House of Representatives
17 May 1962

24th Parliament · 1st Session

Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 10.30 a.m., and read prayers.

page 2441



Mr. BRYANT presented a petition from certain electors of Wills praying that the Government take immediate steps to impress on the Governments of the United States of America and the Union of Soviet Socialist Republics the dangers involved in the testing of nuclear weapons and to urge them to refrain from further testing and to cooperate in achieving full-scale disarmament.

Petition received and read.

page 2441




– My question is addressed to the Prime Minister. Has the Government been apprised of what is claimed to be spectacular progress achieved by the French economy in recent years owing to national economic planning based on four-yearly periods? Is it a fact that the United Kingdom Government has been so impressed that recently it established a National Economic Development Council composed of leading industrialists, trade unionists and government representatives and suported by a full-time staff of economic and statistical experts? Finally, has the Australian Government considered adopting similar procedures to ensure greater economic growth and more orderly, efficient and co-ordinated national development in Australia, or was this Government’s recently-organized consultation with representatives of commerce and industry simply a post-election shock reaction?

Prime Minister · KOOYONG, VICTORIA · LP

– Naturally, we are familiar with what has happened in France in this field and in the United Kingdom, though proposals for the United Kingdom, of course, are not identical with the notions prevalent in France. However, the procedures adopted in both countries are well worthy of study, and they have been receiving it for some time. I am not at present able to say what will emerge out of these things, but they are definitely part of the material that ve have been considering.

page 2441




– I wish to address a question to the Treasurer, as Leader of the House. Consequent on the announcement of the time-table for the Budget sessional period of the Parliament, will the right honorable gentleman intimate whether normal time will be allowed for discussion of the Budget?


– Having regard to the Prime Minister’s announcement, perhaps I should take this opportunity to tell the House of the arrangements and dates proposed for the forthcoming Budget session. In order to provide no less time than has been made available on other occasions for the general debate on the Budget,- it is proposed that the Budget sitting will commence on 7th August and that there will be four weeks of parliamentary sittings before the recess of four weeks that the Prime Minister has already announced. This will mean that Parliament will resume after that recess on Tuesday, 2nd October. I may add that the Government proposes that the Prime Minister will make a statement to the House on Common Market developments that have occurred between the present time and the sitting of Parliament at Budget time. In all probability that statement will be made after the delivery of the Budget speech and before the resumption of the Budget debate so that there may be an effective debate in this Parliament on Common Market issues before we proceed with the general debate on the Budget.

page 2441




– My. question is directed to the Minister for Repatriation. Has the Minister considered the position of the chairman of No. 2 War Pensions Entitlement Appeal Tribunal, in view of the opinion expressed in October, 1957, by Mr. Justice Joske, when he was a member of this House, that the chairman’s interpretation of the onus-of-proof provision in the Repatriation Act was “ absolutely contrary to the law as it stands “, and also in view of the fact that the chairman, although acting in a quasi-judicial or deliberative capacity, takes an active part in politics as president of the New South Wales branch of the Liberal Party?

Minister for Repatriation · DARLING DOWNS, QUEENSLAND · LP

– This matter has been raised from time to time in the House, and my predecessors have had opportunities to deal with it at length. In fact, I think that during the last Parliament the matter was debated as a matter of urgency. Many problems are associated with’section 47 of the Repatriation Act, but I am sure that, in the best interests of ex-servicemen generally, the Opposition would not desire to have that provision changed from its present terms.

Mr Ward:

– What about its interpretation? It is not a matter of what the law is, but its interpretation.


– From time to time the question of interpretation has arisen. The Government is in possession of advice from the previous Attorney-General, and in fact from my colleague the present AttorneyGeneral, on this very section, and it is prepared to accept the advice that has been given by the Attorney-General in relation to the actions of the chairman in this respect.


– My question is directed to the Minister for Defence. In view of newspaper reports of the likelihood of Australian troops proceeding overseas, I ask the Minister whether, in the event of Australian forces serving in any area that might be classed as a theatre of war, the Government will ensure that these men are immediately brought under the provisions of the Repatriation Act and other legislation that confers benefits on servicemen who have been engaged in activities in such areas?

Minister for Defence · DENISON, TASMANIA · LP

– Should it ever become necessary to send forces into any theatre the Government would determine at that time the conditions which would apply to those forces.


– I ask the Minister for Repatriation a question supplementary to that asked of him by the honorable member for Evans. Has the Government considered the propriety of the holder of a high quasi-judicial office, such as that of chairman of a war pensions entitlement appeals tribunal, carrying on an active role in politics, in particular where he is able to influence, or be influenced by, government policy?


– The honorable member asks whether a person who has some association with a political party should be precluded from holding a position as a member or a chairman of a repatriation tribunal, either entitlement or .assessment. When people are being considered for appointment to these tribunals, very careful attention is given to their background and qualifications. Persons appointed as chairmen to either entitlement or assessment appeals tribunals must have legal qualifications. If a person has these qualifications, his appointment depends on his capacity to do the job. No consideration is given to his political affiliations, or to any association he may have with the political party that happens to be forming the government at the time. Certain appointments have to be made in the near future, as the honorable member probably knows. I can assure him that when making my selections I shall be concerned only with the qualifications and the integrity of the various individuals. Their political affiliations will not enter into my consideration in any way.

page 2442




– Can the Minister for Primary Industry tell the House whether the new process for the preservation of meat, known as freeze drying, has been investigated by officers of his department? Can he say whether it has practical economic advantages?

Minister for Primary Industry · FISHER, QUEENSLAND · CP

– The process known as freeze drying has been investigated by the Division of Food Technology of the Commonwealth Scientific and Industrial Research Organization. The matter is within the province of that organization rather than of my department. There has been no real commercial development in Australia of this process, and very little overseas, but, of course, further investigations and trials will be undertaken. This further research will be carried out by the C.S.I.R.O.

page 2442




– Has the Minister for Social Services any knowledge of a proposal by Hoyts Theatres Limited of Sydney to introduce a scheme to make concession admission prices to the company’s Sydney suburban theatres available to all persons currently receiving pensions from his department? If the Minister has a knowledge of this proposal, can he give any information to the House which would be of assistance to honorable members who, in the normal course of their duties, are in constant contact with pensioners in the Sydney metropolitan area?

Minister for Social Services · RIVERINA, NEW SOUTH WALES · CP

– I am pleased to inform the honorable member for Watson that yesterday I received a letter from Mr. Ernest Turnbull, the managing director of Hoyts Theatres Limited, of Sydney, informing me that the directors of his company had decided on concession admission prices to the company’s Sydney suburban theatres for all pensioners recognized as such by my department. As I understand it, the scheme provides for the admission of pensioners at 2s. to these theatres at all sessions except on Saturdays and public holidays and on the infrequent occasions when the company exhibits films of special interest. Since the matter is beyond my province, I shall be grateful for any assistance from the honorable member for Watson or any other Sydney member of the Parliament to give this scheme the public recognition that it deserves and to inform the pensioners accordingly. I commend the company for introducing the scheme.

page 2443




– Can the Minister for Primary Industry inform me what proportion of the £323,000 to be spent by the Beef Research Trust Fund is to be spent north of the Tropic of Capricorn? On what particular projects will the money be spent?


– Although the legislation implementing the Beef Research Trust Fund has been in operation only for a short period, there has been intense interest in and support for research in the beef industry. As a result, about £2,750,000 worth of projects have been submitted to the committee concerned for consideration. Of course, it cannot agree to the conduct of all the research that has been requested but it has allocated £323,000 to projects which I have approved. Of that sum, about £110,000 can clearly be associated with expenditure north of the Tropic of Capricorn. In addition, certain funds voted to the University of Queensland, the Queensland Department of Agriculture and the Western Australian Department of Agriculture will also have a beneficial effect in that area.

page 2443




– By way of explanation of a question to the Minister for Primary Industry, I wish to say that on 15th May the Minister issued a statement regarding an arrangement made between the Australian Dairy Produce Board and a firm in Malaya. The Minister was asked a question by me recently in reply to which he denied that any arrangement had been made. He referred to my question as having contained some flights of imagination. I now ask the Minister: Is it a fact that a Mr. Leong of Kuala Lumpur is to be paid £50,000 in consideration of his relinquishing his position as manager of the Beatrice Food Company? Is it a fact that notwithstanding the payment of this £50,000 Mr. Leong will retain his directorship of the Beatrice Food Company? Is it a fact that the Dairy Produce Board is engaging Mr. Leong for the purpose of forming a company to be known as the Asian Dairying Company in which 50 per cent, of the shares will be held by the Australian Dairy Produce Board and 50 per cent, by other shareholders - presumably South-East Asian shareholders represented by Mr. Leong? Is it a fact-


– Order! I think that the honorable member is now giving information. If he will direct his question he will get information from the right source.


– Is it a fact-


– Order!


– I am asking a question.


– Order! The honorable member is repeatedly using the phrase, “ Is it a fact “, to give information.


– All right. Is it proposed that the funds to be used to pay the sum of £50,000 and to provide half the capital of the company will come from the Dairy Produce Stabilization Fund? Has the Government asked the Treasury to examine the arrangement from the point of view of financial soundness? Has it requested the Attorney-General’s Department to examine the arrangement from the legal point of view?


– In the first place, 1 want to assure the honorable member that his statement that I denied that discussions were going on is not correct. If he looks at the answer that I gave to his previous question he will see that I referred to discussions being held with Mr. Leong. I said that Mr. Leong had a company in Burma and that negotiations were going on in that respect. I said that the honorable member had had vivid flights of imagination when he referred to negotiations concerning the Beatrice Food Company and Mr. Leong’s association therewith. The facts of the matter are that Mr. Leong terminated his connexion with the Beatrice Food Company before the Australian Dairy Produce Board entered into negotiations with him; and the condition mentioned by the honorable member is not, in fact, a condition of the arrangement made by the Dairy Produce Board with Mr. Leong.

The board has completed an agreement with Mr. Leong somewhat on the lines mentioned by the honorable member in his question. The conditions are that £25,000 will be paid upon the registration of the company, and £25,000 will be paid after certain arrangements for the setting up of the company have been completed and pioneer status has been secured from at least one of the Asian countries concerned. This has already been secured. The whole negotiations have been properly investigated. A recommendation concerning the standing of this gentleman has been received from the Australian Commercial Counsellor in Malaya. The matter has been investigated through the Attorney-General’s Department and by my department, and in every instance the reports are good.

Mr Pollard:

– What about the Treasury?


– Yes, it was referred to the Treasury and to the Prime Minister’s Department. The whole matter has gone through Cabinet and has been properly considered. I think it will be all for the good. I have issued a statement covering the matter and have intimated that the Australian Dairy Produce Board will release the full text of the agreement, so no suggestion can be made that anything has been concealed. I think it is commendable that the Australian Dairy Produce Board has had the initiative to try to secure added markets for dairy products in the near East.

page 2444




– I wish to ask the Minister tor Supply a question about the current series of nuclear tests undertaken by the United States in the Pacific. Is the Department of Supply monitoring the radio-active fall-out? Further, has the department issued any advice regarding fall-out? If so, what has such advice disclosed?

Minister for Supply · PATERSON, NEW SOUTH WALES · LP

– I welcome the question from the honorable member for Warringah, because it gives me an opportunity to say something about the measurement of background radiation and perhaps to allay some of the unwarranted fears that have arisen on this subject. The Australian Atomic Weapons Tests Safety Committee maintains quite a number of monitoring stations throughout Australia which are continually in operation. They make constant measurements and the measurements are given in turn to the National Radiation Advisory Committee for assessment. The committee reports to my friend, the Minister for External Affairs and AttorneyGeneral, who has made statements on this subject from time to time.

No fall-out from the present series of tests at Christmas and Johnston Islands will arrive directly in Australia. The prevailing winds in the area are westerly and, therefore, any atomic cloud will necessarily go round the world with the westerly winds before dropping as fall-out in Australia. During this time, of course, the radiation levels will decay and the radiation cloud will be diffused and watered down. I think it can be said that the radio-active material deposited in the lower atmosphere will not reach Australia at all. Material deposited in the upper atmosphere will remain there for some considerable time and will fall out in the form of global fall-out over a period of years.

The level of radiation is expected to be so low that it will be extraordinarily difficult to detect. For that reason, it is not possible to issue daily bulletins on the level of radiation, as some people expect. The change in the level of background radiation will be gradual right throughout Australia and from time to time details of this level will be published in Australian scientific journals.

page 2445



Mr Clyde Cameron:

– I would like to ask a question of the Prime Minister. Is the Prime Minister aware that the number of registered unemployed in Australia is currently 2,000 higher than it was at the time his Government’s policies were decisively rejected by the Australian people? Is it not true that the rate of recovery is far too slow and that stronger remedial measures are urgently required? Does the Government intend to do nothing to relieve the hardship it has inflicted on the community until the Budget is presented in August; or can we expect during the coming recess the sixth major statement of economic policy in less than two years?


– Assuming that this is a question and not an argument, I simply point out that the facts on the register for employment are well known to the House. Everybody has observed that during January, February and March there has been a steady and considerable improvement in the position. I pointed out myself yesterday, and I do not want to repeat it unnecessarily, that the full effect of the February measures has not yet manifested itself, and could hardly be expected to in such a short period of time. Although the progress may seem to some to be slow - and I can understand that because we would all like it to be a little more rapid than it is - that there is steady progress is beyond question. For myself and those who sit with me, I welcome it.

page 2445




– I address to the Minister representing the Minister for Customs and Excise a serious question which affects half the population of Australia directly and the other half indirectly. I refer to the atrocious quality of Australianmade nylon stockings, about which complaints have been published in the “ Sydney Morning Herald “ since as far back as 1955. I ask the Minister whether he will consider lowering or abolishing the duty on nylon stockings imported from the United States of America, Germany and England, because those stockings last from three to four times longer than do Australian-made nylon stockings. As the purchase of nylon stockings uses up such a large part of the income of the females of Australia, and of some of the men, I ask the Minister to look into this matter.


– Unfortunately, I am not an expert on the subject raised by the honorable member, but I shall have great pleasure in referring the question to my colleague in another place for an answer.

page 2445




– I ask the Minister for Labour and National Service whether full employment is an officially declared policy of his department in any document well understood by the officers of that department. If so, when is it expected that full employment will be attained?

Minister for Labour and National Service · LOWE, NEW SOUTH WALES · LP

– I think the honorable member and all Australians know that it is the policy of the Liberal Party and the Australian Country Party that we should have the fullest possible level of employment. We believe in full employment, and we are the only government that has got within a practical distance of achieving that ideal. I do not want to enter into a political discussion here, but a review of the record of the Australian Labour Party will disclose that that party has never come within a comparable distance of the achievements of this Government. (Honorable members interjecting) -


– Order! If honorable members are not prepared to obey the Standing Orders and co-operate at question time, it would be a good thing if somebody gave consideration to the matter of shortening question time.


– As to my own department, what would you expect from the Department of Labour? Of course it believes in a policy of full employment, and it does what it can to ensure that we have the lowest practicable level of unemployment in this country.

As to the last part of the honorable member’s question, I believe that the answer has been given already by the Prime Minister, who has pointed out that as yet the full effect of the Government’s February-March economic policies has not been felt. It is true that at the moment the employment position is not improving dramatically but, after all, we do not get big improvements in the months of April, May and June. From then on, we do expect a substantial improvement, and at the present time we know of no reason why that improvement should not take place.


– I wish to ask the Minister for Labour and National Service a non-political question on unemployment. I refer to boys and girls leaving school who have constituted a significant addition to the work force, and to the general concern of the community about their absorption into employment and the assurance to them of adequate career opportunities. Can the Minister give the House an indication of the number of juvenile registrants over the last few months and the number of these young people placed in jobs? Further, will the Minister state the current ratio between registration of juveniles and the placing of them in employment?


– I am pleased to be able to state to the House that there has been a substantial reduction in the number of school leavers registered with the Commonwealth Employment Service. Honorable members will be interested to know that we registered between 50,000 and 60,000 young people for employment between the beginning of December and the end of January. I am pleased to say that the number of school leavers now registered has been reduced to about 9,000. So, I think we can say that while we have not placed in employment all those who have registered, much has been done. Of those registered in March, we have been able to place 4,600 school leavers in employment and we have now no more than 3,600 young men registered with the Commonwealth Employment Service. A further 2,172 school leavers registered in April, so I say that the problem is being handled as satisfactorily as could be expected in the circumstances. None of us can expect such a large number of young persons to be placed in employment the day after they register. I think what I have said answers the question of the honorable gentleman and that he can be assured that the young people can look forward to opportunities to get into employment fairly quickly. I feel that those who are trying to gain a party political advantage out of the problems of youths are doing a disservice to Australia and to the young people.


– I also direct a question to the Minister for Labour and National Service. Is the Minister aware that the unemployment figures published in his employment statement last Monday showed that more people were unemployed and more people were receiving unemployment benefit in April, 1962, than in any April for more than twenty years?


– I am aware that the number registered for employment in April fell by 2,500, and that registrants now number approximately 98,000. Sir, what we have to remember when considering these figures is that at the end of each year we get a very large increase in the number of persons registering for employment, due to the fact that the number of people leaving schools, technical schools and universities enter the work force. The number has grown at a sharp rate during the past year. When one takes into consideration the fact that between 50,000 and 60,000 juniors registered with us during December and January, and relates that factor to the figure of 98,000 registrants, the problem is put into perspective. Once it is in perspective, one comes to the conclusion that the Government’s policies are steadily working out and, as the Prime Minister has said, we expect them to continue to do so. In my opinion, by August we shall see a substantial improvement in the employment position.

page 2446




– Has the Postmaster-General received information that the Victorian Government is pressing for an early announcement on the appointment of the board of inquiry into starting price betting irregularities in the Post Office? Will the Postmaster-General inform the House when the membership of the board of inquiry will be announced? Has the Victorian Attorney-General suggested that the terms of reference should be wide enough to allow inquiry into any irregularities which may appear concerning the Victorian Police Force in relation to the matters under investigation?

Postmaster-General · DAWSON, QUEENSLAND · CP

– After question-time I shall seek leave of the House to make a short statement dealing with the subject of the honorable member’s question. I think that statement will deal with the matters that he has raised with the exception of his reference to a request for an investigation of police force activities. As to that part of the question, let me say that in a letter to me covering a report from a State board of investigation the Victorian Chief Secretary offered assistance in any inquiry which may be held, but I have had no request for any actual investigation of police force activities in relation to gaming.

page 2447



Mr. GRIFFITHS.^ preface my question to the Minister for Social Services by stating that unfortunately some people in high positions in State and semigovernmental instrumentalities seem to glory in the suffering and disabilities of others. Has the Government constitutional authority to introduce regulations relating to the application of the Social Services Act? If it has, will the Minister give some thought to framing a regulation which will protect pensioners and recipients of unemployment, sickness and other social service benefits from eviction, court proceedings and the inconvenience of having light and power cut off from their homes? This could be done by prohibiting State authorities from taking such action during the period in which the people concerned receive social service payments.


– The honorable member should have addressed his question to the Attorney-General. The matter he has raised is a constitutional one which is entirely beyond my sphere. In addition, it relates to State instrumentalities over which I never could have any jurisdiction.

page 2447




– I address my question to the Treasurer, and I preface it by informing him that I have in my possession a copy of a letter written to a rate-payer and an elector by a local government body in reply to a protest against an increase of rates. The explanation given is that because of the restrictive policies adopted by the Treasurer and by the Government it had been necessary to increase rates. Incidentally, the letter was written to the ratepayer not earlier than 4th April, 1962. Is it correct that restrictive policies have been enforced? If so, what is the actual position?


– I confess that I have no idea to what aspect of government policy this criticism is directed. It is well known to all honorable members that restraint on bank lending was removed completely many months ago and that currently, in accordance with government policy, no restriction whatever is imposed by directive from the Governor of the Reserve Bank of Australia to the trading banks. The resources of the trading banks have been unusually liquid for some months, and therefore the criticism cannot be applied to any restrictive policy maintained by the Government. I confess that I am at a loss to know where such an allegation of restriction is directed. It cannot be applied to loan raising by local government bodies, because action which the Government has taken to encourage greater investment by insurance offices in government and semi-governmental loan raisings should have the effect of increasing the financial provision for the loan operations of the various local government bodies. If the honorable gentleman obtains further particulars for me I will try to give him a more comprehensive answer.

page 2447




– I ask the Prime Minister a question without notice. In view of the current press speculation about the likely nature of the next Budget will the Prime Minister assure the House that he will take every step to see that in future there is no premature disclosure of budget information to the Melbourne “ Herald “, as occurred before the supplementary Budget last February? Did Cabinet investigate these recent leakages to the Melbourne “ Herald “? Did Cabinet find that the price paid by that paper for the leakage was an acknowledgement that the measures contained in the supplementary Budget were based on a series of proposals advocated by the Treasurer, despite the opposition of several of his colleagues?


– It is quite true that occasionally one reads in a newspaper a speculation which is near the mark. It is quite true - but it happens very seldom. In a long experience in these matters I can remember no occasion when our eyes have not been bemused for weeks and weeks before the delivery of a Budget with sconehot, absolutely high-authority statements of the most nonsensical and sometimes of the most damaging kind. I have known speculative stories published about changes in sales tax, which were quite unfounded and yet brought business in the commodities affected by that particular sales tax almost to a standstill. I am responsible for many things: I am not responsible for the extent to which newspapers feel at liberty to publish, as positive facts, as if they came from a government announcement, the speculations engaged in by those who write for newspapers.

page 2448




– I desire to direct a question without notice to the Prime Minister. In doing so I recall to his mind that Standing Order No. 107 provides that at any time when other business is not before the House a Minister may indicate to the House that it is desired to discuss a matter of special interest on which it is not desired to formulate a motion in express terms, and may then submit a motion specifying the time to be allotted to the debate. In view of the doubts that have been cast in many quarters, including the Returned Soldiers, Sailors and Airmen’s Imperial League of Australia, on the adequacy of our defence programme, and in view of the obvious desirability of having this matter discussed before the House rises so that the country can, if necessary, be prepared for what must be done, will the Prime Minister consider allotting time this afternoon, under the terms of Standing Order No. 107, to a discussion on defence?


– The honorable member was good enough to inform me that he intended to raise this question. I have spoken to the Leader of the House, and 1 have learned from him that already the programme for to-day is full and that an arrangement has been made, as usual, between the Government and the Opposition for the allocation of time and for the nature of the matters that will be discussed, so that the House will be able to adjourn to-night. In those circumstances, it is not possible for me to introduce new matter at this stage.

page 2448




– I preface a question addressed to the Treasurer by stating that trading bank deposits have risen by £165,700,000 since January, 1961, while advances have fallen by £86,600,000, and the banks’ holdings of Commonwealth securities have risen by £273,900,000, an increase nearly equal to the increase in deposits-


– Order! The honorable member is giving information. I ask him to come to his question.


– Can the Treasurer explain why the trading banks, with increasing deposits, are not increasing their lending to the public but are lending more to the Commonwealth Government? Does the fact that the trading banks have invested nearly all the £273,900,000 in long-term Commonwealth securities indicate that the banks do not expect any increased demand for loans from the public, and that the economy will not get much better than it is at present?


– I am not able to verify or confirm the detailed figures which have been cited by the honorable gentleman, but I believe that what he has said is a correct expression of the trends in banking which have occurred over the period that he has mentioned. He has asked me to put some interpretation on those movements and has himself suggested explanations. I do not accept his explanations.

I believe the position to be this: In recent times, the banks, with the improvement in our overseas balances, have improved their own liquidity within Australia. This has occurred at a time when Australian manufacturers and importers have been liquidating the large volume of stocks built up during 1961. The liquidation of stocks has caused the manufacturers and importers either to reduce their overdrafts with the banks or to increase the amounts standing to their credit with the banking system. So, over the period, we have had the spectacle of a considerable increase in deposits with the banks and some decline in bank advances. Those trends are being reversed at the present time. Last month saw an unusually great increase in bank advances. I have been telling the House for some time now that the rate of overdraft authorization by the trading banks has been quite considerable and that there is something like £700,000,000 of undrawn overdraft authority outstanding. I would expect bank advances to rise considerably in the months ahead. At the same time, with overseas balances remaining high, the banks are still in a sufficiently liquid position to meet the reasonable requirements of their clients.

page 2449


Prime Minister · Kooyong · LP

– by leave - As honorable members are aware, the United States naval authorities have for some time been investigating possible sites and studying the feasibility of establishing a naval communications station in Western Australia. Following these investigations the United States Government has formally requested permission to establish and operate such a station at North West Cape. The Commonwealth Government has approved the request. The Western Australian Government, which has been kept informed, has already rendered considerable assistance in the initial survey activities. It has expressed its desire to co-operate in the project to the fullest possible extent - an offer which is greatly appreciated by the Commonwealth Government.

The purpose of the station, which will include a complex antenna system, highpowered transmitting and receiving equipment, and administrative and supporting facilities, is to provide radio communications for United States and allied ships over a wide area of the Indian Ocean and the western Pacific. The power supply required for the station will be provided by conven tional-type diesel motors. The total area of land affected by the project will be about 28 square miles. Of this area, all except about 4 square miles will continue to be available for activities such as grazing, subject for technical reasons to restrictions on certain types of construction or installations.

The estimated capital cost of the station itself will be of the order of £A. 33,000,000. Substantial additional funds - probably as much again - will be required for things such as housing and family amenities. The United States Government will meet in full the expenditure required for both the construction and operation of the station, which will be without cost to the Australian Government. Construction is planned to commence as soon as possible and will be at its peak from early 1963 to late 1965. During this period employment on the project is expected to be between 800 and 1.000 people. In the construction of the station, the maximum practicable use will be made of Australian contractors, labour and materials. Detailed liaison will be established between the United States authorities and appropriate Australian departments and authorities to achieve this.

Present plans provide for an eventual population in the area, to operate and maintain the station, of approximately 450, including both United States and Australian personnel and their dependants. Married quarters and essential community facilities will be provided for these people. A detailed agreement is being worked out with the United States Government to cover the status of American personnel who will be in Australian in connexion with the station. In addition to normal inter-service, technical and administrative liaison between the United States authorities responsible for the station and co-operating Australian departments and services, arrangements will be made for consultation between the two governments on matters relating to the station and its use. The facilities of the station will be available to the Australian forces.

The matters to which I have referred will be embodied in a formal agreement between the two governments which is now being prepared. The terms of this agreement will be announced in due course. The establishment of this station in Australia will mark an important step in the steadily increasing defence co-operation between the two countries. It will make a highly significant contribution to general allied military capability in this area. It is within the spirit of co-operation envisaged under the Anzus Treaty, under which the parties agreed to co-ordinate their efforts for collective defence for the preservation of peace and security.

page 2450


Ministerial Statement

PostmasterGeneral · Dawson · CP

– by leave - On 3rd May, I announced that Cabinet had decided to ask a State Supreme Court judge to inquire into allegations of improper conduct and failure to co-operate with the Victorian police on the part of postal officers in connexion with gambling activities in the State of Victoria. I am now in a position to inform the House of the terms in which these matters will be referred to the judge who undertakes the inquiry.

The judge will be asked to inquire into and report upon the following questions: - (a) Whether there have occurred any improper practices on the part of persons employed in the State of Victoria in the Postmaster-General’s Department in connexion with or in relation to illegal gambling activities in Victoria of the kind referred to in the letter sent on 9th April, 1962, by the Chief Secretary of the State of Victoria to the Postmaster-General and in the report which the Chief Secretary enclosed in that letter and, if so, what improper practices, (b) Whether there has occurred any improper refusal on the part of persons employed in the State of Victoria in the Postmaster-General’s Department to co-operate to the extent permitted by the relevant statutory provisions and administrative procedures of the Postmaster-General’s Department with the Victorian Police Force in connexion with or in relation to the detection of illegal gambling activities in the State of Victoria, and if so, in what respect has such co-operation been lacking and for what improper motives has it been refused; and generally as to the facts relating to and the circumstances attending any such improper practices or refusal to co-operate.

The inquiry will be established by com-mission under the Royal Commissions Aci, 1902-1933, which gives the commissioner the necessary powers to obtain evidence and to conduct the inquiry, including power to take evidence in private if the circumstances require. The Government desires to emphasize that the terms of reference do not open to inquiry standing government policies and statutory provisions and administrative procedures designed to secure secrecy of communication through the services of the Post Office.

I regret that I am unable to announce to-day the name of the judge who will conduct the inquiry, as negotiations with a State to make available the services of a Supreme Court judge are not completed.

I lay on the table the following paper: -

Post Office - Illegal Betting in Victoria - Commission of Enquiry - Ministerial Statement, 17th May, 1962 - and move -

That the paper be printed.

Leader of the Opposition · Melbourne

– The Opposition commends the action of the Government in deciding to conduct this inquiry. The matter ought to be cleaned up in the way indicated by the Minister. I raise a question, however, with the Prime Minister as to whether a judge of the Supreme Court of Victoria could or would sit as a royal commissioner in view of the fact that some years ago a meeting of justices of the Supreme Court of Victoria resolved that none of them would act in that way. When the Victorian Government wished to conduct a royal commission of its own into some matter, it had to pass a special act to direct the judges to provide one of their number to make the inquiry.

Mr Menzies:

– It is not to be assumed that it will be a Victorian judge.


– I see. It was on that basis that I intended to proceed. If a judge is not available from the Supreme Court of Victoria, I suggest to the Prime Minister that the royal commissioner should not be a Supreme Court judge of another State, but rather a federal judge. In my view the judicial officer should be either a Victorian judge, because that is where the alleged offences occurred, or a Commonwealth judge, because a Commonwealth department is involved. Although the appointment of a judge from another State could be quite satisfactory, the inquiry might not be considered as important and might not command the same public attention as it would if one of the judges I have suggested were appointed. Beyond that I do not wish to say anything, Sir.

Question resolved in the affirmative.

page 2451


Ministerial Statement. Sir GARFIELD BARWICK (Parramatta ^-Minister for External Affairs and Attorney-General). - by leave - Recent military developments in Laos have given rise to great concern on the part of the Australian Government and ils allies, including the Government of Thailand. The proCommunist forces in Laos have launched attacks and captured important Laotian Government positions in north-west Laos. On 3rd May pro-Communist forces attacked and occupied the strategically important village of Muong Sing. On 6th May they attacked the important provincial centre of Nam Tha in north-western Laos. The Royal Laotian Army garrison at Nam Tha was forced to retreat to Ban Houei Sai, 80 miles to the south-west, where the Mekong River divides Laos from Thailand. Elements of this garrison escaped into Thailand.

These Communist advances have extended the Communist threat to a substantially greater area of Laos. They are of immediate concern to Thailand because of their proximity to the Thai border. The attacks, which had obviously been carefully prepared in advance, broke a year-old ceasefire and have thrown serious doubts on claims by the Communist powers that they genuinely desire a negotiated settlement in Laos.

Britain and the United States have protested to the Soviet Union, which is one of the two co-chairmen of the Geneva Conference, against these violations of the truce and have sought Soviet co-operation for measures to restore the cease-fire, including investigatory action by the International Control Commission. Similar representations were made recently by Western representatives who visited the head-quarters of proCommunist forces at Khang Khay in central

Laos. As of 16th May no satisfactory response to these approaches had been received either from the Soviet Union or the leaders of the pro-Communist forces in Laos.

In these circumstances the United States has taken certain precautionary measures, including the introduction of United States forces into Thailand at the invitation of the Thai Government to help ensure the territorial integrity of that country. In taking these measures the United States has emphasized the defensive nature of its actions, which are designed to enable the speedy fulfilment, should the need arise, of its obligations under the Seato treaty. As a member of that alliance the Australian Government commends and fully endorses the measures taken by the United States Government.

The United States has re-affirmed its determination to work for the reestablishment of an effective cease-fire and negotiations for the formation of a government of national union in Laos. Australia shares these objectives. It is particularly regrettable that the violations of the cease-fire took place within a few days of indications that earlier difficulties in the way of negotiations between the neutralist leader, Prince Souvanna Phouma, and the Royal Laotian Government might well be overcome. It is the Government’s earnest hope that the Soviet Union will be persuaded to use its influence with the pro-Communist leaders in Laos to restore the cease-fire and enable negotiations to be resumed.

The Seato council representatives, including the Australian Ambassador to Thailand, met in Bangkok yesterday, 16th May. They reviewed the situation resulting from the breach of the cease-fire in Laos and heard statements from the United States and Thai representatives on the precautionary and defensive moves, which had already begun, for the positioning of additional United States forces in Thailand.

The Australian Government has had, and is continuing, consultations with other Seato members as to further measures which may need to be taken to ensure the territorial integrity of Thailand, including the movement of further military forces into that country. The Australian Government intends to honour its obligations under the

Seato alliance, as I am sure this House would wish it should. As I have explained to the House on previous occasions, obligations under the Seato treaty are individual as well as collective and any decision as to the manner of performing its obligations will be made by the Australian Government itself, but in the light of consultations with its allies and of the action which they are taking. These consultations, as 1 have said, are proceeding. The occasion for decision by the Australian Government as to any particular course to be taken in performance of its obligations under the treaty has nol arrived; for one thing the Government has, as yet. received no request from the Government of Thailand, but naturally, the Government has been considering what form its assistance might take. I am able to say to the House that, if the occasion arises, that assistance will be furnished by means of the regular Australian forces.

page 2452


Words used in Debate.


– by leave- Sir, it has been brought to my notice that last night I may have said something that would cause the honorable member for Lalor (Mr. Pollard) to feel aggrieved. On reflection I admit that it is possible to place a construction on language that I used that would make it appear unkind, unfair and, indeed, quite cruel. It is a matter of regret to me that I used language in such a careless way, and I most sincerely apologize to the honorable member for Lalor if I have given him any cause for hurt.

page 2452



– I wish to make a personal explanation, Mr. Speaker. I claim to have been misrepresented by the “ Sydney Morning Herald “. An article appearing in to-day’s issue of that newspaper deals with alleged happenings at a Labour Caucus meeting yesterday. The article is headed, “ Caucus Approval of Executive Decision. Calwell’s Tough Fight on Overseas Trips “. The particular portion of the article to which I refer carries the sub-heading “ Tempers Flare “, and it reads -

Mr. Calwell is reported to have flayed Mr. Daly when the latter criticized Labour men accepting oders of free travel overseas.

Mr. Speaker, that statement is deliberately false. At no time did I offer criticism of members taking trips abroad. I regret that 1 have to set out in this House what I did say, in order to correct a deliberate inaccuracy. It is true that I opposed the Labour Party’s acceptance of the Government’s offer in the matter under discussion, because I considered that the Government was making a deliberate attempt to tie the Labour Party hand and foot to the Government’s ill-fated efforts in connexion with negotiations concerning the European Common Market. In my opinion, this would inevitably react to the detriment of the Labour Party. That, Mr. Speaker, was the main reason for my opposition.

My second reason was that as a member of the Labour Party I personally object to the Prime Minister (Mr. Menzies) or the Government saying that only certain members of the Labour Party are to be selected to go abroad, as was done in this case. In my opinion it is the right and the responsibility of the Labour caucus to select Labour’s representatives. I have made these remarks, Mr. Speaker, in order to show the inaccuracy and falsity of the statement that appeared in the newspaper.

The article also contains the following statement: -

Tempers flared as Mr. Calwell charged Mr. Daly with having had more free trips overseas than any other member of the party whilst men like Mr. Whitlam and Senator McKenna had never made a single trip on any pretext.

I point out that in 1947 and 1959 I went abroad as a member of parliamentary delegations. To say that I have had more free trips abroad than any other member of the parly is incorrect, because a number of members on this side of the House have made as many trips abroad as I have, or even more than I have.

In making this explanation, Mr. Speaker, I would like to point out that this is the second occasion in recent times on which this newspaper has published deliberately distorted accounts of matters relating to Labour caucus. On a previous occasion the Leader of the Opposition (Mr. Calwell) had to come into this House and correct inaccuracies on the part of the “ Sydney Morning Herald “, whose reporter in the parliamentary press gallery should ultimately be brought to book.

Finally, let me again express the view that the “ Sydney Morning Herald “ and the writer of this article have selected certain members of this Parliament, I for one, for malicious, misleading and deliberately inaccurate criticism. If there is one thing I have in common with the Prime Minister it is a low opinion of this infamous publication.


– by leave- I wish to make a short comment on one aspect of the personal explanation made by the honorable member for Grayndler (Mr. Daly). The honorable member said he objected to the Government deciding what members of the Labour Party should go overseas for purposes with which honorable members are familiar. I wish to make it clear, and the Leader of the Opposition (Mr. Calwell) and his deputy (Mr. Whitlam) will confirm it, that at no stage of the discussions did the Prime Minister (Mr. Menzies) or any other member of his Government attempt to dictate to the Labour Party on the matter of selection of representatives of the party for these purposes. It was made entirely clear to the Leader of the Opposition that these opportunities would be provided if they were desired by the Opposition, and the selection of representatives was left entirely to the good sense and judgment of the Opposition.

Mr Calwell:

– The phrase used was “ leading members “ of the Opposition.


– Yes, we did suggest leading members of the Opposition, but we did not suggest who should be considered leading figures. The reasons for such a suggestion are quite obvious and, I am sure, would be generally approved.

page 2453


Coal-miners’ Pensions - Taxation - Customs

Duties - Constitutional Review - Marraboor Weir - Housing for Handicapped Persons - Social Services - Nuclear Tests and Disarmament - Employment of Physically Handicapped Persons - United States Navy Communication Station

Question proposed -

That Mr. Speaker do now leave the chair.


.- I wish to make some remarks about the fund from which pension payments are made to retired coal-miners. Under the system now in operation, employees in the industry make certain regular contributions,’ and these contributions are supplemented by the employers to the extent of an amount four and a half times the amount provided by the employees. Over the last few years production in the coal-mining industry has increased rapidly while the work force has declined with the advent of automation, so that a huge output is now obtained with the employment of fewer men. This means that a few men now have to bear the burden of keeping the pension fund actuarially sound. As the cost of living rises and inflation continues, and as production increases at a rapidly accelerating rate whilst the work force in the industry decreases, obviously the contribution by each member of the fund must rise steeply. In 1941 the contribution per head of the work force in the coal-mining industry in Queensland was 2s. 6d. At that time there were 3,500 members contributing to the fund. In 1961 the contribution per head had risen to 8s., while the work force had declined to 2,400.

A survey has been carried out, as a result of which a tribunal of actuaries’ report was issued. This shows that the contribution per head by men employed in the coal-mining industry in Queensland will increase to 10s. in 1962-63, and that there will be a further increase in 1963-64. The contribution will rise year by year. Going hand in hand with this increase, will be a decrease in the work force. I stress this point because it emphasizes the reason why this scheme will fail in the very near future. With the rapidly increasing output and with the small work force required under the system of automation, it will not be possible for the men employed in the coal industry to make a sufficient contribution from their pay without depriving themselves of reasonable standards of living in order to keep this scheme actuarially sound.

The Queensland Colliery Employees’ Union, with the support of the federal executive of the miners’ union, has proposed a scheme which they would be pleased to have the Federal Government consider. This scheme works on a system of excise on production. Instead of the men making a contribution, as under the present scheme, it is felt that contributions should come from excise on the tonnage output of the coal mine. It is proposed to strike an average excise figure which would be reasonable in relation to the less efficient coal mines as well as the more efficient mines. It has been assessed by the unions that an excise payment of about 2s. 9d. per ton on the output of the national coal industry could be struck as a contribution towards the pension fund. In this way, the funds would be kept actuarily sound. This is the only alternative for the Government if it wishes this fund to be kept in operation.

This becomes essential if we realize that there are highly mechanized mines such as the Box Flat mine at Ipswich, Queensland, where, in 1949, 100 men hewed 240 tons of coal a day. To-day, there are 120 men working in that concern and it now produces from 1,200 to 1,400 tons of coal a day. This is an increase of 500 per cent, in output for a mere increase of 20 per cent, in the work force. There are many more mines such as this one which would be capable of an even greater output as a result of automation. Under the present scheme, the concern operating that coal mine makes a contribution of £216 per week. Added to the miners’ contribution of £48, this makes a contribution of £264 per week towards the fund as it now operates. If the present system is to continue it will be impossible to have any funds in reserve later for the men who retire from the industry. We must remember that the average wage of the coalminer has been considerably reduced. It has been estimated that the average wage in Queensland is about £18 per week. There are some instances in which coalminers earn a greater amount than this when they are working on a good clean face. But in the large majority of cases men are earning about £18 a week and have to maintain their homes and wives and families. It does not give them much of an opportunity to save money.

All these men are subject to great hazards in the course of their employment. A number of them, young and old, are seriously injured as a result of their employment through falls from the coal ceiling. If these men suddenly find themselves forced out of the industry and unable to accept alternative employment because of injuries suffered in the course of their work it becomes necessary for them to have a source of income. This fund must be kept going and men in this category must be able to draw on the fund in future. After all, these men who are working in the coal mines are making profits for the mine-owners. Further, those profits are increasing greatly because their wages bill is lower as a result of automation. An alternative system of excise payments on coal must be introduced.

I understand that the coal mine operators in Queensland have admitted that they consider the proposed system to be reasonable and are prepared to support it. But it needs legislation to make it effective. What would happen if the coal mines were to pass into other hands? Any agreement that had been reached, as a gentlemen’s agreement, would not be binding on the new owners. Therefore, on behalf of the Queensland Colliery Employees Union, the retired mine workers of Queensland and miners throughout this country I earnestly urge the Government to give this proposal of the miners serious consideration. These men should be provided with some stability and security when they retire in their old age, or if they are forced into premature retirement as a result of injuries in their employment in which they are making profits for the people who operate the mines and helping to develop this nation.


.- There are two subjects that I want to raise this morning: One concerns the tax allowance for student children and the other relates to customs and excise. As everybody knows, the Commonwealth Government has granted Commonwealth scholarships to students proceeding to a university. As every one knows, the taxpayer is allowed a deduction of £91 in respect of each dependent student child. The High Court of Australia has ruled that money received under a Commonwealth scholarship offsets the tax deduction of £91. As a result, the taxpayer who is meeting the education costs of his child and is in receipt of a Commonwealth scholarship is penalized by losing the deduction of £91. No one will imagine for a moment that any parent can educate a child at a university on a Commonwealth scholarship. The Government should consider an amendment to the act so that the parent whose child is studying under a Commonwealth scholarship will still be able to claim the £91 allowance. As I see it, this allowance for student children does not bear a direct relationship to university fees or to anything else but the fact that the parent has to maintain that child while he is at the university. I use the word “ child “ in respect of people between the ages of seventeen and 21 years. It is a great pity, I think, that deductions cease when the child - or the then adult - reaches 21 years of age but is still dependent on a wage-earner.

Most university courses last for four or five years before the initial degree is bestowed and a lot of people at universities are over the age of 21 years when they graduate. If any one were to tell me that those people are in a position to earn their living while still studying at a university in the final years of their courses I would refuse to believe it. I have one child at a university at present, and I had two there last year, so I speak from some experience and with feeling on this matter. I thank the honorable member for Barker (Mr. Forbes) for reminding me of that fact. I know that he is a strong supporter of this case because his children are fast growing up and he will face this problem himself. Child endowment ceases at the age of sixteen years - an age at which responsibilities and expenses are growing. I believe that the Government is not doing all that it could to assist parents to see children through the university. In this competitive age I think we are all beginning to realize that whereas, in prewar days, the Leaving Certificate provided a certain entry to many vocations, entry to those same vocations now virtually requires a university degree. Therefore, it has become more and more necessary for children who can take an academic course to complete a full-time course at the university. So I ask the Government to look at the matter of tax deductions and ascertain in what respect it can assist.

Many university students have a vacation which extends over approximately three months of the year in which they go out to a full-time job. In my State, for example, it is fairly common for them to be employed on co-operative bulk handling as bin attendants in country areas. The students do not mind roughing it and living in a railway siding with blankets and a stretcher; and they earn up to £20 or £30 a week. This, of course, is of considerable assistance to them and to their parents. They buy books, clothes and other items, and from my knowledge of them, they do not waste the money.

The mere fact that they earn for this period means that their parents are not entitled to claim a taxation deduction for them. I think a general instruction should be issued by the Taxation Branch to enable parents to claim a deduction for threequarters of the year. Regardless of whether a student earns £100, £200 or £300 in this period, the taxation authorities should decide that the student has not been maintained for a quarter of the year and allow a deduction in respect of three-quarters of the year. I believe we should assist any person who is trying to help himself to obtain a university education, especially as a university education is becoming increasingly expensive.

The other point I want to raise concerns shipping on the Australian coast and the fact that customs duty must be paid from the moment a ship enters Australian waters. The journey from Fremantle to Sydney, which is approximately 2,000 miles, is further than a journey from Fremantle to Singapore and I understand is about the same as a journey from Southampton to Athens. I am concerned about two classes of people. The first is the Australian returning from a holiday in England, who buys a steamship ticket for the journey from, say, Southampton to Sydney. For 2,000 miles of the journey of about 10,000 miles passengers do not have the advantage of customs free cigarettes, customs free drinks or the customs free shop. I believe that this is wrong. Most people returning from England are not millionaires. They have saved for their holiday for a very long time and when they reach Fremantle, they have not much money left anyway. For the last part of their journey, they are subject to Australian customs duty. The amount collected in this way does not mean much to the revenue of Australia, but it does mean quite a lot to the traveller.

The second type of person I am concerned about is the person who travels from one port to another on the Australian coast. We no longer have passenger steamers operating on the Australian coast and we are dependent on overseas ships for the carriage of passengers between Australian ports. The person who travels from Melbourne. Adelaide or Fremantle to Sydney has probably saved for a long time for the holiday. I believe that in the interests of tourism and in the interests of our people, we should waive customs duty for ships in Australian waters. We should allow such ships to reopen their bars and shops when they leave port to allow passengers to have the advantage of customs free goods. The cost to the Government would be negligible, but the advantage to travellers would be tremendous.

Many overseas ships do not stop at Adelaide, but the distance from Fremantle to Sydney is about the same as the distance from Southampton to Athens. On a journey from Southampton to Athens, a ship will enter ten or twenty different ports, all of which have different customs arrangements. But the ship is able to sell customs free goods the moment it leaves the port. We should examine this matter and give the advantage of customs free goods to passengers on ships in Australian waters, once the ships have left port. Australia receives much bad advertising from overseas travellers who, having arrived at Fremantle, find that for the next seven days - or onethird of the total time of their journey from England - they are subject to Australian customs laws in the manner I have mentioned.

I place these two matters before the Government and hope that it will give earnest consideration to my suggestions.


.- On 24th May, 1956 - I am quoting from page 2453 of “ Hansard “ for that year - the Prime Minister (Mr. Menzies), by leave, moved that a joint committee be appointed to review such aspects of the workings of the Constitution as the committee considered to be most profitable, and to make recommendations for such amendments of the Constitution as the committee thought necessary in the light of experience. Members of the House of Representatives and the Senate were appointed to the com mittee. The Prime Minister and the Leader of the Opposition were to be ex-officio members. Government members of the committee were the Attorney-General, Senator Spicer, Q.C, who was appointed chairman with the power of a deliberative and a casting vote; the Honorable Percy Joske, Q.C, ex-member for Balaclava and now a justice of the Supreme Court in the Australian Capital Territory, and a judge of the Commonwealth Industrial Court; Mr. Downer, a barrister and now a senior member of the Cabinet; Senator Wright, an eminent barrister; Mr. Drummond, the honorable member for New England and former Minister for Education in New South Wales; and Mr. Hamilton, ex-member for Canning and former Parliamentary Secretary to the Minister for the Interior and the Postmaster-General. At a later stage, Senator Spicer was elevated to the position of Chief Judge of the Commonwealth Industrial Court and his place was filled by the subsequent Attorney-General, Senator O’sullivan, who is a solicitor. The Opposition members were Mr. Calwell, who is now Leader of the Opposition; Mr. Whitlam, a barrister and now Deputy Leader of the Opposition; Senator McKenna, a solicitor and Leader of the Opposition in the Senate; Senator Kennelly, Deputy Leader of the Opposition in the Senate; Mr. Ward and Mr. Pollard, both former Cabinet Ministers in a Labour government.

I think that all honorable members will agree that it was a very well-balanced committee, possessing a wide knowledge of law, backed by a wealth of practical administrative and political experience. The committee had sittings in every State and evidence was submitted by the leaders of various State parliaments, by eminent lawyers and by others interested in the workings of the Constitution. After carefully weighing the evidence and after due consideration, a detailed report containing recommendations for amendments to the Constitution was submitted to the House in November, 1959. I might add that most of the recommendations were unanimous. Certain items were opposed by Mr. Downer and by Senator Wright. The recommendation relating to restrictive trade practices was in the following terms: -

  1. The Commonwealth Parliament should have an express power in section 51 of the Constitution to make laws with respect to restrictive trade practices found by the Inter-State Commission to be, or likely to be, contrary to the public interest.
  2. For the purposes of the power described in sub-paragraph (1) above, the Parliament should have power to make laws for referring questions to the Inter-State Commission for inquiry and report, and the Commission should be vested with power to make its inquiries and report to the Parliament.

The fact that restrictive trade practices are evident is shown by the announcement of the Attorney-General (Sir Garfield Barwick) that the Government intended to introduce legislation to control this menace. However, the Attorney-General has had to interview the appropriate State parliamentary authorities to obtain unanimous approval before the Commonwealth can take action in this matter. This has been going on for well over two years, and so far no progress seems to have been made. I submit that there is very little likelihood of every State parliament agreeing on every point that would make any Commonwealth legislation effective.

The recommendations of the committee on the control of hire purchase and interest rates are indeed worthy of the deepest consideration. The inflationary trends in the Australian economy in my opinion arise directly from the fact that the Commonwealth is powerless to act in many economic matters. It is true that the States have power to control many economic activities, but unfortunately it is not possible for them to reach agreement on these matters. For instance, if New South Wales were to limit interest rates on hire purchase to 6 per cent, and Victoria were to limit interest rates to 7 per cent., finance would flow out of New South Wales into Victoria. As every honorable member is aware, the financial institutions and monopolies have never protested against the States having these powers, and the reason for that is easy to see. They have never protested because they know the States cannot introduce legislation to deal effectively with their malpractices. Therefore, I think it imperative that the matter be taken in hand, and that the recommendations of the Constitutional Review Committee be brought before the House for full debate with a view to submitting to the people by way of referendum a request that power be conferred upon the Commonwealth to control effectively malpractices of the kind which we all know are being engaged in by some representatives of the Australian business world.

Why is the Government holding back and not submitting the question to the people by way of referendum? Is it because it cannot buck its masters, the financial institutions and the monopolies? The Opposition would support any such submission by way of referendum, and I submit that if it had the backing of both sides of the House, the referendum would be carried. Again I ask: Why is the Government holding back? Did it not have faith in the committee which it appointed? The members of that committee were all eminent and leading members from both sides of the Parliament, and they submitted a very detailed report. The committee heard evidence in every State and, after long and detailed discussion, submitted its recommendations to the Government. Why have those recommendations not been acted upon? As every one knows, the only way by which the Commonwealth Parliament can control inflation at the moment is to deflate the currency. This has been done over past years, and widespread unemployment and dislocation of industry in commerce have resulted from it. The original evils have arisen because this Parliament has no power to control them as they begin to appear. Under present circumstances, we can do nothing but allow them to grow until they reach the stage when the only thing we can do is attempt to correct them by way of a recession. The evils should be rectified by legislation, not by deflating the currency.

The investigation by this committee cost the Australian taxpayers almost £17,000. Was that money all wasted? Why was the committee appointed? It was appointed on the suggestion of the Prime Minister (Mr. Menzies), and it cost this country £17,000. What for? Why have its recommendations not been put before the House to be fully debated with a view to submitting them to the people? The Prime Minister has stated in several of his speeches that in the future we might have to seek some of the powers recommended by the Constitutional Review Committee. Why not do it now? The time is ripe for doing it. I am convinced that until these powers are conferred upon the Commonwealth there will be a recurrence of periods of boom and bust, boom and bust, recession and inflation, and recession and inflation with the same results as we have experienced over the past twelve years. I appeal to the Government to treat this matter as one of national urgency, and to submit it to the Parliament. I think all honorable members know that whenever he has been asked when he intends to introduce legislation to control restrictive trade practices, the Attorney-General (Sir Garfield Barwick) has always answered that it is still being prepared1.


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


.- As is well known, I have for many years advocated in this House the abolition of sales tax on foodstuffs containing dried vine fruits, and 1 wish to renew that advocacy now. On 7th March last, I asked the Treasurer (Mr. Harold Holt) when these items would be freed from sales tax, and his answer was -

Certainly this item, in company with others to which our attention has been directed, will be reviewed when sales tax is next under consideration.

I have received answers similar to that for at least eight years now, and I think it is high time that something was done about the matter. I say that for many reasons. At the present time, the abolition of sales tax from these items is urgently necessary because it is generally believed in Australia and overseas that if the United Kingdom should join the European Common Market the dried vine fruits industry would be hit harder than perhaps any other industry in this country. For that reason, everything should be done now to help it prosper in order to withstand any blow that it might receive should the United Kingdom join the European Common Market.

The dried vine fruits industry is carried on mainly in the Mallee electorate, which 1 represent. Approximately 80 per cent, of the whole Australian dried vine fruit pack is grown in the electorate and about three-quarters of the total pack is exported. The average yearly return is approximately £8,000,000. Therefore, this industry plays a valuable part in maintaining Australia’s overseas credit balances. In the main, the men engaged in the industry are exservicemen who are growing these fruits at Sunraysia, which includes Mildura, Merbein, Redcliffs and Irymple at Robinvale - that is a new settlement that is coming along very well - at Nyah, which is an older settlement, at Woorinen, near Swan Hill, and at Tresco.

As most of the men engaged in the industry are returned soldiers, who are deserving of every possible assistance, I ask the Minister to give high priority to the abolition of sales tax on foodstuffs containing dried vine fruits when the next Budget is being framed. I believe that all foodstuffs should be exempt from sales tax but, if that cannot be done, then certainly I believe that those foodstuffs containing dried vine fruits should be exempt from this imposition. After all, there is no sales tax on an ordinary loaf of bread, but the moment some dried vine fruits are put into it it is classed as a raisin loaf and becomes subject to sales tax. That does not make sense, nor is it in the best interests of this great industry or of Australia. On this occasion, I ask the Minister to give special and urgent consideration to my longstanding plea that foodstuffs containing dried vine fruits be exempt from sales tax. I ask him to consider also freeing all foodstuffs from sales tax because, when all is said and done, the people of all countries must eat to live. They must buy food to survive.

One other matter to which I should like to refer is the Murray Valley. All the areas I have mentioned already are in the famous Murray Valley, and they all depend upon the water they get from the river Murray. Therefore, we must conserve more water in the Murray Valley. It is a great, fertile area that will grow almost anything. Even cotton is being grown there. Citrus fruits of all kinds are grown there. As I have said, it will grow anything if it is given water. Those honorable members who have travelled through the valley are aware of its tremendous fertility. It has become famous throughout Australia for its fertility, and at the present time too much of the water from the Murray is being allowed to run into the sea. We must conserve that water, and it is for that reason that I have consistently advocated in this House that the Marraboor weir be constructed. On several occasions I have submitted questions, not asking that the Commonwealth Government contribute to this work - although I hope that eventually it will - but asking that the Minister for National Development (Senator Spooner) convene a conference to discuss the matter. After having advocated this for some years, finally, on 8th March last, I addressed a question to the Prime Minister asking him to confer with the Minister for National Development with a view to convening a conference to discuss this matter, which is of such vital importance to the Murray Valley and to the eventual welfare of the Commonwealth. The Prime Minister had said that there was to be a conference to discuss the Chowilla dam. In his reply to me, the Prime Minister said - i can understand the honorable member’s anxiety about this subject.

I had interjected that my interest was in the Marraboor weir -

However, from long experience of such matters, i would think it is a guinea to a gooseberry that during the course of the conference 1 have mentioned somebody will say something about Marraboor.

But Marraboor was not mentioned, and when I learnt that, I asked another question. I have not time to give the details, but I asked the Prime Minister whether the guinea had been lost and, if so, I asked him if he would convene another conference of Commonwealth and State authorities and others interested for the specific purpose of discussing the building of the Marraboor weir. The right honorable gentleman replied - i shall be very happy to convey my friend’s view to the Minister. As between him and me, i publicly admit that I owe him a guinea.

I have not received the guinea yet and I do not think I have much hope of getting it, because the Prime Minister is an astute lawyer. If I pressed him for the guinea, no doubt he would invoke the old gentlemen’s agreement that if you make a bet you cannot collect when you win unless you can prove that you could have paid if you lost. At this time of the year, gooseberries of the edible variety are very scarce and I could not find a gooseberry to meet the wager. So I have not pressed the Prime Minister for the guinea.

However, I am still pressing my advocacy of the Marraboor weir. The best payment I could get would not be a guinea but a conference of Commonwealth and State authorities and other people interested in the proposal to build the Marraboor weir. That is what I am advocating with all the enthusiasm I can muster. The Marraboor high-level weir would bring into production some thousands of acres of land in New South Wales and Victoria. Surely it is not asking too much when I request the Minister for National Development (Senator Spooner), who is also chairman of the River Murray Commission, to convene a meeting to discuss this proposal. If it were discussed and found to be impracticable we would not push it, but the people in the area I represent know that the weir would greatly assist production in Australia.

I ask the Minister for National Development to convene a conference immediately and discuss the proposal with the people and other authorities. I am confident that if the weir were built, it would mean greater production and prosperity in a large area with consequent general benefit to Australia.

West Sydney

– I wish to bring to the attention of the House a matter that actually has been on the notice-paper since the opening of this Parliament. I refer to housing for handicapped persons. This matter has been brought to my attention by the Civilian Maimed and Limbless Association in Sydney. The subject is not new and the problem is not confined to any one electorate. Every State of the Commonwealth has an interest in this organization. The honorable member for Mackellar (Mr. Wentworth) has had a motion on the noticepaper requesting the Government to give assistance to the housing of handicapped persons on the same lines as the grants to assist in the provision of homes for aged persons. For some reason, the honorable member for Mackellar has been prevented from proceeding with this matter and I hope that it will not be delayed much longer. I suggest to the Government that such provision for assistance to handicapped persons might very well be included in the Budget, and I am sure that the honorable member for Mackellar would have the support of every honorable member on the Opposition side if he proceeded with his motion.

In my electorate, the campaign to provide housing for the handicapped is in the hands of Mr. and Mrs. Bedwin, and Mrs. Hazel Bedwin is the honorary organizing secretary with her head-quarters at 61 Grose-street, Camperdown. I suggest that any honorable member who is interested in this humanitarian work of providing employment for civilian handicapped persons might visit the workshops at Camperdown and see what is being done there. More than 230 persons who are working in five factories in Sydney have been taken off social services and are gainfully employed. The saving to the Commonwealth Government in social service payments must be considerable. Most of these people would have been receiving a weekly pension of £6 each and the saving to the Government on 230 persons would be substantial. Therefore, the Government should not hesitate to provide for the assistance that is sought when preparing the Budget.

These people are unable to find accommodation near their work. They are not able to jump on and off buses or ride in trams and they would be greatly helped if accommodation were provided for them close to their place of employment. Some months ago, the Government took the sales tax off motor vehicles used by incapacitated persons in travelling to and from their employment. That concession enabled many of the people concerned to buy a motor car but there are many others who are not able to meet that expense. The Civilian Maimed and Limbless Association has about £15,000 in hand and is asking the Government to subsidize it on the basis of £2 for £1 - as is done in the case of homes for the aged - to enable the organization to build flats or other accommodation near the workshops to accommodate the disabled persons who work there.

If the Government does not accede to this request in the next Budget I shall continue to raise it, and I hope that the honorable member for Mackellar will also proceed with the motion he has on the notice-paper. I know that Mr. and Mrs. Bedwin are doing fine work and that they deserve every help. The activities of the organization are Statewide and they cover every class and creed.

Mr Bury:

– How many persons would be involved?


– I know of 230, but I understand that throughout all the States probably thousands would be interested. These people cannot live an ordinary life. They sit at tables or in chairs and do various kinds of work. They are paid quite a good wage and the organization has saved £15,000 from the factory earnings. The organizers are only asking the Government to match the money they have and then they will start to build some accommodation.

A few days ago I asked the Minister for Social Services whether, when the Budget was being framed, consideration would be given to granting a medical card to pensioners who have become eligible for the pension since 1955. If ever a government stands disgraced, it is this Government. Since 1955 pensioners who receive more than £2 a week from any source do not receive a medical card. If they call in a doctor - they are lucky to get one at times - they must pay the 30s. fee and then pay the 5s. perscription fee to the chemist. If the medicine prescribed does not come within the pharmaceutical benefits scheme the pensioner may have to pay anything from 10s. to £1 to have the prescription dispensed. How can any pensioner receiving £5 10s. a week cope with expenses such as those? Simply because they may receive £2 from the Railway Superannuation Fund or from some other source, or simply because they may earn £2 a week, they are deprived of the medical card. With the present cost of living it takes these poor people all their money to live, let alone buy a few clothes and pay perhaps £2 10s. a week rent from their meagre allowance. Because they receive or earn an additional £2 a week they are condemned to die like dogs without the aid of a doctor or medicine. That is what it means.

How, in the name of God, can a pensioner afford to spend up to £3 to have the doctor and to buy medicine? It is impossible! This Government takes credit for paying pensioners £5 5s. a week. But it is the State Government which is keeping the pensioners in New South Wales alive. The Commonwealth Government hands them a pension but it is not sufficient for them to live on. In my electorate I know pensioners of 70 and 80 years of age who walk the streets trying to collect money, not only for themselves but also for other very elderly persons. In Harris-street, Pyrmont, Mrs. Healey, a woman of almost 80 years of age. is treasurer of an organization which every year collects £800 or £900 for pensioners.


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


– I regret very much that during the debate on disarmament and nuclear testing I was unable to catch your eye, Sir - to use the euphemism - because I wanted very much to define my position on this matter. However, I understand that the debate now will not be resumed until after the recess so I shall not trespass on what has been said already. However, I want to make my own position clear. Opposition members put before us, not a nuclear policy but, if I may be pardoned for saying so, an unclear policy. The most charitable explanation of this is that they do not know what they are saying or where they are going. I am afraid that it is necessary for us to continue our tests while Russia continues hers. This is not just a case of keeping ahead with offensive weapons. It is much more a case now - this applies particularly to tests in the higher atmosphere - of keeping up with our defence weapons, the anti-missile missiles. If Australia, or any part of the free world, is attacked with atom-carrying rockets, the best way to deal with them may well be to shoot them down hundreds of miles from their target with other rockets carrying atomic warheads so that both will be destroyed without loss of life.

The experiments which are being conducted seem to have mainly a defensive content. They are designed to explore the possibility of shooting down enemy weapons before they reach their target, impeding their guiding system by causing electrical disturbances, or perhaps disarming their warheads by neutron action. These are matters of security so we may not discuss them in detail, but we know that these tests, which are the object of Russian propaganda - most, but not all of the propaganda against them is inspired by Russia - have primarily a defensive purpose.

The second point I want to make is that we in Australia, isolated as we are, may need nuclear weapons in certain circumstances for our own defence, provided - I make the proviso - that we do not have effective world disarmament.

My third point is that we in Australia, isolated as we are, must regard the maintenance of our alliances as the prerequisite of survival. Anything which impairs the maintenance of those alliances may be a fatal blow at the life - I use the word literally - of the Australian people. I make all those reservations because, comparatively speaking, they are minor matters. They would be major matters in almost any context but perhaps they are minor matters in the context of the survival of humanity as a whole. We must have some effective measure of international disarmament, whatever it may involve and whatever loss of national sovereignty or other unpalatable things may be wrapped up in the same package. Although we may have 25, 30 or even 50 years to make up our minds - the chance of destiny will tell us that - we must make up our minds relatively soon or cease to live on this earth.

I believe this to be an issue of great importance and, foreseeing that it would arise, I endeavoured, by sending a telegram to honorable members some time ago, to try to direct their attention to what is the paramount problem of our times. Now we must try to determine our policy on these major issues. Can what we do help or hinder the progress of an effective world system which alone will ensure effective disarmament? We must approach this question in the context of Russian bad faith. That bad faith is an unfortunate fact which we must recognize and admit. We cannot trust the Russians’ word. They are professional Leninists, and being professional Leninists they are therefore professional liars. The two go together. We have heard them say that in no circumstances was it justifiable to resume nuclear tests but, in the most treacherous way, while all the time protesting that they were against nuclear tests by other people, they were busy preparing to make tests themselves. It is in the bad faith of the Russians that we find the historical realities.

We can act in two ways. We can yield in outright and abject surrender. I do not think that anybody in this House will advocate this, and I certainly do not want to be advocating it. On the other hand, if there is not to be abject and unconditional surrender to what I believe are the forces of evil - the Communist and Nazi forces, because they are the same thing, the same kind of totalitarian forces of evil - we must have some means of getting effective control of disarmament. This means, in the first place, effective inspection - and it is not possible to have effective inspection unless Russia can be made to come to the party. So far, Russia has refused to come to the party. If we say to Russia, “ Look, we are not going to test any more. We are going to let you get ahead “, our people, whether consciously or unconsciously, would become pawns in Russia’s designs. By doing that we would not help the cause of world disarmament; we would hinder it, because thereby we would encourage the people who are, for their own purposes, treacherously working against effective disarmament. We would be siding with the enemy because we would be doing what the enemy wanted.

I say once again, lest I be misunderstood, that I believe that we have to have effective disarmament. I believe that we can only have this under effective international control. I say also that it is the Russians who refuse to admit this effective control. The activities of certain people who have tried to work against our testing, although they did not work against Russia’s testing, merely encourage the Russians in their attitude, and does not help but, in fact, actively hinder, the cause of world disarmament. Of course, I am not satisfied with everything that we are doing - or, should I say I wish that we were doing a great deal more? I wish that we were taking the initiative. If we cannot bring Russia in with us we should at least form among ourselves some coherent world set-up. I am sorry, Mr. Deputy Speaker, that my time has expired.


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


.- In the few minutes left for this debate I want to reply to statements made by the honorable mem ber for Mackellar (Mr. Wentworth) on the subject of disarmament. I have never heard it argued so hotly in this place that we are right and the Soviet Union and other forces are wrong. Honorable members opposite claim that everything about the Soviet is wrong, and that our side of the world is right on everything; but we of the Labour Party believe that there are wrongs on both sides. We say that the two sides in this great world argument have to get together to solve the great problem facing the world, and put an end to hate of the kind which spews but of the honorable member for Mackellar.

We in the Labour Party expressed our attitude to nuclear testing years ago in a decision made by the party’s federal executive when it met in Canberra from 10th to 13th September, 1956. The decision read -

This Federal Executive affirms the Labor Party’s unqualified opposition to the continued experimentation with nuclear weapons by way of explosions of atomic bombs whether for war or experimental purposes.

We once again draw attention to the grave fears expressed by the world’s leading scientists as to the danger to the earth and all its peoples if such folly is persisted in.

We stood in that position then, and we stand in it to-day. We condemn the testing of nuclear weapons by the Soviet Union and we condemn the present testing at Christmas Island by the Americans. We say that if those tests continue they will bring about the poisoning of humanity. That is all the time I want to spend on the honorable member for Mackellar. I wish to refer briefly to two more matters.

Yesterday, in this House, the Prime Minister (Mr. Menzies) made a statement regarding permanent employment of physically handicapped persons in the Commonwealth Public Service. This statement came three years after the Boyer report. This over-fed, over-weight, lazy Prime Minister of ours-


– Order! The honorable member will withdraw that remark.


– I withdraw it. In December, 1960, we on this side were hammering away at the Government in regard to the denial of permanent employment in the

Public Service to ex-servicemen, and the Prime Minister said at that time that he would deal with the question. But in his statement yesterday he made absolutely no reference to anything being done in that matter. I say that this Prime Minister and this Government have to give a fair deal to ex-servicemen in regard to permanent employment in the Public Service. We sent these men off to war, and they are entitled to consideration on their return. I see by this morning’s newspapers that the war drums are again being beaten over Laos. Men who have served in the forces, and have become disabled, should be given a fair go by being able to have permanent employment in the Commonwealth Public Service.

A very important decision that has been made by the Government has shocked me. The Prime Minister has announced that there will be a United States Navy communications station established at NorthWest Cape in Western Australia. This Prime Minister has decided that the Government will allow a foreign military base to be established in Australia.

Mr Bury:

– It is to be a communications unit, not a base.


– I want to remind the smug Minister at the table, who has interjected, that on 16th March, 1961, I asked the Minister for Defence (Mr. Townley) whether there had been negotiations between the United States of America and Australia regarding the use of an atomic reactor to provide power for a radio station in Northern Australia. The Minister replied as follows: -

There has been no request from the United States Government to this Government for any station of any sort in the north of Australia.

That answer was given only fifteen months ago, and now the Prime Minister has announced a decision to allow a foreign military base to be established in Australia. The statement made by the Prime Minister commits the Government to that. For the first time in Australia’s history, we are allowing 28 square miles of our sovereign country to be handed over to a foreign power for military purposes. I repeat, it is a part of sovereign Australia that is being given away to a foreign military power. The radio station to be established will be for war purposes and not for the purposes of peace. I condemn this action of the Government. I believe that we should not make our soil available to any foreign power whatsoever.

I should like to know why there is a need for this foreign base to be established in Australia. What are we preparing against? Whom are Australians defending themselves against? I should like members of the Government to answer those questions. I think that we should all condemn this action of the Government.

Debate interrupted under Standing Order No. 291.

Question resolved in the negative.

Sitting suspended from 12.46 to 2.15 p.m.

page 2463


Printing of Ministerial Statement

Mr SPEAKER (Hon Sir John McLeay:

– Honorable members will recall that this morning the House agreed to a motion that a short ministerial statement by the PostmasterGeneral (Mr. Davidson) be printed as a parliamentary paper. The motion for printing was moved by the PostmasterGeneral as the Leader of the Opposition (Mr. Calwell) desired to refer briefly to the statement.

The statement is, of course, printed in “ Hansard “. In similar circumstances in the past when the motion to print has been moved purely to allow debate on the subject of the statement, and to save the cost of dual printing, my predecessors have taken what I think is the common-sense course of treating the motion for printing as being sufficiently complied with if the statement appears in “ Hansard “. I understand that similar action in this case has the concurrence of honorable members.

page 2463


Second Reading

Debate resumed from 15th May (vide page 2294), on motion by Mr. Townley -

That the bill be now read a second time.


.- Mr. Speaker, Jn recent years there have been many matters within the province of the Department of Civil Aviation about which members of the Parliament have expressed suspicion and indignation. It is all the more pleasant, therefore, on this occasion to be able to congratulate the Minister for Civil Aviation (Senator Paltridge) and his officers on the diligence and promptness with which they have pursued the making of international treaties concerning civil aviation.

The purpose of this bill is to carry out the provisions of the Guadalajara Convention, which is only eight months old and which is not yet in operation. Three years ago legislation was introduced to carry out the provisions of the Hague Protocol to the Warsaw Convention. That protocol was less than four years old at that time, and it is not yet in operation. Australia was well ahead of the field, certainly among the common-law countries, in implementing that protocol. The Warsaw Convention itself came to the Parliament after five and a half years had elapsed. Honorable members will therefore see that the time which has elapsed between the Australian Government signing international conventions concerning civil aviation and the Australian Parliament implementing them has contracted quite notably. Australians and persons who travel in the aircraft of Qantas Empire Airways Ltd., Australia’s international airline, will enjoy the benefits of the Hague Protocol, and now of the Guadalajara Convention, as soon as any travellers in the world.

It is particularly important that Australia maintains its good record, Sir. We are among the relatively few countries which adhere to the common law. The law of most countries flows from the Continental or Roman system of law. The conclusion of international treaties and the effect which they have on common law are a relatively new field. Although the legal aspect is a relative rarity in common-law countries, the need for international agreements is particularly great among those countries, because the great trading countries, whether they trade by sea or by air, are commonlaw countries. These are the United States of America, above all, and the United Kingdom, and also, to a quite remarkable extent, Canada and Australia. Australia, admittedly, operates no international shipping. However, it does very successfully operate an international airline. Australians and visitors to Australia depend more than do the people of almost every other country on international air travel.

I wish to make one other general remark about the Guadalajara Convention and international civil aviation treaties in general. This bill and the principal act deal with matters in respect of which the Commonwealth Parliament .and Government occupy most of the field. The Commonwealth Government is the only government in Australia which can be party to any international commercial arrangements and the Commonwealth Parliament is the only parliament in Australia which can legislate on international commercial arrangements. This is also the only parliament in Australia which can legislate on interstate commercial arrangements, subject to the condition that freedom of interstate trade is preserved. Accordingly, in the field of civil aviation, the Commonwealth Parliament is able to pass laws which cater for most flights, most passengers and most cargoes. Therefore, the Commonwealth has been able to act promptly, and has acted promptly, in accepting its obligations.

I point to the contrast with other fields of civil aviation and with marine navigation, in respect of which the Commonwealth, not always of necessity, but, in recent years, practically always, as a matter of practice, has left the implementation of interstate or international arrangements to the State parliaments. In the civil aviation field, one can make a comparison with the legislation dealing with damage by aircraft to third parties on the surface. The Rome Convention on this subject was signed in 1952. The Commonwealth, in 1958, carried out its obligations under that treaty - obligations relating to international flights.

The Commonwealth Parliament could voluntarily legislate to apply these provisions to interstate flights. But the present Government has taken the attitude that in Australia the State governments should apply to interstate as well as intra-state flights the provisions which the Commonwealth Parliament has applied to international flights. Only two States have passed such legislation. The New South Wales Parliament passed a Damage by Aircraft Act in 1952, and the Victorian Parliament amended its Wrongs Act in 1953. However, if persons on the surface are injured or their property damaged in any of the other Australian States - that is, over by far the greater part of Australia’s area - by an object falling from an aircraft which commenced and ended its flight within Australia, the remedies available to the persons who are injured or who suffer loss are quite doubtful and, indeed, probably non-existent.

Mr Davis:

– That could apply to civil aviation in Western Australia, for instance.


– And to civil aviation in South Australia, Queensland and Tasmania. I do not think that any intrastate flights are made in Tasmania by the regular airlines. There is certainly a very real doubt about the position in Queensland, Western Australia and South Australia, which are the largest of the Australian States and in which there is no sure compensation for injuries or losses caused by objects falling from aircraft engaged on Australian flights. If the Commonwealth Parliament had the legislative capacity to do it, or if Australia were party to a treaty which gave the Parliament such capacity, then the residents and property owners in those States would and could have been safeguarded for many years past.

They could now be safeguarded if the recommendations of the Constitutional Review Committee, which were placed before honorable members more than three and a half years ago and the reasons for which were given to them more than two and a half years ago, were implemented. Every member of that committee, Liberal Party, Country Party and Labour Party, said that it was urgent and important that the Australian Constitution should be modernized to deal with such a twentieth century matter as aviation. The founding fathers had never seen aircraft, did not contemplate aircraft, and accordingly, did not mention aircraft in the Constitution. So the Commonwealth Parliament can only concern itself with aircraft involved in international or interstate flights, because then aviation comes under the Constitution’s general reference to trade and commerce with other countries and among the States.

The State governments have been extraordinarily tardy in this matter, which could be dealt with satisfactorily if either House of this Parliament were to put a referendum on it to the people and if the people were to support it. As there is no partisan opinion in this Parliament on the matter, it is high time we took this action. If we did, this Parliament would be able to legislate promptly in respect of all aviation matters in the same way as it is now doing in respect of those forms of aviation which can be brought within Commonwealth competence.

The officers of Qantas Empire Airways Limited and of the Department of Civil Aviation have done a very good job in concluding international treaties to safeguard Australian airlines and air travellers. Recently when this House was discussing International Labour Office conventions, Government supporters regrettably expressed the view that a country’s sovereignty is diminished when it enters into treaties. Admittedly it is, but there are some matters which can only be achieved for the Australian public by diminishing our national sovereignty in this way. Only under treaties is it possible to safeguard our rights against citizens of other countries or in respect of property which we own in other countries. We should be grateful that the Government has been able to enter into treaties with other countries which have given up their sovereignty to the extent that is necessary for Australians to be able to sue companies registered in those countries when Australians are injured in flights in aircraft owned by such companies. In order to conclude such arrangements we must give up some of our sovereignty so as to make Qantas Empire Airways Limited liable to suits by citizens of other countries carried in Qantas aircraft or in respect of accidents that occur in such aircraft when in those other countries. Civil aviation and the whole field of international trade and international relations are matters in which tension can be removed and justice procured only by our diminishing our sovereignty to the extent that other countries are persuaded to diminish theirs; that is, to the extent to which we enter into international treaties.

Another example of the Government’s delay in bringing about necessary reforms is shown in problems associated with marine navigation. Here again in recent years the Government has adopted the attitude that most of the problems associated with marine navigation can be overcome only by the

State parliaments. An additional complication is that until this Parliament moves by asking the Australian people to modernize the Constitution, some aspects of intrastate marine navigation cannot even be dealt with by the State parliaments. The Commonwealth Parliament cannot legislate on such matters in the absence of a treaty. In these matters the British Parliament alone can legislate, but in recent years it has expressly excluded ships and coasts beyond the British Isles.

Accordingly, one is confronted by the extraordinary position that the remedies available to persons who work, sail or consign goods in intra-state ships in Australia are still governed by an 1894 British act. The British Parliament has modernized that legislation as regards British shipping and coasts in the United Kingdom. The Commonwealth Parliament can modernize the provisions of its legislation as regards interstate and overseas shipping, but the State parliaments are unable to do anything about ship movements along their own coastlines.

This Parliament could have legislated in respect of about ten treaties covering marine navigation, most of them being International Labour Organization conventions, but it has failed to do so. In respect of one treaty this Parliament has legislated partially. It is the International Convention for the Prevention of the Pollution of the Sea by Oil, 1954. We passed the Pollution of the Sea by Oil Act 1960, which has not yet come into operation and which, in view of government policy, cannot come into operation until the States have passed complementary legislation and have made the necessary shore installations. This is a convention from which Australians can derive great advantages. Its application would prevent ships dumping oil not only within 3 miles from our coastline, which is the present provision, or within 50 miles from the coast, which is the position that obtains in respect of most of the signatories of the convention, but within 150 miles of the coastline. It is quite clear that this convention will be more than ten years old before Australia benefits from it.

Again, there is the 1957 Convention relating to the Limitation of the Liability of Owners of Sea-going Ships. Honorable members no doubt know that the liability of shipowners is limited to a certain sum of money for each ton weight of a ship. All persons bereaved or injured in an accident at sea must share the sum so calculated. The United Kingdom Government increased the sum for British-leased ships in 1958 and this Parliament could do so for interstate shipping. However, if a person works, sails or consigns goods in an intrastate ship - for instance, one of the 60-milers which travel between Newcastle and Sydney - he is limited to the scale set down in 1894 by the British Parliament. If the Government were to implement the 1957 Convention it could cater for such people, who would then receive five times as much compensation.

The whole position could be cured if this House were to adopt another unanimous recommendation of the Constitutional Review Committee. The committee recommended that this Parliament should ask the people to modernize the Constitution by repairing an oversight - that is what everybody admits it to be - by the founding fathers more than 60 years ago when they gave this Parliament power to legislate on interstate navigation alone. By comparison with its approach to civil aviation and all marine navigation matters, the Government has acted with commendable promptness and diligence in becoming a party to the Guadalajara Convention and, before it, (he Hague Protocol. The Government is to be complimented on giving Parliament the early opportunity to adopt the benefits of those international treaties.

There are two provisions which I would ask the Minister to take the opportunity to amend in this bill. They are faults of the 1959 act. The first concerns the eligibility for compensation or damages of passengers of aircraft which are engaged in interstate flights. The second concerns the compensation payable for loss of baggage consigned or luggage carried in interstate flights. The international convention enabled Australia to apply in respect of international flights the scale of compensation set out for passengers and consignors in the Hague Protocol amending the Warsaw Convention, and the 1959 act faithfully reproduced, in Australian terms - pounds Australian and avoirdupois - the amounts of compensation provided in the Hague Protocol. The Parliament then, of its own free choice, provided similar compensation in respect of interstate passengers and also made a specific provision in respect of interstate consignors. It is the differences that we lament, and we ask the Government to take the opportunity in this bill to see that the amounts and methods of compensation for injuries or deaths in the case of passengers, and for losses in the case of luggage and baggage or goods, are the same for interstate passengers and consignors as for international passengers and consignors.

There is a marginal difference - the difference between £7,400 and £7,500- in the lump sum amount which can be paid to passengers in the case of injury, or to their next of kin in the case of death. But in respect of international passengers the protocol provides that in the case of gross negligence a passenger or his next of kin can sue the airline concerned for unlimited damages. The usual position in Australia is that in cases of negligence persons can recover damages commensurate with their injuries. In cases of accidents or losses on the roads or on the railways, except the Commonwealth Railways, there is no limit to the damages that can be recovered if negligence can be proved on the part of the operator.

The Government has asked the Parliament to approve, and the Parliament by majority has approved, a system in respect of Australian interstate air transport which is quite different. We have said that even if gross negligence - quite apart from ordinary negligence - occurs, the maximum that can be procured is £7,500. It may be that £7,500 would cover most cases of injury or death. There have been some sad cases in the last few years in Australia in which children have lost their lives in air accidents, and the compensation which has been paid to their parents has been less than £7,500, because clearly it is not possible for the next of kin to prove that they have suffered losses to that extent. But there are not unusual cases in which passengers may be deprived of their livelihoods or their lives in an aircraft accident, and the losses that they or their survivors suffer are much greater than £7,500. There could be cases in which it would be quite impossible, however much one reduced one’s former scale of living, to complete the education of children or to fulfil other family commitments with £7,500. It would not take many children, and they would not have to be very young children, to exhaust that amount in completing their education even up to the minimum age of fifteen years.

The first thing we ask the Government to do is to permit interstate passengers or their survivors to recover from Australian interstate and territorial airlines such damages as will meet their losses if those losses flow from the negligence of the operators. That is a proposition which we accept in relation to accidents on the roads and on the railways, except the Commonwealth Railways. We should make no differentiation with respect to air travellers. So, our first request is to bring interstate air travellers, in respect of whom this Parliament has complete competence, within the ordinary conditions. If a person is injured in an airways bus while it is in transit, or while he is getting in or out of it, he can secure damages to any amount that will meet the situation. If, however, he is injured in an aircraft, even while taxi-ing - and accidents can happen when aircraft are taxi-ing, as we have learned in the last week - or when he is getting in or out of the aircraft, the limit of compensation that he can get is £7,500, even if the extent of his damages is, in fact, very much greater.

The other request we make to the Government concerns the compensation for loss of luggage. The Hague Protocol limited the amount which could be recovered in respect of registered baggage or cargo to 250 francs per kilogramme and in respect of hand baggage to 5,000 francs, those francs to consist of units with 65i milligrammes of gold of millesimal fineness 900. The Hague Protocol sets out that amount for international flights. Converting to pounds Australian and avoirdupois, we find that consignors can secure compensation of £2 8s. per lb. for cargo or registered baggage - up to any number of lb. - and £150 for hand baggage.

In respect of international passengers, the 1959 act faithfully carries out our obligations under the Hague protocol. But in respect of interstate passengers the act provides, by section 31, sub-sections (2.) and (3.), that the limit in respect of registered baggage shall be the sum of £A.100 and in respect of other baggage the sum of £A.10. We therefore ask that this anomaly should be removed. One does not get compensation unless one can prove a loss. That is quite clear. In respect of international travel one can receive £A.2 8s. per lb. without weight limit, for registered baggage, and £A.150 for hand baggage irrespective of the weight; but in respect of interstate travel one is limited to £A.100 in the former category and £A.10 in the latter. Therefore we ask: “ Why the difference?” The person leaving an international aircraft in Sydney is covered for his baggage up to the amount of the Hague Protocol; on his trip to Melbourne he is covered to the lesser standard which we set in 1959 and which it is completely within our power to raise to the international standard.

Therefore, I move -

That all words after “ bill “ be omitted with a view to inserting the following words in place thereof: - “ be withdrawn and redrafted to incorporate, in relation to interstate and territorial air services -

the general principle of unlimited liability at law for negligence on the part of airline operators in respect of passengers, cargo and baggage, and

at least the same minimal liabilities for safe carriage of goods, registered baggage and passengers’ hand luggage as set under the Hague Protocol.”

Mr Crean:

– I second the motion.

Question put -

That the words proposed to be omitted stand part of the question.

The House divided. (Mr. Speaker - Hon. Sir John McLeay.)

AYES: 60

NOES: 56

Majority . . . . 4



Question so resolved in the affirmative.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time, and! reported from committee without amendment or debate; report adopted.

Bill - by leave - read a third time.

page 2468



Debate resumed from 12th April (vide page 1630), on motion by Mr. Harold Holt-

That the following paper: -

Trading Bank Facilities and Arrangements -

Ministerial Statement - be printed.

Motion (by Mr. Townley) - by leave - agreed to -

That so much of the Standing Orders be suspended as would prevent the honorable member for Melbourne Ports (Mr. Crean) speaking for a period not exceeding 40 minutes.

Melbourne Ports

.- I thank the House for its courtesy. The statement that we are debating was presented to the House by the Treasurer (Mr. Harold Holt) some four weeks ago. It makes four alterations to the banking structure. The distinction between these alterations and others that the House has had to consider is that these are made merely by the fiat of the Treasurer. They require no legislative enactment. However, in essence the alterations are comparatively minor, so far as two fundamental problems are concerned. These problems are of great significance to the Australian economy as a whole. First, in Australia we have the steadily rising cost of credit to the community. In other words, interest rates are exorbitant. Secondly - this is of great import for an economy such as ours - because of the way the economy is growing and the way that affairs are being handled, there is a steadily declining power in the hands of the Australian economy in the overall control of credit. It seems to me that these two fundamtntal problems are untouched by the arrangements made by the Treasurer. I repeat them. They are the high cost of credit - later I will give some examples of this - and the declining power relatively of the Australian Government to control the overall volume of credit.

Before I go into these two problems, I should like to outline briefly what the new proposals are. The Treasurer’s proposals provide for the setting up of what he called a term lending fund. This recognizes that there are deficiencies in the credit structure so far as internal development and export credit are concerned. The purpose of the term lending fund is to set aside a sum of £55,000,000 to create what in essence is a new development bank administered by the trading bank system, as against the splendid example already existing of the Commonwealth Development Bank. Recently, we criticized the Commonwealth Development Bank not for what it is but because it has inadequate capital. Here is a recognition that in some of the fields in which the Com monwealth Development Bank is supposed to operate, there is a deficiency of credit. The term lending fund goes some way towards bridging the gap.

One of the unexplained points about the term lending fund is that it is to be divided between three sorts of activity. They are, first, rural development; secondly, commercial undertakings; and thirdly, the provision of finance for the export trade mainly in durable as against consumer goods.

Mr McMahon:

– The second activity is not commercial; it is industrial.


– I mean commercial in the sense of industry. It is industrial as distinct from rural, and perhaps I should have said that. There is no intimation of the relative importance of these three branches of endeavour. Later, I shall attempt to point out that, so far as the export trade is concerned, we doubt very much whether this provision goes far enough to meet the present problem. It appears that the rates of interest at which the new undertaking will advance export credit will place an excessive burden on those seeking to find new markets.

The proposals provide for more flexibility in the lending rates of the banks. As honorable members know, the ceiling rate of 7 per cent, has operated as the maximum charge for overdrafts. Within that limit, the banks have been allowed to set flexible rates but the average of all loans by banks was not to exceed an overall yield of 6i per cent. Some of the impediments are to be removed, but again the movement of interest rates will not be downward but will be upward. The tendency will be to move towards 7 per cent, as a ceiling rather than towards the present average of 6i per cent.

The new proposal does not recognize the very real problem that is facing the Australian banking system at the moment. When the Government imposed a credit squeeze, it found that bankers had already entered into overdraft commitments that had not been fully availed of, and consequently overdrafts rose instead of falling. In the reverse of the cycle, when it sought to restore the economy and to relax the credit squeeze, bank overdrafts did not respond in an upward direction. Until this quarter, overdrafts continued to fall, although supposedly credit expansion was the order of the day. Whether the present situation is due to the fact that existing borrowers still have no confidence in the future of the economy is one of those questions which perhaps cannot be answered finally to-day, but at least the fact that the people who have been promised overdrafts are not availing themselves of them as rapidly as we would like does limit the capacity of the banks to lend to other people who might want to engage in immediate economic activity. The fact that banks are not lending as rapidly as they would like to do also affects the overall profits of the banking system, and tends to keep the overdraft rates higher than circumstances warrant.

The third measure deals with the only field in which there is a downward movement of interest rates. There is to be a reduction of one-quarter per cent, in the interest rates payable by the banks on term deposits. That might not sound very much in itself, but when we take into account the fact that the term deposits aggregate some £500,000,000 or more, a reduction of one-quarter per cent, in the interest that has to be paid means a net increase of some £1,250,000 in the annual profits of the banking system. But the effect of lowering the interest rates on bank deposits could be to cause those deposits to go into the fringe institutions about which I shall say something later, and which this lgeislation does nothing whatever to restrict.

The fourth limb of these proposals is the creation of a new sort of treasury-bill. Of course, treasury-bills are simply traditional borrowings by the Government from the Reserve Bank of Australia, and hitherto the interest payable on those securities was 1 per cent. The new treasury-bill, of which the banks and the public may avail themselves, and which, apparently, will be available continuously by tender or some other arrangement which has not yet been indicated, will probably bear interest at something over 3 per cent., instead of the 1 per cent, currently payable. That, too, will involve an increase in the cost of credit to the Government.

The overall effects on the banking system of these proposals will be to increase the profits of the trading banks by some £2,000,000 annually. But, to my mind, that is not the critical issue at the moment. To my mind, the critical issue is what has been left untouched - the heavier cost of credit, and the decline in the power of the Australian Government to regulate overall credit in the Australian community. One thing that has emerged in Australia, as a developing economy, over recent years is the fact that, relatively speaking, banks do not play the significant role that they once did. Whereas, in past days, you could operate through the banking system either to relax or contract credit, now, if you were to operate in that sphere, the results would be so disastrous that you would go close to threatening the whole economic life of the community. This is not a new feature. It is a feature that was recognized by the Constitutional Review Committee some three years or more ago. The report of the Australian Labour Party’s Economic Planning Committee, which was drawn up in 1960, and which was submitted to the last federal conference of the Labour Party, held on 10th April, 1961, contained this reference to banking -

In banking it must be recognized that what is technically described as banking now occupies a relatively smaller part of the economy than in the past. This fact was noted in the economic sections of the Constitutional Review Committee’s report, and also in the first report of the new Reserve Bank.

It then quoted these words from the report by Dr. Coombs -

Nevertheless, the growing opportunities for raising funds outside the banking system tend to limit the effectiveness of central bank action directed at the banking system alone.

Those words are to be found at page 20 of the report of the Reserve Bank of Australia for 1960. The Labour Party’s Economic Planning Committee’s report continues -

This position poses serious limitations where Labor is confined to controlling not owning the banking system, and points to the need to obtain the constitutional changes unanimously recommended in the Constitutional Review Committee’s report. Control over interest rates and capital issues comes within this realm.

Meanwhile, recognizing that this latter course might be a long one-

And the progress of constitutional reform is slow and, unfortunately, efforts to achieve reform are sometimes unsuccessful. The report continues -

The Committee recommends active competition in hire purchase activities by the Commonwealth Bank.

The presumption by the Government has been that, because hire-purchase activities were not banking activities, they could not be controlled. We suggest that they ought to be treated as banking, that they ought to be controlled, and the legality of the action taken could be determined by proceedings before the courts. The effect of taking what some one referred to the other night as an ostrich-like stand has been to allow this illegitimate source of credit assistance to the community to mushroom, with unfortunate results to the overall economy. There does not seem to be any doubt, either, that the Government realizes its responsibility to control credit because at page 3 of his memorandum the Treasurer (Mr. Harold Holt) says this -

The Government has to be sure that whatever arrangements are made do not impair seriously its-

That is, the Government’s - power to control the general credit situation.

When referring to the banks, the Treasurer makes this comment at page 1 of his memorandum -

The banks do not in any way dispute the need for an overall control of banking operations in pursuance of national monetary policy.

The Government does admit that it is the responsibility of the Government to control credit, and the banks do not deny that this is an obligation which a government should assume. But the real position is that the Government is not fulfilling the task and, because it has failed to control the new facilities for extending credit, the Government has lost a substantial amount of the power that it had in the old field. Instead of our getting the purposive sort of development that this country needs, the nation’s credit has been wrongly directed down high-cost and often frivolous channels, with a consequent lowering of the status of the banks. The Radcliffe Committee, a committee of experts which examined the structure of the monetary system in Great Britain, described the banks in Great Britain as widespread and efficient lenders. I suggest that that is also true of the

Australian banks. Whatever views we may have about the private banking system in Australia, at least it is a better source of credit, when subject to social control, and a more legitimate source of credit, than some of the new instrumentalities that have been allowed to flourish under this Government.

The flourishing of these illegitimate sources of credit encouraged speculative manias in the community. They wrongly directed the pattern of the nation’s development and led to two sets of action on the Government’s part. They led to the disastrous action in February, 1960, when the Government removed import controls. The stated purpose of the relaxation of import controls was to allow the admission of more goods into Australia and so cause a lowering of prices, but that did not eventuate and in consequence, at the end of 1960, we had the application of the credit squeeze which developed through 1961.

I think the effects are adequately summed up in an article in the March, 1962, issue of “ The Economic Record “. It is a contributed article dealing with the Australian economy at February, 1962, and was written by Professor H. F. Lydall of Western Australia. Looking at the slump of 1961 that followed the relaxation of import controls in February, 1960, and the credit squeeze in November, 1960, he said that these were its effects -

Broadly, it appears that in the slump of 1961 Australian gross national product fell by about S per cent.-

Again that does not sound very much, but in money terms it meant £350,000,000 to £400,000,000-

  1. . industrial production by 11 per cent., retail sales by 5 per cent., new vehicle registrations by 30 per cent., houses and flats commenced by 20 per cent., and gross private fixed investment in plant and equipment by IS per cent.

It is to this gross private investment that we look to provide additional capacity as an economy. The professor added -

As has been noted already, a number of these indicators suggest that there was the beginning of a revival of activity in the fourth quarter of 1961.

That is the financial year we are in now. At least, they were the consequences in 1961 flowing from the actions of 1960, and it is to remedy that situation that the measures we are now contemplating have been brought down. I think it is right to ask at this point: If we are only operating at the level of the banking system, will we not get a re-emergence of the situation that the Government said faced us at the beginning of I960? Will we not get back into the atmosphere of boom?

I have heard supporters of the Government suggesting that what they call the improvement in the economy was perhaps going a little too fast, so far as it has gone. I do not know what the 100,000 unemployed are to think about any improvement going too fast; but that is the view held by some honorable members on the Government side. The suggestion apparently is that if an improvement goes a little fast, the credit squeeze might be applied again. The Opposition says, and I repeat these two basic problems: First, the cost of credit in Australia is too high at present; and secondly, because of its failure to face up to changed circumstances - and banking is only one part now of the credit structure - the Australian Government has lost substantially the power to control the volume of credit which any modern government ought to have.

Mr Chipp:

– The honorable member said that we did not have the constitutional power to do that.


– I suggest that the Government can take measures other than constitutional change. Constitutional changes might be made to get an effect, but if the Government waits until that comes about, there will not be much to save in the Australian economy. The Government could make better use of the powers at its disposal, but what has characterized this Government has been an indifference to the need that exists in the community.

In a recent article in the “Australian Financial Review” dated 17th April, 1962, and entitled, “ Banking Not For Bankers “, there is a reference to this matter. Our view is that banking is too narrowly construed if it is considered only in terms of private bankers. Banking is more than the private practice of those concerns called banks. What banks do or do not do is of vital consequence to the whole community.

Mr Forbes:

– Is the honorable member setting himself up as an authority?


– Some five or six years ago I wrote for the Australian Labour Party a pamphlet entitled, “ Banking is Your Business “, meaning that it was everybody’s concern and not just a mystery to be kept in the hands of certain gentlemen who talk about liquidity ratios and l.g.s. and other jargon. Banking is part of the flow of credit. We, as the Australian Labour Party, have always taken the view that money basically is stuff that simply should make the economy flow. Credit is blood rather than body and spirit; but the view of the banker, of course, is that he cures the patient by stopping the circulation of the blood. There are very few diseases, so far as I know, that respond to that kind of treatment.

Getting back to the cost of credit, the article published in the “ Australian Financial Review “ of 17th April stated -

Between 19S3 and 1961, the maximum overdraft rate has risen from 5 per cent, to 7 per cent.; the rate of interest on first mortages registered in N.S.W. has risen from just over 5 per cent, to nearly 9 per cent.;-

That is of significance to home-buyers. - the yield on Commonwealth Government shortterm securities has risen from about 3i per cent, to about 4i per cent.; the rate on first-class company debentures has risen from 4 per cent, to about 6 per cent.; the rate on other company debentures has gone from about 5 per cent, to about 8 per cent.

We had the spectacle the other day of what investors call one of the “ blue chip “ industries of Australia borrowing £12,000,000 at 7 per cent. If the honorable gentlemen opposite feel that Australia will develop - particularly its rural industries and export trade - in terms of interest at 7 per cent., that is not the view on this side of the House.

The other set of figures that I wish to cite shows the change in the relative importance of the banking system as a provider of credit. Again, I take this table from the “ Australian Financial Review “ of 10th April. It shows the total assets in respect of Australian business of certain financial organizations, giving the figures at June, 1953, and June, 1961. lt does not matter whether we take assets or liabilities; these institutions are simply sources of the provision of credit in Australia. But let us take the assets. At June, 1953, the assets of the trading banks totalled £1,548,000,000.

By June, 1961, they had increased to £1,961,000,000 because in that period, as a result both of inflation and of some growth in the Australian economy, the general circulation of credit had increased. However, the banks provided only 29.7 per cent, of the total credit structure. In eight years there had been a decline of one-quarter in the relative significance of the banks as providers of credit. But other institutions mushroomed in that period. At June, 1953, hire-purchase and other instalment credit companies had assets of £89,000,000; by June, 1961, these had increased to £480,000,000 - a five-fold increase as compared with a one-quarter decline in the relative significance of the banks. Building societies’ assets increased from £121,000,000 to £230,000,000, a 100 per cent, increase, and non-life insurance companies increased their assets from £101,000,000 to £205,000,000, or by more than 100 per cent. However, it is significant that the assets of pastoral finance companies declined from £129,000,000 to £106,000,000. I doubt whether there was less need for pastoral finance in 1961 than there was in 1953 but, as I have said, the assets of pastoral finance companies declined in the aggregate and, most significantly, as a proportion of the total. Unit trusts and investment companies - a new kind of financial device popular on the stock exchange these days - increased their assets from £19,000,000 to £84,000,000, a 450 per cent, increase. Friendly and health societies increased their assets from £28,000,000 to £52,000,000. The total assets of all these providers of credit increased from £3,829,000,000 to £6,454,000,000. I repeat, for the benefit of honorable members, that during the same period the trading banks’ proportion of the credit structure fell from 40.4 per cent, to 29.7 per cent. At least that shows that the banks, as providers of credit, have declined and the other institutions have increased.

If you consider the profit structure of these new hire-purchase companies you will obtain some indication of the rate of profit earning which is due to the interest charges imposed on those people who avail themselves of that source of credit. I should like to refer to an article, written by W. L. Burke and N. Runcie of the Faculty of Commerce, University of New South Wales, which appeared in the August, 1961, issue of “ The Australian Accountant “, a very respectable journal. The article is headed, “Australian Finance Companies: A Study of Profits, 1951 to 1960”. The writers took the history of thirteen finance companies which were in existence for the whole period from 1951 to 1960. In that period their profits, before tax, rose from £2,044,000 to £7,316,000, a 350 per cent, increase. Another group studied consisted of six new companies, which commenced operations from 1951 onwards. The profits of those new profiteers in the field rose from nothing to £5,500,000. In other words, nineteen hire-purchase companies between them made a profit, before tax, for the year ended June, 1960, of some £13,000,000.

The significant thing is that their total profit ranks with the total profit of the private banking system which still provides four times more credit than is provided by the companies to which I have referred. The figures give some indication of the exorbitant interest rates which are charged by hire-purchase companies. To illustrate the rates of interest I shall refer again to the article in “ The Australian Accountant “ and cite figures supplied to the writers of the article, which is headed “Typical H.P. Terms of Leading Companies, December 1960 to January 1961 “. Remembering that we regard a maximum of 7 per cent, interest on a bank overdraft as excessive, listen to what is charged by hire-purchase companies! On new motor vehicles the effective rate is 13i per cent. On a used car, two years old, the effective rate is 17i per cent., and the same rate applies to a used car four years old. On a new truck, which, after all, is an integral part of an industry, the effective rate is 13) per cent, and on a used truck it is 17i per cent. On a new tractor the regular rate is 13i per cent, and the seasonal rate also is 134 per cent. Taking plant and machinery, the effective rate on a new lathe is 13i per cent., as it is on new agricultural equipment, but on used agricultural equipment two years old the rate is 171 per cent. Then we come to consider the average person in the community who is bold enough to believe that his wife and family are aided by having in the house a refrigerator, a washing machine and a television set. The effective rate on the credit supplied for those modern appliances is 19i per cent.

The circumstances of banking indicate what can happen when social control is applied. At least some kind of limit is set to the rake-off, but when there is no control or restriction the hire-purchase and other institutions obtain the profits which I have mentioned. In the aggregate, the profits earned by hire-purchase companies total only £2,000,000 or £3,000,000 less than the profits earned by the whole private banking system. The private banking system has been in existence in Australia, without much tribulation at any rate, since 1893 - for 70 years. Most hire-purchase companies have mushroomed in the ten years since 1951 but, as I have said, their profit return is almost of the same magnitude as that of the banking system.

Measures which are supposed to abate the serious circumstances of the Australian economy are presented to us. We of the Opposition repeat that this Government is only tinkering with the great problems which beset the nation. We should be doing some of the things which people in other parts of the world regard as necessary for the effective operation of their economic life. I want to bring to the consideration of the Minister for Labour and National Service (Mr. McMahon), who is at the table, and the Treasurer (Mr. Harold Holt) an examination of the conditions which exist in Sweden, a country which, I suggest, has an economy somewhat comparable to our own. I should like to read from an article entitled “ The Possibilities of Monetary Policy”, written by Erik Lundberg, which appeared in the October, 1961, issue of “ Skandinaviska Banken “. It commences in this way -

Our present attitude towards the inherent possibilities of monetary policy, and towards its efficacy as a stabilizing agent, can be described as one of well-informed uncertainty.

In Australia the uncertainty is not even well informed, and this is also the case in a lot of spheres other than financial. The writer then goes on to refer to - our modern Swedish credit policy

I emphasize the word “ modern “- which aims at a strict regulation of the credits extended by banks and other institutions.

In other words, you cannot operate through the banks alone. The article continues with an appraisal of the Swedish system, and says -

Swedish monetary policy aims-

And I suggest that these aims would be worthy of any Australian government - not only at achieving a certain stability, but also at assisting fiscal and social policy, by bringing about a particular type of credit distribution between branches of activity and by giving priority to certain particular fields of investment. One finds less of this type of policy in the U.S. for instance; there the stabilization policies tend to let the forces inherent in the markets find their own level. In Sweden, on the other hand, the aim is largely to steer or to suppress these forces.

I suggest that that ought to be the aim of credit policy in Australia. The policy ought to be aimed at planning for the use of our resources so that we shall get the maximum development, so that we shall get full employment, so that we shall get price stability, so that we shall get justice as between all sections of the community. We have not those things now. We have had stop-and-go in economic policy from this Government, culminating in the situation of a month or two ago, when we had about 150,000 unemployed. Even now the unemployment figure is in the region of 100,000.

Mr DEPUTY SPEAKER (Mr Falkinder:

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

Minister for Labour and National Service · Lowe · LP

– The motion for the printing of this paper gives us another opportunity to contrast the philosophies and the policies of the Labour Party with the philosophies, the policies and the activities of the Liberal Party and the Australian Country Party. Before I touch on that matter, which I regard as of great political importance, I shall deal with some of the reasons why the Government has taken administrative action to extend the range of activities of the private trading banks and of the Commonwealth Trading Bank, and to give them greater flexibility in the management of their own affairs.

The honorable member for Melbourne Ports (Mr. Crean), who has spoken on behalf of the Opposition, has stated that there are two objections to the Government’s actions. The first objection relates to what he describes as the excessive interest structure. The second objection lies in his claim that the Government has done little or nothing to permit the private trading banks and the Commonwealth trading banks to expand activities.

Mr Pollard:

– They are certainly expanding their profits.


– The honorable member for Melbourne Ports said the trading banks would make a profit of about £2,000,000. The honorable member for Melbourne Ports obviously made an error when he said that the average maximum rate of interest was 6i per cent., because it happens that the average maximum rate charged by the banks to-day is 6 per cent. It happens also that the banks have informed the Commonwealth Government that they have no intention of changing the average rate that would be charged throughout the banking system. They have also made it clear that the system of preferred lending to exporters and the rural section will still be observed.

The honorable member for Melbourne Ports then mentioned interest rates generally. Of course we want the lowest rate of interest that can be achieved to apply. Of course we want lenders to lend at the cheapest possible interest rate. But what the honorable member for Melbourne Ports has forgotten is that in a community like ours the money has first to be obtained by the banks from their depositors - the savers in the community - and unless a satisfactory rate of interest is offered on deposits savings will not be attracted, and the development of this country cannot proceed.

To-day, the effective rate of interest on deposits for one year is 4 per cent. I venture to say that if that deposit rate were reduced savings would dry up, and the capacity to lend money to develop the economy would diminish accordingly. So, whilst I should like to see effective rates of interest fall, I doubt whether the average rate of interest can be reduced, in a commercial economy like ours, very much below 6 per cent, with deposit rates at the present level of 4 per cent. The proof that this average rate is a commercial one, as the honorable gentleman very well said, is that Broken Hill Proprietary Company Limited, borrowing on commercial terms, has had to pay 7 per cent, in the market for the money it has raised.

As the House well knows, bank advances are now increasing substantially, which indicates that the borrowers themselves are satisfied1 with the market rate of interest they are paying.

I want to come now to the substance of the speech made by the Treasurer (Mr. Harold Holt), and I want to deal with the reasons why the Government decided to take action. First, we believe in a strong central banking system. We want the central bank, with the support of the Government, to be able to control the quantity of credit and the dual structure of interest rates charged in the banking system. Subject to that - and here we come to the second major point raised by the honorable member for Melbourne Ports - we want the trading bank system to expand their operations and capacity to lend as the nation grows in strength and in industrial capacity. In other words, we want expansion of trading bank activities as the capacity of the community to expand grows. So what has been done is to provide something of the order of £55,000,000 that can be used by the trading banks, both public and private, for medium and longterm loans for periods of between three and eight years. We want the banks to expand, and provision has been made to permit them to expand. We want them to find new fields of lending and if necessary, to take over some of the lending that has been carried out by the fringe banking institutions. 1 believe that that answers the second objection raised by the honorable member for Melbourne Ports.

It is our hope, and our expectation, that as the private trading banks and the Commonwealth trading banks expand their activities there will be diminishing activity by the fringe banking institutions and those institutions which the honorable member classifies as “illegitimate”. When this has been done it will permit the Reserve Bank and the Government, in co-operation, to have a much more effective central banking control over the activities of the trading banks themselves, and over the lending activities of the insurance companies and the hire-purchase companies and other lending organizations. In other words, the greater the amount of effective control that can be exercised through the Reserve Bank the greater will be the activity of the trading banks, and the less will be the activity of other lending institutions. That is the first objective of the Government. I am glad that this action has been taken, because I want the financial strength and the efficiency of the trading banks, both private and public, to improve. I want those banks to take an increasing part in the development of the nation.

The Government’s second objective is to permit the banks to manage their own affairs. The banks have felt for some time that there was a little too much interference in their domestic affairs, and that there could be greater efficiency and greater expansion of lending activities if the average rate of interest were abolished and if they were permitted to invest their deposits in the way that they thought was in the interests of the banks and of their own depositors. In order to achieve this, the Government has said: “ It will abolish the average rate of interest, because it no longer serves a useful central-banking purpose, and it can create administrative and practical difficulties for the trading banks. In order to permit them to exercise a greater degree of efficiency in management and in banking operations generally, the trading banks will be permitted to compete on commercial terms for the new kind of treasurynotes that will be issued at a commercial rate of interest. They will be permitted, also, to lend more of their funds to what is called the short-term money market. Here are changes by the Government designed to give the banks greater opportunities to invest their funds in the way that they think is best, subject always to centralbanking control, and also to permit the management of the banks, and particularly the private trading banks, to adjust their assets in order to get the best return.

The third point that I wish to mention in relation to the statement made by the Treasurer is this: For long, we in this country have lacked what may be called an indicator interest rate, a change in which will give the trading banks the signal to change their interest-rate pattern and so affect the structure of interest rates throughout the community. With this in mind, by agreement with the Reserve Bank of Australia - the central bank - and the trading banks, and with the approval of the Government, it has been decided that there will be what is called an indicator rate. This will be a maximum rate of interest that may be charged by the banks. It is expected that when this rate is changed there will be changes in the various other rates of interest charged, first by the private banks, and, as a result of the influence of those banks, by the other sections of the economy. I believe, Sir, that this will mean a great improvement in monetary policy and in our capacity to manage the money market compared with what we have known previously.

The three changes proposed by the Government which I have outlined have the objective and, I hope, will have the effect of reducing interest rates, because money will be attracted into the banking system and lent by it. Money will be taken from the fringe banking institutions, which the honorable member for Melbourne Ports described as the illegitimate banking system of this country. We shall find that the banks being more efficient and lending at the lower rate than the non-banking lenders, will take away business from the nonbanking organizations and that over the economy as a whole, there will be some reduction in interest rates, perhaps even, in time, a significant reduction. Secondly, we shall find that the banks will expand their activities and take their proper place in the expansion of the economy. They will provide the blood, if I may adopt the metaphor used by the honorable member for Melbourne Ports, which will enable a healthy body and a healthy spirit to work effectively.

Finally, Sir, it is said that some additional profit will be made by the banks. The honorable member for Melbourne Ports mentioned the amount of £2,000,000. I do not know whether that estimate can be sustained, but, if that were the amount, the tax on such profits would be about £800,000, and the net amount earned by the banks would be some £1,200,000. We should not regret the earning of such additional profits by the banks. In fact, I think that if their profits increased by such a sum, they would be better able to improve the working conditions of their employees. As one who believes in the trading-bank system and wants it to be strong, and, subject to ordinary central banking controls, independent. I applaud what has been done by the Government. I believe that it will strengthen the banks and improve their capacity to participate in the growth of this great and vigorous country.

I want to direct attention now to certain other matters. I believe that the time has come when we should make it clear to the people of Australia where we and the Opposition stand on the issue of private banking. As one who believes in a free-enterprise system, and in the freedom of men freely to associate, I also believe that we must have free institutions as a support for the freedom that we want our people to enjoy. I do not think that you can have freedom unless there are in the community institutional safeguards to protect the people from arbitrariness, the bureaucratic mind and dictatorship. If we mean what we say about our belief in free men and free institutions, it is essential, in my view, that we have a free and relatively independent private banking system in this country. I state my firm belief in such a banking system as one of the great bulwarks against arbitrariness and bureaucratic control. I believe that the private banking system of this country has done much in our time not only to promote the development that has taken place in this country in the last 50 years but also to protect the people against arbitrariness and unnecessary interference.

But what of the Opposition, Sir? The Opposition likes us to believe that it has now become liberal in inclination and intention. During the last general election campaign, we heard the Leader of the Opposition (Mr. Calwell) proclaiming that whilst the policy and platform of the Australian Labour Party are based on socialization of the means of exchange that Labour would not put any of its socialist policy into effect during the lifetime of this Parliament. However, words are not enough, Mr. Deputy Speaker. Members of the Labour Party ought to be known by their actions rather than by their professions of intention. The motives and feelings that have dictated the actions and the socialist policies of Labour have, in the past, been directed towards the destruction of the system of private banking that we know in this country and I do not think their motives and intentions have changed.

It is no use the Leader of the Opposition proclaiming, “ We have not the power “. The Australian Labour Party may not have the constitutional power, Sir, but absence of constitutional power is not all that is necessary to protect the banking system against arbitrary action by a government or against an attempt to destroy it by indirect means. We all know that in 1947, without any notice, without any proclamation of intention and without any good reason, Mr. Chifley, who was then Prime Minister and Treasurer, stated that his Government had decided to nationalize the banks. The present Prime Minister (Mr. Menzies), who was then Leader of the Opposition asked that a referendum be conducted to ascertain the wishes of the people but the honorable member for East Sydney (Mr. Ward), who was then a Minister in the Labour Government, refused to consider a referendum because, he said, nationalization of the banks was the policy of the Labour Party. Owing to the action of the Privy Council, the nationalization proposals could not be put into effect. These actions indicated the attitude of mind in those days of the Labour Government and of the Labour Party, and showed where Labour stood in relation to private banking and what it would do if it had the power to effect changes. What applies to the private banking system applies also, I want the world and the Australian people to know, to the medical profession, and to the insurance companies of this country.

It may be easy, Sir, to argue, as no doubt the Leader of the Opposition can: “That was long ago. We were socialists then. We have now become liberals.” But I have taken the trouble within the last few days to turn up one or two of the statements made by the Leader of the Opposition which indicate what is in his heart and mind and what he would do over the long term if he were Prime Minister of this country. On 26th November, 1957 - not so many years agothe honorable gentleman, referring to the private trading banks, said -

We have always believed that the history of private banks in Australia is a history of fraud, failure and corruption. That is why we have always hated them. We hate them with a holy hate.

On 12th March, 1959, referring to legislation designed to separate the commercial and central banking functions of the Commonwealth banks, he said -

The Labour party view … is that the legislation is unnecessary, that it is dangerous, that it is inspired by malice, and that there is no electoral support for it.

There, I venture to say, we find an indication of what is really in the hearts and minds of members of the Australian Labour Party in relation to private banking in this country.

This is a warning to the private banking interests and the people of this country that if the Australian Labour Party were to form a government and were to find that it had lost effective control of the economy, it would choose the private banking system as the first scapegoat for its own failures and omissions.

I have little doubt that under such conditions they would attempt to nationalize the private trading banks as Mr. Chifley unsuccessfully tried to do in 1947. So, I complete what I have to say in this way: We believe in private trading banks and we have done much, as is evidenced in the Treasurer’s announcement, to strengthen their finances and management. Having said that I believe in them, I think I can say with conviction that I have never known a time when the private banks have deliberately acted against the interests of this country. Many bankers are dedicated to the interests of this country. They do what they can to help develop the nation and to ensure that we have an effective and widespread banking system. So, I commend the banks on their record. I emphasize the contrast between our actions as members of a Liberal-Country Party Government, believing in freedom and free institutions, and the actions of the Opposition when it was in government in making a positive, malicious attempt to destroy the private trading bank system of this country.


.- The Minister for Labour and National Service (Mr. McMahon) and I often follow one another in debates and so we have come to understand each other’s performances. Thus, to-day, I can understand why he is beating his breast about the trading banks and making propaganda statements including such words as “ free competition “, “ free world”, and “preservation of standards”.

He and his Government have plenty to hide. Hidden somewhere in this rather paltry document is a story that he dare not answer. Therefore, we get the breast beating and the propaganda about the trading banks. As trading banks they are doing all right but they are doing particularly well as fringe banking institutions lending money to people who want to finance the purchase of furniture and other articles.

The Minister sedulously avoided mentioning that the Treasurer’s statement to this House followed a visit by the bankers to the Government. The bankers, in their top hats - if one wants to paint a colourful little picture - tottered along to have a yarn with the Government. These architects of our misfortune are the ones who are going to lay down a formula for our prosperity! How utterly ridiculous! One would need a sardonic sense of humour to believe that something of benefit to the community could come from such a meeting. In spite of the statements made by the Minister for Labour and National Service to-day, the trading banks have played a very sad part in the development of this country. Honorable members may recall the famous definition of a banker which appeared years ago in “Smith’s Weekly”. It was said that a banker was the type of person who would lend you an umbrella on a fine day but wanted it back when the first rain drops splattered upon your defenceless shoulders.

The point that emerges from this move by the Government is that the trading banks on the one hand and the Government on the other have been talking about how they can loosen some of the social controls which have been imposed upon the private banking system. The Government says, “We must beware of socialism; we must beware of the Labour Party’s approach to banking, and we must be very careful to preserve freedom “. This freedom is, of course, nebulous. A person has not very much freedom when he has no money and cannot get any from a bank. His freedom of choice is of little use to him then. It is disgusting to hear the word “ freedom “ used in the context in which it was employed by the Minister.

Here is the real point that is relevant to this statement: While honorable members opposite are boasting about the so-called freedom of the banking system, the Government is very pleased to be able to resort to the controls over banking that are available to it under the Chifley legislation. Without that legislation the banks would be in the same unfettered position as the illegitimate fringe banking organizations to which the Minister referred. What sort of hypocrisy is it to take out of its context a statement made years ago by a former Labour leader in reference to this matter, and to present the private trading banks as sea-green incorruptibles when, in fact, they are conducting their affairs - quite happily, I believe, in spite of their protestations - under controls imposed by a Labour government?

The Minister says in his quippish way that we on this side of the House have become a little liberal in this matter. We deny emphatically the soft impeachment. The Government has been able to remain in existence only because, when it was trembling on the brink of disaster, it was able to employ social props and stays to support a decaying economy, and was glad to do so. Nobody can deny that. “ Hansard “ abounds with instances to support my claim.

The Government is attempting to ameliorate the conditions of the private trading banks, but it has done nothing about some peculiar aspects of the banking system generally. This morning the Treasurer told honorable members that about £700,000,000 is waiting to be borrowed. He said that this money is available, on overdraft, to anybody who wants it. Is this not a complete answer to the claim that the Government has corrected the drift in the economy? The banks are not able to help people, because painted in the mind of the Australian community is a picture of disaster. Business organizations will not risk expansion. Stockpiles of goods have not been disposed of because the worker has no money to buy them. Therefore there is a double frustration in the economy. There is a hard core of 100,000 people out of work. Does the Treasurer’s statement say anything about that?

What are the cures for this situation? As has been said so lucidly and brilliantly, as always, by the honorable member for Melbourne Ports (Mr. Crean), the answer lies in a proper sense of banking control and the release of credit. But, not a word has been said about that. This is the Government’s Achilles heel. This is where the Government is vulnerable. It has not been able to make any real impression on the situation. Let us forget the platitudinous nonsense of the Minister for Labour and National Service about the freedom of banks, and talk instead about the worker’s right to a job and to a standard of living commensurate with the Australian way of life. If this had been mentioned in the statement it would have some validity.

We are told that £700,000,000 is available in the banks, but people do not want it because they have no confidence in the Government and they are too frightened to use it. Stockpiles of goods remain unsold and, on top of all, there is chronic unemployment. It is all very well for the Minister to boast about the little bit of attrition that has worn down the rough edges of unemployment by 20,000, 30,000 or one might even concede him 50,000. The fact remains that despite an expenditure of upwards of £200,000 on relief schemes, the Government has not been able to improve the lot of the 100,000 Australians who are out of work.

Where in this reverberating banking document does one find any reference to that? Nowhere! What has happened to the banking system when one hears so much talk about the European Common Market presenting an agonizing problem for the Australian people? The Government thinks it can get by that situation by saying that it will release £55,000,000 to be cut up between industry, those engaged in rural activities, and the boosting of exports. If the Government wants to capture markets in Eastern countries it will have to outlay many hundreds of millions of pounds. If the Government feels that the capital drain is too much, there are remedies for that problem, as has been pointed out so ably by the honorable member for Melbourne Ports. These are the answers to two of the big problems that have not been answered in this trifling document. The third answer, which has been given by way of challenge by the honorable member for Melbourne Ports, is that the situation is partly attributable to the perfidious attitude of banks generally both in regard to their trading activities as banks, and their policies as time-payment organizations.

The position of the private banks is analagous to that of a person who lives in a very high-class suburb but works for profit in a working-class area. A comparison of what the worker pays in hire-purchase interest charges on money he raises to buy necessary articles, with the interest paid by a man who is successful in obtaining a bank overdraft, shows a slaughter of the innocents. The banks which own the majority of, or at least the most powerful of, the time-payment organizations, will lend a worker money to buy goods on hire purchase. They will lend money also on overdraft. But whereas the man who borrows on overdraft pays only 7 per cent, interest, the worker and the farmer have to pay hirepurchase interest charges ranging from 131 per cent, on tractors and motor cars to 20 per cent, on refrigerators, washing machines and television sets. Then it adds on shockingly high additional charges for insurance and freight and anything else they can dream up.

Of course these respectable banks have nice premises in the cities, where everything is above board and everybody is polite and charming, and you are charged 7 per cent, for the money you borrow, if you can borrow it. But if you happen to be a poor man and you want the poor man’s overdraft - time payment - to provide a higher standard of comfort for yourself and your family, you will pay 20 per cent, for the money. The honorable member for Melbourne Ports, who is an expert in these matters, issued a challenge to the Government. Whether the constitutional position is challengeable or not, surely this is a matter that should be submitted to the people in some way or other. The findings of the Constitutional Review Committee clearly established the fact that the bankers are leading a Jekyll and Hyde existence. Their illegitimate trading in the timepayment field is bringing them in as much money in the aggregate yearly as their other avenues of business have brought in over the 60, 70 or 80 years of their existence. This trading has all the earmarks of commercial piracy.

What is the result of all this? The gaining of an extra million or two in profits is doing the most cruel and damaging things to the Australian people, reducing their standard of living and their purchasing power. Even the veriest tyro in economics, like myself, knows that if there is insufficient money in the hands of the worker there cannot be prosperity anywhere. That was the sharp and terrible lesson given to us by the recent recession which brought this Government to the brink of disaster, when it was within a few votes of being thrown out of this House for its collaboration with the banker and its refusal to do anything about these illegitimate fringe societies, its inability to grasp the situation, and its practice of always thumping the worker, claiming that wages were too high and that costs in consequence were too high. Whenever the worker tried to provide for himself and his family a decent living standard, he was mulcted on all sides, particularly by time-payment organizations.

There is no doubt that time payment must be controlled. The worker must use time payment, because it is the poor man’s overdraft. He has the right to use it, and he has the right to be protected. The millions of pounds that are paid out to cover paralysing interest rates show up one of the worst features of modern commerce. All ethical organizations should look carefully at this question, because the things that go with time payment can be so cruel. The financing organizations can resort to repossession without having to get any authority from a court. A man’s car can be taken from his doorway. His radio or television set can be torn out of his lounge room. All these things smell of piracy, and above them all is the crushing desire to get the highest interest rates in this trade. It constitutes a kind of slave system. But of course the methods that are employed by these organizations are quite different from the urbane methods of the bankers, who are the fathers of these illegitimate organizations.

The point made by the Labour Party, and by the honorable member for Melbourne Ports, who led the debate for the Opposition, is that these things show a weakness in our financial system. There is an appalling weakness in it if the banks are allowed to continue these activities. The little relaxation of controls that is offered in this statement is really nothing. It does not mean a great deal, as was explained by the honorable member for Melbourne Ports. Everybody on the Government side, including the Treasurer (Mr. Harold Holt), who prepared this statement, runs away from many of the vital issues. I explained the issue of unemployment and the reason for the Government’s state of glorious inactivity. It cannot shift the problem that it has created.

When one considers the banking sector of the economy, one finds that the pretensions of freedom and community welfare and desires to help the nation amount to nothing more than a matter of pounds, shillings and pence. You get 7 per cent, of decency and high thinking when you deal with the banks, but it is a matter of devil take the hindmost when the worker wants some money to buy goods, because when he cannot continue to pay for them because of the unemployment created by bad banking policy and woeful government administration, the goods that have been partly paid for are taken from him. There must be millions of pounds in the hands of these blood-suckers because of the inability of the workers, in circumstances over which they have had no control, to hang on to the goods that are part of their homes, what the Latins called the lares et penates.

When the Government painted a picture of pastoral innocence, telling us that everything is all right, that the sun is shining and that the men are going back to work, and that the banking system simply needs a penny or a screw put in it, you will find, if you look closely, that it is utterly wrong. The significant point in regard to the timepayment situation is clearly to be seen in the figures for interest rates. The farmer who has plenty of troubles to-day, particularly when he is facing the problems of the European Common Market and consequent difficulties of selling his products overseas, finds that he has to pay £13 10s. for every £100 that he borrows from the fringe organizations to buy certain goods, and he is charged 174 per cent, for items of farm equipment. The worker has to pay 20 per cent, for household goods.

When the Minister says that we must have a reasonable interest rate, he runs up against our charge, which he must answer, that these are not just reasonable interest rates, they are highly dangerous to the com munity. If the Government runs away from the problem and says that it cannot be solved because we are bound by the Constitution, I simply reply that the Constitution is only as strong as the will of the people. It can be changed by referendum or by mutual arrangements between the States. The right place for the people’s money, in my view, is in the people’s bank, the Commonwealth Bank. The right place from which our money should be directed, and our financial policy carried out, is the Commonwealth Bank or the Reserve Bank. The right place for the worker to borrow money to buy household goods is a section of the Commonwealth Bank dealing exclusively with hire purchase in all its ramifications. Then there would be no 17 per cent., or 20 per cent., but there would be something about 7 per cent., or even as low as 5 per cent, later when the scheme was properly under way.

One of the greatest social problems at the moment lies in the fact that if the worker wants a decent standard of living in a comfortable little home, he has to pay not once, but twice or thrice, for these benefits. If there is any value in Labour’s dream of a bank which is truly a peoples’ bank, then one of the corner-stones of that bank must be control of the national credit and finance. But an ancillary task that should be done, and should have been done long ago, is to care for the peoples’ interests by seeing that they are not robbed every day and every minute of the day by time-payment sharks who are, in essential, the creatures of the trading banks.

I have stated the issue. When the Minister says that the Labour Party runs off its course, let me say to him that the Labour Party has never been more solid than it is in relation to its banking policies. Its history is a proud one. What its late leader, Mr. Chifley, tried to do, but was thwarted by constitutional limitations, court cases and so on, has been proven essentially correct. What he proposed many years ago was an ogre at that time. It was something with which to frighten old ladies of both sexes. There was talk of a banking crisis, and although we got pretty close to doing something, we were not able to put our policy into effect. But the salient points of it, concerning deposits held by the banks, the powers of the Reserve Bank, banking powers and controls generally, which were inherent in Chifley’s legislation, have not been altered by so much as a comma by those who are now in power. They protest that they hate socialism, but if they had not our planned economy and our planned system of banking, they would have long since bitten the dust, and the whole crazy system would have collapsed.

There are two points I want to make in conclusion. First, I want to refer to the inadequacy of the amount proposed with regard to overseas exports. It is fantastically low. We are told that we want Indian trade and that we want trade with the East generally. We are told that we have to do something about new markets, which embrace countries in which there is an increasing standard of living. Well, what about the Mediterranean littoral? What about the Middle East? We are selling more wheat and other primary products there than we ever did before, as the honorable member for Lalor (Mr. Pollard) told me only this morning, and we have great chances in those markets if we can just extend a little credit. So why do we not do something substantial about it, beyond providing the trifling amount that is mentioned in this statement?

My second point is that in our basic economy at home the banks are not going to be much good to us unless they are controlled by these social controls, small and insignificant as they are, but extremely necessary. As the honorable member for Melbourne Ports has said, the proof of the pudding is in the eating. Under sane and sensible direction the trading banks can work on 7 per cent., but the mad rush for money and the quick dividend, and the outrageous conduct of the time-payment organizations, is netting them 20 per cent. This is 13 per cent, more and an overcharge on the most vulnerable group of people in the world. I refer to workers with families.

Surely it is not too much to ask for a decent living standard in this country in accordance with the Australian concept of living standards. If there were any courage among economists on the other side of the House they would admit that this is incontrovertible; it cannot be denied. Here would be a good chance to put people back to work by making their wages real. They would not be caught for one-third by the demand at the door by the time-payment collector in dead interest rates if the Commonwealth Bank had control of those rates through a time-payment organization. It could be called the “ Easy Terms Bank “ or whatever you like to call it. This point was brought to the attention of the Constitutional Review Committee and is a basic plank in Labour’s policy. In issuing this statement the Government has evaded everything. It has had a little conversazione with the banks about trifling things that they can do; the Governor of the Reserve Bank could do what is required by a flick of the pen. There is not much realism in the Treasurer’s statement. There is no answer in it whatsoever to the big questions concerning the Common Market, unemployment, and a fair go for the worker who has to buy his goods on time payment.


.- Mr. Deputy Speaker, we have listened on many occasions in this chamber to contributions from the honorable member for Parkes (Mr. Haylen). On some of those occasions he has humbly volunteered the information that he was a dilettante with regard to the subject on which he was speaking. I feel that this is one occasion on which he could well have made that affirmation. In embroidered jargon he has indulged in smears and aspersions on the private trading bank system. One does not need to have had a great deal to do with private industry to know the great contribution that the private banks have made to progress in this country throughout the years.

We are debating a statement made on 12th April by the Treasurer (Mr. Harold Holt) dealing with an agreement made between the Government, the Reserve Bank of Australia and the trading banks, to enlarge the role of the trading banks. Notice of this matter was first given when the Prime Minister (Mr. Menzies) in a statement of 7th February said that he wanted to see the trading banks take a greater part in the progress and the development of this country. As the Treasurer said in his statement, the hall-mark of a conference between the private banks and the Treasurer was an effort to give the trading banks greater flexibility and greater liberty to assist in the development of this country. The trading banks, according to the Treasurer, expressed the view that existing restrictive controls militated against their having that flexibility which they desired. Nevertheless, the banks found no fault with the overriding monetary control policy.

The idea was to give to the banks a new form of lending to meet developmental requirements, especially in financing the production of export commodities in both primary and secondary industry. This is a completely new departure from the traditional and predominant field of bank finance which was by bank overdrafts with daily balances at call. We have got a little bit off the rails with this debate and I think that it would be useful to recapitulate the machinery of this agreement. The agreement, as it now stands, provides that a special lending fund shall be constituted in the hands of the Reserve Bank and to that fund will be applied money obtained from the hypothecation of 1 per cent, of the liquid assets of each bank, government securities, and 2 per cent, of the statutory reserve deposit accounts of each individual bank. It is estimated that this action will provide a fund of £55,000,000 which will be drawn upon as a revolving fund. When portions of each bank’s funds in the special fund are unused the Reserve Bank will pay the bank concerned 3i per cent, on the unused balance.

The purpose of this fund, as I mentioned before, was to finance capital expenditure for primary industry and secondary industry, particularly for those in the export field, and to cover some commercial demand’s. In no case was it intended to lend for consumer expenditure. Loans were to be made for long, fixed periods of from three to eight years, not from day to day. The question of interest rates next came into reckoning. It is on this section that I wish to say something. Prior to this agreement the arrangement made with the banks was for a maximum interest rate of 7 per cent, and practically no minimum rate. Each bank was to average its rates among its own accounts for different classes of borrowers at 6 per cent. It does not need very much thought to see how unwieldy this arrangement would be in administration.

Before a bank would know what rate to charge a new borrower it would have to find out how much it had lent at various rates to other clients in order to strike an average.

I welcome the information that the compulsory average interest rate within each bank has been abolished by the new arrangement. But I see the possibility of some inflation of interest rates following the adoption of this arrangement in the private sector of the financial world. I hope that my fears are not well-founded in that respect. On 12th April, in referring to these interest rates, the Treasurer said -

Within the maximum or ceiling established for overdraft rates the banks will normally be free to adjust rates for individual borrowers and classes of borrowers.

He went on to say -

If, on occasion, it is desired to bring about a more or less general change in bank lending rates, the declared maximum rate will be moved upwards or downwards and the majority of existing rates currently payable will move upwards or downwards with it.

Although it is not mentioned in the statement, I understand that it is implicit in the agreement that a bank may charge a penalty rate of interest over the maximum 7 per cent, of, perhaps, i per cent. This would apply when a borrower, perhaps, has shown inability to make repayment or, perhaps, when the security of the bank for the loan has deteriorated to a great extent. So the range through which, the interest rates will operate may be from as low as you like up to 7 per cent. plus. Under the new agreement, we have abolished the average of 6 per cent, and in its place we refer to a ceiling or maximum of 7 per cent. It may well be that in practice, the actual average rate - we have no real bank interest rate in this country - charged by trading banks could be somewhat less than the 7 per cent, maximum. However, I believe there will be tendency to move towards the higher rate, particularly in respect of new business.

This brings me to another subject, which is affected by the tendency for the bank rate to increase. The traditional movement in the private sector of the money market, although perhaps there has not been any exactitude in the movement, has been for rates of interest on first mortgages on properties to move in some sympathy with the rise in bank interest rates. As far as my recollection goes and as far as I have been able to ascertain, the first mortgage rate has been something over and above the bank rate. When the bank rate has risen so has the first mortgage rate in the private sector, providing that the market, which is the main factor, has remained normal or stable. There is no uniformity between the variations in the first mortgage rate and the bank rate; there is no Australian rate and no fixed rate. However, in some States it tends to be about 1 per cent, or li per cent, over the bank rate. In other States, it is perhaps li per cent to 2 per cent, over the bank rate. Of course, there is another margin. The second mortgage rate tends to be 2 per cent, over the first mortgage rate. So we have this sympathetic movement in the private sector with mortgages, which to my mind reacts to some degree from the component of the bank rate.

It is quite apparent to me that it was not the Government’s intention to alter the position of interest rates which applied prior to the agreement. All the Government has done has been to abolish the necessity for trading banks to indulge in this unwieldly practice of trying to average out all their interest rates over all their loans to comply with the requirement of an average of 6 per cent. That is all the Government intended to do, but I believe that once the question of average has gone and we have a maximum rate, the tendency will be for the banks to move to that rate. In addition, the people who have money to lend on first mortgage in the private sector will decide that, as the bank rate is 7 per cent., they should charge 8 per cent, or 8i per cent.

It would be completely out of character for the Government to have intended that interest rates should increase. There is some relativity between the bond rate and the bank rate, and as we know, we have had a downward trend recently in the bond rate. The 1961 bond rate was, I think, 5 J per cent, and the February, 1962, bond rate was 5 per cent. In an atmosphere where the bond rate is going down, we would not expect the bank overdraft rate to rise. However, I believe the action now taken will have that effect.

I have spoken of the sympathetic increase of the first mortgage rate, because any increase in the price of finance for a genuine home buyer is not good for our economy. An additional I per cent., or even one-half per cent., over a number of years on principal of £3,500 borrowed to buy a home can raise the cost of the home by a considerable amount, in some instances exceeding £300 or £400.

The action of the Government has a good deal of merit in that it bridges the gap between traditional overdraft banking and the operations of what are termed fringe institutions. It is doing this to provide a benefit for those people who will promote exports for the development of the country. On the other hand, I see in this action a detriment to the young people and to those who wish to buy a home and keep costs down. However, I believe there may be a way out. I respectfully suggest to the Treasurer that in this agreement we should perhaps have had an indicator, which was the term used by the Minister for Labour and National Service (Mr. McMahon) when he spoke earlier, as to the notional average bank interest rate. I do not mean that the banks should be required to apply such an average, but I suggest we should have a notional average rate of 6 per cent., as it was before. If we had such a notional average, this component would be more correctly assessed by those who fix the rate at which they will lend private mortgage money. There is no doubt that the acceptance by these people of the maximum rate of 7 per cent, will unduly increase the rate of interest to be charged in the private sector.

Apart from that factor, this proposal is a step forward. It is another measure taken by the Government in its series of economic moves to bring the economy back into balance and to promote the growth and progress for which we have been looking. As such, I commend it, but again I should like to ask the Treasurer to determine whether we can, without impeding the operations of the banks, refer to perhaps a notional average bank interest rate so that we will have an official interest rate of some sort current in this country.


.- In 1939, when war commenced, the Treasurer, who was a member of the Liberal Party, brought into effect a regulation which allowed the nation to take control of the deposits of the private banking institutions. These deposits were, in effect, put into cold storage in the Commonwealth Bank, lt was realized at that time that if the control of credit was in the hands of private banking institutions to be lent out at profit during a period of war, interests that were inimical to the country could be promoted and industries concerned only with profit could be developed instead of the resources of man-power and labour being mobilized for war. In 1945, the Labour Government introduced legislation under which a governor was appointed to control the activities of the Commonwealth Bank and to put into effect its policy to ensure the supremacy of the government institution over the private banking system. When the present Government then attained office, its first step was to introduce legislation designed to create a board to control the Commonwealth Bank in place of the then governor of that institution. The members of that board were private business men, who might or might not use the positions they occupied as directors of our national bank to further the interests of their own private organizations.

The Labour Party opposed that legislation. At that time the Government said, in effect, that the only thing wrong with the Labour Government’s 1945 banking legislation was the existence of a governor instead of a board to control the activities of the Commonwealth Bank. But a short time later, the Government went further and amended the provisions relating to the deposits of the private banks. It gave those banks more control over their deposits and expanded their power to create credit in the community. Later again, it extended the powers of the private banks even further. On every occasion on which this Government has interfered with the banking system of the community, it has endeavoured to destroy the ability of the Commonwealth, or peoples’, bank to compete with the private banks, and has increased the ability of the private banking institutions to make profits at the expense of the community in general.

What does this legislation propose? It is of no use talking about liquefication, or using all the banking terms that the partly erudite in the community use to befuddle others and to hide their own ignorance. To illustrate what will happen under this legislation, I quote the following remarks by the financial editor of the “ Sydney Morning Herald”, as published on 13th April, 1962-

The effect of the measures will be to add some £2i million a year to the taxable profits of the banking system- a half million (£550,000) from the new form of Treasury Bill to be known as “Treasury Notes”.

That is only one lot of profit. The statement continues -

Three-quarters of a million (£750,000) from the unfreezing of part of Statutory Reserve Deposits-

That is the second avenue of profit for the private banking institutions -

One and a quarter million (£1,250,000) will be saved by the reduction of i per cent, in the rate of interest payable on £500,000,000 interest bearing deposits.

That means that, almost overnight, £2,550,000 is to be added to the profits of the private banking institutions as a result of action by this Government. But, after all, the Government teels it has got to save the banking institutions from annihilation. 1 have before me a copy of the Government “ Gazette “ for May, 1962, in which is contained a statement of the profits, losses and dividends declared by the banks for various years. For 1961, the Australia and New Zealand Bank Limited paid a dividend of 12 per cent., the Bank of Adelaide Limited paid a dividend of 10 per cent., the Bank of New South Wales paid a dividend of 9 per cent., the Commercial Bank of Australia Limited paid a dividend of 4 per cent, on preference shares and 10 per cent, by way of ordinary dividend, the Commercial Banking Company of Sydney Limited paid a dividend of 9 per cent., the English, Scottish and Australia Bank Limited paid a dividend of 9 per cent, and the National Bank of Australasia Limited paid a dividend of 9 per cent. The result of this legislation will be to add approximately £2,500,000 to the total profits of those banks. In other words, to the total of £6,302,000,000 will be added a further £2,550,000,000, so that the profits of these institutions will be increased by approximately 33 per cent. This will mean that, instead of being 12 per cent., the dividend declared by the Australia and New Zealand Bank Limited will be 16 per cent., that instead of 10 per cent, the dividend declared by the Bank of Adelaide Limited will be between 13 per cent, and 14 per cent., and that instead of being 9 per cent, the dividend declared by the Bank of New South Wales will be 12 per cent. Again, instead of being 9 per cent., the dividend declared by the Commercial Bank of Australia Limited will be 12 per cent., and that declared by the Commercial Banking Company of Sydney Limited will be 12 per cent., as will the dividends declared by the English, Scottish and Australia Bank Limited and the National Bank of Australasia Limited.

Members of the Government and those who support them are continually rising in their places to protest that the cost structure in Australia is too high, that we are being costed out of our overseas markets. If we ask for an addition of 2d., 3d. or 6d. to the wages of the workers, members of the Government argue that this addition to the cost structure will not merely make it more difficult to sell our goods overseas, but in some cases will make it impossible to sell them overseas. Under this Government, we are not permitted to add to the cost structure of the community by adding 2s. 6d. a week to age pensions; we are not permitted to add to the cost structure by increasing the child endowment paid to the mothers of the community; we are not permitted to add to the cost structure by giving to the basic wage earners the increases necessary to meet increases in the cost of living. No! Why should we? The Government argues that we shall only cost ourselves out of overseas markets. But if, by one act, the dividends of the banks can be increased by 4 per cent.; if, by one act, the profits of the investors in the private banking institutions of the country can be increased by £2,550,000, no one should voice any complaint! I cannot understand that reasoning. After all, who would dare Stand in his place in this House and declare that 12 per cent, is not an adequate return on money invested in a private bank? Why must it be 16 per cent.? Why must the 10 per cent, become 14 per cent.? Is not 10 per cent, an adequate return?

With all the difficulties facing Australia, too many people are being paid too much for doing too little. In reality, of course the people who take dividends from the banks get paid for doing nothing at all. They are merely money lenders. They lend their money to the banking institutions. I watch television and I see these instruments of private enterprise - these so-called competitive forces in the community - advertising at the same time on the same screen under the same heading as the seven private banking institutions. They state, “ We present the following programme “. There is no competition as between one and the other. They do not fight one another to provide money for the people at a cheaper rate for the development of our primary or secondary industries. No. They join together, side by side. They seek to impose an increased levy and a higher toll on the people, and they do it with the assistance of the Government that now controls the treasury-bench.

Mr Curtin:

– It is protection for the Government.


– As I read these figures and listened to honorable members on the Government side, I thought of the exploits of the pirates of old and of the bushrangers who roamed the countryside of Australia in the early days to prey upon the people, and I thought I judged them too harshly. I thought that after all, if these things are considered to be legitimate and honest business in this day and age, then we should at least apologize to the shades of Ned Kelly, Thunderbolt and others.

As I have said, people who invest their money in the private banking institutions are not the big promoters of industry. They do not grow an extra blade of grass as a result of their own activities. They do not manufacture any goods. They do not build a house, or a cathedral or a hydro-electric scheme. All they do is contribute their money and go about their business. They might be solicitors and earn their money as solicitors, but in 1961 their dividends were at the rate of 12, 10 and 9 per cent. In 1962, those dividends will be 16, 14 and 12 per cent. Those are exorbitant rates. I have heard it said by honorable members opposite that in reality the banks are not making these profits from banking but from their fringe organizations. These fringe organizations are Industrial Acceptance Holdings Limited, the hire-purchase organization of the Australia and New Zealand Bank Limited; Finance Corporation of Australia Limited, the hire-purchase organization of the Bank of Adelaide Limited;

Australian Guarantee Corporation Limited, the finance organization of the Bank of New South Wales; General Credits Limited, the hire-purchase organization of the Commercial Bank of Australia Limited; Commercial and General Acceptance Limited, the subsidiary of the Commercial Banking Company of Sydney Limited; Esanda Limited, the subsidiary of the English Scottish and Australian Bank Limited and Customs Credit Corporation Limited, the finance organization associated with the National Bank of Australasia Limited.

As was pointed out by the honorable member for Melbourne Ports (Mr. Crean), these organizations make vast profits which go into the banks with which they are associated. Now, the Government comes along and, in effect, it says, “ Why should we not raise the profits of these banking institutions as banking institutions because they are not making big profits “. At the same time, we do nothing to control or restrict the exorbitant profits of their subsidiary organizations. Why? The first thing this Government should do, if it wants to serve the people and get Australia out of the difficulties that have been created by its trading policies and will be complicated by the European Common Market, is to deal with the exorbitant profits of the hirepurchase organizations that are subsidiaries of the private banking institutions. That is what it should do before it dares to raise the profits of the private banks by £2,550,000 as it is doing in one single operation.

Mr Leslie:

– Where did the honorable member get those figures?


– I got them from the financial editor of the “ Sydney Morning Herald “, and they are available from a dozen financial organizations. But supporters of the Government, when speaking on questions of banking, seek to obfuscate the true position. The Treasurer (Mr. Harold Holt) does not say, “ I am introducing measures that will increase the profits of the banks by £2,500,000”, or, “I am introducing legislation whereby I will increase dividends of the banks to 16 per cent.”. I know that the Treasurer has said none of these things. If I might say so, he is the prime obfuscationist in this situation. He hides everything. He seeks to pass such measures without letting the people know the real importance of what is occurring.


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

New England

– We have listened to a very fervent and forceful address by the honorable member for Scullin (Mr. Peters) but we have not really had from him very much enlightenment on the paper that has been set before us for debate by the Treasurer (Mr. Harold Holt). The honorable member for Scullin developed a general attack on the banking institutions of Australia but there were some extraordinary gaps in the information he was presenting to the House. The document before honorable members deals with trading banking facilities and arrangements. It sets forth the means by which the Government hopes to stimulate the economy. The Government plans to inject into the economy, through the consortium of the banks and by the machinery referred to in the Treasurer’s statement, some £55,000,000.

I should like to pick up the theme which was dropped by the honorable member for Scullin. He said that the trading banks, including the Commonwealth Trading Bank, have become involved increasingly in what are called fringe institutions which operate in the hire-purchase field. To a large extent those institutions have been acquired by the banks. It is not sufficient to make such a statement. It is necessary that we should examine the reasons why this has happened. A study of those reasons will indicate that prior to the war our banking structure was completely distorted because of the policies which the Labour Government of the day adopted. I do not claim that all of the distortion was deliberate; to a large extent it was inevitable. For instance, let us consider that oft-vaunted claim that during the war interest was pegged at 34 per cent.

I was agreeably surprised that the honorable member for Scullin did not dig up that old story once again. What has never been said in conjunction with it - unless this is said the statement is almost nauseous in its infantile application to the circumstances of the present day - is that the Government was right when it determined that the bond rate should not rise beyond 34 per cent. A vast amount of money was passing into the public’s hands and there was no outlet for it in ordinary consumer avenues or in ordinary capital development. It was impossible to find any outlet. A colleague of the honorable member for Scullin even cut off the tails of men’s shirts to make them go round. I do not know whether they were meant to go round the person or round the community. The fact remains that rationing was proof positive that people could not spend the high incomes that they were receiving, and the sensible thing was to fix a rate which would not impose on the community a continuing high rate of interest on the sums necessary to fight the war.

At the same time deposit rates were fixed. It was at this point that distortion occurred after the war. Bound hand and foot, as it were, to the fetish that we must have low rates of interest and low deposit rates, without the slightest regard to the fact that the position had altered, that consumer goods were pouring into the country, that demands were increasing every day for public and private purposes to make up the leeway and to meet tremendous expansion, there was this determined attempt for something like two years after this Government took office to change the set-up. There was no effective political power to do so. Once the banks were told that they would not pay more than 21 per cent, or 2) per cent, on deposits while outside organizations were prepared to pay from 6 per cent, to 8 per cent., it was obvious that the banks had to turn - reluctantly in one case that I know of - to what is called association with the fringe institutions so that they could carry On. Let us get the record straight. I do not stand here as an advocate of private or public monopoly of banking. Monopolies are apt to become evil if they grow too large. I merely want to clarify the position by setting forth some of the facts.

I am more concerned with the effect of the proposals which have been advanced on the rural sector of the economy than I am with their effect on the other sectors. Many honorable members in this place are more intimately connected with industry and commerce than I am, although I have had some association with both. The Opposition has many spokesmen. One is the honorable member for Scullin, who put forward what I regard as rather weird ideas on how financial operations should be conducted. When I have regard to the present position of the rural sector of the economy I can only express very considerable pleasure that the Government has taken steps to introduce a more effective and helpful system of finance than has been practicable since the drift to which I have referred interfered with the course of normal banking.

If you go bacl: to the time before our economy was distorted «nd accelerated even by distortion, you will find the forms of banking which were assisting the rural sector of the economy. In the first place, there was established rural . trading bank overdraft finance which was operated through unregistered mortgages. A tremendous number of men on the land developed their properties and succeeded because they were required to pay interest only on a day-to-day balance. For those who were and are able to obtain that kind of finance and who are strong enough to use it - that is, they are not too deeply involved otherwise - that is probably the most convenient form available, particularly in the rural and perhaps in the commercial sectors of the economy.

The second line behind this older type of finance was the merchant store. What the early settler owed to the large and small merchant stores which tided him over difficult periods has not been always appreciated as it should be except by those who benefited from it. For example, in the city of Tamworth my friend, the late Mr. T. J. Treloar, a former honorable member for Gwydir, conducted a business which rendered yeoman service in the development of the area. He helped many farmers to stock their properties by advancing the money to purchase the stock. These were valuable forms of assistance which, to a certain extent, have been undermined, particularly the type of assistance given to farmers by way of bank overdraft. More or less associated with this assistance to the man on the land were insurance companies which had their own forms of long-term loan. Such loans were for a term of from three to seven years, and interest was paid quarterly, half-yearly or yearly. The principal did not have to be repaid until the end of the term. These loans, like mortgages, usually carried more onerous terms than bank loans. I speak from personal experience of both types of assistance.

Although it was necessary to supply security for a long-term loan, curiously enough the borrower paid more for obtaining such a loan than he would, as a rule, have had to pay for overdraft accommodation. The Commonwealth Bank had a mortgage department, but this was never very popular with farmers. I think that this was because farmers were used to dealing with trading banks, with whose experienced managers they could conduct their business with a minimum of red tape. However, I do not want to criticize the Mortgage Bank Department. The New South Wales Government Savings Bank, later the Rural Bank, also did a magnificent job in helping to finance farming operations by way of long-term loans.

Since the war, there has been a serious contraction of services by the trading banks. They have reduced their provision of what were virtually long-term loans. As I have already said, this was brought about not by intention, but because of a policy which was established by a former government which, because of the lack of legislative power, could not be altered until at least two years after the present Government came to office. There had been a reduction in registered mortgages and daily overdraft balances.

In addition, there was the growth of hire purchase. I do not think that hire purchase is a useful means of assistance to the man on the land. Money borrowed from hirepurchase companies is borrowed on a flat rate of interest. Payment of instalments does not progressively reduce the interest owing, which is calculated on the total amount borrowed and not on the reducing balance. A carrier using a lorry bought on hire purchase to increase his business, and deriving an income from his use of the lorry, could find hire purchase very helpful; but the man on the land may have to wait twelve months before he gets any return from his crop or his wool clip. In such circumstances hire purchase is not an economic proposition in farming, although I do not suggest for one moment that there are not many other forms of business in which it could be the means of an immediate increase in turnover, and so be a sound economic proposition.

With other members of the Australian Country Party and my colleagues in the Liberal Party, I am concerned at the situation which faces people on the land. At present, in my own area, some publicspirited citizens have organized the New England Rural Development Association, which is very closely associated with the Adult Education Department of the University of New England. This body has received major assistance from Professor J. N. Lewis, the Professor of Agricultural Economics at the university. As a result of investigations, the professor and his staff have produced valuable and, to a large extent, disturbing information. During the winter months of last year, a series of meetings was held. The area investigated was divided into four districts, and about 770 properties were examined. Eleven hundred people engaged in land operations took part in the investigations.

The answers to a questionnaire which was handed out at the meetings established that the farmers, almost without exception, considered that long-term loans and mortgages were essential for continuous rural development. During the course of the meetings, Professor Lewis carried out, with one of his officers, a survey of nine properties which are closely associated with an animal nutrition station on the New England tableland. The properties averaged approximately 1,100 acres each. The disturbing factor is that Professor Lewis found that the average return from eight out of the nine properties was less than 1 per cent, on capital investment.


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


.- The statement before the House deals with what has been described as an administrative act by the Treasurer (Mr. Harold Holt). One effect of this administrative act is to increase the annual profits of the trading banks by more than £3,000,000. I will demonstrate later the reasons for arriving at that figure. The significant point about an administrative act of this kind - which presumably was put before Cabinet, although we were not informed of it - is that it illustrates the way in which government is carried on in Australia to-day. Government in Australia to-day is a dictatorship between elections. We have here an act of administration which has not been submitted to Parliament before being put into effect. It has not been debated. The pros and cons of it have not been gone into. A decision has been made, the act is done, and the profits of the trading banks will be increased by more than £3,000,000 in the next twelve months. I think that responsible government has no room for decisions of this kind.

At the end of this sessional period, we have seen a number of administrative acts of even greater significance than this one is. I want to refer to them in passing, Mr. Deputy Speaker. The Government, by administrative act, has agreed to the establishment of a United States naval communications radio station in northern Australia. Again, the Minister for External Affairs (Sir Garfield Barwick) to-day implied that Australian troops are practically on the way to Thailand. We have become involved in the hot aspects of the cold war as a result of administrative acts. This Parliament has not been asked to pass judgment on any of these matters. We live in times of dictatorship between elections.

This administrative act of the Treasurer in relation to banking, first, has created what is to be called a special term-lending fund. This allows the trading banks to hold some of their funds with the Reserve Bank of Australia under conditions which will give them 2i per cent, more on those funds than they have been getting up to date. Secondly, this administrative act has reduced by one-quarter of 1 per cent, the rate of interest that the trading banks pay on funds deposited with them. Thirdly, it has removed the limitation on interest charged by the trading banks. That limitation was the provision that the average rate of interest should not exceed 6 per cent.

The Treasurer’s statement was simply an announcement that certain things were to be done with respect to banking practice in Australia. The private trading banks are to have more business and are to make more profit. This decision is quite clearly the result of continued pressure over a period by the trading banks themselves. The Treasurer said -

The banks put to us at our first meeting their belief that they both could and should play a wider and more constructive part in the growth of our country and the expansion of its trade abroad.

The Government has agreed that the trading banks are to have more business and more profits.

What do the banks really gain out of these proposals? Some honorable members on the Government side of the House have questioned the claim that the trading banks will increase their profits by £2,000,000 or £3,000,000. Let us examine this matter carefully. We need not rely on the financial editor of the “ Sydney Morning Herald “ or on the “ Australian Financial Review “. Members of this House are quite capable, I should think, of working out for themselves what the trading banks will gain out of this, and honorable members should work it out for themselves.

The gain to the banks comes, first of all, from the establishment of a special termlending fund held at the Reserve Bank, which is to be equal to 3 per cent, of the banks’ deposits. No doubt, we can work out that amount in this way: At the end of March, 1962, the total deposits of the banks were £1,895,300,000. Three per cent, of that is £56,850,000. The Government has been speaking of the equivalent of 3 per cent, of the deposits in terms of £55,000,000. That is what the amount would have been at about 12th February. The amount in the fund, however, will grow as the deposits grow. This fund is to be made up of existing liquid assets and government securities that the trading banks hold with the Reserve Bank and amounts transferred from the special reserve deposits of the trading banks.

It is worth noting that for a long time the trading banks have been very anxious to get their hand’s on an increasing amount of their special reserve deposits, and the Government has on this occasion given way to the pressure by the trading banks. Onethird of the special-term lending fund will come from government securities and liquid assets and two-thirds will come from the statutory reserve deposits. Therefore, as at the end of March, 1962, £18,950,000 would come from liquid assets and government securities and £37,900,000 from the special reserve deposits.

This change will mean an increase in the rate of interest that the trading banks get on the equivalent of the amount in this fund. The Treasurer’s statement clearly indicated that the rate would increase from 1 per cent., which the banks get on this money now, to 34 per cent, in consequence of this change. So the first gain by the banks will be 24- per cent, of £56,850,000, or about £1,280,000.

The Government having created this special term-lending fund, the banks will be entitled to lend the amounts held in the special term-lending fund, and those amounts will be lent to the community at an increased rate of interest. The honorable member for Maribyrnong (Mr. Stokes), a Government supporter, pointed this out to the House this afternoon. The Treasurer, of course, did not point it out to us. The trading banks are being relieved of the inconvenience of having to adhere to an average rate of interest not greater than 6 per cent. The Minister for Labour and National Service (Mr. McMahon) said that this would not lead to an increase in the rate of interest charged by the banks. But the honorable member for Maribyrnong was able to see that the rate of interest would increase. The trading banks will be free to increase the rate of interest and to pay no attention to the need for averaging, and the rate of interest will move up to something like 7 per cent.

It is difficult to see what gains the banks will make out of this. The Treasurer has given us no indication; nor has any one else given us any indication. There will be an increase, and I suggest that it will return to the banks somewhere between £500,000 and £1,000,000. But that is not the end of it. The trading banks will gain out of this in another way. From now on they will pay one-quarter of 1 per cent, less on the interest-bearing deposits held with them. ‘At the end of March, 1962, these totalled about £656,000,000. One-quarter of 1 per cent, of that is some £1,600,000.

So we can finally assess the total increase in the profits of the trading banks, before payment of tax, as a result of this administrative act which has never been put before the Parliament to be debated or discussed before being implemented. The increase in profits will be made up of £1,280,000 in interest gains from the special term-lending fund. Anything between £500,000 and £1,000,000 will come from the interest gain on loans made out of that fund, and the reduction of interest paid on interest-bearing deposits will increase the profits of the banks by about £1,600,000. The total increase will be something like £3*400,000 or £3,900,000. Last financial year, the profits of the trading banks totalled £8,000,000. So, by this administrative act, they will be allowed to increase their aggregate profits by about three-eighths compared to those of last financial year - an increase of 36 or 40 per cent.

This has been done by administrative act, but at this late stage in the present sessional period we do not see any administrative act designed to increase age and invalid pensions or child endowment, or to provide funds to put to work men who are to-day unemployed. Proposals of that kind have to wait until the Budget is presented. Yet, by administrative act, in the late stages of the present sessional period, the trading banks have been put in a position in which they stand to gain more than £3,000,000 a year. It is a good thing to be a trading bank in this country and to have a government like this one in office. There is no need to wonder where support for governments like this comes from.

It has been said, of course, that the profits of the trading banks have been low. Compared to the profits of some of the more usurious sections of the financial world, the profits of the trading banks are low. But let us not forget that the trading banks get profits also from the fringe banking institutions that they conduct. The profits of Esanda Limited are taken by the English, Scottish and Australian Bank Limited. Likewise with the other banks. They all have very close associates among these fringe banking institutions that are charging rates of interest up to 12, 15 and 18 per cent, of which we were told by honorable members on this side of the House earlier this afternoon.

The trading banks should at least be heartened to know that they can get from the Government such a good response as they have had. If I were a waterside worker, and expected a similar response, I would look forward with great confidence to the outcome of the recent conference with the Minister for Labour and1 National Service in which the waterside workers put forward their claim about the most unfair and iniquitous long service leave provisions of the Stevedoring Industry Act under which penalties are imposed on waterside workers who work every day in the week, when they can get work, for £15 or £16 a week. I would have great confidence, as a waterside worker, if I believed that the Government would respond to the claims of the waterside workers as it has done to the demands of the trading banks. But, so far, the waterside workers have waited in vain for any sign of a response. Yet Government supporters talk about our society not being a class society!

The important change in banking that is taking place as a result of the measures announced by the Treasurer in the statement that we are now debating is the result of a policy that this Government has consistently adopted over the years. The Government’s policy over the years has resulted in a continual increase in the interest rate. Never is the interest rate reduced. It is always increased. There is a tendency to shift lending into the high-interest-rate field. The Government’s policy in this matter is a money lenders’ policy.

The honorable member for New England (Mr. Drummond), who, a few minutes ago, was lamenting the state of rural incomes, could very well have looked at the White Paper on National Income and Expenditure to see what has been happening to the distribution of income in this country. Wages and salaries increased from a total of £2,252,000,000 in 1953-54 to £3,570,000,000 in 1960-61- an increase of a little more than 50 per cent. The increase in company income over the same period was much the same - slightly more than 50 per cent. Farm income, on the other hand, fell from £499,000,000 to £467,000,000. Yet, presumably, a great many of the farmers still support the Government. That is something that I will never understand But what has happened to the financial section of the economy? Rent and interest other than on dwellings has increased from £82,000,000 to £168,000,000- an increase of about 110 per cent. That is approxi mately double the increase in the incomes of other sections of the community.

The net effect of this Government’s administration over the last six or seven years has been to shift more and more of the national income into the pockets of the rentiers and lenders - the people who have all they need and some to spare. They have been given more and more over the years as a result of the Government’s policy on interest rates. Yet the Government wonders why we have inflation! Its intention is to make private money lenders better off. As the honorable member for Scullin (Mr. Peters) said, they make no positive contribution to production, but levy their charges on it in order to maintain their own status and standards. This Government’s policy is designed to give them more money to lend. But will this policy of giving that section of the community more money to lend have the effects that the Government presumably wants?

Economic recovery is supposed to result from the measures announced in this statement, but recovery is not occurring. The trading banks have been put in a vastly better position with respect to freedom of lending. Their total deposits rose by £165,700,000 between the end of January, 1961, and the end of March, 1962, but their total advances fell by £86,600,000.

Their liquidity is higher than it has been for years. They are in a vastly better position to lend, but they are not lending to the public. What is happening to this money? It is interesting to notice that the increased amount that the trading banks hold in Commonwealth Government securities has risen by exactly the difference between the increase in their deposits and the fall in their advances. They have had all this money placed in one hand by the Government and they have lent it back to the Government with the other hand at an interest charge of 5 per cent, or more, thus making a profit of 2 per cent, or 3 per cent, on the transaction. What a handout the whole process is! What a fake and a fiction this finance system has become! Of course, this policy is not good enough.

The Government says that there has been a recovery since the end of last year. At best it has been a slow recovery. I notice something concealed in the answer given this morning by the Minister for Labour and National Service (Mr. McMahon) to a question on unemployment. I do not know whether he realized the implication of his answer, but one of the statements he made was that there had been an increase in January of 50,000 to 60,000 in the number of school-leavers registered for employment, but this number has now fallen to 9,000. He said also that this enormous reduction was an indication of the great job the Government had done with the economy. However, what was concealed in the figures that he quoted was the fact that because aggregate unemployment has fallen by only 33,800 in that time, the level of adult unemployment must have risen since the beginning of this year by at least 7,200 people. When the Minister for Labour and National Service and the Prime Minister (Mr. Menzies) recently saw a fall of 19,000 in the number of unemployed persons in one month, all their confidence and arrogance, which deserted them following the last elections, seemed to be restored, but clearly that fall was due to school-leavers finding employment.

Mr Makin:

– A cheaper form of labour!


– That is right. As I have said, the number of adults unemployed has risen by at least 7,200 according to the figures given in this House this morning by the Minister himself. Do honorable members regard this position as satisfactory? Of course they do not. At best this is a slow recovery, and the evidence suggests that this deliberately slow recovery brought about by the Government is consistent with its handout policy to the trading banks. Why should there be a deliberately slow recovery? I shall suggest the reason. In February, 1960, this Government gave up permanently its policy of full employment; it now talks about the highest possible level of employment. It no longer talks as it did for year after year about full employment. It has given up that policy for a reason that the honorable member for Mackellar (Mr. Wentworth), who will follow me, can clearly recognize. It has . given up that policy because it has now geared its economic policy to overseas funds, and it will not follow a policy of expansion, development and full employment in Australia if such a policy will conflict with the availability of overseas funds.

What is the state of our overseas reserves? Here again the Prime Minister, as usual, has been leading us out along the limb of a tree. He has been talking optimistically about the great improvement in trade figures. Of course there has been an improvement in those figures and they are available for anybody to see. In March we had a £12,000,000 trade surplus, in February, £17,000,000, in January, £13,000,000, and so on. Over the past six months we have had a trade surplus of £112,000,000. So it would seem that the Government’s confidence is being restored. But, what has happened to our overseas funds? We had a deficit last month alone of £70,000,000. In the previous month there was a gain of £11,500,000, and in the month before that a fall of £5,600,000. In other words, over the past six months, despite favorable trade figures, we have had a fall of £36,800,000 in overseas funds. The Government is aware of the position and it is aware also that our overseas reserves will not stand the drain unless there is a measure of regulation of the policy of full employment. So, the Government is adopting a restrictive policy - a policy of spoils for those who have already got them rather than of increased expenditure all round. I do not know whether I shall have time to intimate how we might get out of this situation. A vital matter to emphasize in the closing hours of this session is the need for planning and regulation to ensure full employment.

Mr DEPUTY SPEAKER (Mr Mackinnon:

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


– The honorable member for Yarra (Mr. Cairns) left it until too late to make any constructive suggestions. He is bitter about the private banks, and for a very good reason. It was his party which so nearly got its hands on the banks and on the people’s money.

Mr Jones:

– It is a pity we did not.


– We hear an Opposition member saying, “ It is a pity we did not”. Now it is coming out. Here is the reason for the bitterness. Had the Labour Party got hold of the banks we should have a socialist and sovietized Australia to-day. This was the instrument of sovietization. Opposition members are. bitter because they failed, and they failed by only a narrow margin. The honorable member for Yarra has the forgetfulness, the impertinence, the hypocrisy - I do not know which word I should use - to talk about administrative act. I need not go outside the banking sphere to talk about the administrative acts of the Labour Party, though of course the honorable member for Yarra ranged rather more widely than that. Honorable members opposite will remember that when the decision to nationalize the banks, a decision involving hundreds of millions of pounds, was taken, the matter was not put, in the first place, even to the Labour caucus. The decision was taken by two or three senior Ministers.

Honorable members opposite talk about “ dictatorship between elections “. They did not utter a word about the nationalization of banking before they went to the elections. It was not their fault that they did not nationalize the banks. It was not their fault that they did not have this administrative dictatorship. When a Labour government is in office - and heaven help us if one should come to office again - everything is done by administrative act. The Parliament means nothing. The Labour Party boasts that it is the pawn and the instrument of an outside body. The Parliament means nothing to it. Everything is an administrative act while a Labour government is in power. If the Communists happen to be in control of the Trades Hall or of the unions, then it is the Communists who do the administrative work.

Then the honorable member for Yarra has the impertinence to get up in this House and talk about administrative dictation between elections. That is the whole principle of the Labour Party. It is the basis on which it is founded, and of which it boasts. One would think that the honorable member would be ashamed to get up and make such a statement in this House.

The honorable member claims to be very worried about banking profits. The real truth of the matter is that there is virtually no profit at all in banking business to-day. If you study the accounts of the banks you will see that normal branch banking, as it is conducted in Australia to-day, is not really a profitable business. The banks do make profits from investments of their old accumulated funds. They make profits from foreign exchange transactions. But if you take those two profit avenues away, you will find that the remainder of their business is not conducted at any considerable profit at all.

The banks do, in fact, perform very important services for the community. Honorable members know very well that they give to the community the accounting service on which it depends. They perform very important and worth-while functions in the community, but they do not make profits from their banking business as such. They make profits from investments of funds accumulated in the past, and they make profits on foreign exchange business, but if you take away those profits, the remainder of their business is not much better than a line ball.

All this talk about banking profits is a long way outside the mark, as is the talk about employment. I am one of the people who have criticized the Government in the past for its employment policy, but I am not critical of the action proposed to be taken according to this statement, which is designed to, and in fact will, raise the level of employment. Here is something constructive being done. It would be all right if the honorable member for Yarra had criticized the Government for not taking this action sooner. There are honorable members on this side who would make the same criticism. But now, when the Government is trying to do something about employment, all that honorable members opposite can think of is to try to exploit a past bitterness, which ought to be buried, in order to gain whatever political capital they can from it. We have before us a constructive measure which is part of a policy of reemployment. Criticize it if you like for being tardy - I would criticize it on that ground myself - but do not criticize the Government for doing the right thing now.

This statement outlines an attempt to reactivate the banking system. In the past, I think, there has been an unwise measure of control exercised over the banking system. The banks have been put in fetters or straitjackets - call them what you like - and because of this pressure, which, I think, went too far, the natural flow of money has been not through the banks at all but through the fringe institutions.

Mr Griffiths:

– The banks own half of them.


– I thank the honorable member for his interjection. I was going to say that some of the trading banks have been forced, for their own protection, into participation in the business of these fringe institutions. I do not think this is altogether a healthy thing, and it is something that we might have a look at. But this has come about as a result of a restrictive policy exercised over the banks, the end of which is now signalled by the statement that is before us.

This statement does not give a policy of increased interest rates. Rather is it very much the reverse policy. It is a policy to make borrowed money available more cheaply to more people. It is a policy that will take business away from the fringe institutions - not all business but a good deal of it - and put it back into the banking system where it properly belongs. It is a constructive policy. Flexible interest rates will help the economy. The fact that there will not need to be as much recourse to fringe institutions will mean that more people will be able to borrow more cheaply. The fact that the banking system is to be put on a basis which will allow it to expand and develop is a guarantee of the freedom of enterprise throughout our economy. Criticize the Government if you like for being too tardy in doing these things, but do not, for heaven’s sake, criticize it for doing them now. We are going to have, as a comparatively small part of the total structure, a new system of long-term lending. The whole thing is now going to be more healthy and more balanced.

In conclusion I would like to suggest to the Government that we should look at the system of overdrafts throughout the Australian banking structure. Perhaps I am wrong in saying that this is something the Government should look at; it lies more within the province of the Reserve Bank. In many other countries, although not all, an overdraft is given as a single transfer, and the normal current account does not carry interest on the daily balance. But in Australia there is an undrawn liability under this system. This is not altogether a good thing because it means that in the early stages of recovery one does not get a quick enough addition to employment and in the later stages one may rather over-run into inflation because the increased limits may be activated by customers in ways which the banks themselves cannot control.

Surely it would be better if we were to adopt the system which is used, for example, in the United States of America, where an overdraft is given as a single act and transferred to a current account so that the distinction between the limit and the amount of the overdraft can disappear. I know that in the Australian system, under which the primary producer is by custom dependent to a large extent on bank overdrafts, there would have to be some modification of any such proposal in favour of the primary producer. I would agree with that, and I make that qualification in regard to the proposal. But, in general, I should think that we could get a higher level of general employment without running the risk of inflation if we were to change the system a little and transfer the whole of each overdraft, at the moment of granting, into a current account. I say this with particular reference to the way in which the banking figures have moved over the last few months, although in the last couple of weeks the trend might not have been so much in that direction.

Mr Leslie:

– Your proposal would abolish interest on daily balances.


– Yes. I agree. But there would be some variation of the arrangement for the primary producer. I think that this would give us a healthier economy. It would also allow a reduction of interest rates which would be of advantage to all concerned. I do not want to labour this point. I put this forward very tentatively as a matter for consideration. I know very well the complexities and difficulties in working out a scheme such as this. I commend it not for action but at least for study at the present moment. If we were to do this we could safely increase the tempo of the economy without running the risk of future inflation. I conclude by reiterating my incredulity at the attitude of the honorable member for Yarra who had the impertinence, as a member of the Labour Party which lives on administrative dictatorship, to try to charge this Government with exercising such a dictatorship.

Sitting suspended from 5.49 to 8 p.m.


.- The statement of the Treasurer (Mr. Harold Holt) on trading bank facilities and arrangements deals with the vital question of bank credit. Bank credit is essential for the establishment and expansion of most businesses conducted by individuals, families or partnerships. Businesses conducted by corporations can be established or extended with capital from other means, such as shares, debentures or unsecured notes. But the individual, the family and the partnership depend on bank credit.

It is natural that the Treasurer, and indeed every member of the Parliament, should deal with the question of trading bank facilities and arrangements, since on three occasions in the successive horror budgets of 1951, 1956 and November, 1960, an essential feature of the Menzies Government’s economic policies has been to restrict credit through the banks. The horror budget in each instance has been accompanied by a credit squeeze, or, more correctly, a bank credit squeeze. When the Treasurer introduced the bank credit squeeze on 15th November, 1960, he devoted particular attention to two matters. He said that he had to introduce it for the third time because of the growth of fringe banking and because the banking system was not responding promptly or adequately to other forms of guidance which the Government exercised.’

The criticism we make of his statement on this occasion is that he has not touched those two matters - fringe banking and the sluggishness in bank response to Government direction - which largely necessitated the third bank credit squeeze and which, of course, prompted the two earlier ones. I will quote passages from his speech on the last occasion. Dealing with fringe banking, the Treasurer said -

I have spoken earlier about the rate of turnover of money and the relation of this to the operation of the so-called “ fringe “ institutions or financial intermediaries . There is a great problem of how to regulate the activities of these bodies.

The lesson he drew was that one had to regulate the banks since they were one form of credit which it was possible for the Commonwealth Government to regulate. Referring to bank advances, he said -

For months past, the Government and the Reserve Bank have desired to see the growth of bank advances slowed down to more acceptable levels . . . but the techniques used have failed to bring about the desired results. In the event, bank advances outstanding have increased by no less than £150,000,000 during the current calendar year alone . . . There were those who told us that this outpouring of bank credit cannot be stopped; at the very least that dire consequences will befall us if it is. Well, the simple answer is that it can be stopped and that serious consequences will follow if it is not stopped. So it must be stopped.

Later, throughout 1961, and towards the end of that year in particular, advice was given to the banks to lend more money again, first of all with some restrictions and later with none. Once again, the banking system responded too slowly to the Government’s desires and directions. The problems, therefore, of fringe banking institutions and the slowness of response of the bank advances were with us in November, 1960, were largely responsible for the third bank credit squeeze and are still with us, because the Treasurer has still not dealt with them in the statement which we are debating to-night.

The shallowness of the Treasurer, and, I regret to say, of too many bank directors and bank investors, is shown by their discussion on how far the new arrangements will make it more profitable to conduct banking or to invest in banking. There are, of course, differences of opinion as to how profitable a government should make the provision of credit. But at least it must be conceded that banks find it less profitable to lend money than does any other financial institution. It must also be conceded that borrowers find it less expensive to borrow money from banks than from any other source. The banks by no means can be said to exploit as much as other financial institutions do.

I will deal with the four respects in which banking by these arrangements has been made more profitable. First, the statutory reserve deposits at present earn only three-quarters of 1 per cent. Now, amounts in the term-lending fund will earn 3i per cent, and still higher rates on the amounts lent from the fund. This will be worth, it is calculated, £750,000 to the banks in a full year. Secondly, the banks at present receive 1 per cent, on treasury-bills; henceforth, they will receive 3 per cent, to 3i per cent. - that is, market rates of interest, as the Treasurer put it - on the new treasurynotes. This is calculated to mean an extra profit to the banks in a full year of £500,000. Thirdly, there is to be a reduction of one-quarter of 1 per cent, in the fixed deposit rates, but there is to be no corresponding reduction in the lending charges. This is calculated to mean an increased profit to the banks of £1,300,000 in a full year. Lastly, the abolition of the averaging system, even though the ceiling limit on overdrafts is retained, may involve a rise in average rates charged by the banks. All told, the banks - this includes the Commonwealth Trading Bank as well as the private trading banks - will now, it is calculated, make an extra profit of at least £2,600,000 a year before tax is paid.

The whole problem is, of course, being tackled from the wrong end. If the Treasurer were to curb the exploitation by the fringe credit institutions, there is little doubt indeed that people would deposit more with the banks, the banks would then be able to lend more of those deposits, and the banks’ profits would rise.

Now I deal with the three principal proposals in the Treasurer’s arrangements. The most significant, or the least insignificant, of them is the establishment of the termlending fund to provide development finance, especially for rural and secondary industries and for export sales. Approximately £55,000,000 will be provided in this way. I believe that the Minister for Air (Mr. Bury), who is the Minister assisting the Treasurer, will follow me in the debate. I will, therefore, make a sequence of criticisms of the proposal and put some unresolved queries to him. I will be glad to hear his comments on them.

First, by way of criticism, the purposes of the fund are broadly those of the Commonwealth Development Bank. An increase in the resources of that bank would have achieved the same purpose. The only consequence of this proposal is that new business will go to the private banks. Secondly, the provision of export finance from the fund will run a bad last. A large part of the funds will be allocated to rural industries and to manufacturers for expansion of their plant. It is a disappointment for all persons looking for a bold approach to the provision of credit for export. The Australian Labour Party at the last election proposed the creation of an export credit bank, such as the United States Federal Government established a generation ago. The Department of Trade has made similar proposals. It is permissible to speculate that the Treasurer came out with this premature and half-baked proposal in order to anticipate any suggestion by the Minister for Trade (Mr. McEwen), who, on his return, might urge, successfully we would hope, the estab.ment of an export credit bank. This is just another example of how the present Government, since the last elections, has adopted many of the Labour Party’s ideas, but has only half-implemented them.

The third criticism I have to offer is that loans from the term-lending-fund will not be for less than three years. The probable range will be from three to eight years, according to the Treasurer. At the moment, the greatest difficulty is experienced by exporters who want more than 180 days’ credit. The real need is to secure credit for periods ranging between six months and three years. The new arrangements will make no provision whatever for those terms. The three to eight year terms proposed are largely applicable only to the export of heavy-type capital goods, which, at the present time, make up only a small percentage of our exports. In the last financial year, they amounted to only 2 per cent, of our exports, and that figure includes commercial vehicles and light machinery. The fund, therefore, will help only a very limited range of our exports. For instance, sales on credit of primary products such as those which the United States of America and Canada are making, and which the Australian Wheat Board has been making through new avenues in the last year, would not be facilitated, or permitted, under this new arrangement. We could not hope to establish new markets for primary products in this way because such markets would not require credit for from three years to eight years; they would require it for something between six months and two years.

My fourth criticism is that the size of the fund is to remain at 3 per cent, of trading bank deposits. On the other hand, the Treasurer says that the fund “ is to permit the new lending facilities to be developed steadily over the next few years in accordance with current credit policy “. In recent years, however, the rise in bank deposits has not kept pace with business activity, due to the development of the fringe institutions. If this trend continues, the rate of growth of the fund, in line with bank deposits, will diminish in relation to the volume of transactions it is designed to finance.

The last criticism 1 make is that, according to the Treasurer’s statement, the allocations to the fund will occur without subtracting from the capacity of the banks to carry on other forms of lending. However, the reduction of 2 per cent, in the banks’ frozen funds is to be accompanied by a 2 per cent, increase in the minimum liquid assets and government securities ratio. An increase in this ratio does reduce the liquidity of the trading banks and their capacity to lend. Although, in their present liquid position, this is unlikely immediately to affect normal bank lending, the Treasurer does not seem completely candid in saying that there will not be any reduction in the capacity of the banks to carry on other forms of lending.

As to the fund in general, I feel that there are certain outstanding queries which should be answered. First, what is to be the interest rate charged on loans from the fund? All that the Treasurer said is that “ the broad pattern will be consistent with overall interest policy as determined from time to time “. Secondly, his statement does not make clear how the business of the fund will be apportioned between individual banks. The fund will initially amount to 3 per cent, of each bank’s deposits. Does this mean that each bank will be limited to lending 3 per cent, of its own deposits? Or does it mean that, after its lending for export and so on increases, it will be able to borrow from the deposits of other banks with the fund?

The next proposal of the Treasurer concerns bank interest rates. It refers to the abolition of the averaging system, and the decision not to reduce interest rates on overdrafts. The first comment I make is that the Treasurer says that “ the present ceiling of 7 per cent, on overdraft rates will continue to be observed except in cases where an exemption is agreed upon to meet certain special requirements “. What are such special requirements likely to be? Here again the Treasurer’s statement is more significant for what it omits than for what it says. Secondly, in the present economic situation, there is a very good case for a reduction of overdraft rates despite the refusal of the Treasurer so to reduce them. Australia’s overdraft rates have gone up in each of the successive bank credit squeezes under this Government, and they have remained up after the squeeze has passed. The overdraft rates in Australia are now higher than they are anywhere else in the English-speaking world. If the rates were to be reduced, as has been done in similar circumstances in other English-speaking countries to prime the pump when necessary, it would result in a reduction in bank profits. This would be desirable on social as well as economic grounds, but the Treasurer has made no contribution to the solution of that problem. He is more concerned to push bank profits up.

Thirdly, when dealing with the interest rates of banks, the Treasurer makes no reference to the high interest rates charged by fringe institutions. As these institutions offer high interest rates to their depositors, they have to exact high interest rates from their borrowers, and this is what has distorted and raised the whole interest system in Australia since 1951, the year of the first credit squeeze, and 1953, when the green light was given to the banks to go into the fringe institutions themselves.

The remaining point I want to make relates to treasury-notes. These, in effect, are treasury-bills in a new guise, but designed to carry a higher rate of interest. The interest they will carry will be from 3 per cent, to 3) per cent, compared to 1 per cent, hitherto. The object of the Government in introducing these notes, of course, is merely to enhance the profitability of banking. If it is necessary for the Government to borrow in the form of treasury-notes it can do so just as well through its own bank, the profit from which, of course, goes back to the public.

In the three minutes remaining to me, I must deal very briefly again with the two great causes of the third horror Budget and credit squeeze, with which this statement does not deal in any respect. The first is the failure of the Government to ensure a smooth and quick response in bank advances to variations in credit policy. In the financial year before last, several requests were made by the central bank to the trading banks to restrict their lending, but bank lending kept going up. The first request was in December, 1959, when bank advances totalled £942,000,000. A second request was made in June, 1960, when the figure had increased to £1,015,000,000. Then came a third request in August, when the figure had risen to £1,066,000,000, and a further request was made in October, by which time the amount had increased to £1,092,000,000. Then came the final blitz in November, 1960, when the figure stood at £1,089,000,000. During 1961, on the other hand, the central bank - that is, the Government - was asking the banks to lend more money to prime the pump again. The first request was made in April, 1961, when bank advances were down to £1,017,000,000. Another request was made in June of last year, when the figure had risen to only £1,020,000,000. Finally, in October last year, all restrictions were removed, and by that time bank lending had dropped to £1,007,000,000. It kept on dropping, and by last February had dropped to £965,000,000. Only in March did advances again reach the total of last October, when all restrictions were removed.

It is quite plain that the Treasury and the Treasurer have devised no means by which the banking system, in that form of credit which the Commonwealth Government can regulate, will respond promptly to the policy determined by the Government.

The other matter with which the Treasurer does not deal is fringe banking. In 1946, the volume of money - chiefly deposits - represented 106 per cent, of the gross national product. In 1953, it was 63 per cent, and in 1961 it was 50 per cent. Two and a half years ago, the Constitutional Review Committee, in its report to this Parliament, quoted Professor Arndt’s statement that for the five pre-war years ended June, 1939, the trading banks provided about 56 per cent, of all credit, and in the five years ended June, 1958, they provided only 21 per cent, of all credit. Fringe banking has harmed normal banking, yet the Treasurer is still concerned with regulating normal banking instead of fringe banking.


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

Minister for Air and Minister assisting the Treasurer · Wentworth · LP

– The Deputy Leader of the Opposition (Mr. Whitlam) has raised one or two points which he said needed some clarification. Let me assure him in the first place that this so-called fund of £55,000,000 is not in essence a fund; it is a total of amounts which will be available to the individual banks for the various purposes covered, such as further developmental work in the country, industrial and manufacturing development and exports. The honorable member suggested that under this arrangement export finance would be starved of provision. Nothing could be further from the truth because this £55,000,000 is not necessarily the end of the story. After all, we are always dealing with these matters and if, in fact, this arrangement works as well as we hope, it will come up for reconsideration again.

The honorable member asked what would happen about loans for exports for a term under three years. The greatest advantage of these funds is that they will be administered by the banks which are in close touch with their customers. They know the individual requirements of customers and what they want. They are in the habit of dealing with them and have ready-made machinery, and since there is good machinery in existence, it would be extremely wasteful to go about setting up new institutions. Hitherto, one of the big difficulties has been to marry the requirements of the two parties. Banks have been reluctant to lend on long terms and they have been officially discouraged from doing so. This measure overcomes that difficulty. The new funds are for the most part to be applied for three to eight years but it does not follow that the banks do not now lend up to that period, because they do so in many cases.

Let us not overlook that there is a snag in this export credit exercise which must be carefully watched. Although the Opposition does not agree, we borrow capital abroad to further our own development, and we do not want to put ourselves in the position where we are obliged through various grants of export credits to be exporting capital ourselves on a large scale. There are dangers here because you can always sell goods in the world if you are prepared not to be paid for them, and you can make other sales if you are prepared to go further and advance more money at lower rates than do other people. But we have to consider very carefully that our main requirement is the maximum capital resources for the development of Australia, and although there may be an increasing necessity to finance exports, we have to keep in mind all the time that the process must be kept within close limits.

Let me disabuse the mind of the Deputy Leader of the Opposition on one point. When fringe institutions obtain deposits, they are not lost to the banking system. It may mean that these on-demand deposits do not become available to support lending by the banking system, but the difference in respect of banking - and why it is necessary to control it much more than other loan transactions - is that bank loans do create extra credit. Fringe institutions may make money much more freely available; they may accelerate what is known as the velocity of circulation of money, but they do not in themselves - as the banks do - add to the national supply of money. Banks create credit; fringe institutions only use funds which are already available and pass deposits from one to another.

The Deputy Leader of the Opposition criticized the fact that there was nothing in this statement about interest rates to be charged. This statement, covers quite a lot, but it is not meant to cover in itself the causes of any recent economic upsets or the rectification of them. It sticks quite closely to its main object; and that is that henceforth we wish the banking system, and particularly the trading banks, to play a larger part in the economic affairs of this country than they have done in the past few years. Trading banking is the essence of the free enterprise system because it has close personal relations between banker and customer - not only with individuals and partnerships, to which the Deputy Leader of the Opposition referred, but also with companies and the whole gamut of economic activity. All these people are known to the bank managers and they are financed by the banking system. Individual brokers know who should have resources. They can arrange, on the whole, that money goes to the right businesses much better than a distant planner might do sitting at a great distance.

This is of course the great point of difference between the Liberal Party and the Australian Labour Party. If I were a socialist, the first thing I would aim at would be control of the banking system. Once you have control of the banking system, you can nationalize it. Having nationalized the banking system, it comes under the control of the government and the government is under the control of the caucus, so you can carry out whatever policy you like because very few business transactions can take place without the consent, expressed or implied, of the powers running the nationalized system. Therefore, all socialists over the years have made this the primary objective of socialist policy.

That is sensible from their point of view. I abhor the system; but that is the real central difference between the socialist and liberal parties. It is the great point which first brought the Government parties into power in this Commonwealth Parliament. Do not let us overlook this; let us recognize these fundamental differences. It is in the platform of the Australian Labour Party, and if I were a socialist I would want to keep it there because that is the way to carry out the policies of socialism. Nationalize banking and everything else is in your grip. Nothing substantial can move once you have nationalized tha banking system. Of course, the Labour Party could legally nationalize the banking system. The decision of the Privy Council covered only one particular matter which defeated the legislation introduced by the Labour Government to that end for the time being. That is, that once a bank has been nationalized, it cannot carry on business because that would offend section 92 of the Constitution. But, in fact, a carefully drafted bill could enable the banking system to be nationalized directly, not just indirectly. This is no doubt something with which we could well be confronted at another time.

If political circumstances are such that you cannot nationalize the banking system, the next thing to do is to discredit it, snipe at it, say it should not earn big profits, damage it, lame it. That is what the honorable member for Yarra (Mr. Cairns) did, and his tactics were reasonable from his point of view. The aim of the honorable member and his colleagues would be to soften it up. It is true that these measures will increase the profits of the banks. If the banking system is going to carry out its proper part in the development of Australia, it must make profits; but in referring to the increased profits, it must not be overlooked that the honorable member for Yarra omitted to recognize the extent to which the profits of the banking system have been very closely screwed down for many years.

The current situation which the proposals before the House are designed to resolve was the result of a series of developments, most of which might have been unavoidable but were certainly unhappy. For the purpose of waging war, the whole banking system had to be put in a strait-jacket. When government expenditure increased and deposits rose as a result, further expansion of credit by the banking system to private individuals would have resulted in severe inflation. This provided the original justification for the adoption of the special accounts system. Although these arrangements were necessary in war-time, for one reason or another they have been continued in peace. There are two main reasons why the trading banks have been kept in a close strait-jacket. One is the constant need, which has been apparent for most of the time since the war, to combat inflation which, when the present Government came to power, was running at the rate of 10 per cent, per annum. For this reason the Government has felt obliged to screw down the banking system and to prevent any increase in the money supply. At other times, when things have not been quite so tight, governments have tended to expand the economy by expanding government expenditure. But every time government expenditure exceeds government receipts there is a corresponding addition to the credit structure which finds its way into the banking system in the form of deposits. Because it becomes undesirable to create further money at a later stage, through an expansion of bank advances, the banks are restricted accordingly.

Mr Peters:

– What is a reasonable profit?


– From your point of view no one should make a profit. Your main object in life is to prevent any one from making a profit. Naturally a reasonable profit for hire-purchase transactions is very much higher than it would be for many banking transactions.

If you screw down one part of the economic structure in a lively thrusting country like Australia, it bursts out in another place. The banking system has been screwed down and these enterprising gentlemen have found other ways and means of doing things. By offering high rates of interest they have managed to attract to their own control deposits in the banking system. These deposits are not lost to the banking system because they go from a private individual into a hire-purchase or a fringe finance company. The role of the fringe banking institutions has been mainly to speed up the use of whatever money is available.

This has happened not only in Australia. This reaction to too much tight control in one sector spilling over to another has been apparent in the United Kingdom. A certain amount of such activity is natural and healthy. As time goes on and we become more sophisticated we are bound to have a fresh range of institutions so that a lot of this development would have taken place in any event, but it certainly has been hastened by keeping the banking system very largely in a strait-jacket. The proposals we are now discussing are designed to ease the claustrophobia of the banking system. They should make for greater flexibility. Instead of having a system of interest rates which had to be adjusted constantly by the banks to an average - a very awkward administration incubus to place on them - in future they will be guided, in fixing their rate structure, by a maximum rate. The maximum rate indicated from time to time by the authorities will become, in fact, the general indicator to the banking system of whether interest rates should move up or down. The trading bank system would not deny for one moment that from the national point of view there is some general responsibility to indicate what the basic corpus of bank interest rates should be.

There are difficulties too. The Deputy Leader of the Opposition referred to the fact that the Government had not evolved any scheme whereby bank advances could be made to jump up or come down smartly according to the dictates of the Government.

Here is the position: If business is slack, people do not want overdrafts. At other times when they see an opportunity to expand and to profit, the demand for overdrafts is very strong. But it is not just the banking system or the Government which controls the economic life of the country; it is the hundreds of thousands of individuals in the community. Long may it so remain!

The present system is more difficult to operate than any other. It is more difficult economically to keep the country just at the edge of full employment than to avoid fluctuations by putting every one into a vast concentration camp and giving them orders; but the present free-enterprise system offers much more in the way of progress than any other and it is improving constantly over the years.

Let me turn now to the system of bank overdrafts. Our present system grew up very largely to meet rural circumstances. Historically bank lending evolved very largely to finance rural producers. The system is less well adapted to meet the new commercial industrial conditions which have become established in Australia over the last twenty years. Large overdraft limits are established and, having been established, individuals are free to draw on them as and when they will. At present many of them pay nothing for the right to draw that money at will whenever they want it. Hundreds of thousands of individuals throughout the country can write a cheque on their overdraft at any time, if this established limit is not fully drawn. That has a marked effect on the country’s economy by expanding the money supply. This was one of the things which made the position very difficult in 1960. But steps are being taken to ease these difficulties away. These arrangements are all the outcome of customs, habits and personal relationships, all of which are important and can be changed only slowly.

This is a problem which the banks have begun to consider. The question of charging for unused overdrafts by levying something akin to what the Americans call a commitment fee is being examined increasingly. These are the matters that have to be worked at over a period, but no one except a drastic social planner would suggest that the habits of banking and trading in the private community could reasonably be changed overnight.

I know that honorable gentlemen opposite make much of interest rates, but from the time you begin to fix interest rates you set up a train of rigidities and anomalies throughout the system. The Opposition would like to control interest rates because it would like to control everything. If you peg the bond rate you have to peg the next rate so that some deposit rate does not interfere with it. So, you go right through the system and end in a strait-jacket. You then have rationing of loans by bureaucracy. Honorable members opposite like this idea and often hark back to the days when very mistaken policies were pursued which drove the long-term bond rate down to 3i per cent. That policy might have been reasonable for a time, but it was followed for too long. When the rate was 34 per cent, there was capital issues control and very close control over the banking system. We can choose a free-moving system in which interest rates move up or down according to circumstances, or we can set a limit. If a low interest rate is set, as undoubtedly it would be by the Opposition, some bureaucratic control has to be set up to ration credit strictly. We on this side of the House view that system with a great deal of horror. None of these things is ever pushed to logical extremes. Do not overlook the very large basic difference between us. We on this side of the House are often accused of serving the banks and big interests. Do not let us overlook-

Mr Calwell:

– I will settle for the big interests.


– You will settle for the big interests? By jove, you have! We all remember that strange marriage which took place during the last election campaign. I am surprised that the Labour Party does not look at its strange marriage a little more closely than it has. There are signs of a break-up as the deficiencies of the bridegroom become increasingly apparent. Let the Labour Party ask itself who now bows down his head in the temple of Baal. Is it we on this side or is it one or two other gentlemen opposite? Behind all this lurks the ultimate difference between us. The difference between liberalism and socialism comes to a head in the nationalization of banking.


– Order! The Minister’s time has expired.

Leader of the Opposition · Melbourne

Mr. Deputy Speaker, the Minister for Air (Mr. Bury) accuses us of wanting to nationalize the banks. We cannot. We tried and we failed. But we wanted to nationalize the banks on the payment of compensation. This Government has crippled the banks without paying compensation. The Government is in difficulties because of the policies it has pursued in regard to the banks over the last twelve years. This Parliament is the proper place in which banking policy should be determined, Sir. This is the place where the statement made by the Treasurer (Mr. Harold Holt) should be discussed. The honorable member for Melbourne Ports (Mr. Crean) is the spokesman of the Australian Labour Party on banking, and he has stated the position of this party on the issue.

After nearly three months of secret negotiations between the Government, the Reserve Bank of Australia, the Treasury and the private banks, the Treasurer announced the Government’s proposals concerning banking reform. After such a prolonged effort, in which the spur of neardefeat in the general election could be expected to provide a stimulus to constructive action, the Treasurer presented a document which is most notable for the fact that it entirely missed the point. It omitted to mention the two most vital issues of credit policy - issues which have bedevilled the progress of this country for more than a decade under the Menzies Government. These two issues are, first, the steadily rising cost of credit in the community and, secondly, the steadily declining power of the Government to control movements of credit.

The Treasurer’s proposals are designed almost entirely to mollify some grievances of the trading banks and to provide them with some short-term advantages which will lead to an immediate lift in their profitability. But in his statement there was not one hint of the slightest concern over the big issues of credit policy relating to the rising cost of money and the decline in control over the volume of money in the community. In fact, on one aspect at least - the decision to reduce the rate of interest which the banks are to be allowed from now on to offer on deposits - the proposals have certainly contributed a little more to the steady decline of monetary control. This decision shows how little concerned the Government has been, over the three months before the Treasurer made his statement, in seeking to get to the bottom of our really serious national difficulties in the field of credit policy.

Let me outline what has really happened under the administration of this Government. In the first place, the cost of credit has gone up. Between 1953 and 1961, the maximum overdraft rate rose from 5 per cent, to 7 per cent. The rate of interest on private first mortgages went up from just over 5 per cent, to nearly 9 per cent. The yield on short-term Commonwealth securities went from 3i per cent, to about 4i per cent. The rate on first-class company debentures went up from 4 per cent, to about 6 per cent., and the rate on other company debentures from about 5 per cent, to between 8 and 8i per cent.

Another factor has been driving up the cost of money. That is the decline in proportion of total credit which has been provided in recent years by relatively lowinterest lenders like the banks, and the increasing proportion provided by relatively high-interest lenders like the hire-purchase finance companies. Between 1953 and 1961, the total assets of the trading banks rose by about 221 per cent., while the assets - mainly the outstanding loans - of hirepurchase companies rose by about 440 per cent. Whereas, in 1953, the proportion of the assets of hire-purchase companies compared to those of the trading banks was about 6 per cent., by 1961 it was about 25 per cent. As the lending rates of hire-purchase companies are on average something like twice as high as those of the banks, it is not hard to see that this vast expansion of hirepurchase finance has brought about a large increase in the total cost of credit. AH this is in addition to the underlying trend towards dearer and dearer money which has been a distinguishing feature of the credit policy of the Menzies Government.

The first point, therefore, is that, under the Menzies Government, interest rates have risen steadily and the proportion of credit supplied by the high-cost lenders has increased remarkably. One has only to consider the figures. The cost of money has gone up and up. That has been one major reason for the lengthening periods of economic stagnation from which we have suffered in recent years. This has been a major deterrent to the expansion of our country and to the spread of investment and enterprise. The second change which has taken place in the field of credit under the Menzies Government has been the steady erosion of control over the movement of credit. Under existing legislation - laws which the Menzies Government has never seriously attempted to alter - the only part of the credit supply which is under direct control is the credit supplied by the banks. Yet the Minister for Air says that this Government believes in free enterprise and no controls.

There is no control over the volume of credit supplied by the hire-purchase companies; there is no control over the credit supplied by the capital market, largely through the stock exchanges; there is no control over the vast and growing supply of credit provided through the mounting activities of pension and superannuation funds; there is no control over unit trusts; and there is no control over life insurance and other such companies. There is control over the banks alone. And, as we have learned to our cost, even that control works very badly under the Menzies Government. Yet the asset’s of the banks have grown more slowly than have those of almost any other form of credit institution under the administration of the Menzies Government. There has been a tremendous explosion of credit through nonbanking institutions which, under our current laws, are almost entirely beyond control.

Between 1953 and 1961, the assets of the trading banks, as I have said, rose by about 22i per cent. Over the same period, the assets of life insurance companies rose by nearly 90 per cent., those of pension funds by more than 180 per cent., those of nonlife insurance companies by more than 100 per cent., those of unit trusts by more than 340 per cent., and those of hire-purchase companies by about 440 per cent. In the five years ended 30th June last, the amount raised annually by companies listed on the stock exchanges rose by 150 per cent. The result of these developments is that whereas in 1953 the controllable sector of the credit supply - the trading banks - represented about 40 per cent, of the total, to-day the proportion is down to less than 30 per cent. We are moving steadily and quickly to a state of anarchy in the markets for money.

What does the Treasurer’s statement tell the anxious people of Australia about these grave problems of the rising cost of credit and the decline in control over credit? It tells them nothing. It does not even mention the problem. All that Minister after Minister talks about is the nationalization of banking. Ministers say that the Government wants to help the private banks. As the figures that I have cited demonstrate, this Government certainly has sacrificed the private banking system to the fringe banking system over which it has no control and over which it does not propose to try to exercise any control. It has never tested its powers before the High Court of Australia to see whether it has any control over the fringe banking field.

The effects of the collapse of credit policy in the last decade or so, Sir, have been more than a raising of the cost of money in the community and a movement towards anarchy in the control of movements in the volume of money. The failure of the trading banks and the savings banks to grow at anything like the rate achieved by hire purchase, pension funds and the capital market has meant that the credit available in the community often has been diverted into frivolous channels, while the urgent needs of the community for housing, rural development, export finance, education services and the modernization of the nation’s factories have been neglected. The failure of the trading banks to grow has led to a reduction in the standard of supervision over the granting of loans and the development of a vast and growing fringe of loan sharks, second-mortgage lenders and other high-cost lenders who have swept into the gap left by the banks.

Mr Reynolds:

– And the backyard financiers.


– Obviously, a profound revolution in our national approach to the urgent problems of credit is needed. Is there any hint of such a revolution in the Treasurer’s statement? Again there is none. He and his Government are still tinkering with the problem; he has made some minor adjustments to the conditions under which the banks will be permitted to lend on overdrafts and some other minor changes aimed at improving the deplorable present position of export and rural needs which are almost entirely starved of a share in the increasing volume of credit. These minor changes will effect some improvement in the profits of the trading banks and this alone may explain why the trading banks were content to accept such pitifully inadequate changes when what was needed was a revolution.

Indeed, the ready acceptance by the trading banks of such sketchy and superficial changes reinforces my view that banking is far too serious a matter to be left to the banks. Of course, the problem goes even farther when one considers the consistent failure of the Government and of the Reserve Bank in recent years to control the movement of bank advances - the one aspect of credit flow which they have power to control directly. Their failure has contributed in no small measure to the overall failure of the Government’s economic policy to guarantee in recent years a high and steady rate of economic growth in Australia. Is there any mention of this problem in the Treasurer’s statement? There is none. So the present position may be summarized in this way: There has been a steady rise in the cost of credit under the Menzies Government. Also, there has been a steady reduction in the proportion of the total credit supply, which under existing legislation is controllable. Further, there has been a failure to control even that part of the credit supply which is controllable. Moreover, the nation’s credit has been diverted into many frivolous and very high cost channels and the standards of credit supervision have been steadily reduced.

In the face of all these profound problems the Treasurer makes a statement and brings forward a series of proposals which certainly show no recognition of those problems and provide nothing more than an immediate lift to bank profits and some minor palliatives to the problem created by the distortion of the credit supply. Undoubtedly the best solution to these problems is the implementation immediately of the spirit of the proposals of the Constitutional Review Committee on monetary reform. We in the Labour Party have always recognized the committee’s proposals and have fought hard and long to have them implemented so that our legal framework may be brought into line with the requirements of a modern economic policy. So far we have had no success in achieving our aim. The four Labour members of the committee, the Deputy Leader of the Opposition (Mr. Whitlam), the honorable member for Lalor (Mr. Pollard), the honorable member for East Sydney (Mr. Ward) and I, have tried hard over the years to have a referendum put to the people on these and other issues. We have failed, and so too have our colleagues who have joined with us. The Government has studiously avoided any serious attempt at implementing the reforms which the Constitutional Review Committee recommended and are so urgently needed.

So, for the time being, the Labour Party, appreciating the long delays which are likely to be involved in this matter, believes that its policy of constitutional reform will have to be implemented by more urgent and immediate steps. But this does not mean that nothing can be done. On the contrary, there is a great deal of room for constructive action to bring order into the prevailing anarchy in our monetary arrangements. It seems to us in the Labour Party that action must be concentrated on bringing a bigger proportion of the total credit flow in the community back into the area where it is controllable and is largely the cheapest - the trading banks. They must be permitted to obtain control over a very much larger proportion of the total credit supply than is, or will be, likely after the temporary effects of the minor changes introduced by the Treasurer last Thursday have been exhausted.

The trading banks must be permitted to expand rapidly, for two reasons: Firstly, their credit is still the cheapest as well as the best managed and, secondly, their credit is controllable. Those are the issues on which we are trying to pin down the Government. Let it say why it will not give the private trading banks, whom it pretends to support, an opportunity to supply more credit at a cheaper rate. The Treasurer’s proposals already contain the seeds of a further weakening of the competitive position of the trading banks in the market for money as soon as the present temporary period of an extreme money glut passes. After all, the Treasurer has already reduced the deposit rates which the trading banks will be permitted to offer. He has shown that he does not understand the gravity of the problem confronting the nation. Unless strong action is taken to strengthen the banking system, we must expect a continuation of the trend towards more costly credit and still less control over the flow of money to the community. As the law stands we have no alternative to working strenuously for the rehabilitation of a strong banking system as the foundation for our whole money supply. This may involve some increase in bank profits, but I cannot see that this is a very important issue.

Hire-purchase profits are not controlled, nor are those of oil companies and unit trust companies. Why should it be thought necessary to single out the banks for special attention when the only effect of that policy will be to make credit more costly for the ordinary citizen, to favour the big man against the small man and to break down the whole fabric of monetary control? If one wants to control bank profits, or those of any other business, one has a powerful weapon in the form of income tax law. We shall not hesitate to use it. This Government has been tried and has been found wanting. We on this side of the House shall continue to encourage a vigorous expansion of the Commonwealth Banking Corporation when we attain office, because in itself it will provide a powerful competitive spur to private enterprise in banking. In 1945 a Labour Government brought down the first modern banking legislation that this country has known. All the actions of the Menzies Government since then have served to undermine the power and effectiveness of that legislation, endangering in the process full employment and price stability. These were prime aims for the Commonwealth Bank, which Labour established as a modern central bank after the war.

The power and effectiveness of central banking has been injured not only by the “ stop-go “ policy of the Menzies Government, but also by the steady undermining of the base through which our policy was to work. This base was to be a strong system of banking in Australia. Only through the restoration of that banking system, the weakening of the fringe banking system through the revival of the trading banks, both Government and private, in the exercise of their legitimate activities and with the private banks divorced from their hire-purchase activities, can we restore the control of banking operations in pursuance of national monetary policy, which is so vitally needed for the fulfilment of the economic aspirations of the people of Australia.


.- Some of the facts given by the Leader of the Opposition (Mr. Calwell) are irrefutable, but we differ from him in the method of approaching the problems posed by them. It seemed to me that his speech had one theme running right through it - control. At the outset he said, “ We would not nationalize the banks “, but the controls about which he spoke would so leg-rope the banks that they might as well be nationalized. Of course, it is not what the Labour Party says it will do but what it does is important. One need only look at the Chifley banking legislation to see that. Much is heard these days of company takeovers, but the Chifley measure was ten years before the first great company take-over occurred. Listen to this provision in act No. 57 of 1947 which was supported by the older members of the present Labour Opposition. We find phrases like these in the act - the shares in the Australian private bank . . shall … be vested in the Commonwealth Bank. the shares in the Australian private banks concerned . . . shall, by force of this act, be vested in the Commonwealth Bank.

Opposition Members. - Hear, hear!


The Commonwealth Bank may . . . purchase all or any of the shares in a private bank . . at a price not less than the market value in Australia of those shares on the fifteenth day of August, One thousand nine hundred and fortyseven.

Opposition Members. - Hear, hear!


– Then we find a division of the act devoted to “Acquisition of Shares in Private Banks “ - take-over!

Opposition Members. - Hear, hear!


– Order! I remind honorable members of the standing order concerning interjections. I suggest that the House come to order.


– We have just witnessed a display, Mr. Deputy Speaker, by the Labour Opposition, acting in unison, of their agreement with the Chifley legislation, which was designed simply to effect a takeover of the private banks. Yet the Leader of the Opposition (Mr. Calwell) said, “We will not nationalize the banks because we cannot”. Now we find that every honorable member opposite supports the proposition that the private banks should be taken over. I invite them to declare where they stand on the matter.

The Leader of the Opposition said something about hire purchase. Fortunately, the honorable member for Maranoa (Mr. Brimblecombe) has handed me a report on hire purchase which was prepared by some very distinguished men. I will come to their names in a moment. This report said that the average rates of finance charges under hire purchase, over which we have no control, as honorable members well know, were these -

These rates are average flat rates per year. But paragraph 78 of the report says this -

The finance charges are not usually regarded as interest, but if the repayments are made in regular weekly or monthly instalments the charges as an effective rate per annum on the unpaid balance would be slightly less than double the rates quoted above.

In other words, the interest rate in some cases approaches 20 per cent. In the final report, which was signed by a very distinguished gentleman-

Opposition Members. - Who was he?


– The following statement appears: -

The finance charges as set out in paragraph 77 are not unreasonable and there appears to be sufficient free competition among the finance companies to act as a brake on excessive charges.

Mr Cope:

– Would you read that again?


– Honorable members opposite are asking who was the distinguished gentleman who signed it. It was J. B. Chifley. I have been asked to repeat the parts of the report to which I referred. Well, as I said, it tells us that with a flat rate of 10 per cent., if repayments are made in regular instalments the effective rate per annum would be slightly less than double that figure. Then J. B. Chifley signed the statement that those charges were not unreasonable.

The Leader of the Opposition went to great trouble to tell us that the private banks have not been able to discharge their full responsibilities, and he pointed out that this has driven people who wish to borrow to the fringe institutions. Let us see why this has happened. We all listened a few days ago to a speech by a distinguished American who praised free institutions. I would like to make the point at this stage that if we free the trading banks we will get a fair go for the people and for the country. In this situation, who are the real usurpers? They are not the free enterprise trading banks. Private persons and the companies who cannot get accommodation from the trading banks are driven to pay high interest rates, rates that are twice as high as those obtaining in the open market, that is, under the banking system itself. It would be better for the people of Australia for the Government to restore freedom to the private banking system. The statement that we are discussing tells us on page after page that the arrangements that are being made are a further step forward in freeing the banking institutions.

All of these controls arose out of the National Security Regulations that were enacted under the defence power during the war, and which, of course, overrode the relevant provisions of the Constitution during that period. Let me say again that it would be better for the people of Australia for the Government to restore freedom to the trading banks, because that would reduce the cost of raising money. Thrifty people do not get a fair rate of interest on their fixed deposits because the Reserve Bank pays only three-quarters of 1 per cent, on the funds that it seizes from the trading banks under the statutory reserve deposit provisions. These provisions were originally brought in under the shock of war, in a most unusual atmosphere, the war having produced all sorts of pressures. Now we have these arrangements embedded in our banking system, and the Reserve Bank pays only three-quarters of 1 per cent, to the free enterprise banks for the money that it takes from them. Except for New Zealand, no other country in the world follows such a practice. In the United Kingdom the full bond1 rate is paid for the money held in the statutory reserve deposits, or whatever the fund is called in that country. In Canada the amount paid by the central or reserve bank varies with the bond rate. In the United States of America the interest rate paid on the statutory reserve deposits is actually fixed by the representatives of the banks themselves. I rely for my information in this regard on Mr. Mariner Eccles, chairman of a Federal Reserve Bank, of which there are twelve in all. I think this gentleman comes from Salt Lake City, Utah.

Under the present arrangements there is a move to free, or there has been freed, a further amount of £55,000,000 which was held in the statutory reserve deposits. I think that either in this month or in the preceding month another £36,000,000 went out in overdrafts.

Unfortunately, the 1953 and 1955 legislation reflects the socialist act of 1945, which had its roots in the Chifley banking policy as expressed by the late Mr. Chifley in his minority report to the monetary and banking commission of inquiry of 1937. In that report he said that the Commonwealth Bank should be used to compete with and finally destroy the free enterprise banks.

Opposition members. - Hear, hear!


– I am very grateful for the interjections, because they confirm what everybody has suspected, that the Labour Party is determined to carry out its policy. Every time I make a comment such as this I hear a chorus of “ Hear, hear! “ from honorable members opposite.

This practice of which I have spoken has been embedded in our banking legislation, and it has been carried on by our draftsmen into new banking bills, probably without the Government realizing it. The Commonwealth Bank and the Development

Bank are now working together for the expansion of each other. Section 28 of the Commonwealth Banks Act says - (1.) The Trading Bank shall carry on general banking business. (2.) It is the duty of the Trading Bank to develop and expand its business. (3.) The Trading Bank shall not refuse to conduct banking business for a person by reason only of the fact that to conduct that business would have the effect of taking away business from another bank.

In other words, the Commonwealth Trading Bank is free to take customers from other banks. Mr. Deputy Speaker, I believe that the public suffers more from this experiment in socialism than the banks themselves. Once again, this arises from the socialist act of 1945 which, in retrospect, was another way of preserving in peace-time the all-powerful defence powers known as the National Security Regulations.

In Australia fringe banking is different from fringe banking in other parts of the world. Here it grew up out of controls. In other parts of the world it grew out of modern systems of banking such as merchant banking. Of course, there is a place here for fringe banking to supplement ordinary banking procedure; but in Australia fringe banking occupies an abnormal position. Why is this? It is because it tries to fill in the gaps created by the Government when it suppresses private banking initiative and growth. The socialist approach to this problem is to extend the present controls over the banks to the fringe banking institutions as was recommended by the all-party Constitutional Review Committee. Of course, the Leader of the Opposition (Mr. Calwell) has confirmed that with great vigour during the last twenty minutes. This would simply mean one set of socialist controls breeding a new set of controls. The truly liberal solution to the problem is to set the private banking institutions free so that they can give effective competition to the fringe banking institutions. This is the only way in which the public will receive proper benefits of fair interest rates on their savings and be able to borrow money at reasonable rates.

Looking back at the original arrangement for the Commonwealth Bank, the Fisher Government, in 1911, introduced legislation and proposed that the capital of the bank should be £1,000,000 to be raised by the sale and issue of debentures to the public.

Mr Ward:

– No debentures were issued.


– In 1914 provision was made for an additional issue of £9,000,000 of capital by the sale of debentures. This was authorized. But as the honorable member for East Sydney has said no debentures were issued. The intention was to sell debentures to the public in which case the public would have been the owners of the bank, not a socialist government. However, it was not necessary to sell the debentures authorized because of the extraordinary situation which arose. In 1914 we were going into a war. Inflation began and deposits were sufficient. In other words, the people deposited their money in the bank and there was no need to sell debentures. But the Labour Government of those days proposed to raise funds from the public. I believe that this is the only way to free the banks and to ensure fair competition.

This was promised by the Prime Minister (Mr. Menzies) in his 1949 policy speech. He said that, first of all, we would have a referendum to amend the Constitution to make sure that the banks would never be nationalized. That policy was accepted by the people of Australia. The Labour Party has not been back in power since it was then defeated on the socialization issue. Then the Prime Minister said that there should be fair competition between the banks. The only way to do this was to examine the ownership of the Commonwealth Trading Bank itself. There has been a successful move to separate the Reserve Bank of Australia from the Commonwealth Trading Bank. To-night, in Mosman, a strong branch of the Liberal Party is debating a resolution which reads -

With a view of further implementing the 1949 anti-nationalization policy which proved so acceptable to the people of Australia, and arising from the 1953 and 1959 banking legislation towards separation of the functions of the Reserve Bank and the Commonwealth Trading Bank, the ownership of the Commonwealth Trading Bank be changed from Government ownership to free enterprise ownership, that is, the ownership of the shares by the Australian people, with the necessary safeguards to ensure this.

We have heard a great deal from the Opposition, Mr. Speaker, to the effect that the ownership of oil companies and of other big companies should be Australian. I agree with that. If the Australian people have the courage and are to be entrusted with such ownership they should ultimately be the owners of the Commonwealth Trading Bank. Last week we had the privilege of listening to one of the great protagonists of free enterprise. I think it will not be wrong when we are discussing free enterprise and trading banks to repeat some of his words. I refer to the speech by Mr. Dean Rusk in this building. He said -

We have seen in our own lifetimes the transformation of the lives of peoples under free institutions. When we say to our friends in the developing countries that we know the Communists have not found a magic formula for rapid development it is because we have seen fantastic and rapid development under freedom while you and we have been alive.

Let us not concede this notion that it takes two or three hundred years to develop just because, almost as a truism, all of us have had two or three hundred years of history behind us. Because this development has occurred in the most recent times. In 1920 only 1 per cent, of the farms of the United States had electricity. To-day 98 per cent, of them have electricity. You could multiply those examples and figures many times in your own personal experience. What I am saying is that we have reason for a confidence in the capacity of free societies to deal with these great yearnings for economic and social development that we must transfer to those who are giving these aspirations highest priority in their own situations, and that we dare not pretend, we dare not concede that those who are now responsible for what is happening all the way from East Germany to North Viet-Nam have found any answer even to the central problem to which they say they have addressed themselves, namely the problem of economic and social satisfaction.

Mr SPEAKER (Hon Sir John McLeay:

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


.- Mr. Speaker, I had not intended to speak on this issue, but there are some aspects of it which make me feel anxious. The honorable member for Macarthur (Mr. Jeff Bate) referred to the debentures which could have been issued under the original Commonwealth banking legislation had that been necessary. But he seems to have become confused and to have got the idea that this would have meant that the control of the Commonwealth Bank would have been removed from the Government. The facts are that under the original act the Government had complete control of the Commonwealth Bank. There was provision, it is true, for the issue of debentures but debentures were never issued, as the honorable member for East Sydney (Mr. Ward) said. They were never issued because the Government utilized the funds of the Commonwealth Savings Bank as capital for the formation of the bank. This was quite a remarkable organization in view of the colossal job that it has done in developing this country and prosecuting two world wars on behalf of this country. That was done without the issue of any capital whatsoever. It is probably the only occasion in the history of the world on which that has been done.

The honorable member for Macarthur also referred to what he called the 1945 socialist legislation. The facts are that this Government, by and large, has almost entirely retained the provisions of that legislation. The legislation to-day is not altogether basically different from the 1945 legislation. The only aspect on which this Government has differed from the Labour Government is that it has encouraged the fringe banking system. To-day, the Government is finding that this empire it has built is a little too hot to handle and it is trying to find ways of curbing the activities of this system.

Let us look at a little of the history of these institutions. Provision was made in the 1945 banking legislation for the Commonwealth Bank to establish a hirepurchase section to finance the purchase of farm implements, motor cars for business purposes, and so on. It was envisaged that this section would set a pattern for similar private organizations, and that in this way the activities of the private organizations would be controlled and would not become anti-social. But one of the early acts of this Government, after it was elected to office, was to withdraw from the section the right to finance the purchase of motor cars. In a matter of approximately nine months, the section had become the largest hirepurchase house in the country. It was doing an efficient job; it was not an inefficient governmental enterprise. In addition, it was providing finance at an interest rate of 4 per cent. Any person who approached the section could arrange to take delivery of a motor car on the same day as he lodged his application for finance. I have known business men who were against the section until they had to use it for the purchase of a motor car. They have come away from the section saying that they would take their hats off to it for the job it was doing.

The section was growing quickly and was setting such an efficient pattern for the private organizations that the private organizations started to complain. They went to their lackeys, this Government, and asked the Government to control the section’s activities, although it was doing an efficient job for the people of this country. The Government in its first banking legislation limited the capital of the section. The section had to operate with the capital it then had, although the cost per unit was increasing. As honorable members know, the cost of motor cars was steadily increasing, particularly during the early years of this Government’s term of office. If the section had only the same amount of capital, its volume of business would decline. As there was no capital issues control, the private organizations were allowed to increase their capital. On the other hand, the hire-purchase section of the Commonwealth Bank was placed in the position where the number of units it could lend against was progressively reduced.

The private organizations were not satisfied even with this action. Accordingly, the section was told to withdraw from the motor car field altogether. This hire-purchase field was left wide open to private organizations. No pattern of efficiency and service to the public and business community was set by a government organization and the private organizations had complete control of this sphere of activity. This was done deliberately by the Government. It built this mammoth empire of the fringe banking system and now it is saying that the position is dangerous and must be examined. The fringe banking system is the Government’s own Frankenstein.

To-day, the Government basically is still promoting the activities of this fringe banking system, and this is not good for the Australian economy. A dear money policy is operating and the Government is simply chasing the tail of the fringe banking system. Interest rates increase. The hirepurchase companies seek money at high rates and the Government must compete against them and also pay high rates. The Government is chasing the tail of the fringe banking system all the time. That is the very basis of the creation of the dear money policy that this Government is following. It follows this policy not only of necessity but also because it likes and believes in it.

The honorable member for Macarthur mentioned a previous report on banking. 1 point out to him that Mr. J. B. Chifley was one of four members of that committee; he was not the only member, as the honorable member suggested. The committee sat during the term of office of the previous Menzies Government, which was also following a dear money policy. Interest rates that were unreasonable in the time of the Curtin and Chifley Governments would not have been so unreasonable then because they were based on a different interest framework. The two periods could not be compared. The Menzies Government of that day was following exactly the same dear money policy that it is following to-day. This policy was reversed by the Curtin and Chifley Governments during the war years and the post-war years.

Those are the basic issues. To-day, the Government is encouraging the fringe banking system. It has itself built an offspring of the private banking system, and it has no control over it at all. The Government realizes that this fringe banking system is seriously attacking the very basis of our economic framework and that it must do something to control the system. The Government tries to avoid its responsibilities by accusing Labour of acting wrongly in the past. The fact is that the Government’s banking policies have not been sound in the past and it is obvious that they will not be sound in the future.


.- I want to make only one reference to the speech of the honorable member for Mitchell (Mr. Armitage). He said that the Labour Government conducted the war without issuing credit. That was no doubt a very great achievement, but it was easy of accomplishment. At that time, under war-time regulations, the Government had complete control of capital issues. No one could do anything with money except lend it to the Government.

Mr Armitage:

– You could get control, too.


– Yes, with capita] issues control. Is that what Labour wants?

Mr Armitage:

– Yes.


– Labour does not want to nationalize the banks, according to the Leader of the Opposition (Mr. Calwell), but it wants to have complete control of capital. This is in keeping with the speech made by the Leader of the Opposition.

Mr Einfeld:

– It was a good speech, too.


– Yes, in one respect, and if Opposition members will allow me to do so, I will refer to it. The Leader of the Opposition said that banking was too important a matter to leave to the banks. I would not debate that point with him. But in the rest of his speech he made a plea for greater freedom for the banks. He condemned the Government because it was not allowing greater freedom for the banks, yet at the outset he claimed that banking was too important a matter to leave to the banks. I will confess that that was the first time I had ever caught out the Leader of the Opposition in a contradiction during the course of one speech.

Mr Einfeld:

– You did not understand it.


– I understood it all right. The Leader of the Opposition also said that this proposal for short-term loans was designed to meet requests from the banks. That is entirely wrong. But I rose to point out to the House that the most important aspect of this banking proposal is the fad that it is designed to meet an urgent require ment of the rural industries. I remind honorable members that, in his speech, thi Treasurer (Mr. Harold Holt), said -

We have been aware for some time of a growing need for a new type of bank lending to mee developmental requirements, especially of rur industries.

And there is such a need. Owing to change in the nature of our economy, thi need has arisen, and it has not been me It might be of interest to honorable men bers of the Labour Party, whose knowledg of the rural industries is limited to illustrations of animals in the picture books they had when they were children, if I explain the position.

In the rural sector of the community, two types of borrowing are necessary. First, money is needed for developmental work. That money is required on a long-term basis. It cannot be repaid immediately because development work extends over a long period, and the money borrowed for this purpose should be looked upon more as a capital investment. The proposal we are considering is designed to meet that need. The second type of financial assistance required by the rural sector is bank overdraft or short-term loan money. This is what we might call carry-on money. The farmer needs it at the beginning of a season to buy what is necessary to put in his crop and carry out normal farming operations. Having done that work, he then must wait for a season before he gets any return, and he hopes that, at the end of the season, he will get a big enough return to enable him to repay his loan and to finance his operations for the next year.

Over a period, if the farmer is blessed with good seasons, he becomes reasonably prosperous, and reaches a stage at which he has accumulated sufficient money to carry on without borrowing. But by that time, he requires money for the replacement of plant and for additional development. This again means a long-term loan, for it is developmental money that he requires once more. I believe that in the past, because of the rigid control over the banking system, insufficient money was available to the banks to enable them to meet both long-term and short-term requirements of our primary industries. Because of a shortage of money, the banks had to restrict either their carry-on lending or their longterm lending. Actually, there has never been long-term lending. Hitherto, the practice has been to make money available by way of overdraft. Because their funds were restricted, the banks were able to lend money only in those cases where they could »ee quick repayment. Therefore, their lendng was restricted to lending for carry-on purposes. If they lent money on a longarm basis, they would, in effect, be using money which was required for carry-on purposes. It was because of these circumstances that some farmers were unable to obtain developmental money while others were unable to obtain carry-on money. Whether the money was to be made available on a long-term or a short-term basis was purely a matter for the banks themselves. This proposal is welcomed most heartily by the rural industries because it will meet what hitherto has been a very definite requirement.

I had hoped that the principle of lending by way of bank overdraft would not be abandoned. I refer now to the system under which the borrower by way of overdraft pays interest on the daily balance of his account. The honorable member for Wentworth (Mr. Bury) suggested earlier today that there should be a system under which, once the customer obtained an overdraft from the bank, the total amount of the overdraft would be transferred to his current account and the customer would continue to pay interest on the total amount of the overdraft irrespective of what his current account balance was. The honorable member for Wentworth did qualify his suggestion by saying that special arrangements would have to be made for the rural industries; and I agree that they would. Australia has developed under a banking system under which interest is payable only on the daily balance. In my opinion, that is the fairest method, and it is the only system under which banking should be carried on.

I can only hope that the £55,000,000 which the Government proposes to make available will be sufficient to meet all the calls which will undoubtedly be made upon it. The Treasurer has indicated that there is a possibility that it will be increased at some time in the future. If there is that distinct possibility, then I can only say that a promising future lies ahead of our rural industries. What the Treasurer has suggested is urgently necessary, and the Government should be thanked for its proposal because undoubtedly it will lead to a great improvement in the economy of the country within a very short time.

One .point that does interest me greatly is the interest rate. Normally, the interest rate has been left to the discretion of the lender who fixes it according to the nature of the risk taken. The rate of interest charged has always been related to the nature of the security. The greater the risk, then naturally the higher the rate of interest. If the risk is not very great, and there is a possibility of early repayment, the interest rate is lower. A long-term loan usually carries a higher rate of interest because of the longer repayment period, and because of the possibility that while the money is out on loan other opportunities to invest for a higher return may be missed. I gain confidence from the fact that, when referring to interest rates, the Treasurer said -

Where various classes of rural and other borrowers now receive preferred treatment from the trading banks in the matter of interest rates, this preferred treatment will be continued.

I emphasize that this preferred treatment not only will continue in respect of current borrowers but is to apply to future borrowers in the same classes.

That is a tremendously important statement and one which will be welcomed by rural borrowers, because as I understand this proposal it is essentially designed to assist in the development of our rural industries. It is related also to improving our export industries. Actually, that means assisting our rural industries, because I remind the House that we are still basically dependent upon our rural industries for our exports, and we must develop our rural industries to earn more from our exports if we want to maintain solvency.

The question of interest rates is particularly important because an interest rate that is too high can discourage developmental work. Actually too high an interest rate can bring tragedy to a person who is unable to obtain a sufficient return from his investment to make repayments. A person who sets out to engage in developmental work needs sufficient not only to meet charges but also to make a profit. I congratulate the Government on this proposal.

Mr Gray:

– Why not congratulate the Leader of the Opposition also?


– I am not sure yet which way the Leader of the Opposition is jumping. He contradicted his own statements. Once I have his position clarified I will know whether to include him in my congratulations. But the Government’s statement is clear. It is encouraging to the country and will relieve one of the difficulties in the development of Australia. Considerable development has taken place as a result of this Government’s work over the past ten years. I conclude by emphasizing that the Government deserves the congratulations that I now extend to it. I believe that in their hearts, members of the Opposition know that the Treasurer (Mr. Harold Holt) has done a good job and that they, too, congratulate him.

Mr McMahon:

– As honorable members know, the motion to print a paper is a form of the House used when it is desired to discuss the subject matter of the paper. As the ministerial statement was printed in “ Hansard “ and has been widely circulated, it would be a needless expense to print it as a parliamentary paper. Therefore, I ask for leave of the House to withdraw the motion.

Motion - by leave - withdrawn.

page 2513



– I present the first report of the Printing Committee.

Report - by leave - adopted.

page 2513


The following bills were returned from the Senate: -

Without amendment -

Gold-Mining Industry Assistance Bill 1962.

International Wheat Agreement Bill 1962.

Appropriation (Works and Services) Bill (No.


Supply (Works and Services) Bill 1962-63.

Without requests -

Appropriation Bill (No. 2) 1961-62.

Supply Bill 1962-63.

page 2513


Motion (by Mr. McMahon) agreed to -

That the House, at its rising, adjourn until a date and hour to be fixed by Mr. Speaker, which time of meeting shall be notified by Mr. Speaker to each member by telegram or letter.

page 2513


Motion (by Mr. McMahon) agreed to -

That leave of absence be given to every member of the House of Representatives from the determination of this sitting of the House to the date of its next sitting.

page 2514


Trade - Textiles - Questions on Notice -

Immigration - Use of Australian Military

Forces Overseas - United States Navy Communication Station - Ministerial Visits Overseas - The Parliament

Motion (by Mr. McMahon) proposed -

That the House do now adjourn.


.- Last Tuesday, I asked a question of the Minister for Trade (Mr. McEwen) and part of that question was as follows: -

Is it true that during the last thirteen years Australia bought from the United States of America about £500,000,000 worth of goods and merchandise more than the United States of America bought from Australia?

I then went on to ask whether the efforts now being made to sell more goods to the United States of America were not a condemnation of thirteen years of unbalanced trade with that country. In his reply, the Minister said in part -

The policy of the Government has never been to seek to establish a bi-lateral balance of trading with any one of its trading partners. The policy of the Government is to seek to have an overall satisfactory trading position for Australia

Anybody reading or hearing that remark of the Minister could reach only one conclusion: That the overall trade of Australia with the rest of the world was beneficial to this community, that it was favorable and that the adverse trade balance with America was only an isolated case that I had brought out in order to create a wrong impression about the trading operations of this Government. Therefore, I state that during that period, Australia paid out to the rest of the world £1,669,000,000 more than it received; so its trading with the rest of the world was much worse than its trading with the United States alone. I mention that figure because I think the Minister for Trade either deliberately or unconsciously gave a reply which was most misleading. I emphasize again that our trading activities have been disadvantageous not only bi-laterally but also multi-laterally.

I desire to mention another matter while I have the opportunity to do so. To-day the honorable member for Richmond (Mr. Anthony) made an attack upon the Australian textile industry. In years gone by when the Sydney weekly newspaper the “ Bulletin “ was a worthy Australian journal it used to refer to those people who con tinually knocked Australian enterprises and Australian achievements as members of the “ stinking fish brigade “. It was quite a descriptive title. The honorable member for Richmond has qualified easily to become an outstanding member of that brigade. He attacked the Australian textile industry and its products either to justify, or to seek to improve, the sale within this country of textile products imported from overseas. In reality, the Australian textile industry can meet all our requirements.

Not millions, not tens of millions but hundreds of millions of pounds worth of textiles have been imported into this country as a result of the Government’s trading policy. This has resulted in Australian workers being out of jobs, and Australian factories being closed down. The textile factory in Bridgewater, Victoria, and the decentralized factories in many other country centres have closed their doors forever because of the products which have been coming from overseas. This immense quantity of textiles could have been manufactured by Australian workers in Australian factories. It is deplorable that an endeavour should be made in this House not merely to reflect upon one brand of textiles or the products of one factory but also to attack generally the Australian textile industry, wherever the factories may be situated and by whomever they may be operated.

It is only fitting and proper that I, who have always endeavoured to assist the Labour Party’s efforts to protect and promote Australian industries, to ensure the full employment of Australians and the reemployment of the 100,000 who have been displaced, and to secure as well employment for those who left school last year and still have not found a job, should voice a protest against the continual knocking of our manufacturing industries by members of the Country Party who, I suggest, can only be described in the words of the “ Bulletin “ in days gone by as members of the stinking fish brigade.

East Sydney

.- There are several matters to which I want to refer in this, the closing hour of the present sittings of the Parliament. I want to refer particularly to the Government’s failure to answer questions some of which have been on the notice-paper since 27th

March last. One of the subjects about which it is almost impossible to obtain any information is in the field of what are usually referred to as parliamentary perks. When questions are asked about the misuse of Commonwealth cars, the Government either refuses to reply or gives completely evasive answers.

My questions about the misuse of Commonwealth cars have been on the notice-paper since 27th March last. Evidently they will remain there until we return for the Budget session on 7th August - if I receive a reply at all which can be regarded as providing the information that I am seeking. A few days ago 1 went to the trouble of putting two other questions on the notice-paper asking when 1 might expect a reply to the original questions. Those questions also have remained unanswered. I have done my best to extract from the Government the information which I require.

I note that an announcement was made to-day that the Minister for Immigration (Mr. Downer) is joining the “ gravy train “ for overseas. According to the announcement, he is going overseas to attract additional immigrants to this country and - so he tells us - to reply to the propaganda which has been disseminated abroad that at present Australia is suffering a depression. He will seek to remove that impression so that Australia can attract more migrants. All I can say is that I hope every member of the Labour Opposition who has a contact overseas, either in the Labour movement or in the trade unions of other countries, will write immediately to those contacts informing them that Australia has at least 98,000 unemployed. That is the Government’s own figure but everyone knows that the volume of unemployment in this country is much greater than that.

To show how ridiculous the situation is, the Government is sending urgent delegations overseas because it claims to be worried about Britain’s threatened entry into the European Common Market. If Britain does enter the Common Market and this Government fails to obtain the assurances regarding Australian trade which it has sought, and which every one knows it will not obtain, there will be a serious impact on Australian industries and a rapid growth of unemployment. The Minister for Immigration should not be allowed to go abroad unchallenged to misrepresent the position in this country in an endeavour to attract unfortunate immigrants who, the moment that they land here, will find themselves in difficulties in regard to employment. It is an urgent duty to ensure that these potential immigrants are fully informed of the position.

Let me tell the House how foolish it is for the Government to set out, as it has been doing for a number of years, merely to obtain large numbers of immigrants to this country. The Labour Party has argued always that the influx of new settlers should be related to our economic position and the availability of employment having due regard to the strain to be placed on our resources. According to the Government, its plan - if it can be called a plan - will bring additional people to this country, yet this afternoon’s newspapers carry a statement that no funds are available to complete the building of a branch of the University of New South Wales and that the work will stop next week. If the Commonwealth and State Governments have reached the stage at which no funds can be made available to extend educational and housing facilities and so on, surely this is not a time when a Minister should go abroad to try to attract more people to this country.

I turn now to one other matter - the Government’s decision to offer to send troops to Thailand. My opinion - and I think it is shared by all my Labour colleagues - is that Australian forces should not be used outside our own country except as part of a United Nations force. It seems to me to be rather dangerous to have in control of our affairs a government that obviously is prepared to send troops overseas in this fashion without knowing the full circumstances and even without a request for Australian forces to be sent. This Government represents fewer than 41 per cent, of the electors of this country. What right has it to commit Australia to send forces anywhere or to offer them to a country that has not even asked for them?

I am of the opinion that these matters ought not to be determined in this way by a government which represents a minority of the electors and which barely scraped in at the last general election on the preference votes of the Communist Party of Australia. Such a government has no right whatever to commit this country in these important matters. These are serious matters for the people of Australia.

Let me turn now to another decision that has been announced by the Government. For some time past, questions have been asked in this Parliament and elsewhere about a suggestion that the establishment of foreign bases on Australian territory was being considered. I do not propose to canvass the merits of the question. I merely say that any agreement with a foreign power for the establishment by that power of a base on Australian soil should be debated and considered in this Parliament. The terms of such an agreement should be known. But that is not done. The Government, first of all, committed the country and the Parliament, and the Parliament has to tag along and be told at some convenient time in the future what the terms of the agreement are. These are very serious matters that ought to be receiving the attention of this Parliament.

Furthermore, I am of the opinion that the Parliament should not be going into recess until 7th August. Many important matters placed on the notice-paper have not been dealt with. For example, honorable members on the Government side of the chamber have been complaining that they have on the notice-board items of business that they are anxious to have debated in this Parliament and decisions thereon made. Opposition members, who represent a greater proportion of the Australian electors than does the Government, have put down important matters for discussion and decision and have not been afforded an opportunity to have them debated.

What is to happen in the period when the Parliament is in recess? I am always fearful when we have an anti-Labour government in office. When I heard the Prime Minister (Mr. Menzies) announce that he was to go abroad during the recess, I wondered to myself, as I always do when he is about to go abroad, whether he would do more damage to us by remaining at home or by going overseas. After all, he has not proved to be a good negotiator for Australia. He has no great list of successes that he can claim responsibility for. We know that he has been a complete failure as an international negotiator. Apparently because he has the backing of a certain section of the press in this country, the right honorable gentleman is a much bigger figure in Australia than he is overseas. Experience has shown us that when he attends international conferences overseas he is cut down to size.

Who believes that the delegations that are to go overseas will affect the issue of the European Common Market any more than it was affected by the visit of the Minister for Trade (Mr. McEwen)? The Minister went abroad to state Australia’s case on the. Common Market issue, so he told us. When he came back to Australia, it was proved that he had been an absolute failure, because he had not been able to get any notice in the world press for the arguments

Mr SPEAKER (Hon Sir John McLeay:

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

Mr Clyde Cameron:

Mr. Speaker, I wish to say something about that saintly soul, the honorable member for Moreton (Mr. Killen), who has re-emerged as a speaker in debates on the motion for the adjournment of the House. He has now taken to talking about a subject entirely different from that about which he usually speaks, namely, unity tickets. The honorable gentleman has been a curious character in this Parliament. From the time when he entered this House originally, he held me in wonderment and amazement. At times, listening to him, I thought that I was hearing the echo of Edmund Burke. At other times, I thought I was listening to the echo of Lord Chesterfield. But then I thought that those great, esteemed and illustrious gentlemen surely could not have devoted so much of their time to the question of love as does the honorable member for Moreton, who, with his own lips, told us that he once rode a horse 35 miles to make love to his girl friend, only to be sadly disillusioned by her.

Nor do I think the illustrious gentleman that I have mentioned would have concluded, as did the honorable member for Moreton, that the members of the Russian ballet company who visited this country were just a bunch of spies who had come to this country to act on behalf of the Russian M.V.D. The talk that the honorable gentleman gave us one evening on “Lady Chatterley’s Lover” was something which I think all of us will remember till our dying day. It was a touching tribute by the honorable member. I believe that all these things give us some idea of this strange character who represents the Division of Moreton.

The honorable member not only has this great quality of understanding the finer arts. He also at times has made to this Parliament what I think are rather candid confessions about the kind of things and the motives that move him on these odd and curious occasions. This bold centurion, in his maiden speech in this House, gave us what I think has been the punch line of his contributions to the debates in this place ever since. He spoke about what happened when he first arrived in this place and told us what it felt like to be a new member. As reported at page 281 of “ Hansard “ of 28th February, 1956, the honorable gentleman said - . . I was disturbed by one honorable gentleman, more solicitous in his behaviour than others, who impressed upon me the fact that there comes a time in the life of every member of Parliament when he plays the role of fool, and that the most opportune time for that occurrence was the delivery of that member’s first speech in the House, upon his election.

The unfortunate thing about our esteemed friend is that he accepted the solicitous advice of the other honorable member and, in fact played the role of a fool in his maiden speech. He has not ceased to play the role of a fool ever since.

Any one who cares to read the remarks made by the honorable gentleman last evening in the debate on the motion for the adjournment of the House will readily see that he has not yet stopped playing the role of a fool. Last evening, he told one interjector to powder his nose. On another occasion he told an honorable member to take a long walk on a short pier. These are classic examples of this honorable gentleman’s wit. I have gone through the “ Hansard “ records and picked out some of the gems of his remarks enshrined there. Here are some examples. He describes somebody as a mean, miserable dwarf-like, angry ape. He said that the Bishop of Woolwich was a silly old goat. My friend, the honorable member for Parkes (Mr. Haylen), was so incensed at this as to feel constrained to interject, “ You are a dirty little liar”. The honorable member for Parkes was forced to withdraw that remark, as is shown by the “ Hansard “ report.

The honorable member for Moreton, this touching figure who has given us so many contributions, made it quite clear at one stage that he had a great abhorrence of unity tickets. He has said that the unity ticket device is a terrible thing which can expose the whole community to disruption, and so forth.

But I have not come to the end of the honorable gentleman’s qualifications. Not only has he made these rude, coarse and crass remarks to honorable members who interjected when he was speaking. Also, at times, he has shown us that he is a man of no mean literary ability. He can write poetry and I have here a sample of the fine verse that at times he has contributed to the parliamentary debates. On 5th September, 1961, the honorable member, talking of my esteemed leader, had this to say in a poem that appears on page 812 of “Hansard”-

He says, “Labour won’t have dead-end kids,

Now listen to our tempting bids “

But when poll results show,

The poor fellow will know,

That he’s off to a dead-end on skids.

I did not think very much of that; in fact I thought it was very poor doggerel because it did not even rhyme. But, I was not to be disappointed, because to-day in the Library this honorable gentleman was to be seen in the midst of a number of voluminous books. I understand he is studying law and I congratulate him on the progress that he has made. When he left the Library I thought I would sneak up to see whether in fact he had been studying law or doing something else. On the desk at which he had been working I found two slips of paper on which appeared something in the nature of a poem, which I think is well worth reading to the House. It is as follows: - “ Pull out the tar brush “, I said with delight, To Aston, Pearce, McColm and Bruce Wight, “ Great “, cried Anderson, Wheeler and Browne, “ No one will know we are acting the clown “.

Chresby, of course, could always survive. By repeating my tale of the “ Mystic five “. Unity tickets and spies in the ballet, Was wonderful stuff for the member for Mallee. By ranting about tickets and using the smear I felt like a Hitler on three thousand a year. But my knowledge has widened since taking up law

In’ music, the arts and old Bernard Shaw.

Hitler was right, when he said you could bluff All of the people by lying enough. Evatt and Calwell and even old Chif Hadn’t a hope when a Comm wears a ziff.

With a foot in both camps I was able to gloat, *’ The Bishop of Woolwich is a silly goat “. Lady Chatterley’s lover was ardent, I know But thirty five miles didn’t lessen my glow.

Sursum corda, my friends, we’ve nothing to fear, We have the bes! of both worlds plus Santamaria, But unity tickets have come here to stay I’ll have one myself if Maxie will pay.

*’ So pounds before principles “, my punch line will be,

While Gough reads Deuteronomy Chapter II, verse 33.

Now 1 think of my mates who followed my bleat I’ve got advertising rights on the soles of their feet.

I’m magnificent according to Ming, And with Communist preferences I feel like a King.

So do what I say - not what I do,

For I’m Denis James Killen the Red Jackaroo.


.- I should like to thank the honorable member for Hindmarsh (Mr. Clyde Cameron) most cordially for reading those snatches of verse, because I treasure them. There could be no finer flattery than that the honorable member should spend not an hour or two, but apparently a day or two, penning such monumental forms of tribute to invoke the wrath of him whom my friend the honorable member for Watson (Mr. Cope) would call the honorable member for “ Mortein “. Closing ones eyes while listening to the honorable member for Hindmarsh and imagining the prefex “ D “ in front of his name, one could think this was the Decameron coming over and I was flattered by his approach. He referred to a variety of matters, but before I start on them I should like to say that there is great affinity and community of understanding between him and the former jackaroo from the outer Barcoo, or to place him properly in perspective, the honorable member for “ Mortein “. In his more respectable days the honorable member for Hindmarsh worked in a shearing shed, where he built up a well-earned reputation for “ knocking out “ the greatest number of sheep in a day, because he always picked on the poor blue-bellied Joes. I did precisely the same. His verse has it that on one occasion I rode 35 miles on a horse to make love. At least I had something at the end of it.

I put to you, Sir, as one who has had infinite experience in these matters, firstly, where would one find a horse to carry the honorable member for Hindmarsh 35 miles, and secondly at the end of that distance where would he find any one to whom to make love? The honorable member spoke about Lady Chatterley. I have never disguised my views on her but, as I listened to the honorable member I detected what I thought were solid undertones of regret that he was never in some sort of close relationship with Lady Chatterley, or more particularly that he was never able to betray Lady Chatterley.

What torments the honorable member to the point of utter distraction, for he has been unable to live it down, is that he has restored peaceful co-existence in trade unions. The House will recall his great onslaught against the late Mr. Bukowski and Mr. Dougherty who he described as the commissars of trade unionism. He threatened, not just occasionally but constantly, because he did not know where he would find the wherewithal to brief such people as the honorable member for Evans (Mr. Monaghan) or the honorable member for Werriwa (Mr. Whitlam) who have followed a respectable profession. Surely he does not despise the law. If he does, he might care to raise his hand, as a pale face does to an Indian, and say, “Yes, I do”. However, the honorable member for Hindmarsh was considerably vexed and so he thought, “The only way I can finance this is by running a series of coin evenings “. They were abject failures. Then he had to turn round and depend upon legislation passed by a Tory, re-actionary government to get what he wanted.

Mr Mackinnon:

– To save his face.


– Precisely. The honorable member had to turn round and depend upon tory legislation to rescue him from his dilemma. So, what he has had to say about unity tickets does not disturb rae in the least. However, a person who has been in a worse torment than the honorable member for Hindmarsh is my friend from East Sydney (Mr. Ward) who, in the week when I was waiting for the poll results, sent this telegram to me -

Keep your chin up old chap. I am writing to Khrushchev furiously. Signed Edward.

That from the honorable member for East Sydney of all people! But he has also written a poem which runs as follows: -

They told me, Jim Killen,

They told me you were dead.

They brought me awful news to hear

And bitter tears to shed.

But now that you are alive again

My heart leaps up to see

That comrade dear from Moreton

Across the bench from me.

Motion (by Mr. McMahon) agreed to -

That the question be now put.

Original question resolved in the affirmative.

House adjourned at 10.20 p.m. to a date and hour to be fixed by Mr. Speaker.

page 2519


The following answers to questions were circulated: -


Mr Luchetti:

i asked the Minister for Shipping and Transport, upon notice -

  1. What number of ships was sold or withdrawn from Australian service during the last ten years? 2.. What number of coastal ships was sold or withdrawn during the same period, and what was the name and tonnage of each?
  2. To what countries were these ships sold?
  3. Were they sold for transfer to registers of other countries or for breaking-up as scrap?
  4. How many ships are at present engaged in coastal service, and what is the name and tonnage of each?
  5. How many ships are engaged in service in Queensland, the Northern Territory and Western Australia, and what is the name and tonnage of each?
Mr Opperman:
Minister for Shipping and Transport · CORIO, VICTORIA · LP

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

  1. Particulars of vessels sold or withdrawn from Australian service, i.e. overseas tramp and passenger trades with Australia, are not available.
  2. 3 and 4. The names and tonnages of Australian coastal vessels of SOO tons gross and over, sold or otherwise lost from Australian coastal trade during the ten years from 19S2 to 1961 inclusive, are set out in Schedule “ A “. In the case of vessels sold overseas, the name of the country to which registration of the vessel was transferred by the purchaser is also shown. As there is no obligation on the part of a shipowner to indicate whether a vessel is being sold for scrapping or for continued operation under the flag of the country to which its registration is transferred, the references in Schedule “ A “ to vessels being sold overseas and scrapped are not necessarily a complete record of such scrappings
  3. There are at present 134 Australian registered ships of 200 tons gross or more engaged in the Australian coastal trade. The names of these vessels and their gross tonnage are shown in Schedule “ B “. In addition there are six vessels licensed to engage in the coastal trade but which engage principally in trading between Australia and overseas ports and lift little cargo coastwise. These vessels and their gross tonnage are as follows: -
  1. No Australian ships over 200 tons gross are engaged exclusively in trading between ports in Western Australia or the Northern Territory. Ships over 200 tons gross engaged in intra-state service in Queensland are “ Katoora “ (327 tons gross) and “ Waiben “ (1,379 tons gross). Ships on regular interstate service to Queensland. Western Australia and the Northern Territory ports are shown in Schedule “ C “.


page 2522


Trading Vessels of 200 Tons and Over at

Present Employed in the Australian Coastal Trade.

Schedule “ B “ - continued, (b) Intrastate Vessels - continued.


Commonwealth Railways

Mr Calwell:

l asked the Minister for Shipping and Transport, upon notice -

What was the amount of profit made by the Commonwealth Railways Provisions Store at Port Augusta in each of the last five financial years?

Mr Opperman:

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

The purpose of the store is to provide provisions for Commonwealth Railways employees and it is not considered to be in their interests or the interest of Commonwealth Railways to disclose the nature of the profits made. The profits are relatively small but are sufficient to maintain the store and its subsidiaries as an efficient organization, to enable adequate service to be given and to -provide funds for such improvements as may become necessary from time to time.

Qantas Empire Airways Limited

Mr L R Johnson:

son asked the Minister representing the Minister for Civil Aviation, upon notice -

  1. When did Qantas Empire Airways Limited terminate its airline freighter service between Australia, the Far East and the Middle East?
  2. With what frequency did the service operate?
  3. What personnel and aircraft were engaged in the operation of the freighter service?
  4. Was the freighter service a successful trading venture?
  5. Why was the service discontinued at a time when Australia, due to Common Market implications, is attempting te increase its overseas trade?
  6. Which air services have taken over the air freight business relinquished by Qantas?
  7. Did Qantas construct a new air cargo handling building at Sydney airport a short time prior to the cancellation of the air freight service from Australia to Europe?
  8. What was the purpose of this building, what was its capital cost and when was it opened?
Mr Townley:

– The Minister for Civil Aviation has supplied the following information: -

  1. The Qantas freighter service which operated between Australia and Singapore and which continued from Singapore to the United Kingdom via India and the Middle East under charter to B.O.A.C. was terminated at the end of March, 1962.
  2. Once per week.
  3. It is difficult to state exactly what flight personnel were engaged in the operation of the freighter service as these crews were integrated with other Super Constellation operations. However the operation of this freighter service would require approximately eight technical crews, i.e. a total of 24 pilots, 6 navigators and 16 flight engineers. Super Constellation aircraft were used in this operation.
  4. No, Revenue earned by the all freighter service did not cover the costs attributable to it. 5 and 6. Increased Boeing services which were introduced as from 1st April, 1962, between Australia and the United Kingdom provided sufficient capacity on the normal services to handle reasonably the cargo offering without the operation of a special freighter service. These changes would not affect Australia’s export efforts because there has been at all times adequate capacity for outbound cargo. No special air freight service between Australia and the United Kingdom has since been established by Qantas or any other operator. 7 and 8. Qantas constructed at a cost of £225,000 a new air cargo building at Sydney airport and this was completed on 14th December, 1961. The building was constructed to rectify deficiencies in the company’s facilities for cargo handling at Sydney and to provide for normal expansion. Withdrawal of the special all freighter service did not affect the need for this building.
Mr L R Johnson:

son asked the Minister representing the Minister for Civil Aviation, upon notice -

  1. Is it a fact that there is no direct air service and only limited shipping service between Australia and South America?
  2. Bearing in mind Britain’s possible entry into the European Economic Community with its consequential effects on Australia’s trade with Europe, what efforts are being made by Qantas Empire Airways Limited or the Australian Government to open a service to South America to utilize to its fullest the trade possibility with that continent?
Mr Townley:

– The Minister for Civil aviation has supplied the following information: -

  1. There is no direct air service between Australia and South America. There are two regular shipping services to South America and, in addition, a number of passenger services running irregularly but fairly frequently.
  2. The Australian Government has been very much aware of the need for following up the development of trading relationships with South America with the establishment of appropriate transport links. The fact that the Australian Government gave some element of guarantee to the shipping services mentioned above is an illustration of this. In relation to the development of air services to South America, a Qantas representative was attached to the group which made a preliminary survey in South America of trade possibilities just over eighteen months ago. Qantas is again represented on the trade mission which is now visiting that continent, to investigate the possibilities of trade development. The Department of Civil Aviation has kept in close touch with the Department of Trade on this matter and has recently indicated to the Department of Trade its considerable interest in studying the results of the trade mission’s visit when these have been assessed following the return of that mission. Whilst indicating that these steps have been taken I should also sound a cautionary note that the development of air services to and through the continent of South America will not be an easy or possibly an inexpensive task. Such factors as the operational problems associated with long ocean flights and the adequacy of facilities for these flights are involved. There is also the need to obtain, through negotiation with a number of governments, routes and traffic rights for Qantas aircraft necessary to give a real prospect of sound commercial operations of the type that Qantas operates to other parts of the world. The growth in the volume of trade will, of course, be a very significant factor in this connexion and it will be this aspect that the Government will watch with particular care.


Mr Ward:

d asked the Treasurer, upon notice -

  1. Did the Full High Court reject, by a majority decision, an appeal against the refusal of the Commonwealth Taxation Department to accept fares to and from work as an allowable deduction for taxation purposes?
  2. Did the Chief Justice, Sir Owen Dixon, in delivering his judgment, state that the authority for refusing to allow fares to and from work as income tax deductions was open to question, and did he also say that the matter was one for clarification by the legislature rather than the court, or words to that effect?
  3. If so, why has this doubt not been resolved in favour of the taxpayer, at least until the position has been clarified by the Government submitting the matter to the Parliament?
  4. Are amounts incurred in the purchase, maintenance, and running expenses of a motor car, provided for business executives by the company with which they are associated, an allowable deduction for income tax purposes?
  5. Does this situation discriminate against Australian workers; if so, will he take steps to have the cost of fares to and from work made a deductible amount for income tax purposes?
Mr Harold Holt:

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

  1. Yes, the appeal was disallowed by a majority of four to one.
  2. The Chief Justice, Sir Owen Dixon, held that the expenses were not deductible either wholly or in part. In the course of his reasons for judgment the Chief Justice referred to earlier Australian judicial decisions supporting the nonallowance of a deduction and said - “These views have remained unquestioned up till this case. The relevant provisions of the English Income Tax Acts are not in the same terms as those of the Australian law, but the whole course of English authority involves a like conclusion. To escape from the course of reasoning on which they proceed requires the taking of refined and rather insubstantial distinctions. I confess for myself, however, that if the matter were to be worked out all over again on bare reason, I should have misgivings about the conclusion. But this is just what I think the Court ought not to do. It is a question of how an undisputed principle applies. Its application was settled by an old authority long accepted and always acted upon. If the whole subject is to be ripped up now it is for the legislature and not the Court to do it.”
  3. Any amendment of the law to allow a deduction in respect of the cost of fares to and from a place of employment or business is essentially a matter of budgetary policy and must be considered within the framework of the Budget as a Whole.
  4. The income tax law requires the allowance Of deductions for expenses not of a capital, private or domestic nature that are incurred in gaining or producing assessable income. The provisions of the law also extend to those expenses if they are necessarily incurred in carrying on a business for the purpose of producing income that is assessable. Expenditure incurred by employers in relation to motor cars is allowed as a deduction only to the extent that these tests are satisfied.
  5. See answers to 3 and 4.

Industrial Arbitration

Mr Daly:

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

  1. Of the cases of union members listed as applicants for financial assistance at the direction of the Conciliation and Arbitration Court given in his reply to my question appearing in “ Hansard “ (Vol. H of R. 29, page 2433) of 26th October, 1960, what were the costs of the action in each case, and which of the applicants were awarded costs against the other party?.
  2. What amount of costs was awarded in each case?
  3. Did any of the union members listed as applicants in fact claim financial assistance; if so, which were they, and what specific amount was determined and paid to each applicant or his legal advisers?
Mr McMahon:

– This answer replaces that given in reply to a question by the honorable member on Notice-paper No. 22, question No. 17, which answer was published in “ Hansard “ on 2nd May, 1962. The original answer was capable of being misinterpreted and references to the first and second action were misplaced.

  1. The costs of action in each case are matters for the parties directly concerned. The only knowledge I have is where, in the event of an order having been made as to costs and, subsequently, a bill having been submitted, the Industrial Registrar has taxed the costs (see 2 below). With the exception of A. R. Auld, in whose case no order was made as to costs, and C. R. Cameron, on the occasion of that applicant’s first action when the respondent union was ordered to pay half the applicant’s costs, all the applicants were awarded costs, to be taxed by the Industrial Registrar, against the other parties, respectively.
  2. The amount of costs taxed by the Industrial Registrar in each case and, therefore, the amount of costs awarded, were -

No bill has been submitted to the Industrial Registrar by or on behalf of W. K. Spence and, accordingly, no costs have been taxed. Similarly, no bill has been submitted by or on behalf of C. R. Cameron in relation to that applicant’s first action.

  1. The only claim made was on behalf of C. R. Cameron in relation to his first action. After judgment had been given in this action, Mr. Cameron sought, and obtained, an interim financial payment of £400 in accordance with the regulations. No further claim has been made on his behalf in respect of this action. None has been made in respect of the second action since costs were awarded against the respondents.

Waterfront Employment

Mr O’Brien:

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

  1. What was the daily average number of waterside workers in each capital city in receipt of workers’ compensation during each of the periods

1st July, 1960 to 30th June 1961, and 1st July, 1961 to 30th April, 1962?

  1. What percentage of the real labour force do these figures represent in each capital city?
Mr McMahon:

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

Mr O’Brien:

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

  1. Will he for the period 1st July, 1961 to 30th April, 1962, list each industrial dispute involving waterside workers, giving the port, name of vessel, men involved and action taken, and also indicate each occasion on which the Stevedoring Industry Authority withheld attendance money in lieu of suspension?
  2. Will he also list similarly the number of unauthorized stoppages and mass walk-offs?
  3. What was the saving in attendance money payments for this period resulting from action by the authority?
Mr McMahon:

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

  1. and 2. I presume that the honorable member, from earlier experience, knows that the Australian Stevedoring Industry Authority collates information along the lines requested by him. Actually information for April, 1962, has not yet been collated. Provision of the information sought would, I am advised, require well over 50 pages of foolscap. I do not consider that preparation of all this material can be justified. As the honorable member is aware pursuant to section 57 of its act, the authority publishes each month a great deal of the material he seeks. Arrangements are being made to supply him with copies of these section 57 reports.
  2. It is impossible to assess what savings in attendance money payments have resulted from action by the authority.

International Labour Organization

Mr Whitlam:

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

Who is the correspondent of the International Labour Organization in Australia?

Mr. McMahon: The answer to the honorable member’s question is -

Ian G. Sharp.

Status of Women

Mr Jones:

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

  1. Did the United Nations Status for Women Commission recommend (a) action to end wage discrimination against women and (b) implementation of the principle of equal pay for equal work by all governments in respect of their staffs?
  2. What were the terms of the commission’s resolution?
  3. Did Australia support the resolution; if not, why not?

Mr. McMahon: The answers to the honorable member’s questions are as follows: - 1 and 2. The answer to these questions is to be found in the text of the resolution which is provided in the answer given on 16th May to a similar question by the Honorable the Deputy Leader of the Opposition.

  1. No. The Government’s attitude to the implementation of the I.L.O. convention and recommendation is well known to the honorable member.


Mr Ward:

d asked the Minister for Trade, upon notice -

What countries were the principal purchasers of Australian wheat in each of the past five years, showing the percentage of total exports in each instance?

Mr. McEwen: The answer to the honorable member’s question is as follows: -

The table below, shows, for each year, the countries which look 5 per cent. or more of Australia’s total exports of wheat in that year. When a country took less than 5 per cent. the amount is not shown.

page 2527


Main Markets as a Percentage of Total in Each year.(a)


Mr Ward:

d asked the Minister for Trade, upon notice -

  1. What was the value of Australian wool exported to Communist countries during each of the years 1959-60 and 1960-61 showing the figures for each country separately?
  2. What are the latest figures available for the current year’s trading?
Mr McEwen:
Minister for Trade · MURRAY, VICTORIA · CP

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

The following statement, containing figures supplied by the Commonwealth Statistician, shows the value of wool exported from Australia to Communist countries during the years 1959-60, 1960-61 and the nine months ended 31st March, 1962: -

Export Income

Mr Ward:

d asked the Minister for Trade, upon notice -

  1. What financial return was received in the year ended 30th June, 1961, from the export of (a) wheat, (b) flour, (c) sugar, (d) dried fruits, (e) butter, (f) milk, powdered, evaporated or condensed, (g) eggs, (h) cheese, (i) beef and veal and (j) mutton and lamb?
  2. What are the latest figures in respect of the export of these commodities in the current trading year?
Mr McEwen:

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

The Commonwealth Statistician has advised that the recorded value of exports of each of the ten commodities listed are as follows: -

Shipping Freights

Mr Ward:

d asked the Minister for Trade, upon notice -

What increases in shipping freights have occurred in the last two years in respect of (a) exports, and (b) imports?

Mr McEwen:

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

The department does not maintain the detailed information sought by the honorable member. In the main, shipping freight rates are determined by negotiations between exporters and shipowners. The following information on variations in export freight rates since 1960 might be of interest: -

United Kingdom and Continent -

Freight increases 1960 -

Freight increases 1962: - A maximum increase of 5 per cent. on all commodities will apply for 1962, 1963 and 1964 export seasons. A rate of increase lower than 5 per cent. will apply if the results of 1961 voyages (when available) do not justify an increase of 5 per cent.

Freight reduction 1962: - In January, 1962, the freight rate on tallow to the United Kingdom and Continent was reduced from £10 (stg.) to £8 10s. (stg.) per ton.

Japan: - In July, 1961, freight rates were increased by 5 per cent. on all commodities except wool and refrigerated cargo. The freight rate on wool was increased from 3d. to 3.15d. (A.C.) per lb. This was the first increase for five years. At the same time the freight rate on steel was reduced from 160s. to 110s. (A.C.) per ton. In 1962 the rate on wool has been increased from 3.15d. to 3.32d. (A.C.) per lb.

Malaya: - In October, 1960, freights to Malaya were increased by 6 per cent. on all commodities. However, since then the rates on various commodities have been reduced, e.g. -

Flour- Reduced from 192s. 6d. to 137s. 6d. (A.C.) per ton.

Allied cereals - Reduced from 175s. to 145s. (A.C.) per ton.

Steel- Reduced from 175s. to 145s. (A.C.) per ton.

These three categories of products comprise more than 50 per cent. of total exports to Malaya.

India: - There have been no recent freight increases but a reduction has been made in the rate for wool from 3.62d. to 3.05d. (stg.) per lb.

Mauritius and South and East Africa:- There has been an overall freight rate increase of 6 per cent. on this service but reductions have been granted on individual commodities.

Americas: - No general increase has been introduced although there have been some increases on individual items. On the other hand the freight rate on frozen meat from Australia to west coast U.S. ports was reduced in January, 1962.

Freight rates on Australian imports are determined in overseas countries and with a few exceptions particulars of fluctuations cannot be reliably obtained in Australia.

Papua and New Guinea

Mr Bryant:

t asked the Minister for Territories, upon notice -

  1. How many Australian teachers employed in the teaching service in the Territory of Papua and New Guinea have (a) a bachelor degree and post-graduate qualification in education, (b) university qualifications and (c) qualifications from an Australian teachers’ college?
  2. What are the corresponding figures for non-Government schools?
  3. What are the usual methods for recruiting Australian teachers for (a) government and (b) non-government schools?

Mr. Hasluck: The answers to the honorable member’s questions are as follows: - 1. (a) 21 including supervisory staff, (b) 41 including supervisory staff, (c) 433 including supervisory staff.

  1. Full details in connexion with nongovernment schools are not available but the following information is provided. The staff of nongovernment schools include 28 graduate teachers, Australian and foreign, and 201 Australian trained teachers whose qualifications are acceptable to the Director of Education. 3. (a) Administration Schools: Recruitment from Australian State departments as permanent appointees or on secondment; granting of cadetships to matriculants who take up teaching duties after two years’ training in Australia; special recruitment of men at junior level who are posted to primary “T” schools after six months’ training in the Territory; married women teachers holding Australian qualifications who are available in the Territory. (b) Non-government Schools: Mission teachers are brought to the Territory by the various mission organizations and subject to the granting of registration by the Director of Education take up teaching posts at registered mission schools.


Mr Ward:

d asked the Minister for Trade, upon notice -

  1. Will he prepare a statement showing the number of companies with overseas affiliations whose sales are restricted as to (a) area and (b) brands of products?
  2. Will he also supply whatever other information is available in the Department of Trade regarding export restrictions imposed on Australian industries?
  3. In how many instances is there a complete prohibition on exports beyond Australia or its Territories?

Mr. McEwen: The answers to the honorable member’s questions are as follows: - 1 and 2. More than 400 companies are at present known to have restrictions of various kinds on their exports of products made under arrangements with overseas affiliates.

  1. About 100 companies ate at present known to have restrictions which do not permit sales beyond Australia or its Territories.


Mr Daly:

y asked the Postmaster-General, upon notice -

  1. Has his attention been drawn to a statement on frequency modulation broadcasting by Mr. F. N. Leddy, chairman of the Electronic and Allied Industries Division of the New South Wales Chamber of Manufacturers, quoted in a Sydney newspaper of the 14th ‘arch, in which Mr. Leddy referred to a statement made by the Postmaster-General to the effect that he had not been informed of any general desire by listeners to have this service reinstated?
  2. How does he assess the general desire of listeners?
  3. How many protests and petitions has he received since he announced the closing down of frequency modulation transmissions last June, from what quarters did they come, and what was the number of signatures?
  4. Can he say whether the United Kingdom, the United States of America, France, West Germany, Canada, South Africa and other countries manage to radiate frequency modulation broadcasts in the 88-108 Mc/sec. band without interfering with other radio communications?
  5. If so, what special conditions make Australia’s problem more acute than that of other countries?
Mr Davidson:

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

  1. I have read the report of a statement by Mr. Leddy on frequency modulation broadcasting in the “ Sydney Morning Herald “ of 14th March, 1962.
  2. The representations which I have received on this matter since the announcement of the cessation of the transmissions on 30th June, 1961, have come from or have been made on behalf of a fairly limited range of listeners, primarily those who were owners of equipment capable of receiving the former experimental transmissions. Many of these are high fidelity enthusiasts. There is no evidence that the great body of listeners throughout the Commonwealth are dissatisfied with the national and commercial services at present operating in the medium frequency band and employing amplitude modulation. Whilst I appreciate that there is a degree of interest in frequency modulation broadcasting as evidenced by the people who have written to me on the matter, the number of listeners involved is not so many relative to all listeners in the Commonwealth as to suggest a widespread demand for this type’ of service. Having regard to the very high expenditure which would be involved in establishing a Commonwealth-wide frequency modulation service,’ because it must be accepted that any such service cannot be confined to a section of the public such as those residing in capital cities and not, at the same time, provide for country dwellers, who are even now less adequately catered for, demands for the establishment of such stations would need to be widespread and representative of the general listening public. Any such demands should also take into account the possible effects on the development of other types of services such as medium frequency broadcasting and television, from which funds and attention might need to be diverted.
  3. I have received approximately 200 letters - from manufacturers of radio equipment (3), trade journals (4) and private persons (193). Some of these correspondents have written to me on more than one occasion. Three petitions have been received by me comprising 90 signatures.
  4. and 5. I understand that the countries mentioned do have frequency modulation broadcasting stations operating or propose operation in the future in all or part of the band 88-108 Mc/s. The situation in these countries is not necessarily comparable with Australian conditions. The development of V.H.F. broadcasting in other parts, of the world has been largely due to the great demand for broadcasting services by the large population in those areas and the consequent overcrowding of the medium frequency band, which resulted in serious interference between stations during hours of darkness. In most parts of Europe, fewer programmes, free from interference are available to listeners than is the case in Australian capital cities. The need to provide channels in the V.H.F. band for development of the television service in Australia made it necessary to use the band previously used by frequency modulation stations for television purposes. As I have previously stated, if additional frequency bands are required for broadcasting purposes adequate space is available in the ultra hig’i frequency band.

Postal Department

Mr Ward:

d asked the Postmaster-General, upon notice -

  1. Did his department purchase rails from the contractors who successfully tendered for dismantling the Cooktown-Laura railway in North Queensland?
  2. If so what quantity of rails was purchased?
  3. What price was paid by the department for this material?
Mr Davidson:

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

  1. Yes, my department did purchase 2,300 rails from P. & G. Pacific Proprietary Limited which successfully tendered for the dismantling of the Cooktown-Laura railway in north Queensland. The rails were used in the construction of a new trunk line between Cairns and Cooktown.
  2. The price paid by the department wm £7,820.

Local Government Finance

Mr Don Cameron:

n asked the Treasurer, upon notice -

  1. Will he give favorable consideration to the granting of a special Commonwealth Government loan of £5,000,000 to the Brisbane City Council to permit sewerage, draining, road surfacing, water channelling and reticulation to be carried out in the suburbs of Brighton, Banyo, Boondall, Nundah, Hendra, Pinkenba, Cribb Island, Nudgee Beach, Sandgate, Shorncliffe, Deagon, Zillmere, Eagle Farm, Winstanes. Wavell Heights, Northgate and Virginia?
  2. If this loan cannot be made over a long term period, will he recommend to the Loan Council that the Brisbane City Council be authorized to raise the sum of £5,000,000 outside the council’s normal loan allocation to enable this very necessary and important work to be carried out in these suburbs as quickly as possible so as to improve the health and living standards of the people living in these areas and also create employment which will assist in relieving the serious unemployment situation existing in Queensland?
Mr Harold Holt:

– The answers to the honorable member’s questions are as follows:1 -

  1. The Commonwealth Government has been approached on a number of occasions with requests that it provide funds directly to or for local government authorities. Successive Commonwealth governments have adhered to the view that, since these authorities are constituted and operated under State laws, it is for State governments to decide whether, and in what manner, their funds should be supplemented. It would, therefore, under present constitutional arrangements, be inappropriate for the Commonwealth to provide funds by grant or otherwise to a particular local authority. The Commonwealth lays down no conditions concerning the very large general revenue grants which it makes each year to the States, thus leaving them free to pass on any part of these they may think appropriate to their local government authorities.
  2. As indicated by the reply to the preceding question, the loan requirements of the Brisbane City Council would be a matter for the Queensland Government which could, if it desired, submit to the Loan Council a recommendation along the lines suggested. In this connection, I might recall that at the February meeting of the Loan Council the Commonwealth, having in mind the particular needs of Queensland, undertook to make available to that State the largest share (£3,300,000) of a £10,000,000 non-repayable grant to all States for expenditure on employmentgiving works.

Papua and New Guinea

Mr Bryant:

t asked the Postmaster-General, upon notice -

  1. Is it a fact that broadcasting services in the Territory of Papua and New Guinea are inadequate?
  2. Why has the Australian Broadcasting Commission failed to expand these services?
  3. Will he examine the possibility of establishing broadcasting stations similar to those established by the services in the islands in 1944-45 in order that each main centre of population may have its own local station?
Mr Davidson:

– The answers to the honorable member’s questions are as follows: - 1 and 2. The responsibility for the formulation of plans for the establishment of additional national broadcasting stations is the prerogative of the Australian Broadcasting Control Board and the Minister, not the Australian Broadcasting Commission which is the programme authority. The need for expansion of the broadcasting services in the Territory of Papua-New Guinea is appreciated and plans for the establishment of a 2-kw. station at Rabaul and improvements to the high frequency services at Port Moresby have been approved. The improvements will be effected as soon as possible.

  1. The Administration is in fact operating an interim broadcasting service at Rabaul at present. The question of the further development of the broadcasting services in the Territory of PapuaNew Guinea is under discussion between officers of the Department of Territories, my department, the Australian Broadcasting Control Board and other authorities concerned. The honorable member’s suggestion will be borne in mind.


Mr Hayden:

n asked the Treasurer, upon notice -

  1. What income was received by the Government from (a) petrol tax and (b) sales tax on motor vehicles during each of the years from 1950-51 to 1960-61, inclusive?
  2. How much in each case was paid to the States during each of these years for road works?
Mr Harold Holt:

– The answers to the honorable member’s questions are as follows: - 1. (a) The following amounts were received by the Commonwealth from petrol tax during the years 1950-51 to 1960-61 inclusive:-

  1. For the financial years 1950-51 to 1955-56, the information disclosed on sales tax returns did not permit of ascertaining the tax payable in respect of motor vehicles. However, since 15 th March, 1956, sales of motor vehicles, spare parts and accessories have been identifiable as they have been subject to separate rates of sales tax. From those statistics, it is estimated that the tax payable in each of the financial years 1956-57 to 1960-61 was as follows: -

It is not possible to estimate with any degree of accuracy how much of the tax payable at the 163 per cent, rate was attributable to commercial vehicles, and how much was attributable to spare parts and accessories but it is thought that for each of the years shown these two categories each accounted for about half the tax collected for that class.

  1. Prior to 1959-60 the amounts paid to the States for roads purposes were based upon collections of petrol tax, but under the Commonwealth Aid Roads Act 1959 this is no longer the case. There is no connexion between payments to the States for roads purposes and either collections of petrol tax or receipts from sales tax on motor vehicles. Receipts from these and other sources are paid into the Consolidated Revenue Fund, and payments to the States for roads and other purposes are made from that fund.

Amounts paid to the States for roads from 1950-51 to 1960-61 inclusive were-

Productivity Index

Mr Webb:

b asked the Treasurer, upon notice -

  1. When did the Commonwealth Statistician commence investigations into the possibility of publishing a productivity index in Australia?
  2. What progress has been made by the Statistician in the preparation of such an index?
  3. What is delaying the publication of this index, and when is it likely to be published?
Mr Harold Holt:

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

  1. Successive Commonwealth Statisticians have investigated over many years problems associated with the compilation of an index of productivity. 2 and 3. During this time the Commonwealth Statistician has undertaken considerable research but has found no reliable means of measuring the quantity of national production. Compilation of an index of productivity is a further stage again, and involves the additional problems of measuring the quantity of labour and capital used in production. Under carefully controlled conditions productivity may be measurable for particular products or for particular plants, but in any total sense neither output or goods and services nor the input of factors of production is susceptible to precise statistical definition. There are no generally accepted standards for the measurement of productivity, and in most countries work on problems related to such an index is still in the experimental stages.

National Health Act

Mr Ward:

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

  1. Is the Department of Health at present investigating an alleged broach of the National Health Act by a New South Wales doctor?
  2. Does the alleged breach concern the charging of patients for drugs listed as free under the pharmaceutical benefits scheme?
  3. Is he able to say whether the doctor involved is identical with a medico who was dismissed by the committee of the Hawkesbury District Hospital for having refused to treat a boy with a broken arm unless he was first paid a fee, and whose dismissal subsequently led to a strike and boycott of the hospital by his fellow medical practitioners?
  4. If the position is as stated, will the Minister state when it is expected that the present departmental investigation will conclude and when the result will be made known?
Mr Swartz:

– The Minister for Health has furnished the following replies: -

  1. Officers of the Commonwealth Department of Health are continuously engaged in investigations into matters arising under the National Health Act. 2, 3 and 4. I have no knowledge of any investigations in this particular case.

Commonwealth Property

Mr Clay:

y asked the Minister for the Interior, upon notice -

  1. Has the vacant land at the rear of the post office at Arncliffe, Sydney, yet been sold?
  2. If so, to whom was it sold and what was the price paid?
  3. Can he say to what use the purchaser intends to put the land?

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

  1. No. 2 and 3. See answer to 1.

Papua and New Guinea

Mr Whitlam:

m asked the Minister for Territories, upon notice -

  1. What are the categories and value of exports from the Territory of Papua and New Guinea to (a) the United Kingdom, and (b) the Common Market countries (i) directly and (ii) through Australia?
  2. What are the categories and the value of imports into the Territory of Papua and New Guinea from (a) the United Kingdom, and (b) the Common Market countries (i) directly and (ii) through Australia?

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

Imports are recorded statistics for country of origin irrespective of country of purchase. Exports are for the country of consignment. Papua and New Guinea statistics are not recorded separately for (i) directly and (ii) through Australia but trade with the United Kingdom and Common Market countries is generally direct.

Equal Pay for Equal Work

Mr Whitlam:

m asked the Prime Minister, upon notice -

What would it. cost the Commonwealth to apply the principle of equal remuneration for men and women workers for work of equal value in (a) the public service, (b) industries and undertakings operated by the Commonwealth and (c) work executed under the terms of contracts let by the Commonwealth?

Mr Menzies:

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

The estimated cost of introducing equal remuneration for men and women for work of equal value, that is, of introducing an equal base rate in the case of those females already receiving equal margins, is -

approximately £1,300,000 per annum for female employees of the Commonwealth Government employed under the Public Service Act; and

approximately £650,000 per annum for all other civilian female employees of the Commonwealth Government, except locally recruited staff employed overseas.

As the females carrying out work under the terms of contracts let by the Commonwealth would be employees of the contractors concerned, and not of the Commonwealth Government, it is impracticable to assess the costs involved.


Mr Ward:

d asked the Prime Minister, upon notice-

  1. Is there in each State a serious inadequacy Of educational facilities of every description and grade?
  2. Is it a fact that the State governments lack the financial means of rectifying this position?
  3. Is the present grave position largely attributable to the rapid influx of new settlers brought to Australia under the Commonwealth immigration scheme?
  4. If so, will he state what action is proposed by the Commonwealth for solving this most important national problem?
Mr Menzies:

– The answer to the honorable member’s questions is as follows: - 1-4. Population increases in a State, whether from natural increase or from migration, bring about increased demands for all State services including education. On the other hand, population increases are also reflected in the level of tax reimbursement grants to the States. These grants have increased from £102,500,000 in 1950-51 to an estimated £302,000,000 in 1961-62. It is, of course, for the States to decide how much is spent on education and how much on other services. In addition to this, the special action taken by the Commonwealth in support of tertiary education should not be forgotten. The Government’s views on the relative responsibilities of the Commonwealth and the States for the provision of educational facilities in Australia were expressed at some length by me at the Premiers’ Conference held in February.

Parliamentary Privilege

Mr Ward:

d asked the Prime Minister, upon notice -

  1. On what date did be give Parliament an undertaking that it would be afforded an oppor tunity of reviewing the question of parliamentary privilege with a view to clarifying the matter?
  2. On how many occasions since, has this matter received his or the Government’s consideration?
  3. When does he propose to fulfil his promise?
Mr Menzies:

– The answer to the honor- able member’s questions is as follows: - 1-3. On a number of occasions I have said that I would look into this matter. I have not yet reached finality.

Petrol Tax

Mr Fox:

x asked the Minister for Shipping and Transport, upon notice -

  1. What sum has been received from petrol tax during each of the past five years?
  2. What amount has been provided for roads during each of these years in each of the Slates and in the Australian Capital Territory?
  3. What amounts have been provided for strategic roads in each of these years?
  4. Is there any provision in the Commonwealth Aid Roads Act which requires the States to spend any specific amount on country roads?
Mr Opperman:

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

  1. For the past five years collections of customs and excise on petrol have been -
  1. Road allocations to States under C.A.R. Acts (in £’000) have been-

The figures given above do not include allocations for roads in either the Australian Capital Territory or the Northern Territory - which are not eligible for grants under the Commonwealth Aid Roads Act.

  1. In 1956-57, £307,000 was provided for strategic roads; £405,000 in 1957-58, and £700,000 in 1958-59. The current Commonwealth Aid Roads Act (1959) contains no provision for strategic roads, however, in view of the importance of the Eyre and Barkly Highways £37,500 was authorized in 1959-60 and £25,000 in 1960-61 from votes of the Department of Shippng and Transport. Roads in the Northern Territory are the responsibility of the Department of Territories and therefore these amounts for the two latter years do not include provision of funds for the Stuart Highway or that section of the Barkly Highway within tha Northern Territory. Roads within the Australian Capital Territory are the concern of the Department of the Interior.
  2. The Act provides that each State shall spend upon rural roads, in the year in which the money is received, not less than two-fifths of grants made.


Mr Coutts:

s asked the Minister for Shipping and Transport, upon notice -

  1. Has he given approval under the Customs (Prohibited Imports) Regulations for the purchase of a cattle-carrying ship from Yugoslavia?
  2. If so, what is the value of this ship?
  3. Did any government department play any part in the negotiations with the Communist Government of Yugoslavia for the purchase of this ship; if so, which department?
  4. If no department was involved in the negotiations, can he indicate the name or names of the company, persons or person who arranged the deal?
  5. Is the ship subject to customs duty; if so, how much?
  6. Could a similar ship have been built in an Australian shipyard?

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

  1. The matter has not arisen as no application has been made for permission to import such a ship.
  2. As I have no detailed knowledge of the ship referred to I am not in a position to provide this information.
  3. I am not aware of any such negotiations that may have taken place.
  4. See answer to 3.
  5. As the size or value of the vessel in question is not known to me a precise answer cannot be given. However, the most favoured nation tariff rate for vessels exceeding SOO tons gross register is. 12i per cent, and the most favoured nation tariff rate for vessels of under SOO tons gross is 55 per cent.
  6. I know of no reason why a vessel suitable for the carriage of cattle could not be built in an Australian shipyard.

South-East Asia

Mr Whitlam:

m asked the Minister for External Affairs, upon notice -

Would an armed attack on (a) Australian armed forces or aircraft in Malaya or (b) United States armed forces or aircraft in South Viet Nam constitute an armed attack in the Pacific area on either of the parties within the terms of the Anzus Treaty?

Sir Garfield Barwick:

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

The relevant provisions of the Anzus Treaty are Articles IV. and V. As to the meaning of the expression “ Pacific area “ I would refer the honorable member to my reply to his separate question on that point. I do not consider it appropriate for me to comment further on the application of the treaty to the hypothetical situations mentioned by the honorable member.

Mr Whitlam:

m asked the Minister for Externa] Affairs, upon notice -

  1. Which of the islands off the coast of China and Australia are included in the term “ Pacific Area “ in the security treaty between Australia, New Zealand and the United States of America?
  2. Which of the islands between Australia and Asia are included in the term “ general area of the South-West Pacific” in the South-East Asia Collective Defence Treaty?

Sir Garfield Barwick: The answer to the honorable member’s questions are as follows: - 1 and 2. The honorable member asked an identical question three years ago. The answer provided by the then Minister for External Affairs, which appears in “Hansard” of 26th February, 1959, is still applicable.


Mr Ward:

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

  1. What oil tankers have been constructed in Australian shipbuilding yards during the past ten years?
  2. What Commonwealth subsidy was paid in each instance towards the cost of construction?
  3. What percentage of the actual cost of construction of each subsidized oil tanker did the Commonwealth contribution represent?
  4. What conditions must be satisfied by the interests for whom the oil tanker is built in order to qualify them for the payment of a Commonwealth subsidy?
  5. Which of these oil tankers is manned by an Australian crew?
Mr Opperman:

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

  1. The only oil tanker to be constructed in an Australian yard during the past ten years is the “ P. J. Adams “ of 32,250 tons dead weight, which is not yet completed.
  2. Orders for ships built through the Australian Shipbuilding Board and attracting Commonwealth subsidy are processed as to purchase and sale by the Commonwealth on the basis of competitive quotes and the amount or rate of subsidy in individual cases cannot therefore be disclosed. The Government’s approval to shipbuilding subsidy, based on the Tariff Board’s recommendation, limits the rate of subsidy to not more than 33 per cent, of construction cost.
  3. See answer to 2.
  4. No standard conditions have been laid down in relation to the payment of subsidy on tankers built in Australia in circumstances similar to those which applied in the case of “ P. J. Adams “. As in that case an enquiry for a similar type of vessel for trading to and from Australia would be considered having regard to all the related circumstances, particularly to the then current situation obtaining in the Australian shipbuilding industry. Had the Commonwealth not extended subsidy benefits in the instance of the “ P. J. Adams “ an order of the value of approximately £4,000,000 would have been lost to the local industry at a time when new orders were urgently needed.
  5. There are no Australian built oil tankers in commission.

Qantas Empire Airways Limited

Mr L R Johnson:

son asked the Minister representing the Minister for Civil Aviation, upon notice -

What aircraft and trained aircrews does Qantas Empire Airways Limited have available for an air lift of Australian troops from Malaya or Australia to any part of South-East Asia as could be required by South East Asia Treaty Organization?

Mr Townley:

– The Minister for Civil Aviation, has supplied the following answer: -

If Qantas has some potential for contributing to a military airlift, as implied by the honorable member’s question, this would obviously be information of a security nature which could not be revealed.

Waterfront Employment

Mr O’Brien:

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

What was the total number of accident reports made to the Stevedoring Industry Authority in respect of waterside workers for each of the periods 1st July, 1960, to 30th June, 1961, and 1st July, 1961, to 30th April, 1962?

Mr McMahon:

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

The accident reporting scheme is conducted by the Central Committee of Interstate and overseas Shipowners Accident Prevention Organization. I understand that the system of accident reporting has now been extended to all ports with the exception of Darwin and Thursday Island, but to date the organization has not published any statistics.

Road Safety

Mr Webb:

b asked the Minister for Shipping and Transport, upon notice -

  1. Has Australia a road death rate of 8.5 persons per 10.000 motor vehicles?
  2. Is this death rate aggravated by an inadequate road system? 3’. Is it a fact that Australia ranks fourth to the United States of America, New Zealand and Canada in popularity of the use of motor vehicles, but has a higher percentage of road deaths than occurs in these countries; if so, is this an indication of the inadequacy of the Austraiian road system?
Mr Opperman:

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

  1. Yes, based on the Commonwealth Statistician’s returns for the twelve months ended 30th June, 1961.
  2. The Commonwealth Statistician’s road accident returns for latest available period show that, of the 2,542 road deaths reported for the twelve months ended 30th June, 1961, 73 were due to causes attributed to road conditions. The detailed figures are as follows: -

Australia’s experience has been that approximately 90 per cent, of all road deaths are due primarily to human error, and this general pattern of road accident causation is found in other highly motorized countries throughout the world, such as the United States of America, Canada, New Zealand, and Western Europe. Whilst roads are an important factor in the general road accident picture, it is significant that most of Australia’s fatal and serious accidents occur on our better class roads.

  1. Due to variations in methods of compiling statistics, geography, traffic characteristics and composition of vehicle populations, figures are not always strictly comparable. On the data available, Australia ranks fourth to United States of America, New Zealand and Canada in ratio of vehicles per head of population and does not appear to have a higher number of fatalities per 10,000 registered vehicles. As indicated in my answer to the second question, road conditions are not a major primary cause of road fatalities in Australia.


Mr Harold Holt:

t.- On the 8th May, the honorable member for East Sydney (Mr. Ward) asked me a question which may be subdivided as follows: -

  1. Is it normal practice for the Taxation Branch, where a taxpayer has been found to have substantially understated his income, to afford the person concerned an opportunity to submit an amended return?
  2. If not, will the Treasurer ascertain whether there are any instances involving large sums of money where this has happened?
  3. Will the Treasurer also ascertain from the Commissioner of Taxation whether there have ever been any cases where a departmental assessor has discovered that a taxpayer has failed to reveal his full income and where the name of the taxpayer concerned has not been shown in the annual report of the Commissioner of Taxation as having offended?
  4. If such cases exist, will he secure and furnish details and the reasons for the omission of the name from the annual report of the Commissioner of Taxation?

The following statement is furnished for the information of the honorable member: -

In the fortieth report to Parliament of the Commissioner of Taxation, Section 16 - Breaches or Evasions of the Act (pages 66 and 67), the Commissioner drew attention to the circumstances in which taxpayers who committed breaches or evasions of the Acts were reported by name. For income tax, the schedule of names includes those taxpayers who understated their taxable incomes and who have been charged statutory additional tax, after any remission, of £250 or more.

The commissioner informs me that the name of a taxpayer who has voluntarily made a full and true disclosure of any understatement of taxable income is not included in the schedule. It is traditional policy for the Taxation Office to encourage taxpayers to report the full amount of their incomes and to claim as deductions from taxable income only those amounts to which they are, in fact, entitled. It is also traditional to regard a taxpayer who makes a genuine voluntary disclosure of an earlier understatement of taxable income as having made good his breach of the income tax law. On this subject generally, attention is drawn to the following extract from the printed instructions which are made available each year to assist taxpayers in the preparation of their returns: - “ Where a taxpayer has neglected to furnish returns or finds on examination of past returns that tax has been avoided and he voluntarily makes a full disclosure of the true facts to the Deputy Commissioner, the Court prosecution may be waived and the additional tax may be reduced to the equivalent of simple interest at the rate of 5 per cent. per annum of the amount of tax avoided.”

The commissioner emphasizes that a case is not considered to be one of voluntary disclosure if the Taxation Office has already taken some action which revealed an omission of income or an overstatement of deductible expenditure.

When preparing the schedule of names of taxpayers for inclusion in the Report to Parliament care is taken to ensure that a taxpayer is not reported unless his case has reached finality. Thus a taxpayer is not reported until all his rights of objection or appeal against his assessments have been exhausted and the extent of the remission of statutory additional tax has been decided. In some complex cases this involves considerable delay.

In summary, it may be said that a taxpayer’s name is included in the Report to Parliament if - (i) he has understated his taxable income; (ii) the amount of the statutory additional tax, after any remission, amounts to £250 or more; (iii) his case has reached finality; and (iv) he did not voluntarily make a full and true disclosure of the understated taxable income. There are no exceptions to the above rule.

The answers to the four questions put by the honorable member are, therefore, as follows: - 1 and 2. No, but if a taxpayer offers to furnish an amended return, that offer would be accepted. However, the furnishing of an amended return would not be regarded as absolving the taxpayer from publication in the annual report. 3 and 4. The commissioner assures me that he personally knows of no case which has been accepted as one of voluntary disclosure but which was, in fact, the subject of earlier departmental action, and, further, he knows of no case where a taxpayer ranked for inclusion in the Report to Parliament but was not reported.

The Commissioner has stated that should it be brought to his notice that there has been a departure from the general rules applying to the compilation of the schedule of taxpayers’ names for inclusion in the Report to Parliament, he will have the matter investigated.

Snowy Mountains Scheme.

Mr Menzies:

s. - On 15th March, the honorable member for Hume (Mr. Fuller) asked me without notice whether the Blowering dam is part of the Snowy Mountains hydro-electric scheme and, if so, whether funds for its construction by the Snowy Mountains authority would be provided by the Commonwealth. As promised, I have consulted my colleague, the Minister for National Development, about the matters raised by the honorable member.

The position is that the Blowering dam is not a part of the Snowy Mountains scheme in the sense of being one of the works which the Snowy Mountains authority is required or authorized to construct. Clause 6 of the Snowy Mountains Agreement, which was made in 1957 between the Commonwealth and the States of New South Wales and Victoria, provides that the State of New South Wales shall, for the purpose of regulating waters of the Tumut River and the waters diverted thereto from the Eucumbene, Tooma or Murrumbidgee River catchments, construct or cause to be constructed as soon as practicable storage works on the Tumut River at Blowering or at such other site on that river, and of such capacity, as that State determines.

It is clear, therefore, that responsibility for construction of the Blowering dam rests entirely with New South Wales and not with the Commonwealth. Construction of the dam has not, however, yet been commenced, and correspondence between the two governments in relation to this fact is proceeding.


Mr Cairns:

s asked the Postmaster-General, upon notice -

  1. Did he last month announce that (a) there had been pressure from certain sources for more commercial television licences for capital cities,

    1. the Australian Broadcasting Control Board would hold a public hearing in September, and
    2. it would take about a month for the board to make its recommendations to the Government?
  2. If not, what were the terms of his announcement?
  3. If the terms as stated are correct, will one month be an adequate period in which to complete the inquiries and make recommendations?
Mr Davidson:

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

The Australian Broadcasting Control Board has informed me that it will commence inquiries on 22nd May, into the applications received for the grant of commercial television station licences in the six country areas for which applications closed on 4th May.

Applications in respect of the Sydney and Melbourne areas are to be lodged by 15th June, and it is anticipated that inquiries into the applications received will be commenced towards the end of July. Applications in respect of Brisbane, Adelaide and Perth and tha remaining fourteen country areas being considered in this stage of development are to be lodged by 27th July, but the date of commencement of the inquiries into the applications received in respect of these areas has not yet been determined.

Following the completion of the inquiries, the board will make recommendations to me but as the duration of the inquiries cannot be estimated at this stage it is not possible to state when the recommendations will be made.


Mr Nelson:

n asked the Minister for Territories, upon notice -

  1. Does Territory Rice Limited or Adelaide River Development retain the concession of land at Humpty Doo as provided in the original agreement of 1954, between the Commonwealth and Territory Rice Limited?
  2. If not, what areas are held by either or both of these companies, and what part has reverted to the Crown?
  3. If any area previously held under the agreement has reverted to the Crown, why has it so reverted?
  4. If the land is still held by the companies, does the Government intend to forfeit the whole or part of it for non-compliance with the terms of the agreement?
  5. In any action that the Government intends to take, will it protect the interests of the sharefarmers who lease part of the area from Territory Rice Limited?
  6. Will the Government draw up a programme for the development of the area along the lines of soldier settlement schemes so as to ensure the establishment of a valuable export industry in this area in the interests of the Northern Territory and Australia?
Mr Hasluck:
Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

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

  1. The agreement which was operative from May, 1956, provided for Territory Rice Limited to select land for leasing over a period of fifteen years, from within an area of sub-coastal plain land. The agreement was terminated on 17th January, 1962.
  2. Under the agreement Territory Rice Limited has been granted an agricultural development lease of 6,905 acres, a miscellaneous lease of approximately 72 square miles and a special purpose lease of 16 acres. Transfers of these leases from Territory Rice Limited to Adelaide River Limited have been executed. 3 and 4. Land was not held under the agreement but under leases, the grant of which was provided for by the agreement. The termination of the agreement terminated the right of Territory Rice Lmited to be granted further leases, but did not affect the leases already granted, which are governed by the terms of these leases.
  3. Rice Development Limited, a company formed by the four share-farmers holds a sub-lease of land from Adelaide River Limited. I do not know of any action the Government could take in relation to the head lease to Adelaide River Limited that would prejudice the position of Rice Development Limited. No such action would be taken without regard to the position of Rice Development Limited.
  4. As fast as problems are solved and prospects for a rice-growing industry proven the Government will develop settlement schemes.

Clothing Industry

Mr Ward:

d asked the Minister for Trade, upon notice -

  1. Is it a fact that manufacturing tailors in Hong Kong have advertised in Australian newspapers seeking agents in this country to procure orders for made to measure suits?
  2. Will he have this further threat to the already depressed Australian clothing industry urgently examined with a view to immediate action being taken to protect the employment of those engaged in this industry against the product of overseas factories where the rates of pay are extremely low and the hours of labour much longer than those which prevail in this country?
Mr McEwen:

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

  1. At least one advertisement along the lines indicated, has appeared in an Australian newspaper.
  2. Protective duties at the rates of 25s. each plus 45 per cent, ad valorem or 62 per cent, ad valorem, whichever rate returns the higher duty, are in force against imports of men’s suits imported from Hong Kong. The Australian industry may seek a review of the existing protection. If urgent action is considered necessary the temporary protection procedures are available to the industry which has set up industry panels and is aware of the procedures. No request for a review of the existing protection has been received.

Importation of Seafoods

Mr Don Cameron:

n asked the Minister for Trade, upon notice -

  1. Is his department completely satisfied that ali imported frozen, chilled or smoked seafoods are caught, processed and packed under first class hygienic conditions and arrive in Australia in a condition fit for human consumption as laid down under our State Health Acts?
  2. Is his department completely satisfied that the importation of frozen, chilled or smoked seafoods is not seriously affecting the Australian fishing and prawning industries?
  3. If not, has any consideration been given to an increased tariff or the imposition of an import quota on these seafoods to prevent them underselling and underpricing seafoods caught in Australian waters by Australian fishermen?
  4. If the question of protection has not been considered will he arrange for this to be done in order to give adequate protection to the Australian fishing industry?
Mr McEwen:

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

  1. Where such conditions are laid down under State health acts this would be a matter for the State government concerned and would not come within the jurisdiction of the Commonwealth Government. 2, 3 and 4. There has been no recent request by the Australian fishing industry for protection against competition from imported seafoods. A request for urgent temporary protection against imports of frozen prawn meat has been made to the Department of Trade. This application however has not so far been supported by the major producer organizations which have been informed of it.

The honorable member will appreciate that the need for protection against import competition is, in the first instance, one for consideration by the industry concerned. For this reason the initiative in seeking protection lies with industry. The last inquiry by the Tariff Board of interest to the fishing and prawning industries was in 1961 when the board inquired into the question of protection against imports of all types of fish, including crustaceans, in airtight containers. In that case the Government accepted the board’s recommendation for increased duties on canned tuna which was the only item on which increased duties had been requested.


Mr Beaton:

n asked the Minister for Primary Industry, upon notice -

  1. Has he received a request from any organization seeking the discontinuation of representation by the Meat Industry Employees Union on the Australian Meat Board?
  2. Has his attention been drawn to the attitude of members of the Union who regard their representation on the board as vital to their interests and to the interests of the industry?
  3. Will he ensure that a representative nominated by the federal body of the Meat Industry Employees Union will continue to serve on the board?
Mr Adermann:

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

  1. Proposals for the reconstruction of the Australian Meat Board have been received from federal meat producer organizations which provide for the removal of certain representation from the board, including the employees’ representative.
  2. Yes.
  3. When the proposals for the reconstitution of the board are being considered by the Government the attitude of the Australian Meat Industry Employees Union will be taken into account.

Primary Production

Mr Hayden:

n asked the Minister for Primary Industry, upon notice -

  1. Is the high cost of production one of the main reasons why primary producers, particularly dairy farmers, do not enjoy a higher standard of prosperity?
  2. Is the high cost of materials, spare parts, &c, required by the primary producers in the operation of his industry one of the major reasons why cost of production is high and profit returns so low?
  3. Will he take action to investigate the cost structure of materials used by the primary producer with a view to reducing unjustifiably high prices for these items and thus assist in the reduction of production costs?
Mr Adermann:

– The answers to the honorable member’s questions are as follows: - 1 and 2. The Government is very conscious of the need to keep a brake on the cost of production of primary producers. Production costs are, however, only one of the problems confronting Australia’s primary producers. Adverse movements in the prices received for the major primary products, a high proportion of which are exported, also represent a great problem. The particular difficulties of the dairy industry have been given special consideration by the Government in the legislation recently passed by Parliament.

  1. Appropriate government authorities publish regularly details of movements in the prices paid by farmers for items entering into costs of production. This information is taken fully into account in determining the Government’s rural and overall economic policies.
Mr Hayden:

n asked the Minister for Primary Industry, upon notice -

  1. Will the Government carry out a survey of primary industry in this country with a view to providing information, where required, to the industry?
  2. Will a survey be made also of latest procedures, methods of production, farming and utilization of land, &c, in other parts of the world in connexion with the counterparts of any particular sections of primary industry in Australia where this would be of advantage?
Mr Adermann:

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

  1. A large number of economic analyses covering virtually all of Australia’s rural industries are already available. For example, the Bureau of Agricultural Economics regularly undertakes this type of work and there have also been in recent years a series of special industry enquiries.
  2. It is not practicable.

Spare Parts for Farm Machinery

Mr Hayden:

n asked the Minister for Primary Industry, upon notice -

  1. Is it a fact that the cost of spare parts for farm machinery, such as a pump for a milking outfit, is dearer if those parts are purchased separately than if embodied in a complete unit?
  2. If so, will he undertake an investigation to discover the reason for this anomaly?
  3. Will he take action to have the Government reduce these prices by legislation?
Mr Adermann:

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

  1. It is generally the rule. 2 and 3. The question of possible excessive charges for spare parts has been drawn to the attention of the States through the Australian Agricultural Council, the Commonwealth Government not being empowered to control prices for these products.

Social Services

Mr Whitlam:

m asked the Minister for Social Services, upon notice -

  1. Did he say on 4th October, 1961, in opposing the Labour Party’s proposal to reduce the residential qualification for age pensions from twenty to ten years, that the qualification could not be altered without consultation with the Government of the United Kingdom and the Government of New Zealand?
  2. Did the Prime Minister announce on 15th November, 1961, that the parties he leads would legislate to reduce the twenty years period to ten?
  3. Was the residential qualification reduced with effect from 1st March, 1962?
  4. On what dates were the United Kingdom and New Zealand Governments informed of the reduction or proposed reduction?
  5. On what dates did the Governments advise that they would pay reciprocal benefits to pensioners who had lived between ten and twenty years in Australia and who now go to live in the United Kingdom or New Zealand?
Mr Roberton:

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

  1. Yes, in relation to any amendment to the reciprocal agreements.
  2. Yes.
  3. Yes.
  4. The United Kingdom authorities were first informed on 17th November, 1961. All aspects of the matter were discussed with the New Zealand authorities in February, 1962.
  5. Discussions at the departmental level were held with the United Kingdom and the New Zealand authorities. The United Kingdom has asked for additional time to consider the matter. No amendment of the agreement with New Zealand appears necessary.
Mr Ward:

d asked the Minister for Social Services, upon notice -

  1. When did the Rehabilitation Service administered by his department first begin to function?
  2. How many (a) men, and (b) women have been afforded rehabilitation training in each year since that date?
  3. How many of the trainees were subsequently placed in employment?
Mr Roberton:

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

  1. Amendments which were made to the Social Services Consolidation Act in December, 1948, provided the basis for the present Commonwealth Rehabilitation Service. Prior to this authority existed for the provision of vocational training for invalid pensioners.


Government Contracts to Sheltered Workshops

Mr Reynolds:

s asked the Minister for Social Services, upon notice -

  1. What Commonwealth Government commercial contracts have been let in recent years to sheltered workshops in Australia?
  2. Has the Government any particular immediate proposals in hand to assist in the employment and rehabilitation of disabled persons attached to these workshops?
Mr Roberton:

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

  1. Most sheltered workshops in Australia are conducted by voluntary organizations and my department has no details of any arrangements made by them for carrying out work for either commercial enterprises or for State or Commonwealth departments.
  2. Any proposals which the Government may receive for assistance to sheltered workshops will be considered when social services are reviewed in connexion with the preparation of the Budget later in the year.

Housing Finance

Mr Harding:

g asked the Treasurer, upon notice -

  1. Has his attention been drawn to the lack of funds available to housing societies in Townsville where- some 46 people are endeavouring to buy homes?
  2. Will he consider providing assistance for these societies from Treasury funds?
Mr Harold Holt:

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

  1. No.
  2. The Commonwealth does not lend money directly to individual building societies in the States. General Commonwealth assistance to such societies is provided under the Commonwealth and State Housing Agreement 1956-1961 which requires that at least 30 per cent, of Commonwealth advances from Loan Fund for housing be allocated to building societies and other approved institutions. The distribution of these moneys amongst institutions throughout a State is solely a matter for the State government concerned.

Foreign Affairs Committee

Mr Ward:

d asked the Minister for External Affairs, upon notice -

  1. On how many occasions has the Parliamentary Joint Committee on Foreign Affairs met in each year since its formation?
  2. How many of these meetings were held on days when the Parliament met but at a time when the Parliament was not actually sitting?
  3. What countries have been visited by the committee or its members on committee work since its establishment?
  4. What has been the total cost of conducting the business of the committee in each year, including the cost of transport and fees payable to its members?
  5. In what year and on what subjects has it reported to the Parliament?
  6. What questions of importance has it examined (a) on its own initiative, or (b) at the request of the Minister for External Affairs?
Sir Garfield Barwick:

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

  1. Neither the committee nor any of its members has officially visited overseas countries on committee work.

5, 1952: On 1 lib September, 1952, First Report, relating to the Peking Peace Conference, was presented to Parliament. 1953: On 7th October, 1953, Second Report, relating to the Committee’s activities and functions, was reported to have been forwarded to the Acting Minister. 1954: On 8th April, 1954, the Committee reported that the Third Report, relating to Indo-China, had been forwarded to the Minister for External Affairs. 1956: On 5th June, 1956, a Report, relating to extradition arrangements between Australia and Communist-controlled countries) was reported to have been forwarded to the Minister. Report tabled on 24th October, 1956.

  1. All matters considered by the Committee have been of considerable importance. In most cases the subjects have been under discussion by the Committee at the time of reference by the Minister for External Affairs. Such matters have included -

Allied policy in the Far East.


Colombo Plan.


West New Guinea.


Trade with Communist China. South-East Asia.

Regional Economic Development.

Freedom of worship.

The future of the Commonwealth.

The future of the United Nations.

New Guinea and the South Pacific.

Laos and South-East Asia.

Africa and the Middle East.

Economic relations.

Economic and Technical Assistance.



Mr Cairns:

s asked the Attorney-General, upon notice -

  1. Has his attention been drawn to a statement by the secretary of the University of Queensland Union in minutes dated the 29th March, 1962, that several members of the executive of the Queensland University Student Action Movement had been interviewed by the Australian Security Intelligence Organization?
  2. If so, will he make inquiries to ascertain if any such interviews took place, and if they did, will he state the reasons for such action?
Sir Garfield Barwick:

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

  1. No.
  2. Statements of the kind to which the honorable member calls my attention are made from time to time without any basis of fact, sometimes due to failure to distinguish between State police officers and members of the Australian Security Intelligence Organization, and at other times falsely with a view to creating prejudice. In the present case the statement has no foundation in fact. I ought to say, however, that I do not propose to follow the course of answering questions such as those posed by the honorable member on every occasion some statement of this kind is made. I have already indicated in my answer to the honorable member on the third day of May, 1962 (see “Hansard “, page 1909) that members of the public may request identification of an officer of the Australian Security Intelligence Organization. Any complaint by a member of the public as to the conduct of such an officer which is made to me as the responsible Minister will receive my proper attention.

Laos and South Viet Nam

Mr Cairns:

s asked the Minister for External Affairs, upon notice - 1 Is he able to state what total amount has been spent by the Western Powers upon (a) (military aid and action and (b) economic, social and health aids in South Viet Nam and Laos?

  1. Which countries have provided funds for these purposes, and how much has been provided by each?
  2. What is the estimated number of troops engaged on the side of South Viet Nam, and on the side to which they are opposed, in hostilities in that country?
  3. What number of service personnel has been, or is to be, sent to South Viet Nam by Australia?
Sir Garfield Barwick:

– The answers to the honorable member’s questions are as follows: - 1. (a) I regret that no recent figures are available for the total amount which has been spent by the Western powers upon military aid and action in South Viet Nam and Laos. However, during the period since the Geneva settlement in 1954 up to the end of June, 1960, the United States has provided South Viet Nam with $U.S.497,000,000 in direct military aid and a further $US 1,33 1,000 in defence support aid. In the same period the United States provided Laos with $U.S.68,000,00O in direct military aid and $U.S. 232,500,000 in defence support aid. France has also provided substantial military aid to both South Viet Nam and Laos but the amount of this aid is not known to us. Australia has spent or is committed to spend £A.200,000 from Seato Defence Support Funds for telecommunications and other equipment for South Viet Nam. (A new programme of £A.3 000,000 has recently been announced by the Government for assistance to Asian members of Seato and also to the Republic of Viet Nam, which has sought aid under the Protocol to the Manila Treaty).

  1. The total amount which has been spent by the Western Powers upon economic and technical aid given to South Viet Nam and Laos is not I sown. The following is a summary of the known amounts spent by various Western countries (to the end of their respective financial years to 1961) under bilateral programmes of economic and technical assistance under the Colombo Plan in those two countries (as given ia the Tenth Annual Report of the Colombo Plan Consultative Committee):
  2. South Viet Nam:

United States of America - $U.S. 1,547,000,000.

Australia- £A.1,269,000.

Canada- $U.S.825,000.

Britain- £Stg.97,000.

New Zealand- £Stg.47,000.

United Nations Agencies, France and Japan have also provided substantial aid but the totals are not known.

  1. Laos:

United States of America - $U.S.268,000,000.

Australia- £A.347,000.

Britain- £Stg.234,000.

Canada- $U.S.136,000.

New Zealand- £Stg.7,000.

United Nations agencies, France and Japan have also provided substantial aid but the totals are not known.

  1. See the answer to 1. above.
  2. I refer the honorable member to part 1. of my answer of 16th May to the question on notice (which appeared on pages 2429 and 2430 of “ Hansard “ of that date) from the honorable member for East Sydney.
  3. No Australian service personnel have been sent to South Viet Nam to assist that Government in its struggle against armed Communist insurgency, and no decision has yet been taken on the possible despatch of Australian Service personnel to that country. The matter is still under consideration.

Nuclear Tests

Mr Whitlam:

m asked the Minister for External Affairs, upon notice -

  1. How many nuclear weapons have been exploded and nuclear devices tested in the southern hemisphere?
  2. By and in what countries were they exploded or tested?
Sir Garfield Barwick:

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

  1. Twelve nuclear devices have been exploded in the southern hemisphere.
  2. The twelve devices were exploded by the United Kingdom in Australia.


Mr Whitlam:

m asked the Minister for External Affairs, upon notice -

  1. In what circumstances does the Government negotiate with the Government of another country when it desires to deport a citizen of that country from Australia?
  2. When our Government does not recognize the other Government as, for instance, in the case of mainland China, through what channel do the negotiations take place?
Sir Garfield Barwick:

– The answers to the honorable member’s questions appear in “ Hansard “ for 1st May. I may add that it is not normally the practice of the Government to negotiate with the government of another country, when it proposes to deport a citizen of that country. If the deportee requires a valid travel document authorizing re-entry into the country in question, this is attended to, when necessary, as a matter of administrative arrangement with the authorities concerned.

Nuclear Tests

Mr Cairns:

s asked the Minister for External Affairs, upon notice -

What evidence is known to exist which suggests that underground nuclear tests can be detected and distinguished from earth tremors by existing national systems of detection?

Sir Garfield Barwick:

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

Available evidence indicates that, while much is being done, particularly in Western countries, towards developing systems for the detecton and identification of underground nuclear tests, no complete system has yet been evolved which can be accepted as foolproof. In short, the feasibility of detecting underground nuclear tests and distinguishing them from earth tremors - particularly in the case of small explosions - has not been proven. Until foolproof systems are developed, the only way in which the nature of unidentified “ events “ can be verified is by on-site inspection.

Provision of Transport for Senator

Mr Ward:

d asked the Minister for the Interior, upon notice -

  1. Has Senator S. K. Amour been deprived of the use of a Commonwealth car to convey him between his home and Canberra to attend the sittings of the Senate?
  2. Has his attention been drawn to Senator Amour’s inability to travel by air because he is unable to climb the stairway into an aircraft and to his inability to board a train for Sydney at

Yass Junction because he is unable to cross the overhead railway bridge at that station?

  1. Is it a fact that, to make the journey between Canberra and Sydney by rail, Senator Amour is obliged, because of the infrequency of trains with sleeping carriages, to remain in Canberra up to 24 hours after other Members of Parliament have left for their homes, and to leave on the return journey to Parliament many hours before other members depart?
  2. In reviewing this case, has he considered that Senator Amour, after putting his age on and enlisting in World War I. at the age of fifteen years, was discharged as medically unfit as a result of war wounds at the age of seventeen, and that he is a 100 per cent, war pensioner who has been deemed eligible for the payment of a totally and permanently incapacitated ex-serviceman’s war pension upon his retirement from Parliament?
  3. Was Senator Amour elected to the Senate in 1938, and is it only in recent years that, on account of the difficulty he has experienced in using certain types of transport because of disabilities arising from his war wounds, he has required special facilities?
  4. Is Senator Amour considered to be less deserving of being granted the use of a Commonwealth car to enable him to perform his parliamentary duties than many of those at present having authority to use these vehicles?
Mr Freeth:
Minister for the Interior · FORREST, WESTERN AUSTRALIA · LP

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

  1. No. After it was learned that Senator Amour had been using an official car for travel purposes, which had not been authorized, he was advised that he could not continue to do so.
  2. Yes. All the circumstances of the case have been carefully examined.
  3. Senator Amour has used sleeper accomodation when he travels by train. A better timetable is available should Senator Amour decide to use the normal diesel service. Official cars cannot offer the same service as railway sleeper carriages.
  4. See answer to 2.
  5. Yes. Senator Amour has been given all the special facilities available to members with physical disabilities.
  6. No. See answer to 5.

Cite as: Australia, House of Representatives, Debates, 17 May 1962, viewed 22 October 2017, <>.