittering promises that were made by world leaders in war-time. We recall that Mr. Churchill and the late President Roosevelt said, “ We promise you a new order. We promise you social security. We promise you freedom from want.” Those promises have certainly not been honoured, and I have come to the conclusion that they were just meaningless and empty words uttered as a war-time expedient. Nothing has been done to honour them in Australia, just as nothing has been done in the United Kingdom or the United States of America. I think it is the undeniable task of this Government, not merely to reduce unemployment, but to eradicate it altogether from our midst for all time. Every person in Australia has the right to work. Every person in Australia has the right to a job, just as we have in this House. I would say that the maintenance of full employment is the only effective means of fighting communism or of combating any form of totalitarianism.

I should now like to deal with housing, Mr. Speaker. The housing problem is the most important and most urgent social problem that confronts Australia to-day. There are many other things that we need, such as roads, schools and irrigation schemes, and I have already mentioned some of these. But I believe that housing should be accorded top priority by the Government. At the present time, there are many hundreds of people in the Watson electorate vainly looking for homes. On many occasions, I have heard figures cited in this House to indicate the extent of the back-lag in housing. The Minister for National Development (Senator Spooner) says that it is 80,000 homes. Professor Coplanri says that the figure is 90,000. I shall now read to the House a report of the views of another expert, which appeared in the Sydney “Daily Mirror” of 20th June last, under the heading, “ Housing still a problem “. It is in these terms -

Housing remained a major social problem, because home life influenced people from childhood to old age ….

. the Australian building industry was a “ war casualty “ and had taken a long time to recover.

According to the report, this expert went on to say -

There is no doubt the lack of housing is the main cause of child delinquency, as parents cannot create a home atmosphere except in reasonably decent conditions ….

To-day there is still a need for 250,000 homes . . .

That is the claim made by this expert, and he said that we need at least 30,000 a year in New South Wales. According to him, the back-lag in New South Wales alone is 80,000 homes.

Mr Peters:

– Who is that expert?

Mr COPE:

– This expert is Mr. Stewart Fraser, the Liberal member for Gordon in the New South Wales Parliament. He claimed that the housing back-lag throughout Australia is 250,000 homes. So all this talk about its being 80,000 or 90,000 is verywide of the mark, according to this expert, who happens to be an official of the New South Wales Building Industry Congress.

Only recently, Mr. Speaker, many church organizations have been quoted in the press as being very much concerned at and alarmed about the huge increase in the divorce rate in Australia. There are approximately 72,000 marriages a year in Australia at present, and the divorce rate last year was almost 7,000, which is not far short of 10 per cent, of the number of marriages. Many of the divorces that take place to-day can be attributed to the lack of homes. In order to substantiate that claim, I shall read to honorable members an extract from “Pix” magazine of 21st December, 1957, which quoted the views of a person who has had a lot of experience in dealing with divorce cases. Under the heading, “ 60,000 Young Australian Couples with a Problem - Life with the In-laws “, the magazine stated -

In Australia to-day more than 60,000 young married couples are trying to cope with a national problem - how to live with their in-laws and still stay happily married. And the tragic experience of barristers, psychiatrists and divorce judges gives them no better than a hazardous chance of succeeding.

Giving judgment in the New South Wales Courts recently, Mr. Justice Dovey, one of Australia’s most widely experienced jurists in divorce, said: “ It is a sad thing to have to say, but of all young couples whose marriages break up in the first three to five years, sooner in some cases, the fact that they have been living with one or another of their in-laws is responsible in the great majority of cases “.

The tragedy lies in the fact that, in most cases, neither party is directly to blame. Both the host parents and the newlyweds are forced to cope with economic circumstances, accommodation problems and psychological developments with which neither, generally, is emotionally . . . schooled to cope. The result is frustration, pinpricking incidents, mounting tension that almost inevitably ends in a breakdown of what, under normal conditions of marriage, would have been an affectionate . . . relationship.

Does any honorable member doubt the opinion of Mr. Justice Dovey? Of course not. We all know these things to be perfectly true, and the reason for them is that we just have not enough homes for these people. Many thousands of young families are vainly searching for homes. They want to raise children in a proper environment. They are not prepared to have large families while living in dingy rooms, slums, or garages, or while living with in-laws. They want homes of their own. I have heard honorable members say, particularly Government supporters, that babies are this country’s greatest asset. If that is so, what are we doing to encourage young couples to have children? We seem to think that child endowment is all sufficient, but it is not. If we are to improve the birth rate in this country we must provide more homes.

I should like to turn to another matter and refer to the unfair criticism that is levelled at various State governments because of the deficits incurred by their railway systems. In particular, I want to refer to New South Wales. Let me analyse this position of recurring railway deficits. Initially, New South Wales had to borrow £260,000,000 in order to lay railway tracks, build railway stations and workshops, and purchase rolling stock. Later, more money was borrowed to modernize the railways and for the purchase of new rolling stock. The annual interest bill on the money that was borrowed is about £12,000,000. The income at present being earned by the railways far exceeds expenditure, but the killer is the £12,000,000 annual interest bill.

Let us now look at civil aviation. The Department of Civil Aviation has budgeted to spend £20,071,000 this year. Receipts from all airline companies from all sources this year amount to £1,400,000. In other words, the taxpayers are subsidizing air travel to the extent of nearly £20,000,000 this year. Over the last five years the Commonwealth, through the Department of Civil Aviation, has subsidized airline companies to the extent of £78,000,000, and the department has received back the staggering sum of £7,000,000 in revenue! Whereas the railways had to borrow money in order to start their services, the airline companies simply commence to operate with everything provided for them, and they immediately make profits. I should remind honorable members that without the aid of the railways, many of our primary industries would not have been established. Of the amount of £1,400,000 that the Department of Civil Aviation will receive from the airline companies this year, £550,000 represents navigation charges and £300,000 is referred to as miscellaneous income. This means, in effect, that the. Department will receive less than £1,000,000 in return for an expenditure of more than £20,000,000 on aerodromes, and other facilities throughout the country. So before anybody criticizes the State railway systems, for the deficits that they have incurred, he should remember that the taxpayers, through their generosity, are making it possible for people to travel cheaply by air to-day. If the airline companies were not subsidized by the Government, it would cost £80 or £90 to fly from Sydney to Brisbane instead of about £10. The airline companies have been able to commence operations with everything found, for them, and they have been generously subsidized by this Government. Naturally, they earn profits.

In conclusion, I should like to refer to the political science convention held in Canberra last January. It has been reported that the Attorney-General (Sir Garfield Barwick) appealed to the trade union movement to sever its link with the Australian Labour party. That was only to be expected from such an ardent tory as the Attorney-General. He has never been a trade unionist and is never likely to be one. For his edification I should like to inform the Attorney-General that the close link between the Australian Labour party and the trade union movement, particularly in New South Wales, has resulted in the 40-hour week, long service leave, compulsory annual leave - now three weeks by the good grace of the New South Wales Labour Government - sick leave and unparalleled workers’ compensation benefits. The Labour Government in New South Wales has now introduced equal pay for women. Those are only a few of the many advantages that have accrued to the people as a result of the close link between the Australian Labour party and the trade union movement. If it had not been for the efforts of the Labour party and the trade union movement to obtain free education for the children of this country, perhaps the Attorney-General would not to-day be a Q.C.

Many people are under a misapprehension as to what the Labour party and the trade unions have done for Australia. Almost everybody in this country owes his or her prosperity and position in life to the link that exists between the Labour party and the trade union movement. The AttorneyGeneral would be better advised to appeal to the Liberal party to sever its ties with the private banks and the monopolistic combines that control Australia to-day.

Sir WILFRID KENT HUGHES:
Chisholm

– I should like to join with other honorable members in congratulating Mr. Speaker and the Chairman of Committees on their appointments. I also congratulate newly elected honorable members for the speeches that they have made.

I took particular interest in the remarks of the last speaker, the honorable member for Watson (Mr. Cope). He said that the Labour party had been in the forefront of the campaign for equal pay for equal work. When I was known as the Minister for “ Susso “ in the Victorian Parliament in the early 1930’s, I saw certain defects in the economic system, and I wrote some articles for a Melbourne newspaper on equal pay for equal work. That was in November, 1934, and I was pulled to pieces for my action by the Melbourne Trades Hall. So, apparently, the Labour party has had some new thoughts on this subject.

I was also interested in the honorable member’s remarks about transport problems in Australia. This matter was investigated very thoroughly shortly after the war - in 1948 and 1949, I think. At that time I was Minister for Transport in the Victorian Parliament, and the honorable member for East Sydney (Mr. Ward) was Commonwealth Minister for Transport. Two very valuable reports were submitted by a special committee that was set up. Those reports set out the relative and comparative cost of transport by air, rail, road and sea. I had hoped that as a result of the committee’s inquiries something might have been done about the transport problem in Australia and its effect on our economy, because there can be no doubt that transport is a factor that greatly influences our economy to-day, particularly the competition between the various forms of transport; yet we continue to treat the various forms of transport as separate, watertight compartments. For some reason or other interstate shipping is dying on its feet, yet not many years ago shipping was easily the cheapest form of transport. The railways operated by the States are meeting with very great difficulties, particularly when the finance required for capital works is not free of interest and sinking fund payments as is the case with the Commonwealth Railways. The latter have no difficulty in showing a profit because capital charges are met from revenue, and in the main there is no need to bother about interest and sinking fund charges. The State railway systems, however, have to meet those charges, and that is the principal reason why they have incurred deficits, as was pointed out by the honorable member for Watson.

I notice from newspaper reports that there was a difference of opinion between the Victorian State Minister for Transport and the Commonwealth Minister for Transport (Senator Paltridge) at a conference held over the week-end in Victoria concerning the very question raised by the honorable member for Watson, namely, the effect on rail revenue of heavy subsidization of air transport. In this day and age, nobody wants to knock this or that form of transport. What we want, as far as possible, is to be able to take the larger perspective and put all forms of transport on a basis where they can compete in their own spheres of operation. These spheres may overlap to a certain extent, but not very much. The problem is not the subsidizing of air transport to country centres, which I think every member will agree is now ons of the main forms of transport to country centres and which is helping to open up the outback. However, when a subsidy of £3 is paid for every passenger who steps on an aeroplane for an inter-capital-city journey, air transport is given an unfair advantage over rail transport. I know that the Commonwealth is now giving assistance for the standardization of rail gauges, but such indirect subsidies are all done very much on a hit and miss basis instead of on a more comprehensive basis with the larger perspective.

However, I want to talk about one or two other matters to-day. I do not want to enter into any further discussion on West New Guinea, although I am sorry that we were not able to have a much longer debate on that very important matter. However, I commend to honorable members the speech on this subject on 24th February of the honorable member for Bradfield (Mr. Turner) during the Address-in-Reply debate. He set before honorable members the problems of long-term policy and the ultimate future of West New Guinea. His speech was very clear, very well thought out and precise, and I think that every one of us who will take the trouble to read it in “ Hansard “ will derive a good deal of benefit from it.

The first point that 1 want to make to-day is in connexion with the Antarctic. Honorable members know that the Antarctic subcommittee of the Foreign Affairs Committee of the last Parliament, under the leadership of the honorable member for Mackellar (Mr. Wentworth), arranged with the Americans to visit this great white continent. I was lucky enough to be included in the invitation and I think we all learnt a great deal. I do not want to give honorable members a tourist description of the trip. My only feeling in that respect was that it was all wrong that we should go down there, one might say, as ice-happy tourists and have the distinction of flying to the South Pole in a Globemaster, when the real members of any of the Antarctic parties were doing the day-to-day work as a matter of routine. We were the lucky tourists, and they were doing the work. I do not think that any of the Australians who have been at Mawson. Davis or Macquarie Island have ever had the good fortune to be able to step on a Globemaster and fly to the South Pole in four and a half hours, out of Wednesday into Tuesday and back into Wednesday three times in half an hour, as we flew around the Pole on three supply drops of food, materials, and machinery.

Mr Calwell:

– Did the Americans invite you?

Sir WILFRID KENT HUGHES:

– The

Americans invited us, and it was a most enlightening and entertaining tour.

Mr Peters:

– What caused them to invite you?

Sir WILFRID KENT HUGHES:

– I do not know. You can ask them. I was very glad to be invited and I was honoured by the invitation.

A great deal of work is being done down there. The scientists are doing a very big job, backed by a team of men who treat the dangers and risks as part of the daily routine. Apparently many honorable members - judging by the way they are treating my remarks - and many other Australians do not realize the magnitude or the importance of the work being done. I hope that as time goes on more and more people will realize the excellence of that work and the intrepid way in which it is being done, and that honour will be given to those to whom honour is due in a much greater measure than it has been given ia the past.

I do not understand glaciology. I could not quite grasp the significance of the fact that there was 8,500 feet of ice at the Pole, which is just over 9,000 feet high. It would be silly for me to mention ionospheric physics or cosmic rays, but I do know a little about meteorology. We had long discussions with the main weather people down there about how they forecast the various changes in weather. They supply data to Melbourne, which was the centre for the collection of all weather data during the International Geophysical Year, and is the centre for data now being collected. I feel that considerable advantage will accrue to Australia because meteorologists will be able more accurately to forecast weather conditions on this continent.

A series of weather stations has been established all over the Antarctic, and to some extent in the Southern Ocean, at Macquarie Island, and other places. However, there is one big and important gap in the location of weather stations, and this lies due south of Perth - or perhaps a little west of south, but in that general area in the Southern Ocean. We were asked whether it would be possible to station either a weather ship or what are called weather buoys there, and maintain them so that information could be obtained continuously from this area, which is, I understand, of great importance when forecasting weather, particularly for Australia. It seems to me that while we have the advantage of all these other stations and of the co-operation that exists between the various nations, we should do something to make good the deficiency. Therefore, I ask the Minister for the Interior (Mr. Freeth) to consider establishing in this area a weather ship. which could probably do other work as well, such as oceanography. In any event, weather buoys should be stationed at this blank spot, which the scientists dealing with weather tell us is of very great importance in forecasting weather for Australia. I do not need to tell honorable members of the great value that more accurate forecasting would be to Australia.

The other matter to which I wish to refer is the question of Commonwealth and State financial relations. At the outset I should like to mention one matter in particular. I understand that airconditioning in the new Postal Department’s building in Redfern will cost about £750,000. Far be it for me to quarrel with the air-conditioning of any building in which anyone will work, but I do ask honorable members to think about this question: What State Government has sufficient funds to spend £750,000 on this sort of job? I have not had time to check this figure; I speak subject to correction, but I believe that it is correct. The question that I have posed reveals the situation that has grown up, not by design but more by accident, since the war. This Government and the Commonwealth Parliament have more and more money to play with - sometimes more than we know what to do with, so we tuck it away in trust funds. But the States, which are responsible for providing the largest part of the country’s employment, are struggling all the time to find enough money with which to build schools, hospitals and other essential projects in this age of very rapid expansion.

Mr Calwell:

– Why not give the States more money so that they can solve some of their problems such as the railways?

Sir WILFRID KENT HUGHES:

– The honorable member for Melbourne is a Hitlerite. He wants everything unified.

Mr Calwell:

– I am not a Hitlerite. I just want to see justice done.

Sir WILFRID KENT HUGHES:

– I remind the honorable member for Melbourne that the success of British democracy has been based on local government. It grew out of local government. Nowadays, what any democracy has to stop to consider is how far you want to go for complete, maximum efficiency under a unified system as compared with the loss of liberty which threatens you as a result of having one House and one unified government.

Mi. Caiwell. - I do not want that. The honorable member knows very well what we want.

Sir WILFRID KENT HUGHES:

– You want one House of Parliament. You want to abolish the Senate. The Labour party’s policy is unification.

Mr Calwell:

– It is not.

Sir WILFRID KENT HUGHES:

– What is it then?

Mr Calwell:

– It is not unification.

Sir WILFRID KENT HUGHES:

– The

Labour party’s policy is to give all power to the Federal Government. Its representatives have said so through their members of the Constitution Review Committee. However, the honorable member for Melbourne can argue about policy afterwards. What I am saying is that we have to equate all these problems, and the trend has been towards more and more power to the Federal Government to get greater efficiency yet, at the same time, it carries the danger of greater loss of liberty if we go beyond a certain point.

Let us consider, for example, the roads policy. I should like to congratulate the Treasurer (Mr. Harold Holt) on his success in altering the formula for the roads policy for the first time since it was introduced in the late ‘twenties. I do not know whether it is a case of fools rushing in where angels fear to tread, or a case of great minds thinking alike; but I was asked, just before the special conference on roads recently, to write an article for a Melbourne newspaper. In that article, published on 11th February, T stated that a new roads formula was essential. I suggested a new formula based on 30 per cent, area, 30 per cent, population and 35 per cent, registration of vehicles. I suppose I will be accused now of having inside knowledge of what was in the minds of the Commonwealth Government. However. T think the Government was right. Many people believed that the formula should be based on petrol co-is’ motion or the density of vehicle registration in each State; but when you have had for so long a formula which takes in area and population only, it is not practical politics to try to abolish these factors, nor do I think it would have been fair to States other than Victoria. On the other hand, the new formula, without tha big increase given, would have seriously affected the payments to Western Australia and Queensland which between them account for 68 per cent, of the area of Australia if you leave out the Northern Territory, the Australian Capital Territory and Tasmania. Therefore, again I am very glad to congratulate the Treasurer, not only on having put through a formula which is much fairer to everybody concerned, but also on ensuring that the larger States in area will be compensated in other ways, I understand, so that they will receive not less than they had before the formula was altered.

Finally, 1 want to refer to a bigger factor, and that is the taxation problem in Commonwealth and State finance. Personally, I feel that we not only want a new formula, but that we also want a new outlook. In the first place, the formula was based originally in the mid-1940’s on compensation for what the States previously obtained by taxation. Then, gradually, the needs question came into consideration until now the compensation factor has almost entirely gone and the formula is based almost entirely on what the Commonwealth Government considers are the needs of the States. But there is, ] believe, a third factor which should be taken into consideration just as the Commonwealth Government added density of vehicle registration - or the number of vehicles on the roads - to area and population in reaching a roads formula. In the distribution of taxation, I think there should be added a third factor, namely, derivation; that is, taking into account the amount of taxation and where it comes from in finding a basis for a new formula. I will not suggest any percentages because that is something which needs looking into far more closely than I have been able to do. But whether the formula is based partly on compensation cr partly on needs, certainly you must consider derivation as a factor in the formula.

On the other hand, T do not hold with those who think that you can upset uniform taxation.. T think that the sys’em is simpler an’! much more popular with one tax form. I do not like to think of different taxation in different States so far as income tax o- company tax are concerned because so many incomes and so many company revenues are derived from more than one State. On the other hand, I think it most essential that we should consider giving the Spates fields of taxation which give them greater elasticity of movement according to whether it is good or bad government.

Mr Calwell:

– That has been found to be impossible.

Sir WILFRID KENT HUGHES:

– It is not impossible. Nothing is impossible. There is the old war saying: Those things which are difficult take a little time; those which are impossible take a little longer. It all depends whether you want to do it or not. In the States, there is a different tax in different States. There is no reason why we should not have it here.

Mr Calwell:

– The honorable member means the United States.

Sir WILFRID KENT HUGHES:

– Yes, I mean the United States of America. There is no reason why we should not have it here. In Canada, there is not only a difference in sales tax but also in excise duties.

Mr Calwell:

– There are constitutional difficulties in Australia.

Sir WILFRID KENT HUGHES:

– They can be overcome if we want to overcome them, but the Labour party does not want to do that. It wants unification.

Mr Calwell:

– What does the honorable member want?

Sir WILFRID KENT HUGHES:

– I believe in the federal system. I believe in giving the States a field of taxation where they have considerable elasticity. It could be done. The States have been given land tax and entertainment tax, but that does not give them sufficient elasticity. I would recommend that, first, some account should be given to derivation of taxes in considering a new formula. Secondly, we must face up to this problem of giving the States a wider field of taxation with greater elasticity. Otherwise, we will go on destroying the State authority, destroying the State administration and putting everything into the hands of the Federal Government. I was born and bred in the State of Victoria. I had 22* years in the State Parliament. I again remind honorable members that if we destroy the federal system in favour of unification, the result might be some greater effieciency but there will be a much greater loss of liberty.

Mr CALWELL:
Melbourne

.- This debate affords honorable members an opportunity to review the Government’s programme which the Governor-General announced in opening the Parliament. It also gives them an opportunity to talk about any and every subject to which they care to address themselves. No honorable member is necessarily confined to a discussion of the contents of the document concerning which an Address-in-Reply has been moved. The honorable member for Chisholm (Sir Wilfrid Kent Hughes), who spent more than 22 years in the State Parliament of Victoria, has proved quite conclusively that his heart is in the State parliamentary system and he is somewhat out of place in the National Parliament. He is entitled to his views, as are other honorable members, and he is entitled to express his opinion as to what is happening in our society and as to the need for constitutional reform. But the States are destined, with the passage of time, to lose more and more power to the central authority, which is the National Parliament, regardless of which political party members of the government of the day happen to belong to. This trend is just as inevitable as the movement of the wind and the tides.

I have been for two years a member of the joint Constitution Review Committee of this Parliament. That committee was unable to discover any instance of anything like unanimity being reached at a Premiers conference by the Premiers of the various States as to the taxing powers that they wanted and as to what would be a reasonable division of taxing powers as between the Commonwealth and the States. I suppose these differences of view will continue for a long time to come.

There is no reason why we cannot have happy relationships between the Commonwealth and the States if the States recognize that with the passage of the years since the Constitution was framed fundamental changes have taken place in our society. There has been the High Court judgment in the uniform tax case and there have been amendments to the Constitution as a result of two referendums, one held at the instance of the Bruce-Page Government, and the other at the instance of the Chifley Government. There has been a fearful depression, the effects of which are still being felt in this country. There have been two dreadful wars in which Australia found itself engaged. These things have all changed the pattern of society and necessarily strengthened the federal authority. I believe this trend will continue over the years and that nothing will halt it.

The other day, 55 Liberal party members of the Victorian Parliament decided that the recommendations of the joint Constitution Review Committee of this Parliament, which were for the most part unanimous, were unacceptable. These 55 members, drawn from both Houses of the Victorian Parliament, rejected out of hand the recommendations of a committee of this Parliament consisting of equal numbers of Government and Opposition members, drawn from both Houses of the Parliament. 1 suppose those 55 persons have a right to object to constitutional change if they want to, but I have a suspicion - and I admit to a sneaking regard for the ability of the Prime Minister (Mr. Menzies) in this matter - that if the right honorable gentleman were to put forward a programme of constitutional reform he would triumph over all those members of the Victorian Parliament who espouse his brand of politics and who are unanimous in their expressed opposition to any change in the Constitution as it now stands.

The document that we heard read at the opening of this Parliament the other day does not tell us all that the Government intends to do. It is rather a dull kind of document. I suppose that all these documents, over the years, have been dull, and this is no exception. On all occasions of this kind, the Governor-General says what the Government wants him to say, but the Government’s intentions are very often hidden and rarely are they clearly expressed. Some regard the present Government as a committee-happy government. It proposes to solve the problems of the dairying industry by having a committee inquire into them. It proposes to appoint a committee to inquire into decimal coinage. I presume this move will help the pensioners to bear their burden more patiently, or to feel less annoyance with the government of the day. There is to be still another committee to examine our taxation laws.

Sir Wilfrid Kent Hughes:

– If a committee is sound on constitutional reform, why should one be unsound on the problems of the dairying industry?

Mr CALWELL:

– I agree that the Constitution Review Committee was a very good one. It is one that the House could very well re-appoint. I am not opposed to the committee system, as I have often said in this House, but I believe that committees should be committees of this Parliament and that they should report to the Parliament. A committee can be a device by means of which the Government avoids responsibility. We have a feeling that the problems of the dairying industry, and of the wool industry, should be faced at the present moment, and that the dairy-farmers will not be assisted in the continuance of their struggle to make their industry pay by the appointment of yet another committee to ascertain facts which are, or should be, well known to the Division of Agricultural Economics.

On the question of wool, everybody knows that the average price received for wool during this selling season was about 46d. per lb., and it is claimed by woolgrowers that the cost of production is about 60d. per lb. We must do something about the position. This Government offers no solution to the problem.

Mr Roberton:

– What does the honorable member suggest might be done?

Mr CALWELL:

– I suggest that the first thing to do is to get rid of this Government, which will not do anything about the problem. Then when we have a Labour ministry that will tackle the problems with the ability, determination and acumen that always characterize Labour governments, the wool-growers will be as well off as they were under the last Labour government. In those days they got at least something more than the cost of production for their product.

To-day, two Ministers have spoken about our falling trade balances. The honorable member for Scullin (Mr. Peters) asked the Minister for Trade (Mr. McEwen) whether he could explain the fact that in the first eight months of the financial year 1957-58 Australia had a favorable trade balance to the extent of £50,000,000, while in the first eight months of the present year it had an adverse balance of £23,000,000. The

Minister said that it was all due to the drop in the price of wool, as if the drop in the price of wool either does not matter or will automatically right itself at some future time. I do not think that the people will be satisfied with an attitude of this kind towards the great wool-producing industry. The Government is obviously doing nothing at all about the problems of that industry, and it is obvious that if our balances continue to fall as they have been falling for some considerable time - because of the drop in the price of wool - we will have a state of affairs in which we will not be able to finance the importation of essential capital and consumer goods, without which our secondary industries, and, to some extent, our primary industries, cannot flourish.

Another passage of the GovernorGeneral’s Speech to which I wish to refer informed us that in December, 1958, our reserves stood at £500,000,000. His Excellency went on to say -

The relatively small fall in reserves was in part the result of Government borrowing in London and New York; but an important sustaining influence has been the continual substantial inflow of private capital.

At the very best these adventitious aids, the inflow of private capital and continual borrowing on overseas markets, cannot continue for very long. We have to substitute a policy of increasing exports, so that our exports may finance our imports. If we cannot do this we are headed for another depression. We are headed for the kind of situation that developed at the end of 1929, when all governments in this country, State and Federal, had over-borrowed, so that the market collapsed, and, as a consequence, 30 per cent, of the Australian people were, for a long time, unable to sell their labour. As T said earlier, Australia suffered the worst of all the countries during the depression.

Mr McColm:

– Did you see any of the others?

Mr CALWELL:

– No. But I have seen the statistics and I base my case on them. I know that, in some countries, there were bad pockets that were worse, perhaps, than the overall picture in this country. We are heading for difficult times again and it is no use the Government claiming in the Governor-General’s Speech that the unemployment situation is easing. The words used were that “ employment, generally, is at a high level “. It may satisfy the Government to believe that only 2 per cent, of the people are unemployed, on the figures that it produces. But in addition to the 81,901 people who are admitted to be registered for employment, there are many who are in part-time employment. Quite a number of married women have had to go back home and they have never registered for re-employment. There has been a very great reduction in the spending power of the people and one can go among a number of industries and discover that fact quite easily. Only one chain of hotels in Australia - those owned by Federal Hotels Limited - is operating at a profit. All the rest are running into losses or are using the sale of land and other assets to produce balance-sheets which show some small profit.

Even people in the higher income groups have not the same spending power that they had. Their plight is not a difficult one. At least they have enough to sustain life and are able to look after their dependants; but in addition to 600 pensioners there are 31,486 people in Australia to-day who are receiving unemployment benefit. If the Liberal party and the Australian Country party in this Parliament had had their way, the provision that was written into the Constitution in 1946 to enable benefits to be paid to those people would never have been approved. The Liberal party and the Australian Country party opposed the proposals submitted at that referendum empowering this Parliament to pass valid laws in relation to that and other social service benefits which have become the law of the land since 1946.

A number of factors operating around the world are making the unemployment problem a difficult one to solve, even in the most powerful countries. I spoke with David J. McDonald, the secretary of the United Steelworkers Union who was in Australia recently and I asked him to explain how it could be said that the recession in the United States was over when the unemployment figure had dropped from 5,000,000 to 4,000,000 but had risen again. He said that the figure of 5,000,000 represented people who were disemployed. I asked him what was the difference between “ unemployment “ and “ disemployment “. He said that those who were disemployed were out of work because of automation and other factors. He said that the productive machinery of the United States economy was producing and selling almost as much as it had been previously but that fewer workers were needed.

Automation is coming to this country, and it is coming very soon. The report of the Public Service Board which was tabled in this House the other day said that automation would operate in the Public Service of Australia within two years and that this would involve the employment of 5,000 fewer persons than were at present on the Government pay-roll. The Government has no solution to offer of this problem. More and more people are to be thrown out of work and they are, I suppose, to be expected to look after themselves.

Some solutions are open to the Government, of course. It could increase company tax. It could increase income tax. It could increase indirect taxes considerably. With the additional money that it obtained it could finance some more activities. But no government in this country can do anything about the economy while the monopolies exercise their present power. If the Government were to reduce taxation to-morrow the people would not get cheaper products because the monopolies, with their price-fixing power and their great power to corner markets, would keep prices up and unemployment would still be as great, despite reduced taxes, as it is at the moment. It might even be worse.

The Opposition is worried about the situation, naturally, because we represent the masses of the people whilst our opponents represent the wealthy interests in this country. We are concerned very greatly with the continuing growth of unemployment and the indifference of the Government towards the problems that are confronting us. A Labour government was the first government to invite American capital into this country in a big way. It was the Chifley Government that encouraged the manufacturers of the Holden car to commence that industry in Australia. It was Mr. Chifley who rang the Commonwealth Bank and asked the then Governor, Mr. Armitage, to give General Motors-Holden’s Limited an overdraft of £2,000,000. without any security, at that time. The plans of the General

Motors organization went into effect and they were remarkably successful. We encouraged General Motors.

We have always encouraged investments from abroad, but we want investments that will be used to develop the country, not investment for the purpose of making quick and rich profits. Last year, General Motors-Holden’s Limited, on capital every penny of which is held in the United States of America, produced a profit of 325 per cent. A report on the Australian economy has been produced by the Oceanic Steamship Company of which every honorable member has had a copy, and I presume that some of them have read it. In this document investors are told that Australia presents a good market for quick returns. The writer of this survey of our economy, Mr. Warren Bean, says that it is reported that American investors have been able to earn an average annual return of 30 per cent, on their capital - one of the highest rates in the world.

We want investment capital, but we do not want exploitation capital. A total of £700,000,000 is now invested in Australia from overseas. British investors hold the greater part of that capital. But four times as much money goes out of this country in the form of dividends and interest to America as goes to Britain. The Government must look at the whole problem of investment. Otherwise, if wool prices continue to fall and if we do not increase our exports, we shall find ourselves being asked to agree to the repatriation, not merely of the dividends that are being ploughed back into industry, but of other assets that are being built up in other ways. We might easily reach the stage where Americans will ask us to repatriate money which does not represent American investment at all but the amount of overcharge on products manufactured by the monopolies operating at the expense of the Australian public. For example, the Australian Holden car costs probably £200 more than it ought to cost, and that money is being taken as if it were the property of the General Motors Corporation of America and invested here. This is the huge asset investment which is being made at the expense of the Australian people through overcharging and by other means. There is no American money involved. The. General Motors Corporation in America has been the subject of congressional committee inquiries over the last few years. The Supreme Court of the United States less than two years ago handed down an injunction under the Sherman anti-trust laws which required the Dupont empire to release its hold on General Motors which it controlled with a shareholding of only 23 per cent.

Time does not permit me to say all the things I wanted to say on many of these subjects, but I feel that the Government is not taking the House and the country into its confidence in regard to the state of the economy. Pious platitudes such as those uttered by the Prime Minister (Mr. Menzies) in a television interview before the last election will not suffice as a substitute, for sound policy. The Prime Minister said -

Australia would be back on the high tide before very long.

He added -

My pessimism exists in relation to the next twelve months when I see these problems not yet resolved.

But there’s nothing in the state of the world that would persuade me that we won’t be back on the high tide before very long.

That, I think, is not the right honorable gentleman’s real opinion. What is happening in the United States of America is happening here to some extent. I shall quote figures from an article called “ Economics of Power “ written by Lawrence T. King and published in an American journal called “ The Common Weal “ on 14th November last. It showed that there were four major corporations controlling the market for steel in the United States of America and they all follow the price pattern of the largest one - United States Steel Corporation. In 1958, four firms dominated the market for copper whereas there were sixteen controlling 80 per cent, of it in 1915. Of all the investment houses in the United States, 5 per cent, do 90 per cent, of the total business. In manufacturing, four of the largest firms in each of the 120 key industries control between 75 per cent, and 100 per cent, of the total output. In 1958, there were only 15 per cent, of self-employed enterprises in the work force, whereas in 1880 they represented 40 per cent. In the food and fibre industry less than 1.0 per cent, ot retail stores do 6.0> per cent., of the total food business.

Members of the Australian Country party may be interested1 to know that in California alone the number of farms has fallen by 10,000 in four years. That means there are 10,000 fewer farmers in. only one of 49 States. That tendency can be seen throughout the whole of the capitalist world and we will not avoid the consequences of it in this country by trying to delude ourselves that in twelve months’ time or thereabouts everything will be all right. In twelve months’ time, we will be nearer to a repetition of the depression of the 1929 period than we are to-day.

Mr TURNBULL:
Mallee

.- I am delighted to participate in this AddressinReply debate. All honorable members listened to the Governor-General’s Speech with interest, and I join with his expression of. pleasure at the visit of another Royal personage, Her Royal Highness Princess Alexandra. Australians will give her a great welcome. We are pleased that, over the last few years, several Royal visitors have come to this country. Although Australia is a staunch member of the British Commonwealth of Nations, every one knows that these visits cement that kinship which we all enjoy and appreciate and hope will continue.

I wish to make one or two comments concerning items in His Excellency’s Speech. Although members of the Opposition have spoken in derogatory terms of what it contained, there is not the slightest doubt that His Excellency touched on many vital subjects. Honorable members opposite show a tendency to think that this Government should bring down reams of legislation on every subject. But it must be remembered that the present parties have been in government for more than nine years and during that time have been able to have legislation passed through the Parliament which has brought Australia to such a sound economic position that only now and again is it necessary to amend or introduce fresh legislation to encourage the economy to be kept at a satisfactory level.

I wish to refer to a paragraph in the early part of His Excellency’s Speech which reads -

My Government will continue with energy to promote the defences of the nation, with emphasis on the provision of highly trained and wellequipped forces from which Australia could make a prompt contribution in any emergency in support of our national security and Treaty obligations.

Unquestionably, that is being done. I was pleased to hear the last part of that sentence, that our treaty obligations would be observed. If we sign treaties with other countries we must always be prepared to fulfil our obligations. The Australian Labour party seems to believe in negotiating all the time, according to the Leader of the Opposition (Dr. Evatt). But when negotiations are of no further use, something else has to be done. The GovernorGeneral’s Speech made it very clear that this country is willing to carry out its treaty obligations.

In regard to the defence of Australia, only about a fortnight ago naval exercises were conducted outside Sydney Heads in what was called “ Operation Shop Window”. All honorable members were invited but some could not attend owing to various duties. However, quite a number of honorable members were able to witness “ Operation Shop Window “ and some told me that they were amazed at the efficiency of the fleet and of the defence system as was demonstrated on that occasion.

Mr Peters:

– How could you judge?

Mr Cleaver:

– I told him; I was there.

Mr TURNBULL:

– The honorable member for Scullin asks how could we judge. He certainly could not, because he was not there, but the honorable member for Swan was present and he has said that the display was exceptionally good. As one who was present he would be in a much better position to form a judgment than one who was not there.

Honorable members have received from the Minister for the Army (Mr. Cramer) an invitation to be present at army exercises which will be held at Puckapunyal in Victoria and Mackay in Queensland in March and May respectively. Those who attend will have an opportunity of observing the efficiency of the Australian military forces. Only by being present at these demonstrations can members who are not satisfied with the reported efficiency of the armed services be able to see for themselves how efficient they are. It appears to me that members of the Opposition delight in saying in this

House that Australia is completely without defence, and they seem to be inviting some other country to invade us. That is not a true picture of Australia’s defence position, and honorable members should grasp every opportunity to point to the efficiency of our armed services. This will be demonstrated to all who wish to attend at Puckapunyal and Mackay as well as at other places where similar exercises are held from time to time. The Governor-General went on to say -

The Post Office is continuing to expand and improve its postal and telecommunication services to meet the growing needs of the community.

There is not the slightest doubt about that. I represent a great country electorate and my constituents are very pleased to know that the Postmaster-General’s Department is erecting longer departmental telephone lines to connect with party lines. This reduces the length of line that the country subscriber has to build and maintain. The department has said that it will send its experts to advise the farmer on any defects that may develop in the portion of the line which he has to erect and maintain. That is a world apart from anything that the Labour government ever offered the country people in regard to telephone services, and the improvement is remarkable.

These matters are referred to in the Governor-General’s Speech, and they are of the greatest importance. Had the Government announced through the medium of the Speech that it intended to legislate for these things, or hoped to do something about them in the future, perhaps more notice would be taken of them. But the Speech merely pointed out that these things were already being done by the Government - not with any flourish of flags or trumpets, but as part of the ordinary programme of a government that knows the value to this great Commonwealth of the country areas.

Furthermore, the Governor-General said -

This financial year a record amount of approximately £80,000,000 is being provided by my Government for housing. This will enable the normal current demand to be met and, in addition, will permit a substantial reduction in the already diminished arrears. My Government will continue to encourage home ownership.

I understand that to-day is the day on which this great Commonwealth’s population is expected to reach 10,000,000. I believe that people who looked forward ten or fifteen years ago to a great increase in our population did not expect the population to reach 10,000,000 until 1969, and not 1959. In view of that remarkable increase of population to 10,000,000, achieved ten years earlier than expected, I think that the Government’s record in relation to housing in this country is rather wonderful, and the Government should be complimented on it. The Governor-General also said -

A stable and continuing immigration programme is generally accepted as essential to continuing development of our natural resources.

I do not think there is any member of the Opposition who would disagree much with that statement. The Governor-General continued -

My Government will continue its policy of keeping social services under constant review to ensure that they meet the needs and changing circumstances of our growing population.

While I am on this subject I should like to say that the criticism of the Minister for Social Services (Mr. Roberton) by the honorable members for Hindmarsh (Mr Cameron) and East Sydney (Mr. Ward) should be deplored by all honorable members. Everybody who has had any association with the Minister for Social Services-

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– On a point of order, Mr. Speaker: Is the honorable gentleman in order in referring now to a debate that took place on a subject under urgent discussion, a subject that has nothing to do with the Address-in-Reply?

Mr SPEAKER (Hon John McLeay:
BOOTHBY, SOUTH AUSTRALIA

The honorable gentleman is in order.

Mr TURNBULL:

– Naturally, the honorable member for Hindmarsh would not want me to speak on this subject, so he has tried to stop me. He does not want me to continue because he knows that his criticism of the Minister for Social Services was quite unjustified. If you walked down all the streets of the earth and knocked on all the doors for ever, you could not find a more kindly gentleman than the Minister for Social Services, although you might find some as kindly disposed. The Labour Opposition laughs at that statement. The Minister for Social Services is a man of great human understanding, and the criti cisms of him by the honorable members for Hindmarsh and East Sydney in this House are to be deplored.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– You do not even, mean that. You are laughing now.

Mr TURNBULL:

– I am not laughing,, because this is a very serious subject; and at present the honorable member for Hindmarsh is not laughing either, because he knows that the statements he has made in this House about the Minister for Social Services are deplored not only by members of the Parliament, but by the people of Australia.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Nonsense!

Mr SPEAKER:

– Order! The honorable member for Hindmarsh will cease interjecting.

Mr TURNBULL:

– The present holder of the portfolio of Social Services is not the only Minister who has been attacked in this House. When I became a member of this House the present Opposition was in office, and Mr. Barnard was Minister for Repatriation. On occasions I had to speak in that gentleman’s favour, because the then Opposition was finding the same faults with him as the present Opposition finds with the present Minister for Social Services. The whole thing is wrong. At that time we could not get proper social services for the people of Australia, but that was not the fault of the Minister. It was the fault of the Labour Cabinet. Members of the Labour Ministry were the ones who would not give proper social services to the people. At that time I spoke in favour of Mr. Barnard just as I am speaking now in favour of the present Minister. Nobody knows that better than the honorable member for Grayndler (Mr. Daly), who is interjecting now because what I have to say does not suit him.

I believe - I do not know this, but I do believe it - that if the Minister for Social Services could obtain from the Cabinet all the money he asks for, or desires, for the provision of social services, no one on either side of the House would find any fault with the social service policy.

As I have said before, and say now to new members of the House, all the debate on the Budget is not worth twopencehalfpenny. It never has been. It was the same when Labour was in office. The reason is that by the time the Budget is debated the Government has already entered into its financial commitments, and nothing in the Budget will be changed except perhaps printing errors. So I say to the Government now: Give the Minister for Social Services extra money this year so that he can bring into operation the social service provisions that 1 believe are dear to his heart.

I believe the time has come when we have to look more closely at the needs of age and invalid pensioners. I keep quiet on these matters when a pension increase is not justified, but I believe that an increase in age and invalid pensions is justified now, and 1 support such an increase, and will continue to support it. So I say to honorable members on both sides of the House that now is the time to advocate increased provision of social services. Do not wait until the Treasurer brings down the Budget and then deplore what you may regard as its inadequacies, because it is too late then to have anything done about it. Now is your chance to ask for something to be done, and I take this opportunity to urge an increase in age and invalid pensions, because I believe an increase is warranted.

I have been asked, in a special invitation from the Opposition, to say something about wool. Of course, I am very pleased to comply with the request. It has been said on many occasions in this House that if the price of wool keeps falling the nation’s economy will be weakened, and there maybe a fall in our standard of living. The Labour party has taken a great interest in wool only lately. Some years ago a Labour member referred to the woolgrowers as “ bloodsucking woolgrowers “ and “ wool barons “. That statement is reported in “ Hansard “. Now, of course, members of the Labour party are taking a great interest in wool.

We know that wool is of paramount importance to our economy. According to Dalgety and Company Limited, which has started a new information service on wool, the Australian Wool Bureau reports that the amount spent by Australia on wool promotion is 6s. 8d. for every £100 of income from wool, whereas the amount spent on the promotion of synthetics is 66s. 8d. out of every £100 of income. So ten times more is being spent on the promotion of synthetics than on the promotion of wool. I think that that is wrong. The Government should propose to the growers that they contribute 10s. a bale for wool promotion, the total resultant sum to be matched by the Commonwealth. I put that proposition to a woolgrower in my electorate and he said, “What, contribute 10s. with the prices we are getting now? “ The point is that a contribution of 10s. a bale by the growers for a publicity campaign might bring them in £5 to £10 for 10s. subscribed.

Proposals for improving wool prices, such as a floor price, take time to put into effect - and time is urgent for the wool industry. The price of wool is falling by21/2 per cent, and then rising by21/2 per cent, shortly afterwards. If the price continues to move in that way it will be down to nothing eventually, because a rise of 21/2 per cent, following a fall of21/2 per cent, does not bring the price back to its previous level, the reason being that the rise of21/2 per cent, is21/2 per cent, of a decreased price. At the wool sales in New South Wales yesterday prices increased21/2 per cent, on the prices that had been received at the Brisbane sales a week earlier.

I believe that there is no satisfactory substitute for wool. People always turn back to wool after having deserted it temporarily for other materials. I believe that the worst thing people on the land can do is change from one form of production to another. I know a man in the electorate of Wimmera who found, a few years ago, that wheat was not selling at a productive price, so he sold all his wheat-growing equipment and went in for sheep. Two years after that, the price of wool was down to bedrock and he went back to wheat production. So the men in up-country Victoria where I live go in for wheat, wool, fat lambs, and mixed farming generally. The present low price of wool is being offset somewhat by the Government’s splendid wheat stabilization plan. In western districts of Victoria, many people grow wool and fat cattle, and what a godsend the fat cattle are to them now! Recently, fat bulls which, before the war brought £8 to £15 a head, sold at up to £120 and £130. That is a godsend to the people who have cattle.

Do not let it be thought for one moment that I am not aware of the fact that many farmers grow wool exclusively and have no sidelines whatever. They need assistance as quickly as possible. I do not think that we can stabilize the price of wool at a figure which will be profitable for people who paid high prices for land after the boom in 1951. But the average wool-grower should be assisted and I believe that the assistance must come not only in the form of fair prices. The main trouble is that the price would be all right if costs were not so high. The moment that some move is made to reduce costs, the Labour Opposition is up in arms. What was responsible for the high rates paid for shearing sheep? It was the high price of wool. But when a reduction is sought in the award rate for shearing sheep, the Labour party is up in arms, saying, “ Let the wool-grower pay it.”

Underlying the whole prosperity of this country is primary production. Perhaps I should earlier have congratulated all the new members, because they made good maiden speeches, but I may be excused for referring in particular to one new Labour member, the honorable member for Braddon (Mr. Davies). I was so interested in one thing he told us that I can remember it without referring to the record. He said that a man in Burnie had told him that if he could put two barometers outside his shop, one to show the price of potatoes and the other to show the trade that went over his counter, the similarity of the barometer readings would be notable, because in that area when the price of potatoes falls less general trading is done. But the honorable member for Braddon could have given an Australia-wide picture, because that story is the story of Australia. When the price of primary produce is low, Australia may enter a recession or depression and be in danger of suffering a lower standard of living; when the primary producer is prosperous, there is no need to worry about the economy of this great country. The people who say that we can prosper because we have great manufacturing industries are on the wrong track. Those industries are kept going only by the work, industry, and produce of the man on the land. The honorable member for Watson told us of many industries in his electorate. For a start, I say that they should be decentralized because, after all, the electorate of Watson is only a pocket handkerchiefOne atomic bomb would blow all those industries to pieces and they could no; fulfil their purpose. These matters are vital.

I should like to say a word or two to the new members. My remarks are not in the way of advice, because I am not in a position to give that, as all honorable membersknow, but I have worked this out: Sometimes when an honorable member is making: a speech somebody will interject, “ Parish pump! Why are you not a big Australian? I say forget about that. If one represents an electorate and is able to get before the Parliament all the needs and desires of that electorate, he is playing his part. If alt members do the same, they will keep this great Commonwealth on a high standard. As to being a “ little Australian “, we are all Australians striving to build a great Commonwealth, and such interjections dc* not fall well from certain people who have made them on many occasions in this House.

I have asked a few questions since the Parliament met. I asked a question about roads, the last part of which read -

Rather than depend on a Premiers’ conference for an unbiased decision, will the Government consider having the review and recommendations made by an independent committee or tribunal, or by the authority which determined the distribution of diesel fuel oil tax collections? 1 am pleased that that now appears to have been done, and that I got my question in before it was done. I have been advocating this course for thirteen years, but until now nothing was done. An unbiased decision could never be obtained from a Premiers conference. I understand that a decision along these lines has now been made. This is a step in the right direction and will result in our State of Victoria receiving, perhaps, £1,600,000 more. This is being done by the same people - one can guess whom they are - who decided the allocation of the diesel fuel oil tax collections. We look forward to improving the position later. The Prime Minister has said that Western Australia will not receive less for roads this year than it received last year.

Just before the Parliament was dissolved prior to the election, I said -

I am going to say to this House and to anybody who cares to listen that even the most careful listener to all the Labour propaganda during the coming election campaign will not hear anything about socialization. So I ask the people of this country, through you, Mr. Speaker, to listen carefully on 15th October to the opening speech of the Labour party’s general election campaign, which will be delivered by its leader, the right honorable member for Barton (Dr. Evatt), who will then be seeking election for the division of Hunter. Listen to his speech carefully, and if he refers in a favorable way to Labour’s main objective - the socialization of industry, production, distribution and exchange - I am prepared to apologize when I come back to this House after the election.

I do not need to apologize, Mr. Speaker. I listened very carefully to the speech of the right honorable gentleman, who now comes from Hunter (Dr. Evatt), and he did not say a word about this great socialism, democratic or otherwise. We have heard the honorable member for Scullin ( Mr. Peters) and others condemning the Japanese Trade Agreement.

Mr Peters:

– I still do.

Mr TURNBULL:

– The honorable member never speaks about it now in this House. He has been silenced. But Labour members, under their leader, proposed discussion of the agreement as a matter of urgency. They said, more or less, that the country would only have the agreement over their politically dead bodies, and that if they came into power they would immediately annul the agreement. But not a word was said about that during the election campaign. If Labour members were against the agreement, why did they not say on the hustings that if they were returned they would annul it? It was for the simple reason that there were no votes in such an attitude. The people whom the agreement might hurt a little - and it might hurt some in the textile trade - would vote Labour anyway. Wool, barley and wheat can be sold to Japan, and there is a potential market for dried fruits. Labour decided that there were no votes in opposing the agreement and that it would keep quiet.

I said before and I say again that it is a strange coincidence that the Labour party ceased to speak against the Japanese Trade Agreement. What a strange coincidence it was that this vital subject was never raised anywhere in Labour’s election campaign. Can any Labour party member tell me why it was not mentioned and why this vital plank of Labour’s platform did not appear in its election campaign? What is the answer to this question? It is that Labour is always willing to jump on a bandwagon, but if it gets on one that is too hot it gets off it again very quickly.

Mr SPEAKER:

– Order! The honorable member’s time has expired.

Mr ALLAN FRASER:
Monaro · EDEN-MONARO, NEW SOUTH WALES · ALP

– I guess I was no more able to follow the honorable member for Mallee (Mr. Turnbull) in most of his meanderings than were other members of this House, but at least I am glad to be able to agree with him in his basic contention that the prosperity of Australia rests upon the foundation of the primary industries of this country. I would add that if any of the members of the Australian Country party had any real knowledge or experience of the land, the best service they could render to this Parliament would be immediately to leave it and return to till the soil.

When we proceed shortly, as we will, to adopt this Address-in-Reply, it is reasonable, I think, that we should look for a moment once again at some of the things this Speech contains and the many things that it omits. I agree with other speakers that we may certainly thank His Excellency very cordially for the way in which he read it, but the people of Australia have nothing for which to thank this Government in the contents of it. I thought that the GovernorGeneral made a remarkably good job of extraordinarily poor material, and I fancy that only his soldier’s discipline and his sense of service could have caused him to proceed with so thankless a task. I do not imagine that any one would have blamed him if he had tossed the Speech aside altogether and refused to read it, because never in the history of the Commonwealth have we had a speech at the opening of a Parliament even remotely resembling this one in its completely barren content.

The announcement that the banking bills would be re-submitted was almost the sole legislative decision mentioned in the Speech. It is, of course, quite unique that, at the commencement of a Parliament, a Government with three years of office still before it should propose as almost the only legislative proposal which it offers to the Parliament the re-submission of legislation which had been defeated in the previous

Parliament. It would be far better for the people of Australia if to-day, instead of the Government’s proposal to dismember and weaken the Commonwealth Bank of Australia, we had again a measure to nationalize the banking system of this country. However, for the present, the Government has the numbers, and, like every preceding Liberal government in such a position, it will injure the people’s bank to the extent that it dares - and a succeeding Labour government, I hope, will nor only undo that injury, but also proceed far further along the line of public control and ownership of the credit system of Australia.

Mr Cramer:

– Does the honorable member mean nationalization?

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– Nationalization of the banking system.

Mr Cramer:

– I thought I heard you.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I think that the Minister did hear me. The only other legislation mentioned in the Speech - and this is most extraordinary - appears to be measures to simplify the procedure of naturalization, to increase the membership of the Northern Territory Legislative Council, to establish a university grants committee and to make uniform laws for marriage and divorce. When thz Parliament is presented with a legislative programme of such innocuous measures as that, one would think that this growing nation faced no urgent problem of any kind. I cannot understand how a man of the energy and ability of the Minister for the Army (Mr. Cramer) was able to stomach the adoption of proposals so weak as those for presentation to a new Parliament. What sort of a programme is it for the Parliament of a growing nation which is faced with the most urgent problems both at home and abroad? Granting the importance - as I do - of legislation for uniform marriage and divorce laws, the fact is that even that is not the Government’s own child. It is simply something which it has adopted from a private member - the honorable member for Balaclava (Mr. Joske). And there again, the Governor-General’s Speech itself makes it plain that no action is to be taken. The legislation will be presented to the Parliament, and then ample time is to be allowed for members of the Parliament to study it and examine it before any further step is taken. I should think that this new Parliament will be as barren as was the preceding; one of legislation to establish a really uniform system of marriage and divorce in. this country.

So, at the opening of a new Parliament,, the new legislative proposals of a government which is supposed to be in control of the affairs of a dynamic nation - its plansto meet the crisis of our times and to keep pace with our development - boil down tosimplifying the procedure of naturalization” and enlarging the membership of the Northern Territory Legislative Council. There is not another thing of a legislative kind mentioned in the whole of the Speech, and, as I have said, in the whole history of federation, there has been nothing: resembling this before. And there never will be again, Mr. Speaker. This is the most: extraordinary demonstration that the Government is utterly palsied with inertia. In 1959, it is Australia’s tragedy to be saddled for another three years with a government of this kind - at a time whenthe need for vigorous leadership and action was never more urgent, and when, indeed, on the back benches on the Government side of the House there are men who are capable of giving a far more active and’ more energetic lead to this nation than isgiven by those who at present occupy the ministerial bench and who have demonstrated not only to the Parliament but also to their own supporters their complete inability to face up to the problems with which Australia is confronted.

Mr Bowden:

– The people did not say so at the general election.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– No, indeed, they did not, and Government supporters have much for which to thank the divisions which allowed the Government to snatch a victory which far from represented the wishes of the Australian people, as the figures show.

Mr Bowden:

– What about the SouthAustralian general election last Saturday?

Mr Cope:

– Only 37 per cent, of the votes: were cast for the Liberal and Country League.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– The official Labour party registered 50 per cent, of the votes and 37 per cent, of the votes were cast for Sir Thomas Playford’s Government.

Yet that Government was re-elected! If Governement supporters can get any satisfaction from that kind of victory, they are welcome to it, but I say that the result does not represent the wishes of the Australian people. Neither does this Government’s majority in any way represent the wishes of the Australian people.

I should say that evidence of the Government’s somnolent attitude to every problem confronting the Australian people is contained in almost every paragraph of the Governor-General’s Speech. That attitude is: “ Let us appoint a committee “. I do not know whether honorable members have counted up how many problems mentioned in this Speech are to be dealt with, not by action, but by the appointment of a committee. I find that seven new committees are to be appointed, according to this Speech. It is certainly true that, for some problems, you do need committees, out here we have a spectacle of a government that has been in power for nine years or more - and the problems have been in existence and growing in intensity all that time - coming before the Parliament now and announcing that it will appoint seven new committees - as though the archives of this Government and its departments were not already crammed with hundreds of mouldering reports already made by committees, together with thousands of recommendations, which lie neatly tied with red tape, no action on them having been taken. We know that, in many cases, the appointment of a committee is the most convenient way of avoiding action - the most traditional way of procrastinating, the method par excellence of buck-passing for the complete dodging of responsibility - and that is apparent in every paragraph of the Governor-General’s Speech.

In fact, in this Speech, the Government has ignored most of the major problems. It has completely ignored mounting unemployment. It has completely ignored the desperate housing shortage. And it has completely ignored falling rural incomes. But wherever it has not succeeded, in this Speech, in completely avoiding and ignoring the existence of a problem, it has dealt with it by the appointment of a new committee. To take an example, every one knows that the Australian Constitution is out of date, and that the Constitution

Review Committee - a joint committee - has already presented to the Parliament and to the Government a series of specific recommendations. The Speech makes it plain that no action is to be taken on any one of these recommendations. Instead, the committee is to be re-constituted, and the whole problem left without any action being taken until the committee, at some time in the sweet by and by, presents another report and further recommendations.

Mr Luchetti:

– The transport chaos will be ignored.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– As the honorable member has said, in the meantime, the transport chaos will be completely ignored, although it calls for action, not in 1962 or 1963, but now- in 1959.

The Government proposes to join in a committee to consider the peaceful uses of outer space. That proposal receives front rank importance in this Speech. The Government’s action in this regard is typical. It is concerned with what may happen 1,000,000 miles from earth rather than with the urgent tasks requiring immediate attention in Australia.

What help is it to the homeless and jobless of this country to know that the exploration of the unknown areas of the Antarctic is about to proceed? How does that help the farmer who does not have a payable market for his produce? I have no objection to exploration of the unknown areas of the Antarctic, but why do we need a committee to study the problems of outer space, and why do we need further exploration of the unknown areas of the Antarctic, when all the real down-to-earth problems with which the Australian people are day-to-day confronted are totally ignored? The Government would appear to be completely out of touch with the realities of life as lived by the ordinary Australian family to-day. For instance, if anything needs urgent attention to-day it is the taxation law. Every honorable member knows that. There is abundant evidence of the anomalies, absurdities, and injustices that occur under our present taxation law, and they have been brought to the attention of the Government year after year. This Government has been in office since 1949, but what does it propose to do about the difficulties, anomalies and injustices of the taxation law? According to the Speech, it proposes to appoint a committee to look into the matter.

A committee is to be appointed to examine ways and means of establishing decimal coinage in Australia. I think that there is much to be said in favour of decimal coinage, but what can the appointment of this committee mean except further indefinite delay in this matter? Whenever the subject is raised again, the Government will be able to say that a committee is examining the matter, and that in due course the committee’s recommendations will be presented and consideration will then be given to those recommendations. But why is the Government so interested in decimal coinage? Why this sudden interest in this subject?

Mr Davis:

– It is not sudden at all.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– Quite so.

Mr Mackinnon:

– Why say that it was sudden?

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I withdraw my remark about its being sudden. Why this interest in the subject? Does the Government want to reduce the number of pennies in a shilling from twelve to ten? Does it not realize that the people of Australia have already suffered a great deal because of the reduction of the value of their money? Or is it that the Prime Minister (Mr. Menzies), being tired at last of constant reminders of his solemn promise to put value back into the fi, now wishes, by the introduction of decimal coinage, to abolish the £1 altogether?

If any problem in this country is crying out for action it is the problem of the dairying industry, and I feel sure that the honorable member for Richmond (Mr. Anthony) will agree with me. Nobody can say that we have not sufficient information on which to tackle this problem. We have had committee after committee; report after report. You simply go into the Department of Primary Industry and you can find all the information you require in order to tackle this problem. When do the farmers need help? They need it now. They are going through a particularly difficult time. What is the Government’s proposal? The Government proposes to appoint a committee of inquiry into the problems of the dairying industry. In other words, the Government is adopting its classic method of avoiding doing anything definite and is bypassing and dodging the problems of this, great rural industry.

I wonder what can be the state of mind of a government and its ministers when the leading announcement in this Speech at the opening of Parliament is to the effect that the Commonwealth Parliamentary Association will hold a conference in Australia this year. Such complacency, such selfsatisfaction, such an utterly don’t-care attitude, has never been matched in the annals of government in this country.

Mr Mackinnon:

– That statement is a bit extravagant.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– It is. I will modify it: Unless one recalls the first Menzies Administration, which had to be flung out of office as soon as war required real leadership and governmental action in this country.

Mr Anderson:

– Did Mr. Chifley mention nationalization of the banks in his policy speech?

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I did not hear the interjection, but I shall deal with it later. The Government’s complacency was well reflected in the Prime Minister’s attitude to-day, and on an earlier occasion, when he announced with such extraordinary complacency and pride that Australia now had .a population of 10,000,000 people. It was almost as though he had been solely responsible. If you cannot do things yourself you should not claim the credit for them. This Government should only claim credit for its own achievements.

Perhaps the most extraordinary reference in the Speech was the reference to employment, because it was a totally false reference. It did not apply to Australia at all. Not one honorable member of this House can deny that unemployment in Australia is rising. The official figures bear that statement out. At least 100,000 people are actually out of work in Australia to-day. They are looking for useful work to do in order to support themselves and their families. But the Speech does not even propose to appoint a committee to deal with this problem. The Speech simply says that the employment situation is very satisfactory and that the level of employment is steadily rising. In other words, not merely does the Government ignore the problem; it falsifies the actual position in this country to-day.

In the time left to me I wish to deal with two matters which I think are of particular importance. The first matter is the supplementary social services allowance. This matter is not only important to the age, invalid and widow pensioners, who might have been entitled to think that they would benefit from the allowance, judging by the terms of the second-reading speech of the Minister for Social Services (Mr. Roberton). The matter is important to every honorable member, because the Government should not appear to be deceptive, and in the legislation concerning this matter the Government does appear to have been deceptive. There are approximatly 600,000 pensioners in Australia to-day. On the figures so far, nine out of every ten pensioners cannot qualify for the supplementary allowance. Out of 600,000 pensioners, I believe that so far only 65,000 applications for supplementary allowance have been approved. One can only guess at the hopes that have been raised and the amount of bitterness and sorrow that has been caused by this wretched piece of legislation, which is as iniquitous as anything that has ever been placed on the statute-book of this country.

Let us look at this legislation. If a husband and wife each receive a pension, or even if the wife is receiving just a dependant’s allowance, then no matter whether they have any other income or not, no matter how close to starvation they are, no matter how much rent they are paying, they are debarred from receiving the supplementary allowance. If a pensioner does not pay rent, then no matter how desperate his or her situation may be, the supplementary allowance is not payable. A widow may be trying to pay off a house, and she has to pay rates and taxes with no other income but her pension, but she is still debarred from receiving the supplementary allowance. A pensioner who pays 6s. a week rent and who qualifies in other ways can get a supplementary allowance of 10s. a week. If he pays 5s. a week, or ls. a week less, he is cut out of the whole of the 10s. a week.

Was ever a law so clumsily, so brutally or so callously drawn? If a pensioner’s income is 10s. a week and he can qualify in every other direction, he can get the 10s. a week supplementary allowance, but if his income is 10s. 6d. a week, he is cut out of the whole .of the 10s. a week supplementary allowance. No one has ever seen a law like that introduced into the Commonwealth Parliament before. -In all our social service legislation, we merely make provision that if a person’s income exceeds a certain amount, he loses that amount of the pension. But this law has been so carelessly, so clumsily, so ruthlessly and so callously drawn that these wicked injustices are being suffered by pensioners to-day. They are arousing amongst the old, the ill and the widowed the most intense sense of bitterness against the established parliamentary institutions of Australia.

Mr Joske:

– The elections hardly show that, do they?

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I have told you the position about the elections.

Mr Joske:

– They are not taking much notice of what you are saying.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

-The honorable member for Balaclava is laughing. Surely what I have shown would appeal to him as being unjust and in need of rectification.

Mr Joske:

– I do not think the facts are as you state them.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– But the facts are as I state them. I invite the honorable member for Balaclava to ask the Minister whether the facts are as I stated them. I admit that when I questioned the Minister in this House several times before the elections, he refused to give any details to the House of how the scheme would work, but I have since obtained the details officially from the Director-General of Social Services. Every fact that I have given to the House is exactly correct.

Mr Turnbull:

– Anybody can get them.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– That is right. As the honorable member for Mallee will know, the facts as I have given them are correct.

Mr Turnbull:

– They are not contained in a secret document.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– They are correct. For the honorable member for Balaclava to laugh is a betrayal of those in his electorate who are suffering this injustice.

Mr Joske:

– They are not suffering any injustice.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– Instead of ruthlessly and callously pushing the problem aside, he should be doing something to help. He should help not only the banking and big business interests that he represents here, but also the pensioners, the widows and the invalids who make up portion of the electorate of Balaclava. It is no wonder that a man like that was not elected to the speakership of this House!

In the time remaining to me, 1 want to direct attention to another complete breach of faith by the Government. I refer to the national health scheme. At page 1488 of “ Hansard “ of 23rd September, 1958, when dealing with the National Health Bill on behalf of the Opposition, i pointed out that the new benefits provided by the bill might not be payable to people accommodated in benevolent homes, convalescent homes, homes for aged persons, rest homes and similar institutions. I pointed out that at that time the people in those insitutions received benefits under the Commonwealth health scheme and that the new proposal appeared to be open to serious question. I was then ingenuous enough to ask the Minister whether we were right in our doubts and to ask him for an assurance. I said -

  1. . I should like to hear from the Minister the reason for it.

The Minister replied -

The proposal will not disturb those who are at present in receipt of benefits.

But it has taken the benefit away from thousands!

Mr DEPUTY SPEAKER (Mr Lucock:
LYNE, NEW SOUTH WALES

– Order! The honorable member’s time has expired.

Mr PEARCE:
Capricornia

.- Since the commencement of the debate on the Address-in-Reply, I have been amazed to hear Opposition members seeking to gain some warmth in their cold isolation by saying, in effect, that they won the elections.

Mr Duthie:

– We certainly did, morally.

Mr PEARCE:

– My friend from Wilmot say that they certainly did. If I remember correctly, the trouble in the Australian Labour party over its leadership came to a head in recent weeks when the honorable member for East Sydney (Mr. Ward), in his wisdom, decided that the Labour party had been soundly whipped at the elections and that the reason for the whipping was the present leadership. Evidently he gained considerable support for his views amongst members of the Labour party because the press has told us - no one has denied it - that he obtained the startling number of 32 votes. So we cannot discount the fact that the honorable member for East Sydney considered that the Labour party had been whipped at the polls, that he decided to test this theory and that he found very nearly 50 per cent, of his colleagues inside the Labour party agreed with him that Labour did have a whipping. It was also a reflection on the difference of thought in the Labour party that the present leader has been challenged on several occasions. On one occasion the honorable member tor F.den-Monaro (Mr. Allan Fraser) challenged his leadership.

Mr Duthie:

– Is that not democracy?

Mr PEARCE:

– Indeed it is democracy’. It is equally democratic for the honorable member for Eden-Monaro to come into the chamber now and express views that are completely contrary to those expressed on a number of occasions - particularly at election time - by his present leader, the man he attempted to unseat. The honorable member said that if Labour were returned to office it would nationalize the banks. There was no equivocation about the honorable member for Eden-Monaro - I have respected that quality in him at all times - but he must admit that the theory that Labour now stands for bank nationalization runs contrary to his leader’s expressed view - -particulary at election time when votes are in the balance - that the Commonwealth Government has not the constitutional power to nationalize the banks.

I use the point to demonstrate clearly the division that exists within the Labour party to-day. This disunited and decimated body of men has tried hard to gain some comfort from the statement that they won the elections. They sit there in their tattered ranks while the Government is more solidly supported on this side of the House than ever before. It is no wonder that Labour is in so small numbers when it cannot govern itself; in these circumstances, it cannot expect to receive the permission of the people to govern Australia.

As has been said several times to-day, this is the day on which the population of Australia reaches the 10,000,000 mark. It is an historic day and a great occasion. If ever testimony were given to the popularity of a government, to the wise administration of a government and to the planned progress of the nation through all the vicissitudes suffered by all nations in the last eight or nine years, it is the fact that we in Australia are celebrating the day on which our population reached 10,000,000. To-day 10,000,000 people are living in an area of great riches and are enjoying equally without class distinction the wealth that this land produces, which is far greater than the wealth and prosperity shared by the people of many other nations. If we look around our country to-day, we find that our people are enjoying a measure of prosperity that must be, and is, the envy of people in many parts of the world to-day. Much of the credit for this rapid expansion in the growth of Australia’s population must go to a planned immigration scheme. Credit must be given to the honorable member for Melbourne (Mr. Calwell) for the work he performed while he was Minister for Immigration in the previous administration. His work was honest and painstaking and he laid the foundation for the immigration scheme as it exists to-day. As a nation, we must be grateful to the immigrants for what they have brought to us, and to the honorable member for Melbourne for his consistent advocacy of an immigration scheme, often against the expressed wishes of his leader and other members of the Australian Labour party.

In recent years, there has been a marked difference in the Government’s policy on the immigration of Asiatics. If there was one blot on the work of the previous administration in immigration, it was the attitude of the Chifley Labour Government towards Asiatics coming to Australia and those who were already here. In the last two years, Asiatics have been given, the right to become naturalized and it has been made easier for them to obtain permanent residence in Australia. That policy has done much to cement friendly relationships between the Asiatic countries and Australia. Recently, the Minister for Immigration (Mr. Downer) announced that it would be part of the Commonwealth Government’s immigration policy to reunite families and for families in Australia to bring near relatives from overseas. Those people would be given every possible help to come to Australia. That is admirable and humane. It h a credit to the Minister and his two immediate predecessors who had been working on this matter.

I make the plea now that this policy should apply also to Asiatics. We have in Australia a small group of men who came here from Asiatic countries. They do not want to go back there. Many of them will never return to their countries to live. Their lives would be forfeit if they stepped on the shores of mainland China. They dare not go back or else they cannot or will not go back. They have established themselves in Australia. They have become accustomed to the Australian way of life and have become worthwhile citizens of our community. Many of those men left their wives and children in the countries from which they came. They had hoped that eventually they would be able to go back and bring their families to Australia. I do not know whether they acted rightly or wrongly in coming to Australia under those conditions, but I do know that many hundreds of those men in Australia have no earthly chance of being reunited with their wives and families. That is wrong morally and in every other way.

Our economy would not be harmed if they were reunited with their families in Australia. Our relationships with Asian nations would be improved if the men who are already in Australia could be given permission to bring their wives and children to this country. When many of them came to Australia, the wretched conditions which are now apparent in Asia and particularly in China did not exist. Nobody could foresee that these families would be debarred from reunion. I ask the Government to give consideration to this problem which is real although it affects only a small number of men who are living in Australia. We allow people from Italy, Spain, Greece, France, Germany and other countries to bring their wives and families with them but we place a ban on Asiatics. While that policy exists, our immigration scheme is not perfect. I ask the Minister for the Interior (Mr. Freeth), who is sitting at the table and who has performed great service as chairman of the Commonwealth Immigration Advisory Council, to bring this matter to the attention of the Minister for Immigration and to use his influence to have my suggestion implemented.

While on this subject, I would remind the House that although our population has reached 10,000,000 and we have brought 2,000,000 persons to Australia in the postwar years, most of our population still lives in the southern part of Australia. We should never forget that fact. I listened with great interest to the maiden speech of the honorable member for Kalgoorlie (Mr. Browne) when he emphasized that point. I listened also with great interest to the honorable member for Leichhardt (Mr. Fulton), who has come to this Parliament with a full knowledge of the problems of the north. He is one of the small band in this chamber who live in the north of Australia. Only four of us who sit in this House have our homes in the north. The honorable member for Herbert (Mr. Murray) is one of them. He has a wide knowledge of that area of Australia. Although the honorable member for Leichhardt differs from me in politics, I know that he is a leading citizen of his home town, and has a great knowledge of northern Queensland, where his reputation stands very high. I urge the House and the members of the Australian Labour party in particular to listen to the new representative of the Leichhardt electorate when he speaks on the problems of the far north, just as we will listen to the new members who represent Herbert and Kalgoorlie.

I hope that the House will also listen to me on occasions, because this is a real problem. Less than 10 per cent, of our people live in half of Australia. We cannot possibly feel secure while that state of affairs continues, nor can we feel that we are fulfilling our duty in governing Australia. What used to be the outback is now the front door of Australia. What used to be the frontiers, the outposts and the far away places of Australia are now seen every year by thousands of tourists from all over the world. They see at first hand the richness of this land in the northern part of Australia and how little use we Australians are making of that land. As they journey from the south to the north of Australia, many of them express utter amazement that the people in the south know so little about the north. Visitors from overseas calling at Sydney first and seeking information about northern Queensland among their new acquaintances, have difficulty in getting a coherent story about what is happening in the north. They cannot get any information about the climate or how we live in the north. Many people living in the south of Australia are completely ignorant about the ways, habits, prospects and potentialities of those who live in the north.

I want to give a practical illustration of this to the House. About six years ago, a young student in London who had never seen the great Fitzroy River, which has its watershed in central Queensland, wrote a thesis on the prospects of the Fitzroy River basin. Without seeing Australia, he gained all his information from libraries and the University of London. He produced a thesis which is outstanding. I have lived in the area all my life and I could not fault the thesis on facts or prospects. It envisaged a scheme which was bold and imaginative and would transform an area greater than the United Kingdom so that it could maintain and support millions of people. The thesis was sent to Canberra and so far as I know it is still gathering dust in some pigeonhole. It was presented to the Queensland Government first, and so far as I know nothing was done. Both governments should have grabbed hold of that scheme at the time.

The point is that the potential richness of that area captured the imagination of a student thousands of miles away. He was able to obtain accurate information about the area and to write a thesis which could not be disputed. That same information is available to all the peoples of the world wherever there is a library and a university.

I find that overseas people know more about the wealth of northern Australia than do the people who live in southern Australia, and more people outside Australia are caring about it and thinking about it than the people in the southern part of Australia. I listen here in Parliament to the speeches of my friends from Victoria who bemoan the fact that Queensland gets more proportionately out of the Commonwealth Aid Roads grant than Victoria does. I listen to honorable members from New South Wales talking in their ignorance about some sort of a tourist resort that abides along the Queensland coast and the Great Barrier Reef. I want to say this and say it plainly: The people of southern Australia should be glad to pour their money into the undeveloped parts of northern Australia, because it is their frontier, their bastion, the land that stands between them and possible aggression. As it is at present it also offers to the people in overcrowded nations two things; first, the full and complete testimony that we are not properly utilizing this land, and, secondly, that that land is virtually theirs for the taking if they ever should want to move into it.

We are such a small nation numerically, although our population has reached 10,000,000, that alone we could no: withstand an invasion. But even if the people of Asia, in ten years time, us; peaceful means and approach the United Nations - and perhaps by that time they will have greater power - they will be able to demonstrate, unless we do something about it in the meantime, that Australia has failed, under all kinds of governments, to develop the great riches that lie in the land in the northern part of this continent of ours. They will be able to claim that because we have failed to develop it, to make full use of it and to put people of our own kind into it, we have no moral right to hold that land. I can well imagine the decision that would be arrived at if this matter were debated along these lines in the United Nations.

I do urge that our thinking in the matter of the development of Australia should no longer be centred around the development of industries in capital cities in the south, but rather in the development of industries and agriculture in the northern part of Australia, and in ways and means of producing from the land and settling people on the land in that part of the country. We should concentrate on production in northern Australia and transforming the products thus obtained into items of clothing, of foodstuffs and of goods that can be sold overseas, so that we not only may earn money that we need, but also that we may demonstrate that we are utilizing our northern potential to its fullest extent.

It may be that we should, from now on, think about sending all our migrants into the northern areas. We cannot do it immediately, because there is no industry there, but we could absorb these people with an immigration plan based upon the concept of developing industry in the north. We could bring out migrants to assist in the foundation of industries, then bring out more to work in those industries, and then more to develop transport systems. We could thus build up a series of industries in the north of Australia, and so not only develop the country but also keep it secure.

As this Government possesses no power - and if it did I would resent its using it - to lift industries from their present locations and compulsorily force them to go into another part of the country, I would go so far as to suggest that some incentive should be offered to secondary industry to become established in the northern part of Australia. We might establish a fund here in Canberra so that any company with the initiative and enterprise to establish itself in the northern part of Australia could be guaranteed a return on the capital outlay for the first five or ten years of operation, so as to help it overcome the difficulties that would be encountered in those areas. Such an incentive, I believe, would pay off. I believe also that for the next ten years we should say to the taxpayers of Australia, “ If you earn your income in the northern

Darts of Australia you will pay at a rate half that applicable in the southern part of the country “. We must offer that kind of incentive in order to induce people to go to these areas.

Besides offering these incentives, a guaranteed reasonable return on capital outlaid in the case of companies, and taxation concessions in the case of individuals, we should also ensure that the people of the north are given the right to govern themselves. It is a fact that in Australia there is no responsible government in the northern part of the land. All responsible government in this country is centred in the southern areas. If you draw a line from Hobart to Thursday Island, you will find that below a point a little over a third of the way up the line there is a government in Brisbane, one in Sydney, one in Melbourne, one in Hobart, and another in Canberra. North of that point there is no self-government whatsoever for the people who live there. Their lives and destinies are controlled according to decisions made in Brisbane or in Canberra.

Queensland this year is celebrating its centenary of self-government. It is 100 years since Queensland was separated from the rest of Australia and given the right to govern itself. 1 believe that now is the time for us to take positive steps to grant to the people of the north their right of self-government, to make their own approach to federation, to spend their own money according to their wishes, and not have it doled out to them, a handful of money for this purpose and a handful for that, according to how some person in Canberra thinks it best for the people of north Queensland to spend their money. 1 want to leave this thought with the Parliament: If we are to develop the north - and we must either develop it or lose it, and if we lose the north it will be only a matter of time before we lose the south - we must see that this great area gets an injection of population. The people of the north must be given the feeling that their fellow citizens in the south are behind them and want to ensure the development of a land that is immeasurably rich by any standard. If honorable members of this Parliament would only get off the beaten tourist track when they go to the northern part of Queensland, they could stand on any one of a thousand hills and look down any one of a thousand valleys, and they will see mighty rivers flowing through country as fertile as can be found in any other part of Australia. They will see plateaus and tablelands where the soil is deep and rich and will grow anything that can be grown in both tropical and temperate climates. This is our heritage at the moment, but if we do not develop it not only will we have no claim to it, but in the future we will not be able to claim it, because it will have been taken away from us.

I urge, therefore, that our future migration plans should be based on the development of the north. Incentives should be given to industries to become established there. Taxation incentives should be given to individuals to settle in the northern part of Australia, and the people who live there should have self government, following th° early creation of new States. This will give the people the power to make their own decisions about the matters that affect themselves. If we adopt these suggestions, then and only then can the northern half of Australia be secure in the face of the threat that exists at present and, perhaps, will always exist. If security means anything to the people of the south, if Australia’s development means anything to them, then I urge them to throw away their insularity and to help us who are prepared to live in and develop the north.

Question resolved in the affirmative.

Presentation of Address-in-Reply.

Mr SPEAKER:

– I shall ascertain when it will be convenient for His Excellency the Governor-General to receive the AddressinReply, and honorable members will be informed accordingly.

page 440

COMMITTEE OF SUPPLY

Motion (by Mr. McMahon) agreed to -

That the House will, . at its next sitting, resolve itself into a committee to consider the Supply to be granted to Her Majesty.

Sitting suspended from 5.45 to 8 p.m.

page 440

RESERVE BANK BILL 1959

Second Reading

Debate resumed from 26th February (vide page 378), on motion by Mr. Harold Holt-

That the bill be now read a second time.

May I say also that in response to a request which the Deputy Leader of the Opposition, made, I have prepared an historical summary of Commonwealth banking legislation and a comparison between the provisions of the bills now before the House and those of the current banking legislation. This statement, which I am arranging to have circulated for the information of honorable members, will supplement the statement that 1 recently made available which showed a comparison between the bills now before us and those passed by this House last year but rejected in another place.

Mr. SPEAKER (Hon. John McLeay).With the concurrence of honorable members the subject-matter of all the banking bills will be debated on the motion for the second reading of the Reserve Bank Bill.

Dr EVATT:
Leader of the Opposition · Hunter

– This is the third time that the Menzies Government’s so-called reform proposals on banking have been brought before this House. Every Australian will want to know whether and, if so, how, these proposals can possibly improve the economic condition of the country. How can these proposals help in the fulfilment of those aims of banking policy which were set out for the first time in the Labour Government’s 1945 banking legislation? Will the proposals contribute to “ the stability of the currency of Australia “, “ the maintenance of full employment in Australia “, and “ the economic prosperity and welfare of the people of Australia “?

I believe they will do nothing whatever to further those aims. On the contrary, while unemployment has reached high levels, while our exports and our international reserves are unfavorable, and while prices continue their rise, this Government persists in unnecessary or damaging changes in basic Australian banking statutes.

It is clear beyond doubt that the sole inspiration of these changes is the need to placate the Government’s financial backers - the private banks - by sacrificing the interests of the Commonwealth Bank of Australia, which exists only for the benefit of -all its owners - the people of Australia. It has no other object, as opposed to the private banks which are under a duty to look after the financial interests of their shareholders. Slowly but surely the economic prosperity and welfare of the Australian people are being construed by vested interests as the prosperity and welfare of the big financial interests and it is these interests which have demanded the changes contemplated in this legislation.

For no other reason than that, this Government has decided to dismember the structure of the great bank which has, on the whole, served this country faithfully and well through two world wars and in all the great crises of our history. For no other reason than this motive of dismemberment the Government proposes the institution of a new system of central bank control over the reserves of the trading banks, despite the fact that most of the banks have repeatedly repudiated the ratio of liquid assets to deposits - known as the L.G.S. ratio.

A recognized authority, Professor Arndt, of the Australian National University has made a statement on this matter. I hear honorable members opposite laugh, but Professor Arndt is one of the greatest authorities on banking in Australia and in the British Commonwealth. Government supporters cannot laugh that off so they should not make themselves ridiculous by trying to do so. Professor Arndt has said -

The brute fact is that most of the trading banks have not yet altogether shaken off the attitude to central bank control, which according to Giblin . . .

That is, Professor Giblin, one of the great founders of the bank. I hear no laughs when I mention his name.

  1. . motivated them in The ‘thirties: “ While consideration for profits and prestige was in part responsible for this resolve (to fight effective central bank control), with some banks at least ir was almost sanctified by the conviction that their judgments on the appropriate monetary policy in any given circumstances were better than that of the Commonwealth Bank “.

Both of these two fundamental changes envisaged in the proposals will do nothing to increase the economic prosperity and welfare of the people of Australia. The fragmentation of the Commonwealth Bank structure into a Reserve Bank and a Banking Corporation, and the meek acceptance of the private banks’ contemptuous departures from the central bank’s requests and policies, represent nothing more than a collapse by the Government in the face of private bank pressure, because the Government must listen to private bank pressure in this country. This merely shows how far this Government is prepared to go to placate the unworthy and unreal fears of private bankers that in some vague way the energetic Commonwealth Trading Bank has been gaining or could in the future gain some allegedly unfair trading advantages from its previous close connexion with the central bank.

Clearly the Government has not been so convinced that the private banks were right in having these fears. In 1953 the Prime Minister (Mr. Menzies) himself said -

We believe that the Commonwealth Bank’s general trading activities have great merit because they act as a source of information to the central bank. They enable the central bank to have an instrument by which it may give leadership in banking policy.

Now what becomes of the argument contained in that considered statement of 1953, after two important amendments had been carried? The Prime Minister’s view then was that there was merit in the existence of the Trading Bank as part of the Common.mealth Bank under the control or leadership of the central bank. But the Prime Minister has not been the only one to appreciate the value and necessity for an intimate connexion between the central bank and the Commonwealth Trading Bank. The Governor of the Commonwealth Bank himself, Dr. Coombs, put the point very clearly in his important English, Scottish and Australian Bank lecture in 1954, when he said of the Commonwealth Trading Bank -

There can be little doubt that this link gives to the Commonwealth Bank a source of strength which can be of particular value in times when the economy is threatened with declining activity and employment.

Is that not a very strong basis of confidence? Yet there has been no real answer to the point, only a series of assertions. The private banks, of course, deny the value of the association. It is to their interest to do so but those are the views of people of independent authority and responsibility in high office. At this time, when unemployment has just topped 80,000, the Government presents to this House proposals specifically designed to shatter a link which, in the opinions of the Prime Minister and Dr. Coombs, possesses such particular value. It is to be shattered in order to free the banking system, in the words of the ex-Treasurer “ from earlier sources of conflict.” It is true that there were conflicts and differences in opinion. That was the only real reason advanced by the ex-Treasurer, Sir Arthur Fadden, when he brought the measures down. He brought them down in circumstances which made it pretty clear that he had little confidence in them.

The private banks have even questioned the motives and objects of the central bank but their own record is open to criticism. In. the lecture to which I have referred, Dr. Coombs said -

Following consultations with the trading banks during 1952 special account was planned so that the banks could build up their ratio of liquid assets to deposits to about 25 per cent, by June, 1953. It was emphasized that this new division of responsibility would be ineffective unless the banks based their lending policies on their liquid assets only, and they were asked by the central bank to work towards and seek to maintain a ratio of liquid assets to deposits of 25 per cent, subject only to seasonal and other short term variations.

It was hoped thus to establish a convention of behaviour similar to those operating in other countries, which would be a guide to both central bank and trading banks in their relationships.

In other words, Dr. Coombs was making a break with tradition. He was putting the banks on their honour. But what happened in reality? Let us hear the rest of the story -

The central bank had continued to encourage a relatively easy lending policy until about November, 1953, by which time it was becoming apparent that the economy had recovered fully from the recession and was advancing rapidly again. At this time the direction of central bank policy in relation to bank advances changed to one of restraint.

There was a natural fear of inflation. Dr. Coombs went on -

Despite this change in policy the advances of the banks continued to rise, increasing in 1954-55 by £140,000,000. Not until 1955-56 was any check apparent

That was his considered view. He added -

There can be no doubt that the rise in advances of £250,000,000 in the two years 1953-54 and 1954-55 was excessive and contributed significantly, both directly and through its impact on the general money supply, to the rapid emergence of inflationary conditions.

These are the people who, for their own gain, defied the views of the central bank, the authority put there by the law of the land and with the approval of the government at that time. They defied that authority and the result was a rapid emergence of inflationary conditions. These are the people who can twist this Government around their fingers. They are the people responsible for that tremendous burst of inflation during that period. This cold statement of fact by Dr. Coombs shows that in the economic crisis many of the private banks contributed to the inflationary situation, seeking first and foremost their own profits. Dr. Coombs added -

It is clear that perhaps £80,000,000 to £100,000,000 of the increase in advances over these two years was excessive and also that it took place despite strong central bank pressure to restrain it.

So, that earlier version of the “ honour “ system proved to be a costly, and from the point of view of those interested in the economic prosperity and welfare of the people of Australia, a very ghastly failure. It was a case where the private banks gave conclusive evidence that they put their profits before the welfare of the nation. What was the Commonwealth Bank doing during this time? Let me quote Dr. Coombs again. He said -

The central bank proceeded to administer special account so as to withdraw from the banks some part of the assets previously released to them. But if the whole of this loss had been allowed to fall directly on the liquid assets of the banks, their liquidity and their capacity to lend would have been abruptly curtailed.

The central bank felt this would be unjust to those banks who were effectively co-operating and was anxious to resolve this issue amicably.

Three banks co-operated, two private banks and the Commonwealth Trading Bank of Australia, which always complied with the direction of the central bank. This Government says that the Commonwealth Trading Bank, the people’s trading bank, gets preference. It is nothing of the kind. It obeys in the letter and the spirit every direction from the central bank, and has always done so. In such a gentle way did the board of the central bank reward the trading banks despite their decision to repudiate their earlier agreement to maintain a previously agreed liquidity ratio. When we refer to the governor of the bank, he is the governor in a board. We cannot tell how a division of opinion goes at the level of the board. Dr. Coombs summed up the fiasco by saying -

The first attempt to establish a firm liquidity convention was not successful.

He puts it mildly! He added -

It would be purposeless to try to allocate responsibility for the failure.

He does not allocate it, but the responsibility and blame rest solidly on the shoulders of the private banking institutions simply because they were doing what they considered to be their job, making immense profits for their shareholders. Anything else was of secondary importance. In these circumstances it is not possible to operate any honour system or convention; the authority of law is necessary. That was found to be true in the war years and it has been true in the administration of this great bank.

Dr. Coombs felt that the plan lacked precision in the obligations it placed on the trading banks and made insufficiently clear what they could expect from the central bank. Undoubtedly, the plan did make things insufficiently clear to some. It was far too unclear to the private banks, who pride themselves so much on their ability to maintain a trust, that they have had, and still have, the hardihood to claim that the Commonwealth Bank cannot be trusted to act impartially as a central banker because of its association with the Commonwealth Trading Bank.

Have honorable members ever heard such arrant hypocrisy? The very people who are doing the wrong to the Commonwealth central bank and to the people of Australia say that the Commonwealth Bank cannot be trusted to act impartially. These trading banks cannot be trusted because they do not act impartially. As a matter of fact, the Commonwealth Bank Board, under Dr. Coombs, leaned over backwards to give them another chance, and this is the thanks they get. But the Commonwealth Trading Bank observed all the requirements of the central bank, both in the letter and the spirit.

Now there is to be a new honour system, based this time not on the maintenance by the trading banks of an agreed average liquidity ratio but on an agreed uniform minimum ratio. It is believed to be about 14 per cent, or lower than the ratio normally maintained by all but two or three of the banks in the usual course of their business. How is this “ honour “ system likely to work out? I say it is likely to be yet another failure. The minimum ratio is too low to be effective, and in any case past history raises serious doubts about the extent to which the private banks can be trusted to co-operate when there is a choice between acting in a responsible and patriotic way in the national interest or acting in pursuit of their one objective, maximum profits from their own operations.

The unfortunate fact is that in the Australian environment fancy plans for implementing credit policy on a basis of trust severely hamper the effective use of credit policy as part of the total armoury of policy weapons available to the responsible government. The latest instalment in this indirect and roundabout approach to credit policy manipulation is the establishment of a brand new short-term money market in Australia, foreshadowed by Dr. Coombs in the same lecture to which I refer. It was recently announced. There has been no satisfactory explanation as to the scope, purpose and methods of operation of this new market. One statement has been, made that four financial concerns will act in connexion with the short-term market and have the handling of Commonwealth securities. The whole purpose of the Commonwealth banking legislation, is that matters of that kind should not be controlled by people in the business openly for private profit. The Commonwealth Bank through any of its own agencies could do that work, if a short-term market were desired in this country. But this is a radical departure from policy and practice. What is feasible in the United Kingdom with its tradition is not necessarily satisfactory in Australia.

This is not a venture for small concerns, because minimum dealings will be for £25,000 on a short-term loan market. One main aim seems to be to open up a further avenue for the profitable investment by the private banks of temporary surpluses of cash. Of course, it is a very profitable and convenient thing for them and they have been carrying on along these lines in connexion with the special account and the money they have been allowed to trade with practically ever since 1951-52.

It seems probable that in order to achieve some conjectural flexibility in the administration of credit policies the central bank is opening up an avenue for more easy money for the private banks. They will not be the only ones to benefit. The four groups of financiers chosen arbitrarily are to act as operators in the market. That is the announcement. The central bank has agreed to advance finance to these operators up to agreed limits which have also not been announced. These chosen few will move into an area of business where they will be able to turn a profitable pound or two. Why are they selected to do that? Why is not that function committed to people properly selected and, on the basis of fact, approved by the Parliament and embodied in a statute? The people do not want this matter dealt with in a holeinthecorner way. It is contrary to the spirit, if not the letter, of the Commonwealth banking charter. Operations of the character contemplated could be conducted by the official central bank rather than by private finance operators. This is a very serious thing. It could become a scandal and therefore should be examined very closely by the Parliament.

Contrast that preferential treatment of hand-picked financiers with the crises of conscience that the Government has gone through in the establishment of the new Development Bank. Since these banking proposals were first presented to the Parliament nearly sixteen months ago the Government has acted to weaken still further the proposed Development Bank by varying the one feature of its legislation that had merit. The Government has once more wilted in the face of continued pressure from the private banks and from their representatives among the New South Wales Liberal party in this House. Contrary to the earlier intention when the proposals were first presented, the private banks may now act as agents for the Development Bank. They will know what is going on. They will be there to advise. If there is any profit to be made from this new excursion into credit provision we can be sure they will share it. That is not for the benefit of the small man, the man who is struggling, but it is put there to see that the interests of the private banks are protected.

There are now definite restrictions on the investment of Commonwealth moneys with the bank as well as on the Commonwealth’s power to place money on deposit with the bank. Sir Arthur Fadden, the author of the proposal for a specific development institution, must be squirming to see the proposal restricted in scope merely to cater to the desires of precisely those same people, the private banks, whose incessant pressure forced him unwillingly to agree to the present so-called reform of the Australian banking system and the dismemberment of the Commonwealth family of banks which conduct all their business, not for private profit, but for the good of their owners, the people of Australia.

There is no doubt about where Labour stood on this issue. We favoured the functions proposed for the Development Bank. Labour was largely responsible for the rapid development of the Mortgage Bank Department and for the establishment of the Industrial Finance Department; but we should, and shall, strongly oppose attempts to weaken further the Development Bank and, in effect, to submit its activities to the approval of private banks acting as agents.

Now, Mr. Speaker, let me turn from that aspect of the bill and look to the new Commonwealth Banking Corporation as a whole. We believe that there is a heavy responsibility on the Government, now that so much has been granted to the private banks, to see that the new corporation is given a real chance, a fair chance, to compete fairly with its rivals both in respect to the Commonwealth Savings Bank and the Commonwealth Trading Bank. After the previous so-called reforms of the banking system in 1953 we were naturally pleased to see the swift progress which was achieved by the Commonwealth Trading Bank under vigorous and capable leadership. Between 1952-53 and 1957-58 advances of the private trading banks rose by £136,000,000, or by 21 per cent. Over the same period advances of the Commonwealth Trading Bank rose by £48,000,000, or by 81 per cent. That argues sound, good management, and that is what its administrators have given to the running of the Commonwealth Trading Bank. We are justly proud of the record of the Commonwealth Trading Bank in extending such a rapidly-expanding volume of bank overdraft finance to the people of Australia over that vital period.

Mr. Speaker, the private trading banks lacked this concern with ordinary and, perhaps in their minds, somewhat awkward overdraft business. Instead, the facts show that they went in for a wholesale expansion of their holdings of government securities. Between 1952-53 and 1957-58, they expanded their holdings of government securities other than treasury bills from £84,000,000 to more than £176,000,000- an expansion of more than 100 per cent, in the period. Instead of having the moneys available to lend to people who wanted assistance in relation ;o their businesses, their homes or other needs that require financing, they concentrated on investment in government securities apar: from treasury bills. Of course, it was easy money to get, and they got it. This search by the private banks for quick and easy gains through government securities still goes on. In January last, the Commonwealth Bank, as part of its policy to buttress the liquidity of the private banks, released more than £17,000,000 of their money from special account, where it earned a small rate of interest. Incidentally, the rate of interest earned on money in special account used to be 5s. per cent., but in January, 1958, the Government increased the rate to 15s. per cent., and in the case of the advances then in the possession of the private trading banks these banks gained an addition of £1,250,000 to their profits. That almost escaped notice.

Last month, the Government floated a £25,000,000 cash loan, which was heavily over-subscribed. It is believed that a high proportion of this over-subscription was private bank money. If so, the private banks have taken the opportunity yet again to use what money is made available to them, not for lending to ordinary customers to meet their needs in relation to homes or businesses, but to make a quick profit out of a cast-iron investment in high-yielding government bonds, on which Australians must pay the interest out of taxation.

As honorable members know, with a vast amount of government securities of that kind in the possession of private banks, there is open a field for what is called secondary inflation resulting from advances made on the security of those government securities.

Despite the handicap deliberately imposed by the present measures for the purpose of weakening the Commonwealth Trading Bank, we still look forward hopefully to the further expansion of the business of the Commonwealth Trading Bank and the Commonwealth Savings Bank. The tremendous success of the Commonwealth Trading Bank over the years following the 1953 changes in the banking law will, we trust, be repeated despite the obvious intent of the present legislation to weaken the whole Commonwealth Bank structure.

Much depends on the choice of men for the leadership of the Commonwealth Banking Corporation, and there is much anxiety among members of the staffs of the Commonwealth banks, representatives of whom saw several of us in a recent deputation, that the great Commonwealth Bank Service, including the Reserve Bank and all the other instrumentalities forming the one great Commonwealth Bank Service, should remain intact and be given the fullest protection and safeguard. But the Reserve Bank staff has been split off and separated from the rest of the family, to use Dr. Coombs’s happy phrase, quite gratuitously. That was originally done because of the insistence of the private trading banks. Has anybody ever heard of such impertinence and impudence? They come along and say, “ You have to get rid of your staff and set up a central bank “, and that is done. They also say: “ You cannot use the title ‘ Commonwealth Bank ‘. You must call it the ‘ Commonwealth Trading Bank ‘ “, and that is done, too. Then they say, “ So far as your staff is concerned you must separate the Reserve Bank staff from the rest of your staff “. And the Government yielded to that, too! There is nothing the banks will not ask for, and very little that they do not get. In the whole history of changes of that character, which are quite frequent in business, I have never heard of such a suggestion being made. After all, the staff of the Commonwealth Trading Bank will include officers of the highest ability - special ability in special fields - who would be eminently suitable to serve in the Reserve Bank, and there should, therefore, be an interchange among staffs. But no! The Reserve Bank has got to go to the other end of Sydney. It is to occupy a nice building, but nowhere near the Commonwealth Bank.

The name “ Commonwealth Bank of Australia “ will be only an historic name if this legislation endures - and endure I hope it will not. The Commonwealth Bank of Australia! The words are a clarion call to everybody who admires the great job done by the founders of the bank, people like Mr. Andrew Fisher, Mr. King O’Malley,

Sir Denison Miller, and all the other great men who conducted the bank during World War I. and World War II., when it financed the war effort of this country. One would have thought that everybody, even those who run the private banks, would be so pleased with the great service done by the bank that they would do nothing to weaken it. What they are doing arises from personal malevolence and jealousy aroused by the magnificent success of the Commonwealth Bank. I hope that the new Treasurer will have a close look at what is regarded as unjust interference by the private banks with a magnificent body of public servants. The people will be watching closely the choice that is made.

We do not want in the Commonwealth Banking Corporation any one appointed to the critically important position of managing director of the corporation who is associated with outside business. The man appointed should be an officer of the Commonwealth Bank, which ha9 been so successful that that fact ought to be itself sufficient in the consideration of qualifications. There must be no more concessions to the private banks’ desires to use their political influence over this Government to protect themselves from the full force of vigorous competition by a Commonwealth Bank owned by the people of Australia. The position is the same with regard to the Commonwealth Savings Bank. The Commonwealth Bank and the Commonwealth Savings Bank are two of the greatest institutions in the world, but the private banks wanted savings banks of their own in order to get at some of the savings of the people who were already properly cared for, from one end of Australia to another by government institutions and had been for one hundred years. The private banks formed their own savings banks and by all sorts of pressures, statements of which were given during the last debate, induced people who had accounts in the Commonwealth Savings Bank to come across the road and pay the same money into a private savings bank. What kind of a future will co-operation in the banking system have, if that goes on?

The attention of Parliament has already been devoted to this legislation. I have gone through it somewhat hurriedly on this, the third occasion. Certainly no new arguments have been put forward to us by the Treasurer. The legislation is designed to make the private bankers more powerful than they already are under this Government, but fundamental issues of future financial and banking policy are emerging, and they must be faced. The banking system itself is rapidly becoming a less significant element in the financing of the Australian economy as a whole. Dr. Coombs puts it in this way -

Ever since 1946 there has been a persistent downward trend in the money supply expressed as a percentage of the gross national product . . . Expressed in general terms this has meant that the banking system has been becoming a less significant element in the financing of the economy. This is not necessarily a bad thing - indeed, it is a natural development in a growing economy with its financial institutions evolving and becoming more diverse and specialized. But it does mean that to the extent that monetary policy relies primarily upon action through the banking system, it is operating in a steadily contracting field.

I emphasize that warning - “ a steadily contracting field “. One illustration of the trend is given by Dr. Coombs in these words -

People are entrusting more of their financial reserves to business firms and proportionately less to banks and savings banks than previously. In this they are encouraged by the greater reward in interest earned and the fact that in recent years they have not experienced any losses.

The trend is having a serious effect. Dr. Coombs continues -

Money lent direct has tended to flow to the borrowers offering the highest rates. The traditional borrowers - governments, semigovernments and local authorities, housing societies, schools, churches, etc., who offer safety but lower returns and who have in the past been financed through the institutional lenders - have fared relatively badly.

A striking illustration of the trend is provided by hire purchase and its most astonishing growth. There are many lessons in it. Even this legislation, which we think is very important and should be resisted, is almost marginal in character in relation to the problem of the changing economy and the fact that we have this change in balance of the whole financial system, with its effect on the economy of Australia. In June, !953, not much more than five years ago; total bank advances amounted to £670,000,000. At that time, outstanding balances of hire-purchase companies financing goods at retail amounted to £89,000,000. That is, hire-purchase OU.standings represented less than one-seventh of total bank advances.

It was then still true to say that effective control over the movement of credit in the economy could be exercised by working exclusively through the banks. The position has changed radically in the last five years. Between June, 1953, and November, 1958, total bank advances rose by 23 per cent, to £825,000,000. But over the same period the outstandings of the hire-purchase companies rose by over 155 per cent, to over £328,000,000. By November last year, therefore, the ratio of hire-purchase outstandings - that is, the balances - to total bank advances, had gone up to nearly 40 per cent, from the low figure of about 13 per cent, in June, 1953. This tremendous, absolute and relative expansion continues, and it must be expected that the relative importance of purely bank finance in the total credit and financial structure of Australia will continue to diminish. That seems to me to be the view taken by Dr. Coombs.

The leverage of the credit control authority - the Reserve Bank - acting, as it must under present conditions, almost entirely through the banking system, must tend to decline. We must be concerned with this grave tendency towards less and less control over the credit flow as a whole, and to the equally grave trend of reallocation of national resources which flows from the present unrestricted expansion of hirepurchase credit.

How has this situation come about? How is it possible for such a large proportion of the total credit flow completely to escape Commonwealth action, either in relation to the aggregate of hire-purchase credit on offer or in relation to the crucial question of the price - the rate of interest - at which the credit is offered? In 1953-54, nearly 30 per cent, of the funds of hirepurchase companies came from bank overdrafts. In the following year, as a result of credit policy measures designed to restrict the amount that banks could advance to hire-purchase companies, there was a net increase in their indebtedness to the banks. But the loss of these funds from the banks was more than compensated for by the great increase in funds obtained from sources other than share issues and bank advances.

The issue of debentures and notes - fixed interest securities - jumped from £6,500,000 in 1953-54 to an average of £18,800,000 in the subsequent three years. Hire-purchase companies changed the emphasis in their financing from borrowing from the banks to borrowing from those who had stocks of money, usually in the form of bank deposits. That is the position. A completely new credit structure, a second banking system, has been created, which day by day comes to rival the old banking system in importance. What is more, this tremendous expansion in hire-purchase finance has been carried out in defiance of the Government’s original intention to restrict it, if possible, through restricting the access of hirepurchase companies to bank credit.

How have the hire-purchase companies been able to raise the huge amounts of money needed to sustain the expansion of their business? It has been done in two ways. First, they have let the private banks in on the profits of the business. This has been very good business for the banks. The Commonwealth has some powers to influence the profits which the private banks can take out of their normal banking business, through its control over bank interest rates and special account, but it has failed to control the profits which can be taken from the alternative banking system - the hire-purchase companies.

The second source of hire-purchase finance has been far more important. The money has come principally from large raisings from the public at fixed interest, through debentures, registered notes, and deposits. This money carries a very high rate of interest, which has proved very attractive to those in the community who are fortunate enough to be able to lay their hands on such funds. Every day, newspapers carry advertisements for money at 7 per cent., 8 per cent., 10 per cent, and even higher rates. How can such prices be offered? Part of the reason is the ability of the companies to charge, and their customers’ willingness to pay. very high rates of interest. But there is ano her more serious reason: The interest which these companies pay on the money they raise can be deducted from their taxation assess ments. The real cost to them of money for which they pay, say, 8 per cent., is often only something in the neighbourhood of 5 per cent. In other words, the ordinary taxpayers are paying, in effect, through the taxation advantage which these investors are able to achieve, their share of the profits of the big financiers who stand behind hire purchase.

These companies have been enormously successful. One has only to realize that between 1954-55 and 1957-58 the amount of money raised by companies listed on the Australian stock exchanges, through debentures, notes, &c, rose from £28,000,000 to no less than £78,000,000. In the last six months of last year, the amount ra sed was £83,000,000. There was more in those six months than in the whole of the previous financial year, 1957-58. This swollen flood of money goes into the hire-purchase business, and the Government keeps on reminding us - it has to remind us - that there is not enough money for schools, hospitals, homes or transport. Surely we are allowing to be established a distorted and almost mad economy, and surely the whole scale of national priorities and human values has fallen down! How ridiculous it is that a man cart get easy money - at a price, of course - for a car or a television set, although he frequently cannot get the money for a home to put them in and although his children may have to take their school lessons under the trees or in cloakrooms because their need for schools is not sufficiently met!

As a matter of fact, hire-purchase and other companies can get their hands on huge sums while water boards lack the money for essential water supplies or for urgently needed sewerage. You can see that state of affairs right down the line. These instrumentalities can get only what the Commonwealth Government will allow them to get. There is no tax racket which they can adopt. I say, Sir, that the whole structure of credit expansion and of the allocation of credit and money resources has got completely out of hand. The hirepurchase companies have circumvented the whole intention of earlier credit policy. They have created what is in effect an alternative banking system. Through a serious anomaly in the tax laws, the fixed interest position has become as I have described it, and this legislation only gives point to the fact that a radical review of the whole pattern of financial control in Australia is needed, not a continuation of the view that the solution of the problem is only a question of monetary policy.

Some of the Government’s supporters cannot understand that they have not the power to change the situation, or else they have not studied the matter. Without fresh thinking and imaginative action, there will be nothing more in Australia than a continuation of the current trend to anarchy, for that is what it means - no law, no control and no system in the financial affairs of the nation. Sufficient has been said to show evidence of this anarchic trend in financial and credit activities. One indication was the deliberate abandonment of the Commonwealth Bank’s support for the bond market on the alleged theory of inflationary effect - a theory which I believe is quite invalid. Further, the combined effect of the present measures and the Banking Act of 1953 will be to increase the powers of the trading banks and reduce those of the public bank as an agent of the government. This means that the trading banks and their financial associates and allies will exercise, first, more and more power to determine the level of lending in the community and thereby its income, employment and imports, secondly, power also to determine the level of their own profits, and thirdly - and most important of all - the supreme power to determine how they will hold their assets so that they can control the general direction of lending.

The traditional function of the banks is to lend on overdraft for industrial, commercial and rural development, and for housing. As a matter of fact, the trading bank holdings of government securities and other assets have become the basis of the private banks’ diversion of money into new channels. What is wrong with this diversion? Two things are wrong with it. First, the private banks’ holdings of government securities mean that a large volume of the money created is lent to the Government by their purchase of government securities. This means a greatly increased public interest bill and greatly increased bank profits for no necessary services. Secondly, the diversion of bank lending from ordinary overdrafts to hire purchase and investment trust means a diversion of money from relatively low to high profit investment, and also from relatively small borrowers - small businessmen, farmers and home-builders - to large investors. You can easily find examples of that. The result of these changes is, first, that low but essential interest is restricted, and high profit investment is encouraged. Secondly, the small borrower is restricted and the large invesment corporations - particularly the overseas ones - get all the money.

It is clear that no one who believes in a just and equitable banking, monetary and credit system can possibly accept the Government’s proposals. A big job has to be done for Australia. But it must be done disinterestedly, in the interests of the people, and not in the interests of profit for the investment companies or the private banks. It must be done by organizations like the Commonwealth Bank which are controlled solely for the benefit of the people of Australia.

Mr McMAHON:
Minister for Labour and National Service · Lowe · LP

– Mr. Speaker, as usual, the Leader of the Opposition (Dr. Evatt) has read to this House a speech which, quite frankly, he has not understood. If honorable members who sit on the benches behind him and who are interjecting now were able to understand it, they would have been able to do something that they have not previously been able to do during the last nine years - understand the feelings and the thinking of the Australian people.

May I deal with three of the questions raised in this debate by the Leader of the Opposition - hire purchase, the diminishing function of the banking system, and the bill market that has recently been established in this country. None of them has anything to do with the issues raised by the bills now before the House.

Mr Ward:

– Yes, they have.

Mr McMAHON:

– Opposition members may giggle and laugh and make all sorts of protests, but if they could understand what the Leader of the Opposition said, and if they think that there is some relevance in his statements to the bills before the House, I put them in exactly the same class as the right honorable gentleman. He dealt with hire purchase, and bitterly criticized the hire-purchase companies for expanding their loans. First of all, the Commonwealth has no power over hire purchase, and therefore it cannot control it, and it is not subject to the banking jurisdiction that is now being considered in this House. Secondly, the Leader of the Opposition has said that he believes in full employment. If the activities of any one of the many organizations that have contributed to full employment in the last couple of years may be singled out, I suppose it is the activities of the hire-purchase companies in permitting people to borrow money in order to buy ;goods, and particularly to enable them to buy things like refrigerators which they need for their homes. Hire purchase has helped to sustain full employment. If the honorable member for Watson (Mr. Cope), who is interjecting, is against hire purchase, let him come out and say that he is against hire purchase and full employment. Let him say he is against the people. The Leader of the Opposition attacked hire purchase, and he did it deliberately.

So we come to this, Mr. Speaker. First, the right honorable gentleman’s argument was irrelevant, and secondly, the Commonwealth Government has no control over hire purchase. Thirdly, his attack on hire purchase at this stage, against the background of what he thinks should be a policy of full employment, is something that very few people could understand.

I am going backwards along the line of the Leader of the Opposition’s argument. He then dealt with the bill market. On this matter - his speech obviously had been written for him - probably by Professor Arndt, although I do not know for sure. But the right honorable gentleman read it at a very quick pace, and I doubt whether any Opposition member could tell me what he said. Let us see what is the purpose of the bill market. It is to draw off purchasing power at a time - perhaps in the March quarter of the year - when we find that, owing to international trade payments and other factors, the banks have excess liquidity. In other words, when international trade payments are at their peak - and so too is Commonwealth Government spending - we all too frequently find that the trading banks have a high level of liquidity - more money in the tills at the banks than can be profitably let out over long periods. The bill market is designed to skim off the surplus and let it go into a bill market where the money can be more effectively used. If the Leader of the Opposition knew what he was talking about, and if he wants to prevent the banks from being put in a position of excessive liquidity such as that in 1952-53 and 1953-54 which he mentioned, he should understand that the very design of the bill market is to skim off the surplus money and stop that from occurring. So whoever prepared to-night’s speech for the right honorable gentleman did not indoctrinate him properly and did not give him the information that he should have had.

The third matter raised by the Leader of the Opposition with which I want to deal is, as I have already indicated, the declining position of the trading banks. Here again, it is not a matter of the design of the banks themselves - not of the intention of the central banks. It is beyond their control. The reason is purely and simply that interest rates outside the banking mechanism are not constitutional matters over which the Commonwealth has jurisdiction. It cannot control interest rates outside banking. So it turns out that of the three questions to which the right honorable gentleman devoted the major portion of his speech, not one touches or concerns the banking legislation. Not one of them, except the bill market, which as I have stated he obviously could not have understood, can be dealt with by the Commonwealth Bank.

I now move on iO the real issues before the House. It is quite obvious that some honorable members opposite would not for a moment agree with the propositions that were put forward by the Leader of the Opposition. The honorable member for Grayndler (Mr. Daly) and a few others opposite, including the honorable member for Eden-Monaro (Mr. Allan Fraser), nod their heads. They would not do so if they thought that their leader could see them. What is the real question that we have to answer when considering this legislation? There is one question that we have to answer to-night. That question is: Are we constructing a banking system that will carry out the objectives of the legislation? Those objectives were stated by the right honorable gentleman - a banking system that will work in the interests of the Australian people, and that will protect the currency and help to sustain full employment. If the right honorable gentleman had continued on that line of argument and had tried to prove that the changes in the banking system would be detrimental to achieving those objectives - and limited his criticisms to the banking powers themselves - then I would have understood him. But he did not do that. He rambled all over the place and did not touch on the vital issues. I think that it can be shown conclusively that these changes will achieve the purposes mentioned by the right honorable gentleman, and which are the heart and substance of this banking legislation. What are our purposes?

Mr Pollard:

– The honorable gentleman said that before.

Mr McMAHON:

– No, I was telling honorable members the objectives of this legislation. Now I am saying what we are doing in terms of the banking legislation.

Mr Pollard:

– Well, get on with it!

Mr McMAHON:

– Government supporters listened with courtesy and respect, and listened in silence, to the Leader of the Opposition when he was speaking. Perhaps the honorable member for Lalor might have the decency and the common sense to restrain himself on this occasion. The honorable member for East Sydney (Mr. Ward) is punching the honorable member for Lalor. Perhaps that is the only way to silence him.

What then are the objectives of the legislation? The first is the separation of the central bank from the Trading Bank with the objective of making the central bank relatively independent and free from trading banking operations. This will strengthen the Trading Bank itself, and I hope to prove that the Trading Bank will be considerably strengthened. Secondly, the legislation will set up the Development Bank and the Savings Bank, each relatively independent and able to play its part in the development of the community.

Before deciding on this action the Government must have had a motive. The motives were: First of all, we had in mind the attempted vandalism of the Labour Government in 1948 and other years when an attempt was made to destroy the private trading banks. Only Section 92 of the Constitution prevented the Labour Government from nationalizing and destroying them. We now seek to make it difficult for a future Labour Government to achieve this end by deceit and fraud; to make it difficult for it to implement its policy without that policy first becoming known to the Australian people. Secondly, we want to strengthen the central bank. That will be done. Thirdly, we want to strengthen the Commonwealth Trading Bank, and that also will be done.

Having recited the purposes of the legislation and the motives for the Government’s action, may I analyse the criticisms of the Leader of the Opposition? The right honorable gentleman, formerly from Barton and now from Hunter, first dealt with the question of the dismemberment of the central bank from the Trading Bank. The central feature of this legislation aims to separate the central bank, or the Reserve Bank, from the Trading Bank. That is being done for two reasons, and those reasons were well put to the House on a previous occasion by the former Treasurer. They are set out in his speech.

The reasons are these: First of all, it is not right that any person should be in a position where his trust and his interest might conflict. If you find a bank that has control over the trading banks and also itself is a trading bank, it has a conflicting interest, because it is a competitor. It also has a trust, and it has to administer effectively the general banking policy of the other banks. It is in the impossible position of being guardian and competitor. All over the world, in every highly developed banking system, you find the separation of the two banks. Secondly, we wanted to build up trust and mutual respect between the trading banks themselves and the central bank or Reserve Bank. Could it be thought practical or possible to have a competitor put in a position where he can control the general activities of the trading banks and still expect to have full confidence and full trust? Of course not. That was the motive for the separation, and I am sure that you will find, as a result of experience, that because of this change there will be a growing confidence between the two kinds of banks, a growing realization amongst the trading banks that, as the central bank has ceased to be a competitor, they can now look to it for genuine leadership, and they will be able to follow this leadership free from the fear that their own interests may be prejudiced.

Now I come to this question: Have the Commonwealth banks been weakened in any way? Again I think that the Leader of the Opposition could not have understood the legislation, otherwise he would not have spoken as he did. First, let us look at the central bank or Reserve Bank. The Reserve Bank has been strengthened in a way that no one could have contemplated a few years ago, and the recommendations for the strengthening were made by the private trading banks themselves. How did that come to pass? We had a system of what is called special reserve deposits, under which at a base date - about October, 1952 - the amounts standing to the credit of the special accounts were frozen. Then all that could be got from the trading banks and placed in the special accounts was a percentage of the increase in their deposits. There was, therefore, a limit on what could in fact be called up. But under this new reserve deposits system, as much as 25 per cent, can be called up by giving one day’s notice, and an unlimited amount by giving 45 days’ notice. This, therefore, gives to the central bank a power which it otherwise would not have, and which it never had before.

The Leader of the Opposition has argued that there could be delay. I submit that in this case delay cannot be considered as relevant. I do not think that delay is really relevant to the problem, because never in our history has it been necessary to call up as much as 25 per cent, of deposits in order to prevent the commercial banks from overlending under inflationary conditions. In other words, 25 per cent, is, in the opinion of the Treasury, and of the central bank, a perfectly adequate sum to call up and would, in my opinion, cover most of the contingencies, if not all, that we might have to face.

So I submit, Mr. Speaker, that far from being dismembered and far from being weakened, the central bank has been immeasurably strengthened by the change in the deposit mechanism under which it will have power to call up as much as 25 per cent, without notice, and further sums on giving a reasonable notice. We think it has been further strengthened because it is no longer a trading competitor with the private trading banks but can give them guidance, free and certain in the knowledge that it cannot be suspected of having motives which might lead the private trading banks to think that it is favouring one of their competitors - that is to say, the Commonwealth Trading Bank.

Now may I turn to the strengthening of the position of the Commonwealth Trading Bank? Again, we must here argue against one of the propositions put by the right honorable gentleman, because he made the statement - quite incorrectly - that the Commonwealth banking system has been weakened. I mentioned the problem of the Reserve Bank, which has been strengthened. Now let us look at the position of the Trading Bank. My colleague, the Treasurer (Mr. Harold Holt), gave figures when he delivered his second-reading speech. Its capital and reserve will be £10,500,000 and we have now decided to add £2,000,000 to its capital structure. There are some who may argue - and perhaps argue quite persuasively - that its capital structure may in the future require strengthening. But the Treasurer has given his assurance that the capital structure will be closely watched and if it is thought necessary to increase the capital, that will be done and will be done by an appropriation of this House. That is the proper way to do it. It is analogous to the shareholders strengthening the capital structure of a private trading bank and is, I think, the appropriate way to carry out that strengthening process.

Let us look at the assets of the Trading Bank. After payment of taxation, 50 per cent, of its profits can be ploughed back into its development programme. There is not a private trading bank that can put back more than 25 per cent, or 30 per cent. So we find here a strengthening of the Commonwealth Trading Bank. Then, it is guaranteed by the Commonwealth itself. It trades on the strength of the Commonwealth Government and of the people of the Commonwealth.

I now want to put one argument that has not been put here before. It is that it is not the capital structure of a bank that permits it to make advances; it is the amount of deposits that the bank is able to attract and the percentage of the deposits that it is able to lend. So we find a trading bank guaranteed by the Commonwealth in a relatively strong capital position and in a preferred position as far as attracting deposits is concerned. Therefore, it is in a position where its capital structure at the moment is strong and is guaranteed by the Government so that it should be able to attract deposits and, therefore, to expand its operations.

I could mention other factors, but I think enough has been said to show that it is the intention of this Government to establish a strong and independent trading bank, and that that has been done in the legislation. I come to one argument put by the right honorable gentleman, because I think it is important. We have established an independent trading bank. We have given it a charter of its own and its own general manager, subject only to the directions of the Commonwealth Banking Corporation. The right honorable gentleman at one stage argued that the central bank had been restricting the operations of the Trading Bank. If he means that, he should welcome the fact that we have separated the Trading Bank from central bank control and put it in a position where it can at least compete on active terms with the private trading banks. In other words, the central bank will now have to look at them all as an entity, not saying to the Commonwealth Trading Bank, “You must restrict your operations “, but applying any general banking regulations to all the banks as a whole. So the right honorable gentleman has obviously lost the force of his argument and has failed to recognize that the creation of a state of independence has, in effect, greatly strengthened the Trading Bank.

The right honorable gentleman went on to discuss the question of the staff of the central bank and of the Commonwealth Banking Corporation. Sir, I think it is well known that the central bank itself has a very small, highly trained and technical staff. That staff really need not have a great deal of association with the Trading Bank, the Savings Bank or the Development Bank. We find, therefore, a small section, and only a very small section, of technical personnel being taken out of the banking system and the rest of the personnel being left in the Commonwealth Banking Corporation. It is a vast exaggeration to suggest that the personnel will be split all over the place and that prospects of promotion of the bulk of them may perhaps be hindered. On the contrary, I do not think it will have any great effect on the Commonwealth system of banks at all. What the Government has done in this case is this: It has gone out of its way to ensure that the Commonwealth Banking Corporation - that is, the Trading Bank, the Savings Bank and the Development Bank - will have a large staff, interchangeable between the various sections. The staff will have the normal public service rights of promotion and of training for better positions.

That answers, to the best of my ability, most of the propositions that have been put by the right honorable gentleman. I now come back to what I regard as the critical features of this legislation. I think it was desirable in the interests of the Australian people that we should separate the central bank from the Trading Bank. I put the point - I do not want to repeat it again - that it is imprudent and unwise to have a central bank that is at the one time competing with the trading banks and giving them leadership, we hope and expect, in a voluntary way. I have also shown that the central bank has had its powers increased.

I have endeavoured to demonstrate that not only does the Trading Bank become independent and subject only to the same rules as the commercial trading banks, but indeed that its structure has been strengthened and it will have adequate resources to lend to those people who wish to go to it. The right honorable gentleman raised the question whether these changes would be for the benefit of the people of Australia. I unhesitatingly say, and I am sure that every responsible person will say. that these changes will do three things. First, they will benefit the Australian people. Secondly, they will lead, in co-operation with the Government’s fiscal policy, to the continuance of our policy of full employment. Thirdly, they will do much, with the strengthening of the central bank, to help maintain the stability of the Australian currency.

Those were the propositions that I wanted to put. I can only express the hope that I have been able to isolate the various arguments of the right honorable gentleman because, Sir, trying to understand the very quick way in which he read Mr. Arndt’s lectures was like trying to read a pak-a-poo ticket. I sum up by asking: Was our motive the right one? I think it was. Those who listened to the right honorable gentleman tonight will have one convicion in their minds. He criticized the trading banks and said that they had to take full responsibility for the inflationary period of 1952-53. He argued from that that they should be restrained and that perhaps the punitive power should be exercised against them. T think we must infer from his argument that we on this side of the House and the trading banks were quite right in saying that we must protect the private trading banks from acts of vandalism. Whilst the Labour party may argue that section 92 of the Constitution will protect the trading banks from an overt act, yet, by means of fraud, deceit or deception, it could slowly strangle the trading banks. We want to ensure that that strangulation cannot take place unless the public is fully aware of it.

It is obvious the right honorable gentleman did not understand the arguments because the Commonwealth system of banks is not being weakened but strengthened. Finally, I put this one political argument to you, Mr. Speaker: As we listened to the right honorable gentleman and to the interjections of the Opposition, it became obvious that they are as quarrelsome on this matter as they are on most other problems. The state of mind of the various sections of the Labour party can well be described as shillelagh politics. Anybody who puts his head out will get a clout with the Labour shillelagh whether he is friend or foe.

All the arguments put by the right honorable gentleman were made rancorously and against the private trading bank system. It has quite unreasonably got one good clout from the shillelagh. The private banking system has a right to be protected. It looks after its depositors, accepts their savings and guarantees their repayment. It takes the money and lends it to borrowers so that trade can be carried on and this country can be developed. But despite the fact that these banks are doing a splendid job - and we want to give them whatever help we can to carry on that job - the Labour party threatens that any head that is put up in support of the banks will be cracked with the Labour party shillelagh whether it belongs to friend or foe; whether it is for the benefit of the country or not. 1 think these bills will carry out the objectives of the Government. They will make a contribution to the betterment of the banking system and do something to protect the banks against the vandal hands of a Labour government. I commend each of the bills to the House.

Mr CREAN:
Melbourne Ports

– I should like to commence with what I think is fundamental to any discussion on banking; that is by stating what banking aims to do. It is best embodied in the aims that the Australian Labour party wrote into its fundamental legislation in 1945 -

It shall be the duty of the Commonwealth Bank, within the limits of its powers, to pursue a monetary and banking policy directed to the greatest advantage of the people of Australia, and to exercise its powers under this Act and the Banking Act 1945 in such a manner as, in the opinion of the Bank, will best contribute to -

the stability of the currency of Australia;

the maintenance of full employment in

Australia; and

the economic prosperity and welfare of the people of Australia.

It cannot be said that, in the past ten years, there has been stability of the currency because in that time, we have had inflation at an average rate of 74- per cent, which means ls. 6d. robbed out of the value of the £1 every year for the past ten years. At this moment, he would be a misinterpreter of the circumstances who would suggest that full employment exists in Australia. Therefore, if any changes are being made in the banking structure at the moment, they should be made in these fundamental directions: Is there something wrong with the existing banking structure that we have not had stability of the currency and that full employment, which everybody regarded as an inalienable right, is in jeopardy in Australia? We say that, so far as the substance of this set of bills is concerned, they do these things: They dismember the present structure of banking so far as the Commonwealth Bank is concerned. They alter also the method by which the central bank, an aspect at the moment of the Commonwealth Bank, is able to call surplus funds under its control or releases them as it wants according to circumstances.

There has been a lot of talk in this chamber to-night about certain terms but there has not always been clarity in their exposition. The Minister for Labour and National Service (Mr. McMahon), who has just resumed his seat, talked airily about something he called “ liquidity “. 1 should like to give what seems to me a simple and honest definition of liquidity. I take it from a source I do not regard as biased in my favour. It is the Reserve Bank of Philadelphia’s Monthly Bulletin for October, 1958, in an article entitled “How Liquid are the Banks? “ It has this to say about liquidity -

An asset is liquid to the extent it can be turned into cash without loss or delay.

I think the function of a central bank might be briefly summed up in this way, and I largely borrow the definition: A central bank creates liquidity when needed, and a central bank draws back liquidity when required. The first items that banks call liquid items are the items that the ordinary person uses when he goes to the grocer’s shop or the greengrocer’s - pounds, shillings and pence. These are manufactured by the Government and carry the fiat or authority of the Government behind them. That is basically what any bank has to have at any time - a sufficiency of cash for those curious people who still resort to cash and occasionally want it from the bank. The bank has to have sufficient cash on hand if somebody takes a cheque along and says that he wants so many pounds, shillings and pence. That is the first line of liquidity so far as banking is concerned.

The second line of liquidity, as it is understood in Australia, is a government instrumentality called a treasury-bill. Again, in origin a treasury-bill in Australian circumstances is simply a loan made by the Commonwealth Bank. Sometimes it farms a surplus of them out to the banks and interest is earned on them, but in origin, it is a loan by the central bank or the Commonwealth Bank to the Government itself. Tt is the left hand of the Government, as it were, helping the right hand of the Government.

One thing that ought to be said at this stage is that there can be no independence of a banking system from government. There may be a certain independence of activity within the framework of government, but government and banking operate within one closed circle. They operate within the economy which affects the economic destiny of the citizens of Australia. As 1 have said, this second line of what is called liquidity - a treasury-bill - again is a creation initially of the Government itself.

The third line, which is not always quite as liquid but comes within this other thing which was talked about to-night - L.G.S. or liquids plus government security of 25 per cent, of deposits - comprises government securities or Commonwealth bonds. Again, there is nothing mysterious about them. They are creations of the Government. The Minister for Labour and National Service said to-night that the money market was there to help to circulate liquidity. That may be his definition of the function of the money market, but it is not the definition of the money market that is accepted by those on the Opposition side. I suggest it is almost criminal on the part of this Government that, at a time when fundamental alteration is being made to the banking structure as it operates, a new development is being undertaken about which there has been no mention by the Treasurer in the speech he delivered in this House recently. What is the portent of this new money market? I quote from the August, 1958, issue of the Bank of New South Wales “ Review “, in which appears an article entitled “ Towards a Capital Market in Australia”. It refers to the siftings that have been going on in Australia for some time about this new development in the money market. lt says -

So far, however, these developments are little more than tentative beginnings.

This article appeared in August, 1958, and the Governor-General announced in February, 1959, that what was then tentative was in fact beginning. But the writer of this article goes on to say - but they hold far-reaching implications for the form and impact of official monetary controls and also for the structure of business of the banking system.

Yet nothing whatever has been said about the matter, and the Minister to-night dismissed it in a few airy phrases, saying that the only purpose of these benevolent gentlemen who control the private banks is to serve the needs of the community. In fact these benevolent gentlemen are going to earn a profit by supplying this service, and, basically, all they do is to take this inevitable liquidity in the banking system and turn it to their own advantage. I suppose that as profit-making institutions the banks are entitled to turn it to their advantage, but at a time when the Parliament is deliberating upon how these manipulations ought to be controlled, at least some responsible statement should be made in this House, by the Treasurer for the time being, who is charged with responsibility of ensuring monetary stability in the Australian community, with maintaining full employment and serving the welfare of the ordinary people.

The quarrel of the Labour party with the private banks is, of course, that inevitably there are times when the private interests of the banks, as profit-making institutions, conflict with the public good of the community. That is why it has been necessary, from time to time, to intrude into the business of banking. Although these concerns call themselves private institutions, they are not private institutions any longer. Any institution that has hundreds of thousands of clients and handles hundreds of millions of pounds of money is no longer a private institution. It is an institution charged with a great deal of public responsibility, responsibility that may be exercised for ill as well as for good.

The striving of the banking system is always towards this one end of liquidity, to be able to pay out in cash when anybody wants payment, while at the same time so to dispose the rest of its assets that it can earn the greatest profit. Of course, how it lends and where it lends affect the economic destiny of the Australian community, and one difference between the position in Australia in 1958 and that in, let us say, 1908, is that the Government to-day plays a greater part in the economic life of the community. The very fact that the Government takes part in economic activity, that it takes part in day-to-day expenditure and in capital expenditure, involving taxation on the one hand and loans on the other, makes this no longer a simple mechanism, and certainly makes it far from being a purely private mechanism. It makes necessary an intrusion by the Government. There may be argument as to the form and manner of the intrusion, but intrusion of one kind or another there must be.

I would suggest that we are perfectly right in voicing our criticism on this side. I do not want to go primarily into the substance of this legislation, because I think there are several matters of great import for the future monetary and economic stability of the Australian community that this Government has not even looked at, so hasty is it in doing justice to those people to whom, perhaps, it has a certain amount of obligation. We say there is no mandate for this kind of legislation that we have before us. How many honorable members on the opposite side seriously argued the techniques of banking during the last election campaign? How many of them used the word “ liquidity “ and talked about the L.G.S. ratio on the hustings? They hardly mentioned it. The only people, basically, who have demanded this form of amendment that appears in the legislation have been those in control of the private banks. They have demanded it because they say, “ This is our view of what a central bank ought to be, and this is our view as to what we regard as fair competition in the banking structure.” There is very little competition among the banks in their advocacy of this legislation. They have shown a monolithic similarity in their approach to this kind of legislation.

We say that authorities in Australia in the past, to whose opinion we give some weight, have argued - and their argument has never been contradicted - that because of the particular circumstances of Australia the central bank that we have had is a better central bank. Let me remind honorable members that it is in the atmosphere of Australia in 1958, not of London in 1938, that we should be considering this matter. These authorities have argued that the central bank is a better central bank because it has a direct contact with trading activities, as one particular aspect of its activities. And for every authority one may quote giving an opinion one way, another authority can be found to give an opinion of a different kind. One thing that should be taken into account, I think, is that there are no final principles of central banking. Central banking is a sensible adaptation to the circumstances of the time and the particular country, and the circumstances of Australia are very much different from those of other countries. We maintain that this legislation does not strengthen the central bank, and that the Government is merely capitulating to the private banks and accepting their view of what a central bank should be.

A central bank must control the activities of the private banking institutions, and the private banking institutions should be the last to be consulted as to the final form of this kind of legislation. But they are virtually the only ones that have been consulted with regard to the amendments now contemplated.

Great Britain, which has not a socialist government at the moment but has what is called more honestly there a tory government, well over twelve months ago set up a committee called the Radcliffe committee to examine the monetary and banking structure of England, because even the tory government of England realized that the circumstances of banking now are different from what they were when the constitutions that at present control monetary and banking arrangements were created, and that there may be a need to reconsider these matters. That committee, under the chairmanship of Lord Radcliffe, has on it a very prominent authority in the field of banking, Professor Sayers. The committee has been taking evidence from all sorts of people as to the role of banking in a modern community.

I should think that this Government would have done well to have discarded this legislation for the time being. Whatever may have been said about certain committees, there may have been very good reason for an objective committee to deliberate seriously upon the economic circumstances in Australia at the moment. I believe that basic problems are emerging from the economic structure of this country with which the Government is not grappling. One or two of them were hinted at by Dr. Coombs in the lecture which he gave recently in Sydney, known as the “ R. C. Mills memorial lecture “.

It is not often that central bankers make statements about central banking activities. They prefer to leave them shrouded in mystery. But certain things have been going on in the Australian economy which this Government has just allowed to drift on. One of the matters that is fundamental in a community such as ours is the proper handling of the public debt. At the moment, the internal debt of Australia., excluding what are called treasury-bills - the long and short-term debt of Australia - aggregates over £3,000,000,000. In connexion with every budget for the last twoor three years, the Treasurer has hinted, at the beginning of the year, that he faces, great problems of conversion during the ensuing year.

To some extent, the way in which this problem has been handled over the last twoor three years has not been satisfactory. Most of our long-term loans were raised in the war period when the interest rate was not much more than 3 per cent. When these loans mature most people will not convert them on those terms. In fact, many people have been reluctant to convert them at all. Consequently, a large number of conversions have not been in long-term securities but in securities of twelve months or two years’ duration. Therefore, the problem which was deferred in 1957 reemerged in 1958 and 1959 when the shortterm securities came up for conversion once more.

I think that the Government ought to make definite inquiries on this subject. It ought to examine, in particular, the experiences of the United States of America. It should endeavour to ascertain whether it is good for the Australian economy that the major part of this £3,000.000,000 should be held in short-term securities or in longterm securities. I suggest that that is a fundamental problem which may, I hope, have been grasped by certain people in the Treasury but which certainly has not been tackled by the Government. The Government is storing up great difficulties for the future and, in my view, it is not going to he helped by the existence of a new set of money manipulators, as I prefer to call them. Rather it is going to hinder the development of this country because those people are only putting liquidity that they do not want at the moment into relatively short-term securities. When those securities mature they, not the Government, will make the decision as to whether the securities are taken out in cash and reloaned for private activity or put back into new Government loans. It is they who will determine the future pattern of investment in Australia.

I suggest that as long as banking institutions have deposits aggregating hundreds of millions of pounds they must have some influence on the pattern of economic development. But there will be, always, a choice. As every honorable member knows, at the moment there are too few schools, too few hospitals, too few roads and too few irrigation and power facilities to serve the needs of the community. That sort of need is what is called public investment and, in order to carry out all public investment it is necessary to restrict, to a certain extent, the activity of the private banking institutions. That, after all, is what the central banking machinery should be doing.

The Treasurer, who was not in the House when I began my speech, was recreant in that, although these amendments are important to the banking structure, he did not provide any analysis whatever of the purpose or scope of this new device, the money market. I suggest that before this debate is finished at least some authoritative statement ought to be made, not just the little trimming that was given by the Minister for Labour and National Service (Mr. McMahon). He chided this side of the House for not knowing much about it. I submit that he is in similar difficulty himself. That is not a very happy condition. I think that it bears out a criticism which was made recently by the honorable member for Warringah (Mr. Bland) that Ministers in charge of Government measures often do not know what is being done and do not always realize the purpose of the measures.

I am not one who sneeringly uses the word “ bureaucracy “ because I have a great respect for the civil service but in my view it is bureaucracy when the person behind the Minister does what the Minister ought to be doing. I do not say that that is true of the Treasurer but I suggest that, so far, he has given very unsatisfactory explanations. I repeat the words from the Bank of New South Wales “ Review “ - . . these developments . . . hold farreaching implications for the form and impact of official monetary controls and also for the structure of business of the banking system.

That is too important a matter not to be mentioned in this House but merely to be read about in the papers. I suggest that before a development such as that is encouraged and accepted there ought to be some fundamental examination by people other than the Governor of the Commonwealth Bank and the people who want to be registered as borrowers and lenders for this particular kind of economic activity.

The time as my disposal is evaporating and I have not said all that I intended to say. I think it will be realized that matters such as this are of fundamental importance. Such matters sometimes have a little technical difficulty about them. They are matters, I would be the first to agree, that admit of wide differences of opinion. Nevertheless, changes as fundamental as this go right to the heart of the banking system and, in our view, the proposed changes will not make the banking system better. They will make it worse.

I had intended to talk about the Development Bank because it seems to me that when the Minister gives in to the pressure of the backbenchers of the Liberal party he might as well remove the title “ bank “ from the institution. It is not a development bank any more; it is only a limited development fund. It will not go anywhere near serving the sort of purpose that the honorable member for Wannon (Mr. Malcolm Fraser), during the last election campaign claimed that it would serve. It is all very well saying that there is an amount of £20,000,000 capital in this institution. That is not so. There is £15,000,000 of capital which is pretty well already utilized in the mortgage obligations and the industrial finance obligations that are being taken over. The only mobile capital at the moment is the £5,000,000 that this institution will receive.

I was pleased to hear the Minister for Labour and National Service (Mr. McMahon) say that no bank worried very much about its capital but about its ability to get deposits. The Government is restricting so fundamentally the ability of this Development Bank to get deposits that it is not a bank at all. It is simply a very limited rolling fund that will not go very far to produce the basic development for small people in secondary and rural industries which are so necessary in Australia.

Finally, I submit that those who challenge us at all times by saying that the quarterly adjustment of the basic wage is a vicious system should consider why they do not regard increasing interest rates as a vicious principle. Why is that a virtuous principle? Competition in interest rates is going on in Australia, unabated. That is one of the things - indeed the first thing - which, in my view a banking system ought to be doing something to control. All the present banking system seems to do is condone the ever-increasing interest burden on the Australian community. I suggest that it is time the Government diverted a little of the criticism which it devotes almost entirely to the wage earner, in the direction of the usurers.

Mr ANDERSON:
Hume

.- Nobody could doubt the sincerity of the honorable member for Melbourne Ports (Mr. Crean), but I am sure that honorable members realized what heavy weather he was making in putting the case for the Australian Labour party. Every member of the Opposition who debated the banking legislation last session spoke ad nauseam, as they have done in this debate, but they avoided the Government’s proposal to divide the functions of the present Commonwealth Bank and set up the Commonwealth Banking Corporation.

The honorable member for Melbourne Ports referred to Labour’s banking policy, but he should realize that there is no country in the free world which has a banking policy comparable to the Labour idea. That idea comes from behind the iron curtain. There is no country, with the possible exception of Egypt, whose banking system the Labour party would like to apply to Australia. The honorable member said that the Government had no right to make fundamental changes in the banking system. I would remind him that in 1947 the Labour Government, without any mandate from the people, proposed to change completely the banking system that had been in operation in Australia since federation. To my mind there is no possible doubt about Labour’s purpose. It is to attack any banking reform. The Labour party is socialist. Honorable members opposite could call themselves socialists, but socialism is an attack on our way of life. I recall that Lenin was a socialist primarily and a

Communist secondarily, and he said, “ The first thing you must do to bring in socialism is to control the banks “. That has been Labour’s policy since 1921.

The Leader of the Opposition (Dr. Evatt) charges the Government that these changes in the banking system were being effected to repay our financial backers, the banks. What proof has he of that assertion? It was repeated by the honorable member for Melbourne Ports. The Leader of the Opposion is reputed to be a lawyer of some distinction, and he should know that people do not make charges unless they can bring some proof of them. During the last Parliament the banking legislation was debated both in this House and in another place, and although a similar charge was made against the Government no Labour member ever brought proof of it. The simple fact is that no such proof exists, and to my mind it is contempt of the public intelligence to make such a charge without a vestige of proof. If any subsequent speakers from the Opposition side can produce such proof they should do so and expose the Government parties to the general public. But of course they cannot do that, because no such proof is to be found.

Have the private banks any reason to fear the present set-up? That is a question which the Opposition is entitled to ask this Government. Of course, the answer is that they have nothing to fear under the present circumstances. The honorable member for East Sydney (Mr. Ward) not only in public debate but also in television interviews has said that Labour will nationalize the banks. Is not that still the policy of the Australian Labour party? If it is the objective of the Labour party to nationalize the banks, are not the private banks entitled to take some measures to protect themselves against nationalization? Of course, they are. There is no question that the honorable member for East Sydney, who has the backing of nearly half the members of the present Opposition, has openly stated that if the Labour party is elected to office it will nationalize the banks. I notice that members of the Opposition who so often interject do not answer that suggestion. If they did, we would know who voted for the honorable member for East Sydney and who voted for the present Leader of the Opposition.

Members of the Opposition continually attack the private banks for having a profit motive. The profit motive is the mainspring of the capitalist system. There is nothing in that to be ashamed of, but honorable members opposite try to give the profit motive an ugly twist just as the socialists try to give the capitalist system an ugly twist. The capitalist system is the only one that has been devised which has given man his freedom. No other system has been devised by man under which he can call himself free. But the socialists regard the capitalist system and the profit motive as ugly things. Every honorable member opposite is actuated by the human instinct and desire for profit. There is nothing wrong or dishonorable in profit. The fact that private banks go for profit means that they can only make it in a prosperous nation.

I cannot understand how Labour members of Parliament, who boast overseas and in other places about the wonderful life in Australia, try to bring down our national institutions on every possible occasion. If a firm has more than three partners they regard it as big business which is ugly and deceitful. A private bank, which is made up of many small shareholders and a national institution, is also big business and must be brought down. Do honorable members opposite like the Australian way of life? No one on the Opposition side answers or interjects in reply. Yet, every time honorable members opposite have the opportunity they attack our national institutions.

It is interesting to know that most honorable members opposite do business with private banks. I doubt if one would find one Labour member dealing with the Commonwealth Bank. The Leader of the Opposition said that it was hypocrisy to say that the private banks were suspicious of the central bank because it could not be impartial while it had a trading division. Well, surely that is reasonable. If the people who control you have a competitor of yours also operating under their control, they can pass information from one side to the other. It would be the same, in my opinion, if the employers’ federations had the right to deal with the Arbitration Court. Would the trade unions like that? Exactly the same thing applies when you have a central bank linked with a trading bank competing with the other trading banks.

The Leader of the Opposition made an extraordinary charge about the banks helping the big corporations but not the small man, and being run by the big corporations. This is the constant theme of the Labour party. Its members always talk about the big man, about big business grinding down the poor helpless little man. What proof have they that that is the case? Are not big corporations made up of thousands upon thousands of small shareholders? Of course, they are. Where does the Australian with money to invest put it? Must he always put it into government bonds? Cannot he support industry? Cannot he offer his capital as risk capital in oil exploration, or oil shares generally, or in General MotorsHolden’s Limited? Is it a bad thing if he does?

Mr Bryant:

– But he does not have control of them.

Mr ANDERSON:

– The honorable member says that the small shareholder does not have control of the companies into which he puts his money. If his funds are going into a company, he can appoint the people who will control the company. Is there anything wrong with that? Honorable members opposite just do not like our system. They go overseas and boast about conditions in Australia, comparing them with conditions in Yugoslavia, Hungary or somewhere else, and saying what a wonderful life people in Australia live, but here in the National Parliament they do everything they can to decry our system.

One could easily make a speech formed entirely of answers to what honorable gentlemen opposite have said. The Leader of the Opposition quoted Dr. Coombs, the Governor of the Commonwealth Bank, to the effect that the private banks had failed to comply with the request made in 1953 for restraint in advances. The Leader of the Opposition said that that was a direct cause of inflation - that the lack of restraint on the part of the private banks, which they showed by increasing their advances, brought about highly inflationary conditions. But I remind everybody who heard the policy speech made by the Leader of the Opposition during the last election campaign of what the right honorable gentleman said on that occasion about all the marvellous things that credit expansion would enable a Labour Government to do with the aid of the Commonwealth Bank. A tremendous amount of this and that in the field of public investment was going to be done by the use of expanded credit through the Commonwealth Bank. Surely that would have been highly inflationary. Or is it only when credit is expanded by the private banks that expansion of credit is inflationary? The right honorable gentleman cannot have it both ways. Surely the honorable member for Melbourne Ports (Mr. Crean), who preceded me in the debate, must be very shy about the claims his leader made during the election about what the Commonwealth Banks could do.

One point on which the Labour party keeps harping is that the separation of the Commonwealth Bank’s central banking activities from its trading activities weakens the bank. But anybody who examines all the speeches made on this topic by honorable members opposite will find that they contain not one concrete argument to support their theory. Other members of the Opposition will speak later in this debate. I challenge them now to give in their speeches one concrete reason why this separation should weaken our national banking system. Is there one possible argument to support their contention? If there is, why not use it? They do not do so, because there is no such argument.

There is this point: Is there one country in the world outside the iron curtain, other than Australia and Egypt, in which a central bank has a trading division? A great many countries have banking systems that seem to work satisfactorily, but only ons other country - Egypt - has a system like ours in which a central bank operates a trading division. Speakers on the Opposition side will have an opportunity to point to the large number of people who follow the banking system that they advocate, but all these people are behind the iron curtain.

The Leader of the Opposition said how evil it was of this Government to allow private savings banks. His theme was that these were wicked institutions which competed with the Commonwealth Savings Bank. According to him, there was ample room in the Commonwealth Savings Bank for all savings. But why cannot citizens put their money where they want to put it? Deposits in the private savings banks have risen, in the short time in which these savings banks have existed, to £179,000,000. The people who own that £179,000,000 could have put their money in the Commonwealth Savings Bank had they wished to do so.

Do honorable members opposite think that it is a bad thing to encourage savings? Here is a total of nearly £200,000,000, saved by people who deposited it in private savings banks because they preferred to lodge their money with the private banking system. But the socialist party says that these people have no right to put their money where they want to. They have to put it where the State wants them to put it, so that the State may use it as it pleases. That is the sort of thing that happens behind the iron curtain.

It is extraordinary how socialist thinking always runs along this track. Perhaps the next speaker on the Labour side will explain why it is bad for citizens to have the right to put their money where they want to put it. Is it not their money? Is it not safe in a private savings bank? In four years, since the private savings banks were established, citizens have deposited nearly £200,000,000 in them, besides the enormous amount of money deposited in the Commonwealth Savings Bank All that money is going to help production in Australia. The one thing that a young country wants is savings, but when the Government provides more opportunity for people to make savings, the Government is all wrong, according to the Labour party.

We had an impassioned address from the Leader of the Opposititon. I can understand why his speech was impassioned. The reason is that he has nothing detrimental to say about the Government’s proposals that has any real basis. He talked about staff changes in the proposed Commonwealth Banking Corporation. No hardship to the staff is implied in this legislation. They will all get the maximum we can do for them. On the demarcation issue, why should not the staff belong to two services? The Labour party has much concern with demarcation issues in the trade union field. If one type of worker on a ship wants to make a hole in a plank on the deck, he must not do so. He has to wait until a worker in another trade, who is a member of another union, comes along and makes the hole, and in the meantime the ship is held up at considerable cost. But the Labour party will not agree to any line of demarcation between the central bank and the trading bank. The more you study Labour thinking the more you realize the enormous amount of humbug that comes from honorable gentlemen opposite.

I have read the “ Hansard “ reports of speeches made by honorable members opposite on the banking legislation introduced by the Government on several occasions since 1950. All these speeches contain charges that the Government is attempting to destroy the people’s bank. “ Hands off the people’s bank “ was the cry at the general election in 1951, again at the general election in 1954, and again at the last general election. Let us see how we have destroyed the Commonwealth Bank.

In 1950 the Commonwealth Bank had 423 branches; in 1958, eight years later, it had 649 branches - an increase of 226 branches. That is destroying it, is it not? That is art increase of only 50 per cent, in eight years. When we came to office in 1950 the Commonwealth Savings Bank had 4,642 branches and agencies. To-day it has 6,844 branches and agencies, an increase of 2,202 in eight years. That is great destruction! The business transacted on the trading side of the Commonwealth Bank in 1950 was represented by deposits of £84,000,000. To-day these deposits total £272,000,000. In 1950 trading advances by the Commonwealth Bank totalled £62,500.000. To-day they total £118,000,000, which is almost double. Yet what we hear from honorable members opposite on the election platform and the hustings is how this Government is out to destroy the people’s bank.

Let us see how the activities of the Commonwealth Bank have grown since 1950, when we came to office, in comparison with the activities of the major trading banks. In 1950 the Commonwealth Bank had 7.7 per cent, of deposits; to-day it has 13.6 peT cent., which is nearly double the previous figure. That growth has taken place under this Government. We believe in the Commonwealth Bank, but we also believe in the private banking system. There is room for all. The Commonwealth Trading Bank to-day has 600.000 customers, and the Commonwealth Savings Bank has- 5,100,000 active accounts. In the last seven years savings in the Commonwealth Savings. Bank increased by £200,000,000. That is. a history of steady and enormous progressThat is the history of a great institution expanding in a great country. The Leader of the Opposition referred in glowing terms to the progress that had been made by this magnificent institution. He did not mention that this progress was madeduring the period of control by the bank, board. When the board was re-established in 1953 there was talk about polo players, and disaster. But this enormous progress has been made during a period when the governor of the bank has been supported by the bank board. Remember how Labour speaker after Labour speaker said what a retrograde step it was to bring in polo players, and so on! I should be very embarrassed if I were a Labour man.

I want to return to one of the most important provisions in the legislation. I believe that the central bank will be stronger for being completely divorced from the trading division. Say what one likes, the private banks were completely justified in regarding with suspicion access to their records by a competitive bank. I support the attitude of the private banks in this regard. The change in which I am most interested is in the establishment of the Development Bank. This type of bank is most urgently needed in Australia. At present, the secondary industries, by virtue of the enormous investment at their disposal, are making splendid progress. We must have secondary industries in order to have a rapid increase in our population. But primary industry is of more importance than ever to our national economy. I cannot see secondary industries being able for years to earn the overseas capital that is necessary to support them in the importation of raw materials and plant.

Primary production is suffering severely because of falling prices and rising costs. The basic wage in secondary industries can be increased easily, but a primary industry is bound by its market. It cannot pass increases in costs on to the customer. How is industry to deal with this cost factor? Small farmers can reduce costs by sacking people and working harder, but that is a negative approach. The best approach is the attainment of greater efficiency, which requires more capita). Let me give an illustration. A farmer who has old machinery is not efficient. For new machinery he needs more capital. If his pastures are not improved, he is not efficient, but four or five years must pass before he gets the full return from pasture improvement. That is the sort of underlying which joint stock banks and the Commonwealth Trading Bank are not suited to finance. Agriculture, because it is a longterm undertaking, requires finance at low interest for long periods. Slowly, as the years pass, the benefit is reaped. That is a most important factor.

Many primary producers can attain greater efficiency. There is no question about that. But greater efficiency requires more capital, and a development bank is much needed to-day. I agree with the view of the honorable member for Melbourne Ports (Mr. Crean) that the initial capital is not sufficient, but the Treasurer has said that the early stages will be experimental and that capital will be increased as the need arises. The report of the Commonwealth Bank for the year ended June, 1958, shows that the Mortgage Bank Department “has been doing similar work to that which will be done by the Development Bank, and that there was an active demand by primary producers for long-term mortgage facilities. This type of financing ties money up for some time, and consequently a fair amount is required. I am convinced that primary industries now need more capital, and that they can develop only if they obtain it.

Development means much more than higher production and lower costs. I stress the urgent need for water supplies. Every river and every creek should be dammed and weired. Every primary producer should be encouraged to diversify his farming. In the dairying industry are people who confine their activities entirely to dairying. To my mind it is a very unhealthy practice to have only one string to your bow. I believe that with the provision of proper finance from the Development Bank, these people could be encouraged to engage in other industries. In certain districts dairying could be combined with tobaccogrowing, and in other districts with cottonfarming. But this requires capital. If a commercial concern wishes to obtain more capital it can float it in the share market, but there are thousands and thousands of small businesses - one-man farms, partnerships, and pastoral companies - that need finance but cannot finance themselves through the stock exchage in the manner of a corporation or commercial business. They rely entirely on bank finance. That is one of the drawbacks at the moment. Much more money could be injected into primary industry without causing inflation, because much of it would be spent, apart from wages, on plant, and this expenditure would increase production in manufacturing fields.

In this second-reading debate I ask Labour speakers to reply to some of my questions instead of rambling widely. Let them prove the charge that this legislation is a pay-off to the banks and that the central bank will be weakened by separation. Let them prove that there is not an urgent need for a development bank. I have not heard anything in the debates on this legislation in this House and the other place to justify any criticism of the banking proposals of the present Government. I believe that we can look forward to an era of great progress when this legislation is passed.

Mr BARNARD:
Bass

– The honorable member for Hume (Mr. Anderson), concluded by suggesting that members from this side of the House might reply at some stage of the debate to some of the arguments that he has advanced. I say at once that so far as I, and 1 am sure all other honorable members who sit on the Opposition side, are concerned, no real argument was advanced by the honorable member for Hume. He dealt with some irrelevant matters which, in my opinion, have nothing at all to do with the serious situation that will develop as a result of the legislation which we have before us. He spent some time in indicating how successful the Commonwealth Bank has proved to be in the past. We, of course, entirely agree with that point of view. I believe that it says a great deal for the administrative capacity of those officers who control the central bank of the Commonwealth Bank of Australia that they have been able to progress in the face of opposition both from this Government and from the private banking system. And so, Mr. Deputy Speaker, I leave the speech made by the honorable member for Hume because, as I have said, I do not think that he advanced any valid argument that need be dealt with by me at this Stage.

I believe it may be said that the legislation now before us, as was indicated earlier this evening by the Leader of the Opposition (Dr. Evatt), constitutes beyond doubt one of the most important groups of measures that this Parliament has had to discuss for many years. The Government’s banking legislation was first introduced in this Parliament in October, 1 957, and, of course, was subsequently defeated in another place. It was again introduced by an optimistic Government in March, 1958, and on that occasion it met with a similar fate. So it is with us again for the third time early in 1959.

I said at the outset that this legislation must be regarded as extremely important, primarily because of the far-reaching effects that it will have on the future role of the Commonwealth Bank of Australia. Irrespective of what has been said by the honorable member for Hume, this institution, since its inception, has been regarded in the highest possible light by the people of this country. It is an institution which, moreover, has a proud record in Australia, not only for the assistance that it has rendered to all governments regardless of their political beliefs, but also for the assistance that it has been to the country in two great world wars. To-day, we have this legislation which is revolutionary in character and which provides for far-reaching alterations to the structure of the people’s bank. In fact, there is none of the elements of the Commonwealth Bank as we know it to-day that will not be seriously affected by this legislation.

The Leader of the Opposition has indicated, quite clearly, quite frankly and quite truthfully, that the Government has moved in this matter not because the bank has failed to function in the past in the way in which it was originally intended to function, not because it has failed to give a lead, so far as this Government would allow it to do so, in maintaining a measure of economic stability in this country during an extremely difficult post-war period, or not, for that matter, because it has been successfully used in the past by Labour administrations to maintain Labour’s expressed policy of full employment. I do not think that the Government decided to press ahead with this legislation for any one of those reasons. The Government has embarked upon its present course of action merely because the private banks and a number of members who sit on the Government side of the House, and who have some interest in these matters, have pressed it to do so. The reason for the point of view expressed by the Leader of the Opposition in that respect was definite and clear, and in my opinion that view contains a great measure of truth. The central bank - the Commonwealth Bank of Australia - will in future be known as the Reserve Bank of Australia. Even the name of this great institution which has become part of the Australian landscape in every city and every town has to go in this plan to divide and weaken the Commonwealth Bank. I believe that, in one sense, a monopoly of vested interests has combined on this occasion to dictate terms to the Government, regardless of the public interest or the public welfare in this matter.

I think that most honorable members will recall a booklet that was published by one of the major investment companies in Australia, and which was circulated to all honorable members. It contained a report of the company’s twentieth annual general meeting, and it clearly set down the lead given by the private banks of this country in pressing the Government to make what the private banks regarded as necessary alterations to the central bank - in the interests, not of the public or the country, but of the private financial institutions. I think that I should read a passage from this booklet to honorable members, because it clearly indicates the lead that was given by the private banks in this matter, and by some members who sit on the Government benches and who pressed the Government to amend Labour’s banking legislation of 1945. The company to which I refer is the Capel Court Investment Company (Australia) Limited. The chairman, in his report to the twentieth annual general meeting of the company, said -

The early attempt to fob off the private banks with more apparent than real reforms was not tamely accepted, and vigorous endeavours were made in 1952 to bring about the creation of a genuine Central Bank.

It was to be a genuine central bank in their opinion, of course, but there has been no agitation on the matter by the general public. There has been no agitation by the 500,000 people who have sufficient faith in the Commonwealth Trading Bank to bank with that institution. There has been no agitation by these sections of the Australian public, but there has certainly been agitation by the private banks. The chairman of the company continued -

The general views of the banking and financial community were then cogently expressed by the then President of the Bank of New South Wales.

The chairman was putting the attitude that had previously been expressed by the president of the Bank of New South Wales. He then dealt with other matters related to the topic that I am discussing now, and concluded with the following statement: -

Revival of the fight occurred when a strong section of the Parliamentary Liberal party made strong demands upon the Prime Minister.

If I remember correctly, the strong demands were originated by the honorable member for Macarthur (Mr. Jeff Bate), who, as most honorable members will recall, endeavoured to move in this House a motion designed to give effect to those demands. This indicates quite clearly the actions taken by the private banks in pressing their demands on the Commonwealth Government to amend the 1945 banking legislation. So I believe it may be quite fairly stated that the Government has embarked upon this course of action merely because the private banks and certain sections of the Liberal party of Australia have demanded that it do so.

Personally, I am not convinced that the kind of central banking functions required by the private banks of this country is likely to prove to be in the best interests of the community. The banks, as we all know, exist primarily to make profits, and the higher the profits the more successful are the banks considered to be from the standpoint of the investors who have put money into them. We can say at once that, in recent years, the private banks have not done so badly, because they have disclosed that, in the financial year 1951-52, their profits were £10,500,000. By 1954-55, they had risen to £14,600,000. So we can agree that the private banks, in the intervening period, were able to make substantial profits. We acknowledge at once that the private banks exist to make profits. We know that they must borrow money at one rate of interest and lend the same money at a higher rate of interest. I suppose that that is a recognized fundamental principle of the private banking system, and it is quite all right - so far as it goes, and provided that we do not overlook the fact that interest rates have an extremely important bearing on the economic progress of this country. The importance of that point, I believe, Mr. Deputy Speaker, is substantiated to a degree by many of the serious economic difficulties in which we find ourselves to-day. There is the balance of payments problem. There is the fall in our export income.

We all remember that, several years ago, in this Parliament, the Prime Minister (Mr. Menzies) announced that he was arranging a conference of the parties interested in the question of interest rates. The conferences were held in Canberra and were subsequently reported to have been highly successful. At that time an appeal was allegedly made to these groups to exercise some restraint with regard to interest rates. As a consequence of those conferences, we have had the spectacle in recent years of hire-purchase companies competing with each other to achieve the maximum in interest rates. That position was referred to earlier this evening by the Leader of the Opposition. The hire-purchase companies have been competing with each other to achieve a high rate of interest. In this respect the private banks cannot entirely dissociate themselves from that dangerous practice, because most, if not all, of them have a controlling interest in the hirepurchase companies of this country. That point of view, of course, is upheld by the Government. It is naturally upheld by the private banks, because it suits their purpose to channel money into the hire-purchase companies, where the return is much greater than from normal investment.

The attitude of the private banks is summed up in the October, 1958, issue of the “ Quarterly Survey “ of the Australia and New Zealand Bank Limited. The report indicates that the private banks themselves have gone into the hire-purchase business and so far as they are concerned they intend to remain there. The report states -

The reaction of the trading banks to this new set of circumstances, when it came, was definite and to the point. All the major trading banks entered into close association with a hire purchase institution, by acquiring a share in the capital structure, or, in one case, by establishing a wholly-owned subsidiary.

This step was logical. Hire purchase is a rapidly growing field of activity, closely associated with banking.

The report concludes by saying -

Finally, close association with a hire purchase organization has enabled the banks to add a further substantial service to the growing list of services offered by them to attract the public.

So, the point of view expressed there is that the private banks have, for one reason at least, entered into the hire-purchase business in this country. That purpose is merely to attract additional customers. If we are to be faced with a situation in which the private banks can increase interest rates in this country, with all the damage that trend has caused in the past and will no doubt cause to our financial and economic structure in the future, merely because they are endeavouring to attract further customers, I suggest at once that it is time the Government took some positive action in the matter.

Mr Bury:

– The interest rates that may be charged by the trading banks will be completely controlled under the new legislation.

Mr BARNARD:

– I have heard that argument advanced by the Government, and I have heard the States say that it is not possible for them to control interest rates and hire-purchase activities. If a referendum is needed to solve this problem, the Government has had ample time to hold such a referendum. The Government has taken no action in this matter because it is not prepared to offend the people who have controlling interests in these hire-purchase organizations, primarily the private banks. The former Treasurer released figures to show that most, if not all, of the private banks have a controlling interest in hirepurchase companies. As is indicated in the report which I have cited, one of the private banks holds 100 per cent, of the shares in the Esanda hire-purchase company. That is the position which has arisen in recent years despite the fact that the Prime Minister called a series of conferences, which were supposed to be an appeal to those groups to exercise some restraint with respect to interest rates. Nevertheless, those groups have continually increased interest rates.

I heard the Minister for Labour and National Service (Mr. McMahon) say this evening, in reply to the Leader of the Opposition, that the Opposition was opposed to hire purchase. I say at once that the Opposition is not opposed to hire purchase. Indeed, Labour’s policy speech in 1958 made the position quite clear. We stated that if Labour was elected to the treasury bench, we would enter the hire-purchase business through the Commonwealth Bank. We would not only engage in the hire-purchase business that is being indulged in by the private banks, but also we would provide marriage loans to young couples. So, with regard to hire purchase, our position is clear. If elected to office, Labour would have entered the hire-purchase business by establishing a. special branch of the Commonwealth Bank..

Of the fourteen measures before the House, only four may be described as principal bills. The first, the Reserve Bank Bill, is intended to create a new institution that will perform precisely what are now know-i as central banking activities and which, again in the opinion of the Treasurer, will come into existence merely because there has in the past been a lack of co-operation on the part of the private banks on the one hand and the central bank on the other. But if there has been a lack of co-operation, that has not been due to the fault of the Commonwealth Bank. The Commonwealth Bank, as the central bank, has in my opinion: been most generous in its approach to the needs of the private banking system. But the private banks have in every way failed to respond to that co-operation. The private banks object to the link that to-day exists between the central bank, the Commonwealth Trading Bank and the Commonwealth Savings Bank. Therefore, in the opinion of the private banks, the Commonwealth Bank must be separated, and with that principle this Government has acquiesced. In doing that the Government completely ignores the point of view expressed in the report of the Royal Commission on Monetary and Banking Systems. Broadly, that report indicates that whilst it may be unusual for a central bank to engage in trading bank activities, the commissioners, thought it desirable that the centra! bank should do both. The report further stated that through its trading bank activities the central bank possessed powers of competition with the trading banks generally. There, I submit, is one further reason why this Government is embarking upon this particular course of action. No one could seriously suggest that the Commonwealth Bank has ever been guilty of unfair competition. Yet this Government, which constantly asserts that is stands for free enterprise, and therefore freedom of competition, chooses to ignore the convincing and deliberate assessment of the royal commission in respect to the proposed division of the Commonwealth Trading Bank.

The royal commission further stated that in its considered opinion the present structure of the central bank was essential if that institution was to function successfully. As I have said, nobody could seriously suggest that the Commonwealth Trading Bank has ever been guilty of unfair competition. The private banks object to any sort of competition and to the fact that the central bank is proving to be too successful. As a gesture to the Country party, the Government proposes to combine what is now familiarly known as the Mortgage Bank Department and the Industrial Finance Department to comprise the new Development Bank. In the enthusiastic opinion of honorable members on the other side of the House, this will provide unlimited opportunities for new businesses to commence operation. I agree with the honorable member for Hume that if, in point of fact, this is to mean a new era for those who wish to secure finance to engage in business activities, it will undoubtedly receive general support. But if I remember correctly, the Liberal and Country parties said precisely the same thing in 1949. What was their slogan in those days, as advertised in the press throughout Australia? It was, “ Small businesses will be encouraged. Generous financial assistance will be accorded to those people who desire to establish themselves in business enterprises in this country “.

What has happened since 1949, despite the fact that this Government assumed office under the best possible conditions? It must be remembered that no Government has had greater opportunities. In the intervening years, despite the promises of the Liberal and Country parties in 1949 and despite their assurances that unlimited finance would be available for small business people, thousands of them have been, and still are being, forced out of production because of a lack of finance. It is perfectly clear that the functions that will be performed by the new Development Bank are already possible under the powers that are to-day vested in the central bank. The powers are there; they exist under the 1945 legislation. 1 believe that point was made perfectly clear by the honorable member tor Melbourne Ports (Mr. Crean). If such powers cannot be exercised under the existing legislation, all that is required is a few minor amendments. Indeed, we remember quite clearly that in the days of the Chifley Government, a man engaged in rural production, who desired to purchase a tractor or some other implement for rural activities, could secure the finance through the Commonwealth Bank of Australia. But when this Government came into office, it abolished those privileges. Now the Government says it will provide unlimited opportunities through the new Development Bank. We on this side of the House remember the promises that were made by this Government in 1949 when it was in opposition. The fact remains that under Labour’s 1945 legislation the Government has had unlimited opportunities since 1949, but has failed to take advantage of them.

We are not opposed to the Development Bank as such. We are opposed to the Development Bank merely because it is part of the legislation that is aimed at the ultimate destruction of the Commonwealth Bank of Australia. I believe that the former Treasurer, Sir Arthur Fadden, by his actions and statements in the Parliament during the period in which negotiations were being conducted at the Cabinet and private bank level, made it perfectly clear that in his opinion the separation of the central bank, as proposed in this legislation, was no more than a form of political blackmail. It was one further demand made by the private banking system through its agents in this Parliament - the members who have exercised some influence on the Cabinet. It represented no more than a further successful application of the pressure that was applied in 1951, and, if I remember correctly, in 1953 to secure amendments to the banking legislation.

The Opposition is proud of the record of the Commonwealth Bank of Australia. We established it more than 40 years ago, and we believe that it has functioned successfully in the interests of all governments, in peace-time as well as during two great wars. The Treasurer, in his secondreading speech on the Reserve Bank Bill, said -

The operation of the banking system goes to the very root of the national well-being, and it is vitally important that the system should at all times work with maximum efficiency and harmony.

The Opposition agrees entirely with that sentiment. We believe that it has so operated in the past and, under the 1945 legislation, could continue to operate in that way in the future. But this Government, through its agencies, aims to destroy the Commonwealth Bank of Australia and its ability to promote well-being in the economic life of the community.

Debate- (on motion by Mr. Joske) adjourned.

House adjourned at 10.36 p.m.

page 468

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Colombo Plan

Mr Ward:

d asked the Prime Minister, acting for the Minister for External Affairs, upon notice -

  1. What has been Australia’s contribution in each year to expenditure incurred under the Colombo plan?
  2. Under what conditions is aid comprising industrial or agricultural equipment made available?
  3. Is it retained and used by the Government of the receiving nation or sold or given to private producers?
Mr Menzies:
LP

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

  1. Expenditure incurred each year by Australia under the Colombo plan is as follows: -
  1. Aid comprising industrial or agricultural -equipment is made available in response to formal requests from member governments in South am South-East Asia. In making these requests governments specify the uses tor which the Australian equipment is desired. Requests are considered in the light of our financial resources and availability from Australian production. The Australian Government attaches no formal conditions to gifts made to requesting governments under the Colombo plan.
  2. Equipment is normally requested for use by government and semi-government agencies and public institutions such as universities and hospitals designated by the Government concerned. We expect the equipment to be used by the designated bodies and not sold or otherwise disposed of.

Taxation

Mr Uren:
REID, NEW SOUTH WALES

n asked the Treasurer, upon notice -

What was the loss of revenue to the Australian Government from 1st July, 1954, to 30th June, 1958, under the reciprocal agreement with the Government of the United States of America which is enacted in the Income Tax (International Agreements) Act 1953-1958?

Mr Harold Holt:
LP

– It is not possible to assert that there has been any actual loss of revenue - it is quite conceivable that the revenue from income covered by the double tax agreement has even increased since that agreement was concluded. It cannot be assumed that all the transactions that have taken place since the double tax agreements were concluded would have occurred had the agreements not been made. Statistics upon which calculations could be made with or without such assumption have not been kept.

Sales Tax

Mr Crean:

n asked the Treasurer, upon notice -

  1. How many statutes are there in force with respect to (a) the assessment of and (b) rates of sales tax?
  2. What are the principles which necessitate the variety of these acts?
  3. How many separate rates of sales tax were in force during each year since its introduction?
  4. How many separate rates are in force at the present date?
  5. What were the collections of tax under each rate (a) up to the last month of this financial year for which figures are available and (b) during each of the financial years since its introduction?
  6. Does the statistical information compiled by the Taxation Department enable accurate calculation of the amount of tax paid on particular commodities or articles?
  7. Do the principles of assessment allow for certainty when computing the tax payable (a) on goods used in the course of manufacture and (b) when goods subject to tax form only part of the sales of a taxpayer?
Mr Harold Holt:
LP

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

  1. There are nine sales tax assessment acts and nine rates acts. There is also an act known as the Sales Tax Procedure Act 1934-1953 which is designed broadly to facilitate procedure where transactions involving more than one Assessment Act are concerned. There is also the Sales Tax (Exemptions and Classifications) Act 1935-1957 which specifies goods falling into the various categories for assessment and rating purposes.
  2. Section 55 of the Constitution provides that laws imposing taxation shall deal with one subject of taxation only. The sales tax legislation is concerned with more than one type of transaction. It applies, inter alia, to sales by manufacturers, sales by wholesale merchants, certain importations of goods, leasing of goods, and application of goods to the use of certain persons. For the purposes of the initial drafting of the legislation, the opinion of eminent counsel was obtained as to the meaning and effect of section 55 of the Constitution, and it was on counsel’s advice at that time that it was concluded that the nine assessment acts and the nine rates acts were necessary.
  3. The following rates have been in force since the inception of the tax: -
  4. Five rates - see answer to question 3 above.

  5. It is not practicable to dissect actual receipts of sales tax according to the sales tax payable at each rate of tax. However, the following estimates have been made of collections of tax under each rate: -

    1. Estimated collections of sales tax from 1st July, 1958, to 31st January, 1959-

  1. See attached statement.

    1. No, because many sales tax returns do not show details of sales of specific commodities or articles.
    2. Yes, but, as a general rule, goods used in the course of manufacture are not subject to sales tax, being exempt as raw materials or aids to manufacture.

  2. Estimated sales tax collections (financial years 1930-31 to 1957-58) -

St. Mary’s Filling Factory

Mr Cope:

e asked the Minister for Supply, upon notice: -

  1. What was the value of production at the St. Mary’s ammunition filling factory from its opening date until 31st December last?
  2. How many employees are engaged at the plant?
  3. ls the plant working at full capacity; if not, when will it do so?
  4. What is the estimated number of employees which will be required when the plant is in full production?
Mr Hulme:
LP

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

  1. The value of production in the first year of operation was approximately £362,000.
  2. Present employment is 560.
  3. No. This is a war factory. When it will work at full capacity depends upon Services needs.
  4. About 1,500 per shift.
Mr Ward:

d asked the Minister for Supply, upon notice: -

  1. What was the final cost of construction of the St. Mary’s ammunition filling factory?
  2. What is the greatest number of employees who have worked in this establishment since it commenced operations?
  3. What has been the value of production since the factory was completed?
Mr Hulme:
LP

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

  1. The net cost of construction of the factory as shown in the architects’ certificate of final completion was £25,827,000.
  3. The value of production in the first year of operation was £362,000.

Papua and New Guinea

Mr Ian Allan:
GWYDIR, NEW SOUTH WALES

n asked the Minister for Territories, upon notice -

  1. What costs, including expenditure on capital works, were incurred by all departments in the maintenance of the Territories of Papua and New Guinea during the last year for which complete figures are available?
  2. What was the value of (a) exports, and (b) imports in respect of the territories during the same year?
  3. What is the extent of the unused arable land available for settlement by native peoples?
  4. What is the estimated population of these territories (a) at present, and (b) twenty years hence?
  5. What is the estimated amount of capital required (a) at present and (b) twenty years hence to raise standards of living?
Mr Hasluck:
LP

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

  1. The total expenditure by the Administration of Papua and New Guinea for the year 1957-58 was £15,516,000, including £3,479,000 on capital works and services and £1,446,000 on maintenance of works and services. The Commonwealth grant provided £11,283,470 and the balance of £4,222,530 came from local sources of revenue. In the same period, the Commonwealth Departments of Civil Aviation, Works, Interior and National Development spent approximately £1,400,000 of which £500,000 was on capital works. 2. (a) Exports, £12,404,100. (b) Imports, £20,238,770.
  2. Of the total land area of the Territory of 117,465,600 acres only 3,236,686 acres have been alienated for Administration use, European settlement and other purposes, leaving 114,228,914 acres of native-owned land. It is estimated that about fifteen per cent, of this land (or about 17,000,000 acres) is arable, but because of the shifting agricultural methods followed by the natives it is not possible to estimate how much of this arable land is unused and available for native settlement.
  3. (Estimated at at 30th June, 1958)- (a) 1,804,790 indigines; 23,628 Europeans, Asians and others; total, 1,828,418. (b) No accurate estimate can be made mainly because of lack of basic data and the shortness of the period and the limited area in which population trends have been observed, but an increase is expected.
  4. The terms of the question are not definite enough to allow any precise answer to be given. Considerable capital expenditure will be required both on the pubic account (e.g. hospitals, schools, housing, roads, bridges, drainage, &c.) and on the private account (e.g. in developing industres to provide remunerative occupation for the people) in order to make any major permanent improvement in the standard of living.

International Labour Conference

Mr Whitlam:
WERRIWA, NEW SOUTH WALES

m asked the Minister for Labour and National Service, upon notice -

What action has the Government taken to ratify the two conventions adopted at the International Labour Conference last May?

Mr McMahon:
LP

– The answer to the honorable member’s question is as follows: -

The two conventions adopted at the Forty-first (Maritime) Session of the International Labour Conference held in Geneva between 29th April and 16th May, 1958, are at present being examined by the departments and authorities concerned. When that examination has been completed, a statement of the action taken or proposed to be taken will be presented to the Parliament.

Commonwealth Migrant Hostels

Mr Ward:

d asked the Minister for Labour and National Service, upon notice -

  1. What is the present scale of charges to immigrants accommodated in government hostels?
  2. What is the regimen of foodstuffs included in the hostel menus?
  3. What are the general details and standard of accommodation provided for immigrant families residing in these hostels?
  4. What is the usual waiting time before immigrants residing in hostels are supplied with alternative accommodation?
Mr McMahon:
LP

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

  1. Tariff charges for board and lodging at Commonwealth migrant hostels are as follows: -

    1. Workers. - Adult male, £4 12s. 6d. Adult female, £4 2s. Juniors (under 21 years) - (i) where the weekly nominal wage does not exceed £2, 15s. less than the nominal wage; (ii) where the weakly nominal wage exceeds £2, £1 5s. plus ls. per week for every 2s. by which the nominal wage exceeds £2 until the adult worker’s tariff is reached.
    2. Dependants. - Adult male or female, £3 ls. Juniors - aged 16 and under 21 years, £1 17s. 6d. Children - aged 11 and under 16 years, £1 lis. 6d., aged 5 and under 11 years, £1 5s.; aged 1 and under 5 years, £1; aged 1 and under, 10s.

In the case of a family the general rule is that the total charge for the dependants shall not exceed the amount of £3 15s. per week plus 2s. for every 5s. by which the nominal wage of the breadwinner exceeds £9 per week, provided that the breadwinner must be left out of his nominal weekly wage, after paying for board and lodging for himself and his dependants a minimum amount calculated as follows: -

Only one gainfully employed person in any family is, of course, in relation to this concession, regarded as a breadwinner for any dependants who are not gainfully employed.

Workers who elect not to take the hostel cut lunch, receive a rebate of 8s. 6d. per week.

  1. Menus are planned by a qualified dietitian and meals are prepared under the direction of expert catering supervisors. Special provision is made for young children, for expectant and nursing mothers, and for any resident for whom the medical adviser certifies the need for a special diet. Menus are framed to include dishes catering for the tastes of the various national groups. A typical week’s menu will be made available for the honorable member’s perusal if he so desires.
  2. The accommodation made available to a migrant family is based on the size of the family group and the ages and sexes of the children, and therefore varies from family to family. Dining rooms, washing, bathing, toilet and laundry facilities, child minding centres as required, and recreational facilities are provided on a communal basis.
  3. The average length of residence of migrants in the hostels is approximately eight months.

Cypriot Immigrants

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Minister for Immigration, upon notice -

Will you extend to British subjects living in Cyprus the same opportunities for entry to Australia as are at present extended to citizens of Italy?

Mr Downer:
LP

– The answer to the honorable member’s question is as follows: -

Cypriots are already eligible for entry to Australia, as unassisted migrants, on just the same basis as Italian nationals - and the nationals of other countries of Southern Europe. That is, they may be admitted as the spouses, other dependants, parents, fiancees or nances of residents of Australia, or as single women under 35 nominated by such residents. Australia has not, of course, entered into any agreement with Cyprus for the grant of assisted passages to Cypriots, nor is any such agreement contemplated.

Supplementary Rent Pension

Mr L R Johnson:
HUGHES, NEW SOUTH WALES

son asked the Minister for Social Services, upon notice -

How many applications for the supplementary pension allowance have been approved each month since the legislation became effective?

Mr Roberton:
CP

– The answer to the honorable member’s question is as follows: -

Provision for payment of supplementary assistance to age, invalid and widow pensioners was made in the Social Services Act No. 44 of 1958 which was proclaimed to come into operation on 15th October, 1958. Figures of the number of applications for supplementary assistance approved are available up to 5th January, 1959 only but the number approved in each calendar month is not available. The number of applications approved in each period for which figures are available is as follows: - From 15th October, 1958, to 27th October, 1958, 53,881; from 28th October, 1958, to 1st December, 1958, 10,906; from 2nd December, 1958, to 5th January, 1959, 3,931.

Mr Daly:

y asked the Minister for Social Services, upon notice -

  1. How many (a) age, (b) invalid and (c) widow pensioners at present receive the supplementary allowance of 10s. per week?
  2. How many of these pensioners are located in (a) each State and (b) Australia?
  3. What is the number of (a) age, (b) invalid and (c) widow pensioners in (i) each State and (ii) Australia?
  4. What percentage of pensioners at present receives the supplementary allowance in (a) each State and (b) Australia?
Mr Roberton:
CP

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

  1. The number of age, invalid and widow pensioners in the Commonwealth receiving supplementary assistance - (a) age, 51,231; (b) invalid, 9,692; (c) widow, 5,093.
  2. The number of age, invalid and widow pensioners receiving supplementary assistance in each State and in the Commonwealth -
  3. The percentage of pensioners in each State and in the Commonwealth receiving supplementary assistance - were those current on 19th January, 1959, and are the latest available.)
Mr Cope:

e asked the Minister for Social Services, upon notice -

  1. How many persons are in receipt of (a) age and (b) invalid pensions?
  2. What number of (a) age and (b) invalid pen sioners receive the supplementary allowance of 10s. per week?
  3. How many claims for the supplementary allowance have been rejected?
Mr Roberton:
CP

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

  1. As at 19th January, 1959- (a) 506,496, (b) 81,753.
  2. As at 19th January, 1959- (a) 51,231, (b) 9,692.
  3. Up to 5th January, 1959-31,146.

Pensions

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Minister for Social Services, upon notice -

What percentage of population in each State is in receipt of (a) a full age pension, (b) a part age pension, and (c) an invalid pension?

Mr Roberton:
CP

– The answer to the honorable member’s question is as follows: -

Percentage of population in each State in receipt of full rate of age pension, part rate age pension, and invalid pension:

Committees Appointed under Health Acts.

Mr Whitlam:

m asked the Minister for Health, upon notice -

  1. Under what acts have committees been appointed by him or his predecessors?
  2. When were the committees appointed?
  3. On what dates in 1958 did these committees meet?
Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

– Inquiries are being made and a reply will be furnished as soon as possible.

Commonwealth Offices, Adelaide

Mr Makin:
BONYTHON, SOUTH AUSTRALIA

n asked the Minister for the Interior, upon notice -

  1. When is it proposed to commence construction of the building to accommodate Commonwealth departments in the City of Adelaide?
  2. What is the (a) approximate date of completion and (b) estimated cost?
  3. What floor space will be provided?
  4. What departments will be accommodated in the building?
Mr Freeth:
Minister for the Interior · FORREST, WESTERN AUSTRALIA · LP

– The answer to the honorable member’s questions is as follows: - 1 to 4. The honorable member’s attention is invited to the reply given by me on 26th February to the honorable member for Hindmarsh when I stated, inter alia - “ It is not possible at this stage to give a firm indication as to when the Commonwealth can commence the construction of its own office buildings in Adelaide “. I would also direct the honorable member’s attention to the following extract taken from the Thirtyfourth Report (19S7-58) to Parliament of the Public Service Board: -

No new buildings are being currently planned for Adelaide. A number of departments there have been accommodated in new privately-owned buildings and because of this the accommodation position is not acute in that city.

Shipping

Mr Ward:

d asked the Minister representing the Minister for Shipping and Transport, upon notice -

  1. How many ships of all kinds operating in Australian waters or engaged in trade to and from this country are registered abroad?
  2. Does registration abroad enable companies to employ on these ships crews receiving lower wages and working under conditions inferior to those specified under existing Australian industrial awards?
  3. If so, is this a practice approved by the Government?
  4. If the Government does not approve, what action does it propose to take?
Mr Hulme:
LP

– The Minister for Shipping and Transport has replied as follows: -

  1. No exact figures are available but at the present time approximately 400 vessels engaged in trading to and from this country are registered overseas. From time to time overseas registered vessels are granted permits or exemptions under the Commonwealth Navigation Act to lift cargoes coastwise where no suitable Australian ship is available.
  2. Generally Australian Maritime Industrial Awards provide superior standards of wages and working conditions as against those applied to most vessels registered overseas.
  3. and 4. The Commonwealth Government has no control over crew conditions, wages, &c, on vessels engaged in International trading and calling at Australian ports. Except where a permit or exemption is granted a vessel engaging in the Australian coastal trade must comply with the provisions of the Commonwealth Navigation Act regarding conditions as to manning, accommodation and rates of pay.

Rail Transport

Mr Bryant:

t asked the Minister representing the Minister for Shipping and Transport, upon notice -

Is the Minister able to furnish the following information: - (a) What deficits have been incurred by each of the Australian railway systems during the past ten years? (b) What amount of capital is invested in each of these systems? (c) How many passenger journeys have been made and how many tons of freight have been carried in each of the past ten years?

Mr Hulme:
LP

– The Minister for Shipping and Transport has furnished the following information: -

Postal Department

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

r asked the PostmasterGeneral, upon notice -

  1. Were country post offices closed all day on Australia Day?
  2. Until now, have they been so closed only on Christmas Day and Good Friday?
  3. Have country post offices formerly been open from 9 a.m. to 10 a.m. on Australia Day for collection of mail and other essential postal business?
  4. Are country post offices in future to be closed all day on all public holidays?
  5. If this innovation is proposed, has consideration been given to the effect of depriving country people of any opportunity to collect mail, send urgent telegrams, and so on?
Mr Davidson:
CP

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

  1. Yes.
  2. Yes.
  3. Yes. but counter facilities provided were of a limited nature.
  4. It is intended to review the hours of business at post offices on public holidays and a decision will be made in each case in the light of all relevant circumstances.
  5. Consideration will be given to the point raised by the honorable member. Should il be decided that the opening of post offices is not warranted on a particular holiday the telephone facilities will not be varied and may be availed of for the transmission of urgent telegraph traffic.

Cite as: Australia, House of Representatives, Debates, 10 March 1959, viewed 22 October 2017, <http://historichansard.net/hofreps/1959/19590310_reps_23_hor22/>.

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