24th Parliament · 1st Session
Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 2.30 p.m., and read prayers.
– I have received a return to the writ which I issued on 13th August, 1963, for the election of a member to serve for the electoral division of East Sydney in the State of New South Wales to fill the vacancy caused by the death of Edward John Ward, Esquire. By the endorsement on the writ it is certified that Leonard Thomas Devine has been elected.
Mr. Leonard Thomas Devine was introduced and made and subscribed the oath of allegiance as member for the Division of East Sydney, New South Wales.
Mr. WEBB presented a petition from certain electors of the Commonwealth praying that the pension increase of 10s. proposed in the 1963 Budget be granted to all age, invalid and widow pensioners.
A similar petition was presented by Mr. Coutts.
Petitions severally received.
Mr. UREN presented a petition from certain citizens of the Commonwealth praying that the Government remove section 127, and the words discriminating against aborigines in section 51, of the Commonwealth Constitution, by the holding of a referendum at an early date.
– I desire to ask the Prime Minister a question. I refer to the fact that in’ the G. L. Wood Memorial Lecture at the University of Melbourne last August, the Attorney-General, referring to the restrictive trade practices proposals, said -
Out of the controversy will emerge new Australian legislation that will make a significant contribution to the needs of Australia.
I ask: Was the Attorney-General expressing the Government’s view that Australia needs legislation to control monopolies and protect the people? If so, when is it proposed to bring down the legislation outlined by the Attorney-Genera] last year and promised in the Governor-General’s Speech three years ago? Or is it intended that the Twenty-fourth Parliament shall expire without a single notable piece of legislation emerging to make the significant contribution to the needs of Australia foreshadowed by the Attorney-General?
– As to the first part of the honorable member’s question, in which he asked whether the Attorney-General was expressing the Government’s view, the answer is, *’ Yes “. As to the second part, I cannot say at present when the legislation will come down, because the matter, which is vastly complex as the honorable member must know, is still under examination. The proposals were put forward in general terms for the express purpose of evoking criticisms and suggestions around Australia. We now have those criticisms and suggestions and they are being examined. I do not yet know when the Twenty-fourth Parliament will expire, but I will take a convenient opportunity, of course, of advising the honorable member.
– I ask a question of the Minister for Repatriation, who represents the Minister for Health. By way of preface, I point out that the Lottie Stewart Hospital for aged and chronically ill persons and the Home of Peace are both eligible for Commonwealth hospital benefits and the Governor Phillip Hospital at Penrith is not eligible. I ask the Minister: Is there a significant increase in true hospital cases at the Governor Phillip Hospital and are the premises and equipment excellent and the trained nursing staff adequate? Can arrangements be made for the Minister for Health to inspect the hospital on his next visit to New South Wales, with me and other interested district members, if they so desire, to determine whether it is now eligible for Commonwealth hospital benefits? Is the Minister aware that the matter is urgent and that medical evidence can be supplied to support the request?
– This matter has been raised by the honorable member on several occasions in the past. As he knows, the Governor Phillip Hospital is registered as a public hospital by the State Department of Health in New South Wales and is recognized as an approved nursing home under the Commonwealth National Health Act. The majority of the patients at the Governor Phillip Hospital in the past have come within the categories of chronically ill cases, terminal cases or aged sick persons. The hospital has primarily catered for those categories. How’eVer, at the request of the honorable member, inspections have been made of the hospital and its facilities. The reports indicated that, as he said, the hospital is excellent and that nursing staff is quite adequate. However, up to the present it has not been possible to register the hospital under the act, for the reasons I stated. The hospital is entitled to receive the £1 a day for all approved patients under the nursing homes scheme. In addition, it can receive special account fund payments for patients who suffer from an acute stage of a chronic complaint or from some other acute illness.
– This is a long way of saying “ No “.
– I am about to say *’ Yes “. In view of the representations made by the honorable member and the further application submitted by the hospital for recognition under the act, another inspection will be made. As the honorable member asks, it will be made as a matter of urgency.
– My question is directed to the Prime Minister or the Minister for Shipping and Transport. Has the Government received an application from R. W. Miller and Company Proprietary Limited to import four more tankers for the Australian coastal oil trade? When was the application received? Why has not the Government replied? So that the Australian shipbuilding industry will be adequately protected, will the Government include in the approval a condition that the company shall, within a reasonable time, place an order wilh an Australian shipyard for the construction of tankers comparable in size with those imported?
– The honorable member for Newcastle has made representations concerning Australian shipbuilding to me before. The matter raised in his question is under consideration by Cabinet. Obviously, for that reason I cannot give him any answer to the last part of his question. In reply to the first part I say that applications have been received from Mr. Miller of R. W. Miller and Company Proprietary Limited from time to time in respect of the importation of second-hand tankers. That matter is also-under consideration at the present time.
– I preface my question, which is directed to the Minister for Supply, by referring to the fact that the Government shortly will be providing a £2 for £1 building subsidy to charitable organizations which are prepared to provide accommodation for handicapped persons employed in sheltered workshops. I ask the Minister whether the Government will further assist those organizations to rehabilitate disabled persons by, where possible, allocating government contracts to sheltered workshops.
– I think I should tell the honorable member for Henty, first of all, that the Department of Supply, in its various factories, does employ quite a number of handicapped people. By tailoring the work to the disability of the individual, we are able to achieve very satisfactory results. In response to a similar question asked by the honorable gentleman some time ago, the department reviewed the possibility of using sheltered workshops; but an analysis of the kinds of contracts let by the department does not disclose that this is a practicable proposition. Most of the contracts that we let are much bigger than could be handled by sheltered workshops. The work that could be done in sheltered workshops normally would be in the nature of sub-contracts. However, we appreciate the work that is being done. We know something of it. We would never hesitate to encourage our main contractors to use such workshops as a source of sub-contracting.
– My question, which I address to the Minister for Immigration, concerns what might be called “ the second Orr case”. In view of the considerable public interest and the apparent injustice attached to the circumstances surrounding the refusal to extend the stay in Australia of Mr. Harold Orr, will the Minister give Mr. Orr an opportunity to be informed of the grounds of objection to him, in order that he may be able to state his case in reply or rebuttal? Will the Minister give that opportunity privately with Mr. Orr himself or under the provisions of the Migration Act which allow the Minister, where he considers that an alien or immigrant such as Mr. Orr should not remain in Australia, to serve upon him a notice of intention to deport indicating the grounds of objection and allowing 30 days for the accused alien or immigrant to request the appointment of a commissioner to investigate the mat’.er thoroughly, and report?
– I think the honorable gentleman, and one or two other members of this Parliament who have been making statements in the newspapers in the last few days about the case of Mr. and Mrs. Orr-
– I have made no statements in the newspapers.
– I said “ other members of this Parliament”. I was not referring to you. I was referring to the honorable member for Yarra, Senator Cohen ‘ and Senator Cavanagh. I was not referring to the honorable member for Melbourne Ports. I think there, has been some confusion in the minds of honorable gentlemen about the whole position. It might be useful if I informed the House of the exact situation as I see it. The trouble is that honorable gentlemen, in their representations, have failed to distinguish the case of a tourist from the case of deporting an alien resident of Australia who lives here permanently. A tourist vise is an international form of authority for short-term entry. In itself a Visé does not confer a right of entry to Australia. Right of entry is given by the issue of a temporary entry permit. Such a permit may be cancelled at any time with out explanation by the Minister, just as it may also expire. I would add, for the information of the House, that I know of no country that requires the government to give reasons why visitors must leave the country at the expiration of their stay. The Migration Act, which I had the honour to introduce and pilot through .the House in 1958, and which was supported by honorable members opposite- I thank them for it - makes no provision for reasons to be given to visitors why they should leave the country at the expiration of their stay. But, of course, the act lays down very definite conditions under which people may be deported.
Holders of temporary entry permits, such as Mr. and Mrs. Orr, are essentially visitors. I would liken their position to that of a guest in one’s house. Whether you invite a guest or whether he comes at his own suggestion, his presence in your house is conditional on your agreement. He is invited for a definite time and when that time is up he is expected to depart. How strange then if the guest were to say: “ Why should I go? What is your reason for ordering me to leave? “ How strange also if, when the host quite justifiably refuses to explain the circumstances more, the guest were to exclaim angrily: “I must see a member of Parliament. I must go to the newspapers. I must hold daily press conferences “.
Sir, in this case Mr. and Mrs. Orr were given vises which stated explicitly -
Period of authorized stay six months.
They arrived in Sydney on 6th April this year and were given temporary entry permits for six months. Those permits expired last Sunday night, 6th October. As early as towards the end of May - this is interesting - when they had been in the country for only a few weeks they applied for permanent residence here. At the beginning of August Mr. Orr was told that his application was refused. On 18th August Mr. Orr asked for a review of the decision and later he was told that the decision was unchanged. Then, on 2nd September, exercising his perfectly legitimate rights - I do not for a moment contest his action - the honorable member for Yarra entered the field by writing to me on the subject.
I must say this: I have no personal animus against Mr. Orr. Neither his religious convictions nor his private morality is a factor at issue. Indeed, I did not consider them. But, as I have said already in Adelaide last week, from evidence of a substantial nature that has been placed before me I do not think it would be to the advantage of the Australian public if Mr. Orr were allowed to remain here in permanent residence. Neither he nor his wife has any legal or ethical right to stay here. They came as short-term visitors. They knew the conditions of their entry. Having enjoyed the hospitality of this country, as have thousands of other tourists, both can reasonably now be asked to depart shortly. Otherwise, 1 regret to say, other measures will have to be considered, maybe to be enforced; but at all costs the laws of this country must be maintained.
– No doubt the Minister for the Army is aware that the Queen’s Prize shoot, attended by over 3,000 riflemen who fired 140,000 well-aimed shots, has just concluded at the Anzac Rifle Range, Liverpool, New South Wales. Will the Minister give to the riflemen of New South Wales an assurance that the Anzac range will be preserved? He has already given a similar assurance to the honorable member for Mallee in relation to the range at Williamstown in Victoria.
– I was very pleased to note the success of t lie shoot which concluded yesterday. Unfortunately, I cannot give the honorable member the assurance he desires because certain matters are at present under negotiation in relation to the Anzac range, but I can assure him that the welfare of the riflemen will be given every consideration.
– Is the Minister representing the Minister for Civil Aviation aware that His Excellency, the Governor-General, visited the part of my electorate known as Lord Howe Island during the past two weeks? Will the Minister state when the construction of the airstrip on Lord Howe Island will be commenced? Is he aware that the present out-of-date air service from Sydney to Lord Howe Island is costing this Government £100.000 a year and that the cost of building an airstrip is estimated at only £500,000?
– I shall convey the honorable member’s question to my colleague in another place. I think I can state that the airstrip at Lord Howe Island will not be ready in time for the honorable member’s annual holidays at Christmas.
– My question :s directed to the Minister for the Army. How many recruits for the Australian Regular Army applied and were accepted during each of the months of June, July, August and September, 1963? How many recruits are required annually to make good normal wastage? What is the target date for achieving the approved increase of the strength of the Australian Regular Army to 28,000 men? What is the estimated expenditure for 1963-64 on the recruiting campaign?
– I am afraid that I cannot give the honorable member a precise reply to each of his questions. I shall obtain for him the information relating to the number of recruits in each of the four months that he mentioned. At this stage I can state that the- number of recruits was particularly high during June and July. We are in the quiet season now but we hope that the numbers will build .up shortly. I shall also obtain information for him as to the rate of wastage. This is variable because of the time schedules relating to discharges. As has been announced, the target date set for the increase of the strength of the Regular Army to 28,000 men is 30th June, 1967. The expenditure on the recruiting campaign is a matter for the Minister for Defence, because there is a joint recruiting campaign for the three services, but there has been a substantial increase in expenditure.
– Does the Minister for Primary Industry appreciate that there is considerable confusion and indecision among wool-growers and some of their organizations in relation to the proposed £2 a bale promotion levy? Will the honorable gentleman urge Cabinet to make a speedy decision on the question whether the Government will make a contribution to the suggested promotion levy, as has been proposed already by the Opposition?
– I have already informed the House in reply to a question that the industry made representations on this subject by way of a deputation to the Prime Minister and several other Ministers. The representations are now receiving consideration and no doubt the Prime Minister will inform the deputation of the Government’s decision in due course.
– I direct my question to the Minister for Primary Industry. Has the Tasmanian Government approached the Commonwealth Government for assistance in research into the tuna fishing industry? If so, can the Minister give any details of this approach and of any action that the Commonwealth may be contemplating?
– I think the correct way to answer the question is to say that representations have been made to me, as the Minister who is responsible for the Fisheries Development Trust Account, for assistance from that account for a survey of the tuna industry off the Tasmanian coast. I have referred the subject to the interdepartmental committee that usually makes recommendations lo me concerning expenditure from the account. The request is now being considered and I hope to be able to give the Tasmanian Government a reply in the near future.
– I address my question to the Minister for Immigration. The Minister, in answer to an earlier question about the position of Mr. Harold Orr of the United States of America, who wishes to stay in Australia, said that Mr. Orr’s religious convictions and personal morality were not factors that were considered. I think those were the words that the Minister used. Will he give the House an assurance that Mr. Orr’s political views or activities were not factors in the decision?
– I thought that I had made a sufficiently comprehensive statement about my own attitude and the attitude of the Department of Immigration on this matter. Indeed, I must apologize to you, Mr. Speaker, for taking so long in replying to a question, because I know your wishes at question time. I have already stated my position and I have nothing to add.
– My question is directed to the Minister for Social Services. Is it a fact that in several States investigation officers of the Department of Social Services are hiding their identity by using dummy number-plates on Commonwealth vehicles? Does the Minister condone or condemn this contemptible practice, which is designed to trap unsuspecting pensioners whose affairs are under investigation?
– I have no personal knowledge of the matter that the honorable member has raised. I am tolerably certain that there is not the slightest vestige of truth in the allegation that he has made.
– I address my question to the Minister for Labour and National Service. I ask whether the Waterside Workers Federation of Australia has agreed to increase the registered strengths of its Sydney and Melbourne branches by the recruitment of 344 men in Sydney and 295 in Melbourne to bring the strengths up to the port quotas of 5,300 and 4,370 respectively. If the federation has so agreed, what arrangements have been made concerning the recruitments and when is it expected that the required men will be available for work to relieve the continuing shortages in the two ports?
– It is my understanding that the Waterside Workers Federation of Australia has already submitted to the Australian Stevedoring Industry Authority the names of men who have applied to be registered under the Stevedoring Industry Act and that the desire is that the port strengths at both Sydney and Melbourne be brought up to the official quotas. I have been informed that the Stevedoring Industry Authority is now checking health standards and other qualifications. It is hoped that the process will be finished by the 20th of this month in Sydney, and it is expected that the applications in Melbourne will be completely vetted by the end of this month.
– I ask the Minister for Trade a question. The right honorable gentleman will know that the Swift Australian Company (Proprietary) Limited, a subsidiary of International Packers of the United States, has made a £2,500,000 take-over offer for another meat-packing business. Is the Minister aware that when .Swifts acquired the Queensland National Pastoral Company Limited over a year ago the purchase was made with the assistance of a large overdraft obtained from an Australian bank and that no new money came into Australia? Will he consult with the Treasurer and/or the Reserve Bank of Australia to ascertain what action can be taken to prevent foreign-owned companies which operate in Australia from securing accommodation from Australian banks to buy out established Australian enterprises?
– All I know about this matter is a report that I read in the press to the effect that the Swift company has made an offer to take over Mayfair Hams Limited, but I have no knowledge of the terms of the offer or of how it is proposed that payment shall be made. I have spoken previously on a certain aspect of take-overs in which large overseas companies of great standing and great credit-worthiness draw upon Australian savings to finance the operations. There are circumstances in which, due to the dimensions of the transaction or the state of economy at the time, this might not be desirable, but I shall be glad to discuss the matter with my colleague, the Treasurer.
– I ask the PostmasterGeneral whether there has been any change in the administration and control of television station NBN Channel 3 since he told me on 10th September last that the sales of shares in that station had not in any way affected its control and that control of the station was still in the hands of local interests. Is it a fact that a completely new board of directors has been appointed? If so, did the Minister, when approving the sale of shares to persons associated with other television interests, also approve of the removal of the directors of that day? Would it be true to say that station NBN is about to become a relay station only? If so, would that further restrict the viewing of persons already badly provided with television services? In the light of the now developments regarding Channel 3, will the Minister now give effect to the original recommendations of the Australian Broadcasting Control Board and grant a second commercial television licence for Newcastle and the Hunter valley?
– The statement that 1 have made and the reply which I have given to the honorable member for Shortland, to which he has referred, arise from a statement made to me by those who were responsible for a certain change and certain purchases of shareholdings in the station to which he referred. I believe that that statement was correct. I have had no further information as to any change that has taken place since, but I shall have a look at the information suggested by the honorable member in the questions he has put to me and see whether there is anything in it.
– I will give you the names of those concerned if you like.
– All right.
– I address a question to the Prime Minister. In view of the widespread public interest in and speculation about the matter, will the right honorable gentleman inform the House whether an election for the House of Representatives has been arranged or will be arranged before the end of this year?
– Nobody understands better than I do the acute anxiety of the honorable member, an anxiety which I notice is widely shared by his colleagues; but, unfortunately, I cannot put him out of his misery.
– I address to the Minister for Immigration a question supplementary to that asked earlier concerning Mr. and Mrs. Orr. I ask the Minister whether it is a fact that instances have occurred where people who have been admitted to this country on temporary entry permits have been permitted to remain beyond the expiry date of such permits and have subsequently become citizens of this country. Also, is it a fact that many ship deserters from the Merchant Marine Service have been permitted to remain in Australia upon their being located and have later become Australian citizens? If these are facts, why has the Minister discriminated so strongly against Mr. and Mrs. Orr, particularly when Government statements have appeared in the press from time to time to the effect that immigrants would be encouraged to come from the United States of America to Australia and would be welcome settlers here?
– It is quite misleading for the honorable member to talk about discrimination and to use phrases of that kind. The fact remains that very many thousands of visitors come to Australia every year, and, indeed, we wish to encourage them to do so. The whole of my own ideology is towards greater freedom of movement between nations. But if, when a tourist’s temporary entry permit expires and is not extended, there is an attempt to project the matter into this Parliament - as indeed has been done - and to inflate it into a cause célèbre the result will be only an undermining of the freedom of movement to which I have referred, and the vitiating of the whole of our tourist vise policy. You have only to examine the way in which tourist vise1 policy operates, as 1 said earlier in reply to the honorable member for Melbourne Ports, in every other country of the world, and most particularly, since Mr. Orr is an American, in the United States of America, to see that we have nothing to defend in this matter. I challenge my honorable and youthful friend, now in his first Parliament, to go to America and overstay the period allowed to him as a visitor. Let him see what happens then. Let him see also whether he can get a member of the Administration to go to Congress and answer questions on such a trilling matter.
– ls the PostmasterGeneral aware of the great problem facing secondary industries in country areas due to the high cost of trunk line calls? Will the Minister consider whether he could agree to all trunk line calls for industrial undertakings being charged for at nominal rates and to the three-minute time limit now in operation being extended in relation to trunk calls by secondary industries in country areas? Does the Minister know that most telephone calls made by industries in country areas are trunk line calls, and does he consider that the cost of such calls gives an advantage to metropolitan industries, which are not faced with the problem of the cost involved in the numerous calls so necessary for country industries?
– The honorable member refers to the high cost of trunk line calls. One would assume that he is speaking in comparative terms and is saying that the department charges fees higher than those charged in comparable circumstances in other countries, or than were charged in Australia before the policy of this Government came into effect. In fact, our trunk line charges compare more than favorably with those in other countries with longer established postal administrations and telephone administrations.
– Not New Zealand!
– Charges are made on a different basis in New Zealand. There is a smaller charge per call in New Zealand, but much higher rentals are paid. Comparable bases must be established before you can get a proper comparison. Let us have a look at the position. Only a few years ago putting through a trunk line call in Australia - a very important part of business, as the honorable member said - involved waiting for a considerable time. As a result of the great advance which has been made in the telephone services in Australia, due particularly to the large sums made available from the Consolidated Revenue Fund for capital works in the Postal Department, about 90 per cent, of the trunk line calls made throughout Australia are made immediately on demand. That in itself is a very great advantage to businesses throughout Australia. How many times have honorable members, wishing to make trunk line calls, been told by the telephonists, “ Hold the line, please; I will put you straight through “? That service saves a lot of money. Further, it is only abo’t two years ago that the cost of a trunk line call for three minutes over 400 miles was 27s. 4d. Now the cost of a three-minute call over 400 miles during the day is 15s. At night it is 12s. Where is the justification for the honorable member’s suggestion of exorbitant costs? That question was not a Dorothy Dix-er!
– I refer to the international tension which exists in the SouthEast Asian area. I preface my question, which is addressed to the Minister for the Interior, by stating that I am aware that the States are responsible for the promotion of their own civil defence preparations and that the Commonwealth is responsible for control and direction on a national level. I ask the Minister whether he is satisfied that everything reasonably possible is being done by the State authorities to educate citizens in civil defence requirements and in developing the necessary co-ordination of the State services associated with civil defence? Why is it that although £330,000 was allocated last year for civil defer only £273,548 was expended?
– I cannot say that I am satisfied that everything reasonably possible has been done - that is a rather tall order - but I can say that the civil defence programme for the States and the Commonwealth has advanced considerably over the last two years. 1 am satisfied that considerable progress is being made on a planned and orderly basis and with very good co-operation between the Commonwealth and State governments.
The reason for the under-expenditure of funds last year was principally that a large amount of equipment which had been ordered, and which was being supplied at the Commonwealth’s expense, did not come to hand in time for payment to be made out of the vote for the last financial year. The under-expenditure was simply due to the delay in the arrival of the equipment, as otherwise we would have expended practically the whole amount of the vote. That equipment will be paid for out of this year’s vote.
Mr. NELSON address a question to the Postmaster- general Can he state what plans exist for the establishment of television in the Northern Territory? Does he not agree that the city of Darwin and other parts of the Northern Territory, by virtue of their remoteness and lack of amenities, warrant a national service, even if initially it is relayed from southern national stations?
– I readily agree wilh the honorable member that the establishment of television in the Northern Territory would be of very great advantage to the people living there. I assure him that as soon as it is reasonably practicable to give attention to the provision of a service in that area it will be done. It was only at the end of 1956 that we first established television in Australia - barely seven years ago - and already its development throughout Australia is such that over 80 per cent, of the people are now able to view television. In many cases viewers have at least two programmes. When those points are realized I think it will be agreed that this Government has made a great and speedy contribution to the development of this very desirable feature of the lives of the people generally. Although I cannot tell the honorable member that there is some project in hand at the moment for developing television in the Northern Territory, I can assure him that we realize that there are a number of places throughout Australia in which we must increase the spread of television. The Northern Territory is one of the places to which I refer. This matter is constantly under review.
– I wish to direct a question to the Minister for the Army. Can he advise the House whether a sufficient number of applicants has been found for entry to the Royal Military College in the forthcoming year?
– The programme of recruitment for the Royal Military College is just about concluded. I have not the final figures, but I understand they arc much better than those of last year and I sincerely hope they cover the full number required.
– I direct a question to the Prime Minister. Has the Government of the United States of America offered to supply Australia, on loan, the latest American bombers as replacements for the obsolete Canberra bomber? Has the offer been made to give Australia some defence protection while the Government makes up its mind on a suitable replacement?
– I am not aware of any such offer and therefore no such offer has been refused, but weare still concentrating very much on this problem which is great, and not without its urgency and also, as the honorable member will understand, is extremely complex. The answer to the question is, “ No “.
Bill presented by Mr. Roberton, and read a first time.
– I move -
That the bill be now read a second time.
There was a time when children, having been born into this world with major mental or physical imperfections, were condemned to a life of almost complete invalidity and comparative uselessness. Unhappily, to their number were added all those who had been seriously injured, smashed or broken in the normal hazards of life and living, and who were given no opportunity to escape from the thraldom of their permanent infirmities. We made invalid pensions available to them, and we believed that there was nothing else of a practical nature we could do to help them.
All that has been changed by the modern approach to the problems of mental health and physical medicine and by the concerted efforts which have been made to find solutions to these problems and apply them to the restoration of the mentally and physically handicapped wherever that is possible.
To that end, the Commonwealth Government has established rehabilitation centres in each of the six States of the Commonwealth and these centres have been staffed by professional and technical people who are prepared to devote their energies and skills to the recovery of the mentally and physically handicapped who are admitted to them for rehabilitation. Similar centres, I am happy to say, Mr. Speaker, have been established in a number of our great hospitals and, together with the very valiant and valuable work which has been done, and is being done, by a wide variety of voluntary organizations, spectacular progress has been made in restoring the maimed and broken to a better life free from the economic chains of their infirmities.
The processes of mental and physical rehabilitation have been accelerated by the success which has come to the voluntary organizations in the establishment of sheltered workshops where the disabled may be gainfully employed and their self-respect fully restored. I can assure honorable members that it is a most moving experience to go into one of these sheltered workshops, or all of them, and find people - men and women of all ages - engaged in tasks that call for native ability, intuitive aptitude, the powers of concentration and the qualities of enthusiasm which are so frequently lacking in so many of our commercial and industrial enterprises to-day, in an age and generation of infinite ease and dubious affluence. I will never forget going to a meeting of the Junior Chamber of Commerce, when that splendid organization in all States of the Commonwealth had just completed a campaign to induce and encourage the employment of the physically handicapped, and I was introduced to a young man who had no feet, no hands and only fragmentary arms and legs. He was the chief accountant in a large engineering firm employing some hundreds of people, and his employer described him to me as the brains and the driving force of the entire establishment.
But sheltered workshops have always been plagued by the great problem of getting the disabled, scattered as they are throughout the States, to and from their places of employment. It is a difficulty which has been met, but only in one or two isolated instances, I regret to say, by the provision of residential accommodation where the disabled can live in communities closer to the sheltered workshops. Unhappily, the voluntary organizations are limited in these activities by the resources which are made available to them by a generous public, and all honorable members will agree that they richly deserve the quality of encouragement which will enable them to extend their operations and provide additional accommodation. The purpose of this bill is to enable the Commonwealth to make grants to religious, benevolent and other approved welfare organizations to assist them in providing accommodation for disabled persons working in sheltered workshops so that they may reside near their places of employment. The bill introduces a new form of welfare assistance and adds to the already wide scope of the Government’s social services legislation.
There is a growing recognition in Australia of the value of encouraging severely handicapped people who are unable to engage in normal occupations in industry, to occupy themselves to the full extent of their abilities in productive work under sheltered conditions. In this field, as in many other aspects of social welfare, voluntary agencies are tackling the problem with devotion and energy. In my opinion sheltered workshops can operate more effectively in the interests of the disabled people they seek to serve, when they are controlled and operated by voluntary bodies, or, where it is practicable for them to do so, by industrial organizations. The efforts of those who are assisting our severely handicapped citizens in this way are worthy of the commendation of all sections of the community.
Many of the leading voluntary organizations that have had considerable experience in this field, have claimed that their operations could be extended, and more disabled people provided with sheltered employment, if suitable residential accommodation could be made available convenient to the sheltered workshops concerned. Honorable members will appreciate that the difficulty, and in many cases the impossibility, of severely handicapped persons using public transport to get to and from a sheltered workshop is often an insurmountable barrier. Because those conducting sheltered workshops are dependent to a large extent on public support, with few exceptions they are not in a position to meet the costs of providing accommodation and have sought from time to time assistance from the Commonwealth. This bill will enable the Director-General of Social Services, on behalf of the Commonwealth, to make grants to eligible organizations on a £2 for £1 basis to assist in meeting the capital cost of accommodation for such persons.
As sheltered workshops cater mainly for severely disabled persons, who because of the nature and extent of their disability are unable to engage in normal employment, the bill defines a person who may reside in subsidized accommodation as one who is sixteen years of age or over and is permanently incapacitated for work to the degree necessary to qualify for an invalid pension or who is permanently blind. This does not mean that only invalid pensioners can reside in such accommodation, but indicates the extent of the disability before an applicant may qualify for residence. Persons not entitled to an invalid pension on means test or other grounds may reside in subsidized accommodation if they are disabled to the extent indicated.
Organizations eligible for assistance are churches, charitable and benevolent bodies and ex-servicemen’s organizations. Other voluntary organizations which do not come within these groups may be approved by the Governor-General from time to time. The definition of eligible organizations has been extended to include the trustee or trustees under a trust, or a corporation, established by an eligible organization. In addition, a trustee or trustees under a trust established for charitable or benevolent purposes may be approved as an eligible organization even though the body which set up the trust may not itself be eligible.
There are two restrictions on the type of organization that may qualify for assistance. First, it must be carried on otherwise than for the purpose of profit or gain to its individual members. Secondly, the effective control of the organization must be in the hands of persons other than government appointees. This will ensure that the aim of the legislation - Commonwealth assistance to voluntary bodies - is preserved and that it cannot be used for intergovernmental grants. There is no objection to government appointees being members of the controlling body of an eligible organization as long as these appointees cannot themselves exercise control of it. If this were to be the case, the organization would have lost substantially its identity as a voluntary body.
The Director-General of Social Services is empowered to approve of proposals and to make grants on behalf of the Commonwealth if he is satisfied that the intended accommodation is to be used permanently for disabled persons engaged, or likely to be engaged, in employment in a sheltered workshop. Before granting approval, the Director-General will examine the essential nature of the accommodation and its situation in relation to the sheltered workshop where the residents will be employed. What he is required to do is to look at the purpose intended by the organization at the time approval is sought.
For the purposes of the legislation, a sheltered workshop is defined as a factory or workshop or part thereof declared by the Minister to be a factory or workshop in which the whole or a substantial number of the employees are disabled within the definition contained in the bill. To be declared a sheltered workshop the disabled persons engaged therein must receive payment for their work.
It is perhaps necessary fo explain here that paid employment does not necessarily mean the receipt of a normal wage, but it does mean that some payment - even though it be small or in the nature of an incentive allowance - must be made to its workers before the factory or workshop could be declared a sheltered workshop under the act.
Under the bill, the Commonwealth subsidy may be granted both in respect of buildings purchased or to be purchased and erected or to be erected. The Government’s proposal was first announced on 13th August, 1963, and therefore, only a building in course of erection on that date, or commenced or purchased after that date, or proposed to be commenced or purchased after the date of approval, may be approved.
For the purpose of the bill, the capital cost means the cost of erecting the accommodation, and includes the cost of the land on which it is erected together with the cost of necessary fixtures. Where an existing property is purchased, it means the cost of purchasing the property and making any necessary alterations or additions and installing necessary fixtures to make the property suitable for the accommodation of disabled persons. As the approved accommodation must bc vested in some legal person or body able to own property, the act provides for payment to be made only to a corporation or trustees in whom the approved accommodation is or is to be vested.
Since public moneys are involved, the Commonwealth should have some legislative authority to ensure that the purpose of the grant is fulfilled. The bill therefore provides that, in making a grant, the DirectorGeneral may impose terms and conditions; he may require an organization to enter into an agreement regarding them. Such agreement could require an eligible organization, to repay the grant if the accommodation ceased to be used to accommodate disabled persons engaged, or likely to be engaged, in paid employment in a sheltered workshop.
– Does it provide for the workshop building, also?
– It provides foi accommodation exclusively. The DirectorGeneral may, in addition, require the organization to give security to carry out such an undertaking.
It remains only to explain the provisions of the bill relating to the amount that may be granted. The aim of the bill is to encourage philanthropic endeavour by providing Government assistance to voluntary effort and for the subsidizing of funds actually raised by an eligible organization and used for the provision of approved accommodation. A grant may not exceed twothirds of the capital cost of the approved accommodation. In addition to this, the grant may not exceed twice the moneys actually raised by an eligible organization from donations, appeals, public subscriptions or its own resources. In the bill this intention is expressed negatively, and the amount of the grant is limited to twice the moneys expended or available for expenditure which did not become available as the result of borrowing of these moneys or of the borrowing of other moneys; or moneys which were received from a Government source or a Government authority.
The Commonwealth’s intention to encourage the provision of accommodation for the disabled could be defeated and there could be a considerable waste of public moneys if, after projects were commenced, organizations found they were unable to raise the necessary funds for their completion. Before making a grant, therefore, the Director-General must be satisfied that the moneys expended and those presently available will be sufficient, when added to the grant, to meet the capital cost.
It is emphasized that there is no restriction in the source of the moneys available for expenditure by an eligible organization. For example, an organization might raise £1 5,000 from donations or public appeals, receive £5,000 from a State government and raise £5,000 from borrowing. The £.15,000 raised by donations or public appeals would be the sum which could be subsidized. The amount available, however, to meet the capital costs of the accommodation would be £55,000, of which £30,000 would be represented by the Commonwealth grant.
The bill provides that grants shall be payable out of moneys appropriated by Parliament. It is not known at this stage what amount will be sought by way of subsidies in 1963-64, but grants will be made to all organizations that satisfy the requirements. A sum of £150,000 will be allocated for the purpose and this will, of course, be augmented if required. The usual provision giving power to make regulations is included in the act. This is a general outline of the bill before the House.
I am sure that honorable members will agree that, in introducing this legislation, the Government has made a sincere and practical attempt to join with the voluntary organizations concerned in giving further assistance to many less fortunate people in the community. Since the original announcement of the Government’s intention on 13th August last, there have been many expressions of appreciation from both individuals and organizations concerned with the care and welfare of disabled people. I am confident that honorable members, too, will approve the Government’s action and give their full support to this legislation. I am equally confident that it will provide for the churches and charitable organizations a measure of practical assistance that is urgently needed and richly deserved. I commend the bill to the House.
Debate (on motion by Mr. Daly) adjourned.
Debate resumed from 10th September (vide page 747), on motion by Mr. Harold Holt-
That the bill be now read a second time.
– Mr. Speaker, this is a simple enough measure. It provides that a further sum of £5,000,000 shall be set aside to increase the capital of the Commonwealth Development Bank, which is one part of the family of banks which is now encompassed in the general structure of the Commonwealth Banking Corporation. The Development Bank is a new adjunct. It came into existence under the banking legislation of 1959. It commenced operations in January, 1960. The chairman of the Commonwealth Banking Corporation Board stated, at page 5 of the annual report for 1962-63 -
Since it began in January, 1960, the Development Bank has approved financial assistance of £89.6 million.
In terms of total banking activity in Australia, the Development Bank is not a particularly significant organization. The total of banking loans in Australia is in the vicinity of £1,300,000,000. The balance sheet of the Development Bank as at 30th June, 1963, shows its total loans at £53,500,000. So the bank is not very significant in terms of total banking activity in Australia.
The Development Bank is different from most other banks in Australia in that it cannot receive deposits. As everybody knows, it is the receipt of deposits rather than the actual capitalization which is the significant point in modern banking. So capital is more significant for the Development Bank than for any other bank. The capital of most banks after they have been established is comparatively insignificant in relation to their total activity. They depend upon the fact that people deposit money with them and on that basis great expansion can be undertaken. That is not so in the case of the Development Bank. In fact, the balance sheet at page 28 of the annual report for 1962-63 shows that the present capital of the Development Bank is £25,857,000. We are now increasing that amount by £5,000,000. There is nearly £7,500,000 in the Commonwealth Development Bank Reserve Fund. That fund represents reserves that have been built up since the bank commenced. There arc balances due to other- banks, totalling £14,000,000. That figure, I understand, represents amounts that have been deposited with the Development Bank, primarily by the Commonwealth Savings Bank. In addition, there are some other deposits totalling £10,000,000.
The Development Bank’s difficulty is that if it is to increase its activity it must get additional capital by way of appropriation by the Government, as is being done under this bill; it could be given the capacity to receive deposits of its own, and so far that has not been done; or it must borrow money from other banks. Of course, the terms on which it borrows set the terms on which it is able to lend subsequently.
It might be said that the bank, in the three years or so that it has been in action, has done a great deal. I would not want to deny such a claim at all. But it is doubtful whether the bank is really performing the functions that the people who blessed its establishment hoped it would perform. We have to bear in mind that we are dealing with a bank that has comparatively few clients. Whereas most banks like to brag about having hundreds of thousands and even millions of customers, this bank numbers its clients in a few thousand. But at least it is able to deal fairly intimately with the circumstances of those who subsequently do become its clients. It is interesting to note that of the total amount of loans - £53,500,000- outstanding at 30th June last, - £22,500,000 was in what are called rural loans, almost £10,500,000 in what are called industrial loans and £20,500,000 in loans for the financing of equipment by undertakings, either rural or industrial in their nature. But those loans were spread over very few customers. In fact, during the year the number of new industrial loans totalled only 1,700. Of course, for some three years the bank had been making loans and the total amount outstanding as industrial loans was about £10,000,000. It is obvious that the bank does not have many customers.
It is difficult to obtain information concerning the bank’s methods of operation. You can go to the annual report or you may talk to officers of the bank. 1 have not had a great deal of opportunity to discuss matters with the bank’s officers but I would like to direct the attention of the House to one or two matters that are referred to in the report for the year ended 30lh June, 1963, because the bill now before us gives us an opportunity to examine the report and perhaps to reflect on one or two of the matters dealt with in it. The report states -
In general, however, while a significant amount of finance, both by way of loan and by way of equipment finance, has been provided for secondary industry, it would seem nevertheless that small industrialists are not generally aware of the extent to which the facilities of the Development Bank are available to them.
That is a statement worthy of consideration. Here you have an institution designed to serve a particular purpose. According to the bank’s own report there are in the community small industrialists who could be helped by the bank but who are not making their way to the doors of the bank. After all, those who claim that they want to do something to restrict the activity of our over-large economic giants may feel that they can to some extent achieve their purpose by encouraging small undertakings in the community. Why is it that these small concerns are not seeking more assistance from the bank? Is the system whereby other banks act as agents for the Development Bank a retarding factor? I think one may draw from the annual report the inference that the banks which are supposed to be the agents for the Development Bank send to the Development Bank only those clients which it suits them to send. The Government should do something to encourage the small industrialists to seek assistance from the bank. Are the small undertakings not approaching the bank because the private trading banks, the government savings banks and other organizations
The number of requests for loan finance from the Bank during 1962/63 eased …
Surely nobody will seriously claim that in 1962-63 there was less need for development than formerly! Nevertheless, demand for the services of the bank eased.
– That reflects the release of bank credit.
– That is only part of the story. The report reads -
The number of requests for loan finance from the Bank during 1962/63 eased from the level of the previous year, due primarily to increased lending by trading banks and their entry into the term lending field.
In other words, the private banks were now prepared to take risks which formerly they would not take and as a consequence the Development Bank has become a Cinderella among the banks. It gets customers only after the other banks have carefully vetted them and decided whether it is prudent “to take them as customers. This is not the purpose of the Development Bank.- The Development Bank meets a very real need in the Australian community which is not being met by the other banks. In’ my opinion the Development Bank is hampered by having to work through the machinery of the other part of the banking system.
I commend to the House something that was done recently in Canada. In Canada there is an organization known as the Industrial Development Bank, which is somewhat similar, I take it, to our Commonwealth Development Bank. In Canada the emphasis is on small industry rather than rural activity, although the activities of the Industrial Development Bank are not confined to small industry. The report of the Canadian Industrial Development Bank for the fiscal year 1962 states -
Towards the end of fiscal 1961 the Industrial Development Bank Act was amended by Parliament and’ the Bank’s field of lending was further enlarged to the point where almost all types of businesses became eligible including retail and wholesale trade, hotels, motels and the provision of recreational facilities and professional services.
As a result of that amendment the activities of the bank have increased enormously. I
A further reference to this aspect is made on page 27 of the report in this way -
The number of applications submitted by these banks-
That is, private trading banks - for their customers was less than in the preceding year, due, in part no doubt, to the banks themselves providing the finance.
So much for that aspect of the undertaking. Because of the entanglement with the other banking system the charter under which the Development Bank operates is acting to the detriment not only of the bank but also of the clients whom the bank should be able to serve.
There are one or two statements in the bank’s report that I for one found rather confusing. I hope that the Minister for Supply (Mr. Fairhall), who is acting for the Treasurer (Mr. Harold Holt), will take note of this and bring it to the notice of the management of the bank. I do not know precisely what is meant by the following statement on page 26 of the report: -
The experience of the Development Bank, especially during the past twelve months, has confirmed that, in the rural sector, there is need for greater diversification of activity, including finance for the consolidation of properties to achieve more economic areas or efficiency of operation.
– Hear, hear!
– I should be grateful if the honorable member or one of his colleagues would explain what is meant by the words “ consolidation of properties “.
– It is obvious - making them into economic units.
– Does that mean putting two farms togethei to make only one? Does it mean reducing the number of rural holdings? Does it mean adding more acres to acres, or does it simply mean running a particular farm in a more integrated fashion? As I read the statement, I took the view that it meant closing down some small farms and allowing someone bigger to buy them. Apparently the honorable member for Moore (Mr. Leslie) and I can read different meanings into the words. When annual reports are ambiguous, I suggest that they lose quite a degree of their value, to say the least. I for one want a little clarification of the words “ including finance for the consolidation of properties to achieve more economic areas or efficiency of operation “. The report goes on further to state -
Indeed, the Bank’s experience suggests that there is scope for desirable expansion of its activities through the provision not only for this-
I do not quite know what is meant by “ this “- but also for other similar purposes.
The bank should have given a full explanation of “ other similar purposes “. I find it rather difficult to interpret the first statement, let alone the reference to “ provision not only for this but also for other similar purposes”. The report goes on -
As noted earlier, there also appears to be scope for expansion of activity in the financing of secondary industry, particularly smaller industries with prospects of growth.
That is a little easier to understand. I for one applaud the sentiment that some encouragement should be given to the growth of smaller businesses in the industrial sphere. I realize the difficulties that face an economy such as ours in having perhaps too much small industry but sometimes you can have too much big industry. You have difficulty in controlling it and you are faced with all sorts of social problems in regulating the size of businesses. I have always believed that one way to counter big business is to encourage more small businesses. That is one of the purposes which the Development Bank was designed to achieve, but, as the bank’s report states, many of the clients who should be availing themselves of its services are not finding their way to its doors.
Quite a number of my colleagues and honorable members on the Government side have views to express upon this measure so I shall not say any more about it except to recapitulate briefly. We do not oppose the increase in this organization’s funds, but reading between the lines of the annual report it would seem that not only is there the problem of a shortage of funds but also in many ways there is the problem of the activities of this desirable institution being hamstrung by the terms of the original act. I call in evidence the fact that in Canada a similar bank saw fit to amend its charter, as well as its financial provision, to enable it to enter different fields. I suggest that could be done with the Development Bank. I think also that the time has come when customers should approach the Development Bank other than via other institutions. That practice is a restrictive shackle on the operations of this institution.
I commend the measure, such as it is, in the hope that in a few months we will be considering some alterations of the bank’s structure.
– The honorable member for Melbourne Ports (Mr. Crean) in the course of a thoughtful reply to the second-reading speech on this bill said that he thought the Commonwealth Development Bank, in terms of its assets and advances, was not a particularly significant organization when compared with the aggregate of the various banking resources in this country. This criticism, if it was intended as a criticism, and this belittling of the Development Bank, as I believe it was-
– I was not trying to belittle the bank. I made the reservation in my remarks that I was not in any way belittling the activity of the bank, but I said that in total it is not as great as it should be.
– To some extent, I think the honorable member’s remarks belittled the bank. He confuses the purposes for which the bank was established. It is not meant to compete with the private trading banks or with the Commonwealth Trading Bank. It is meant to fill a gap in both the agricultural, and industrial spheres by providing finance which the normal trading banks are not prepared to find because they believe the security available is not sufficiently great.
– They only want the cream.
– In other words, you believe in socialism.
– If honorable members opposite had their way they would probably destroy the whole banking framework as it has been established by this Government, and which is serving our country particularly well. In so doing they would almost certainly destroy the Commonwealth Development Bank.
It is significant that when making loans the Development Bank is meant to have regard primarily to the prospects of the operations of the person, industry or business becoming or continuing to be successful. The bank shall not necessarily have regard to the value of the security that is available for the loan. This provision immediately sets the Development Bank apart from the trading banks, whether they be private or Commonwealth, because they must look to the security available in the interests of their shareholders and of their customers. Plainly it is up to a government organization to provide finance where the degree of risk is greater. Clearly the scope of operations of a bank of this kind will be much smaller in the aggregate than that of normal trading banks. Therefore, to say that the ground covered by the Development Bank is relatively narrow is, in my view, not a just criticism.
The only other point made by the honorable member for Melbourne Ports with which I should like to deal directly is his statement that the operations of the Development Bank are crippled because of the section of the act which requires it to work through other parts of the banking system. I think it is about four years since the measure under which the Commonwealth Development Bank of Australia is constituted was passed by this House. If the honorable member looks, not at the functions, but at the powers of the bank, he will find that they are precisely the same as the powers of the Commonwealth Trading Bank of Australia. The Development Bank has power to establish its own branches if it wishes. There is no mandatory obligation on it to use the branches of the Commonwealth Trading Bank as agencies. The decision rests in the hands of the Development Bank, and if it so wishes it can establish its own independent branches. The principal act certainly does not cripple the activities of this bank in any way, because the bank’s powers are precisely the same as those of the Commonwealth Trading Bank. Admittedly, the functions of the Development Bank, as spelt out in the act, are narrower than those of the Trading Bank, and for specific reasons they are designed to be narrower.
We should not forget, Mr. Deputy Speaker, that the Government, on its own initiative, established the Commmonwealth Development Bank in 1959. The latest annual report of the Commonwealth Banking Corporation, which has been discussed by the honorable member for Melbourne Ports, is the third annual report that has covered a full year’s trading by the Development Bank. The bank has operated for three full years, and in that time we have seen its capital increase from £15,000,000 to £31,000,000. That is assuming the passage of this bill, which I take as a foregone conclusion. We have seen the total of loans by the bank rise to the level of £90,000,000. Of this, £40,000,000 represents loans to the rural sector of the community or to secondary industries of one kind or another, and £33,000,000 worth of these loans is outstanding at the present time. The bank has made £50,000,000 worth of loans for various hire-purchase activities to finance the purchase of equipment of one kind or another for both sectors of industry. At present, £20,000,000 of these loans is outstanding. Finally, the Development Bank has dealt with more than 7,000 customers, and has dealt with them successfully.
The last annual report of the Commonwealth Banking Corporation makes it clear that to some degree in the rural field the activity of the Commonwealth Development Hank has been reduced, because the number of new loans has not been as great as in the two previous years. The reason for this reduction is not that the bank has imposed stricter terms and not that it has been, in any sense short of funds. The reason for the reduction in the number of loans is that fewer customers have been going to the bank with propositions that the bank has felt able to accept. Indeed, in total, fewer people have applied to the bank for funds in the last year than in the previous two years. I think that it is in one sense natural that, in the first year or two of the existence of a banking institution of this kind which makes a new facility available, there is to some extent a rush of applicants to get loans from the bank to fill the needs that the bank is designed to satisfy, and that, to some extent, there is a tapering off subsequently in the number of people applying for loans.
However, there clearly have been other reasons for the reduction in loans - reasons that were mentioned by the honorable member for Melbourne Ports. I think that one of the main reasons is perhaps the fact that the trading banks, including the Commonwealth Trading Bank, are now giving longer terms on loans than they have given for several years. This long-term business of the trading banks, as such, began in April, 1962. So only in the last year have we seen its impact on the business of the Commonwealth Development Bank. Term loans made by the trading banks, including the Commonwealth Trading Bank, have now reached the total of well over £50,000,000. At the end of June, 1963, the total of the term loans outstanding was very nearly £27,000,000, of which the rural or agricultural share was about £11,000,000. So we see, again, that this lending is a particularly useful addition to the banking structure of the community.
The honorable member for Melbourne Ports was right when he said that, because the trading banks are now entering the term-lending field, some projects that might have been passed on by them to the Development Bank are now being accepted by them. The Commonwealth Trading
Bank would be included in this term-lending activity. I do not see anything objectionable in this situation. If the privateenterprise trading banks and the Commonwealth Trading Bank can now accept responsibilities that were discharged direct by the Development Bank in its first year or two, this, I believe, is a good thing. It will release additional resources of the Development Bank so that at some stage it may be able to undertake slightly more risky business than it has entered into up to the present time. I hope that as the bank gains experience it will accept a greater degree of risk than it has accepted up to the present. However, I agree that, in its initial stages, its managers in the various States inevitably should be to some degree cautious.
The honorable member for Melbourne Ports was not correct in his assessment of the availability of funds to the Commonwealth Development Bank, Mr. Deputy Speaker. In the first instance, he implied that the bank was restricted by its charter. He implied that the charter prevented it from receiving money on deposit. This is not so. The first power of the Development Bank laid down in the act is the power to receive money on deposit. So the bank has this power. The bank, it is true, has not actively gone out to win deposits. If it did, it would probably receive deposits that would otherwise have gone to the Commonwealth Trading Bank. The Development Bank’s main function is to act, not as a normal deposit bank but as a development bank. However, to say that it has no power to receive deposits is to make an incorrect statement.
The main source* of the Development Bank’s funds has been the Commonwealth Government, which from time to time has made funds available. There is no cause for criticism, of this Government or for accusations of lack of foresight on the part of this Government in the fact that we are now making available to the bank a further £5,000,000. Twice before since the establishment of the bank the Government has done precisely the same thing. There would have been no purpose and no point in making available to the bank in its initial stages very large sums that would have been lying idle in the intervening period. When the bank was originally established, the Government said quite plainly that, from time to time, as circumstances demonstrated the need, the Commonwealth would make additional sums available to the bank. As I have said, the Government has made additional funds available from time to time. I know for a fact that the bank, under the terms of its charter as it sees them, has never in any State refused a loan on the ground that it has been short of funds. Loans have been refused only because the prospects for the success of the enterprises concerned were not good enough. The Commonwealth has always anticipated the bank’s need for funds and has provided them before the bank has run short or has been in any danger of having to restrict its lending activities. The other quite substantial source of funds has been the Commonwealth Savings Bank, and it is interesting to note that the funds borrowed from the Savings Bank by the Development Bank have been decreasing slightly in each year. I understand that in broad terms it is the wish of the Savings Bank to retain most of its funds for its own particular purposes and that it does not necessarily look upon the Development Bank as a long-term borrower from it. If this is correct, then clearly it will mean that the moneys made available up to the present time by the Savings Bank will have to be replaced, probably by the Commonwealth itself. In addition, I believe that, having in mind the very nature of the Development Bank and the fact that many pf its loans are made for periods of ten years, there will be further continuous applications to this Government for funds in the years to come. I think that this will continue to be the position until there has been established a very large revolving fund which can be used continuously for the Development Bank’s purposes.
In its annual report, the Development Bank refers to the cost-price squeeze which it claims limited its activities. To put the matter in its proper perspective, I point out that the surveys of the wool industry over the whole of Australia made by the Bureau of Agricultural Economics have disclosed that the general profitability of the wool industry fell from 9.7 per cent, for the period 1952-1957 to 3.6 per cent. for the period 1957-1960. One of the reasons given for this is that costs were rising to some extent in Australia while the price of wool was falling. It is clear that under those circumstances there would bc some projects which, in more profitable limes, the Development Bank would have been able to accept but in times of reduced profitability, it would have to reject because their prospects of profitability would be greatly reduced and perhaps destroyed. At the present time we are going through a period of better prices and other assistance has also been made available to rural industries. For instance, wc have the superphosphate bounty which will be the subject of legislation in the not too distant future. Again, there is the very real possibility of Government assistance for wool promotion as the result of a request thai has been made to the Government. All these things will help to increase the profitability of a large section of the rural community. If they are introduced, the scope for the activities of the Development Bank will be improved, but the bank itself says that more attention should be paid to rural productivity. In plain terms, this means that there should be more research, better research, or the greater application of the results already obtained from research. I believe that the bank was correct in saying that more attention needs to be devoted to research and to the extension of research, but one of the difficulties in this particular field is that we have divided responsibilities in that the Commonwealth is largely responsible for research and the States are largely responsible for its extension. Being in the strategic position of being able to survey needs, the Development Bank is quite right in pointing out that more needs lo bc done in these fields.
I should like to comment for a moment on the passages read out by the honorable member for Melbourne Ports (Mr. Crean) because I feel that the real meaning and intention of what may be claimed to bc two ambiguous paragraphs can be made clear by the officers of the bank. They read -
The experience of the Development Bank, especially during the past 12 months has confirmed that, in the rural sector, there is need for greater diversification of activity, including finance for the consolidation of properties to achieve more economic areas or efficiency of operation
Indeed, the Bank’s experience suggests that there is scope for desirable expansion of its activities through the provision of finance not only for this but also for other similar purposes.
I have already said that the bank has never refused a loan because it has been short of funds. Therefore, it cannot be said that the meaning which the Development Bank intends to convey in those two paragraphs is that it needs more money so that it may accept more business. As that is not the intention, it is plain that something else is meant, and it is not difficult to examine what it is. First, there is the question of the amalgamation of properties which are now uneconomic because they are too small. This is a field in which the bank has already been active. It has already granted loans to farmers who have wanted to purchase additional land for the purpose of making their enterprises more profitable. Although this has been done in some cases, I think that the bank had something wider in mind when inserting those two paragraphs, and again it involves the relationship’ between the Commonwealth and the States. I think that some people in both the Commonwealth and State spheres have been inclined to bury their heads in the sand in the past.
In the middle 1950’s, especially in New South Wales, and to some, extent in Vic:toria, the land settlement authorities adopted the policy of putting settlers on farms or blocks that were too small for the economic conditions which .became prevalent in the later 1950’s and which are still prevalent to a large extent. The settlers concerned are people who have been assisted actively by State organizations of one kind or another, and there are some to-day who argue that the Development Bank should assist in getting these unfortunate Statesponsored settlers out of the difficulties in which they now find themselves. I think it would be very difficult indeed to do anything about what has happened in the past because the States themselves must be responsible for their own mistakes and should therefore bear the cost of rectifying those mistakes. The difficult position that exists now is the result of the action taken by the State authorities in putting people on farms that were too small. The State of New South Wales should do something to improve the position itself. I am referring now to- those cases, in which the State authorities decided what, size the properties should be and what their cost should be. In many cases, the State authorities decided the number and kind of stock each settler should run on his property. It is certainly a very large problem and one that should be tackled but I do not believe that it is necessarily a problem, that should be tackled by the Development Bank because it would then be entering into a much wider field than that in which it is operating now and because responsibilities much wider than pure banking responsibilities would be involved. But when we look at what might happen in the future and at what is certainly continuing to happen in certain States now, it is possible that there is room for greater liaison between the States and the Development Bank because it is not unusual for people who. have been placed on farms by a State authority to apply to the Development - Bank- for loans only to be told by the Development Bank that it cannot make the loan because there are no prospects of the enterprise being successful.
I do not say that this is the position in the majority of cases, but it does apply in some instances, which indicates quite clearly that there is a difference between the judgment of the State authority and the judgment of the Development Bank. I do not believe that any State authority would place a person on a farm if it felt that the project had no prospects of being successful. Therefore, there is a difference in judgment between the two authorities.
– That would be something new.
– Perhaps I am attributing to some State authorities a sense of responsibility which other honorable members do not believe that they have. In any case, the question of judgment is involved in this particular matter and it is not good for those people who have been placed on properties by a State authority to be told by the Development Bank that it cannot advance money because a property is not big enough or because the farmer’s resources are not adequate. I believe that it is essential that in each State where circumstances such as these exist some kind of permanent committee or standing committee comprised of” officers of the “State departments concerned, the Development Bank and perhaps the Department of Primary Industry should be set up to try to rectify the position and to guard against similar happenings in the future. It would be, I think, foolish for the Development Bank to tackle these problems by itself and to attempt to solve them without reference to the States. Clearly some States would say: “We can put people on the land. It does not matter if the blocks are too small or are not well enough developed, because the Development Bank will come along and provide finance to put things right.” -This would not be good enough. Co-operation should be established before people are put on farms. I believe that this matter should be treated as one of some urgency.
To recapitulate briefly, I think that what has happened to people who were put on farms in 1953, 1954 and 1955 - particularly in New South Wales - shows that the farms were much too small. They did not provide, under present economic conditions, areas adequate to make a living. This presents a problem which is very difficult of solution and I do not think it is one within the capacity of the Development Bank to tackle, lt is primarily the concern of the States which put people on these particular farms, but it is nevertheless one in which there may be room for some sort of Commonwealth and State co-operation.
I have one other comment to make, and it is offered only because there may be some confusion about the table on page 27 of the annual report. The bank’s report shows that greater preference is given to small loans, under £25,000.. The great majority of the loans are much smaller than that, but there is one loan of £94,000 recorded in the rural sphere.
– But that is to twenty people.
– That is the point I was about to make. .There are twenty people involved in the loan. I was concerned lest any honorable” member should think that the Development Bank was lending £94,000 to one farmer or grazier. That would be a wrong impression. Twenty people have banded together and will operate together. I understand that they own twenty farms, but because they co-operate in various fields in the development of their properties, it was recorded in these statistics as one loan.
– Where are the properties?
– I understand that they are in Western Australia, but I am not sure about that. There are fifteen loans in the category from £20,000 to £50,000. I understand that mostly they are loans for the Northern Territory or for the Territory of New Guinea where much greater reserves are needed than in the more settled areas of Australia.
This additional £5,000,000 of capital for the Commonwealth Development Bank is very welcome. It is provided at a time when the bank has still sufficient funds to meet the volume of new business that is coming forward to it. I repeat that there has never been at any time any refusal of a loan in any State because of a shortage of funds held by the Commonwealth Development Bank. The number of loans it has made and the amount of funds made available have been limited by the number of acceptable applications that have come to it. The Commonwealth has anticipated on every occasion the need of greater funds for the bank. 1 am quite certain that (he Commonwealth will anticipate the future needs of the bank in the same manner.
.- “ The ultimate test of economic policies is whether they lead to increases in production.” That is a very sage remark. It is not mine. It is the introductory sentence to a leading article in the “ Australian Financial Review” of 8th October. The test of the success of the Commonwealth Development Bank is the contribution it has made towards an increase in Australian production. The Treasurer (Mr. Harold Holt), in his second-reading speech on the bill, which provides for an increase of £5,000,000 in the capital of this so-called bank, points out that the principal function of the bank is to provide finance to assist primary production or develop industrial undertakings, in cases where in its opinion finance is desirable but will not otherwise be available on reasonable and suitable terms and conditions. I will come back to that expression, “ in cases where in its opinion finance is desirable but would not otherwise be available on reasonable and suitable terms and conditions “.
I want now to deal with the increase in productivity. 1 have no doubt that the loans made by the Commonwealth Development Bank have contributed to increased productivity, but I feel that productivity has not increased to the extent that is desirable in either the primary or the secondary sections of our community. This is amply evident from the statistics that are available. For example, in 1957, the value of primary production per head of population was approximately £40. Last year it was about £35.
– What about the volume of production?
– It is not a question of the volume; it is a question of the value of the production. The value of the production diminished by about 12 per cent, in only a few years. Some might say: “What about secondary production? Has not that improved immensely during the period? “ I have before me a copy of the “ Australian Financial Review “ of 8th October, the latest edition available. In it is an article headed, “No Growth in Factory Output”. The article states -
Industrial production in Australia showed no growth between March and July, according to the A.N.Z. Bank’s seasonally adjusted index of Australian factory production. The total of all groups (including power) showed an index figure, after seasonal adjustment, of 168 in July against 168 in March and 162 in December last year. Considerable weakness has been evident this year in the production of durable goods, as shown in the A.N.Z. Bank index. The seasonally adjusted durable goods index (1933-54 equals 100) stood at 171 in December last year and at 171 in July. Within the durable goods index the seasonally adjusted value of the index for furniture and household goods, which includes household appliances, actually fell from the December 1962 figure of 184 to 176 in July, pointing to the wellknown weakness of the household appliances trades at this time. . . . The index of “Building and Construction materials “ rose only fractionally from 121 to 122.
Then there is this comment -
This record of industrial production in the four months to July this year must therefore be counted singularly disappointing.
That, of course, is the weakness that the Development Bank should be out to remedy. It should be seeking to provide for the small secondary and primary industries the finance that is necessary to enable them to increase their production. lt is Australia’s production that ultimately determines our standard of living, the level of our social services, education, and hospital facilities and our capacity to defend ourselves against potential aggressors. A properly functioning Commonwealth Bank could help to promote all those things within Australia. This so-called bank - it does not perform all the functions of a bank - has done something towards increasing production, although not to any great extent, because other factors have militated against increased production, with the result that the rate of increase to-day is less than it was at the time of the inception of the Development Bank.
It is within the power of the Development Bank to finance industries, either primary or secondary, where it is considered desirable to do so because they could not otherwise receive assistance on reasonable and suitable terms and conditions. As the honorable member for Wannon (Mr. Malcolm Fraser) pointed out, the private banks have all the functions of banking. They can lend money to secondary and primary industries and all sorts of other projects in the community where the risks are not great and the profits are immense. The honorable member objects to that statement. He has evidently not read this year’s financial statements of the seven private banking institutions. If he does so, he will find that their profits and their dividends payable this year exceed those of last year by over 30 per cent., or one-third. Last year, their dividends ranged from 9 per cent, to 14 per cent. An increase of 30 per cent, on that rate of dividend represents an immense profit that the private banks have reaped from the people of this country.
That profit has been obtained from private and secondary industry as well as from the ordinary householder who buys so many commodities on hire purchase. The private banks have been able to do this through their hire-purchase organizations, together with their ordinary activities, because they are the custodians of the wealth of the community. In other words, they have the cream of all our banking operations while the Development Bank, created by this Government, has the skimmed milk. The Development Bank undertakes all the risky operations and provides the money at reasonable rates of interest. The rates of interest it charges are immensely lower than those charged by the ancillary hire-purchase organizations of the private banks for the accommodation they provide, whether it be to secondary industry or primary industry.
If the Development Bank or the Commonwealth Bank itself was enabled to operate in any sphere of money-lending activity in the same manner as the private banking institutions operate vast sums would be available to it and the institution would be able to issue money at practically negligible rates of interest to promote the growth of both secondary and primary industry. The profit it made in other departments of its operations would enable it to subsidize and promote primary and secondary industry and thus immensely increase Australian production.
The honorable member for Wannon said that the Development Bank had not refused to advance money to anybody because of lack of funds, but bad done so only where the proposition submitted to it was unacceptable. Does he really believe that?
Does he believe that the Development Bank has not refused loans to people to whom it would have advanced money if unlimited funds had been available to it as profits from hire-purchase transactions? Of course he does not! He has admitted, furthermore, what the honorable member for Melbourne Ports (Mr. Crean) pointed out, namely, that the Development Bank does not go out and seek customers. In other words, it is not an aggressive instrument, seeking to utilize its resources for the development of this country. The bank does not go out into industry and into the farming areas seeking to stimulate the activity which is essential to Australia’s expansion. The bank does not go out and say to those engaged in primary industry: “According to the Minister for Trade, we are dependent upon the export of your commodities for our national survival. Take advantage of the opportunities provided by this bank so that you may export more of your products to the countries of Asia, Europe, America or elsewhere “.
Honorable members opposite say that all that the Development Bank should do is put up its sign in Collins-street and hope that customers will come to it for advice and assistance either to establish new industries to provide goods now being purchased overseas or to expand primary production to enable Australia to export more. The Development Bank expects people to come to it. The private banks and their hire-purchase organizations do not sit back and wait for customers to come to them. They go out and practically drag customers in by the scruff of the neck to partake of the benefits of the financial assistance they provide at exorbitant rates of interest. There is not the slightest doubt about that. If the vast profits made by the private banking institutions last year, coming on top of the profits that had been made in the previous year, alone were channelled into the secondary industries or the primary industries or even the mining industries of this country, they would be adequate to give those industries vast stimulation. But no, this is not done. The Commonwealth Bank, the organization of the people, takes all the risks. It shoulders any losses that may be incurred in the financial transactions that it is allowed to undertake, and in making its loans to the people of Australia.
While the Labour Party, as I have said, approves of the granting of another £5,000,000 for this bank for the purpose of assisting the industries of Australia to increase their productivity, it would like to see that amount multiplied by ten and the larger amount used beneficially each year for the people of this country. We say that it could be multiplied by two or three without any cost to the general community, if the national banking organization of Australia were allowed to undertake operations similar to those now being carried out by the private banking institutions. But of course this is not permitted by the members of the present Government.
– They place all sorts of limitations on the Commonwealth Bank.
– As my friend says, all sorts of limitations are placed on the Commonwealth Bank. After all, honorable members opposite are the representatives of the private banking institutions. They are the shareholders of those institutions. Their supporters are the people who tell them exactly what they should do. It was only last year that the Treasurer (Mr. Harold Holt) walked into this House and said that as the banks were making profits of only from 9 per cent., to 14 per cent., it was essential that a measure be brought down to enable them to increase their profits by another 30 per cent. He did not say it in exactly those words, but he said that they had to have freedom that they had not previously possessed. We of the Labour Party pointed out what would be the results of the granting of that freedom. We said that it would result in an increase in the profits of those banks by more than 30 per cent, in the next year, and’ we were later proven correct.
– Would you nationalize the banks?
– It is not a question of nationalizing the banks. I am in favour of the private banking institutions having a fair go with the Commonwealth Bank, but I am also in favour of the Commonwealth Bank having a fair go with the private banks. I am not in favour of the restriction of the functions of the Commonwealth Bank so that the private banking institutions may make immense profits. I am not in favour of, in effect, tying the hands of the Commonwealth Bank behind its back so that it will be ineffective in trying to compete with its seven wealthy and predatory opponents, the private banking institutions.
These are the things for which I do not stand. They are the things for which the Labour Party does not stand. We realize to-day nore than ever that this country faces very grave difficulties. Those difficulties spring from the fact that production per head of population has been diminishing considerably, and that exports per head of population have also been diminishing considerably, over the last few years. This diminution of our production and of our exports has meant that our debts to other countries have become immense.
– I think you will be proved wrong on the current year’s figures, all the same.
– I can give the honorable gentleman figures from 1950. In 1950 exports from this country per head of population amounted to £45. To-day they are about £35 per head. This represents a reduction to the extent of more than 20 per cent, in the value of our exports per head of population since this Government came into power. I can also tell the honorable gentleman that the value of primary production per head of population has declined by more than £50 per head since this
Government came to power. Yet the honorable member says, “You will be proven wrong, I think, this year “. In reality this year will be but a repetition of the years that have gone before.
A vast reversal of the policies of the Government must take place if Australia is to grapple successfully with the problems that face it. One of the changes that must bc made is an alteration in policy relating to banking. We must say to the Commonwealth Bank: “ We are not going to restrict in any way your opportunity to assist the development of this country and to promote the welfare of ils people. We are going to see that you will have opportunities equal to those available to the private banking institutions and the money lending institutions of this country, so that you may operate in the best interests of the people.”
The private banking institutions have but one objective - profit. The bigger the profit the better the year It is only natural that the dividend holders in the private banks should say: “The dividend rate this year is 20 per cent., while last year it was only 16 per cent. What progress has been made! “ From their point of view it is correct that progress of a kind has been made, but that extra 4 per cent, is taken from the industries of this country. Somebody has to pay it. The workers of the community are paying it, the farmers are paying it, certain struggling industries are paying it. Because of this, we of the Labour Party say that we do not stand for the kind of free enterprise in which organizations that profess to believe in free enterprise join together and do their advertising in the newspapers and by medium of television in concert, calling themselves “ Your seven free-enterprise banks “. They are not competing one with the other. The Australia and New Zealand Bank Limited is not endeavouring to lower its interest rate beneath that charged by the Commercial Banking Company of Sydney Limited.
These institutions stand as a solid phalanx. They are joined together by the common interest of exploiting the masses of the people and, at the same time, gaining unfair advantages over the Commonwealth Bank. The Labour Party stands for the freedom of the Commonwealth Bank. What do the advocates of free enterprise stand for? They stand for free enterprise as it affects the exploiter, but they stand for restricted and manacled enterprise as it affects the interests of the people of this country, in the running of a Commonwealth Bank or a national coastal shipping line or any other organization of that description.
Mr. Deputy Speaker, I have said enough to make it very clear that I am in favour of this bill to increase by £5,000,000 the amount available to the Commonwealth Development Bank, but I regret that the £5,000,000 is not £100,000,000.
.- The honorable member for Scullin (Mr. Peters), towards the end of his stirring speech, said that it was the fault of the Government that the rural returns per head had decreased quite seriously over the past ten years. Of course, we all know that this is not so. The prices for rural products in Australia are governed by the prices of the commodities on the world markets, and the Government, at least at present, has no control over these prices. I remind the honorable member for Scullin that negotiations are proceeding at present to conclude commodity agreements that will ensure a fair price for the primary products of our farmers. Those who care to consider the position know that the wonderful efforts of the Minister for Trade (Mr. McEwen), who is the leader of the Australian Country Party, have resulted in other great agricultural countries considering these commodity agreements quite seriously. The honorable member did not pay tribute to the achievements of our primary producers over the past twenty years. They have doubled production without the addition of one person to the labour force.
I, like other members, am extremely pleased to support this measure which increases the capital of the Commonwealth Development Bank of Australia by £5,000,000. The capital of the bank will now be about £31,000,000. No doubt, since its inception in 1959, the bank has been of great value to Australia in both the rural and secondary sectors. The establishment of such a bank is a fundamental plank in the platform of the Australian Country Party. It has been extremely valuable, though its activities have been limited by the capital at its disposal. I am certain that, with bold and intelligent support from the Commonwealth Government, the bank can be a much greater national asset than it is already. Resourceful planning by banking and Treasury officials will lead to the bank achieving an even more important place in Australia’s development.
I would like to deal with some of the potentialities of the bank as I see them. However, I would like first to take the name “ Commonwealth Development Bank “. Up to the present, we have all thought of the bank as being purely a lender to primary and secondary industries when the trading banks are not interested in a proposition. It could be called the bank supplying the greater risk capital, with the development of primary and secondary industries as its main function. This factor in itself has resulted in the private trading banks liberalizing their lending policies. In fact, this is given as the reason for the decline of the number of applications for loans to the Commonwealth Development Bank. I think the ban could help to achieve a dramatic increase in two vital spheres in the Australian economy - first, in the productivity of our rural industries, and, secondly, in the economic development and population growth of our country areas. I think the scope of the bank could be so widened as to lift it to a position where it would become a developer of the Australian continent, particularly of the rural areas. This could not be achieved in a few years, but it could be done eventually.
Our rural industries need loans over a longer term with lower interest rates. The Commonwealth Development Bank should be authorized to provide such loans. Longterm loans are readily available in the United States of America, United Kingdom, Canada and even in Latin America. Several important government or government-sponsored institutions in the United States furnish credit or other banking services to agriculture alone. The first such institution is the Farm Credit Administration, which was specially established to make long-term farm mortgage loans. Then there is the Commodity Credit Corporation, the capital of which is 6,750,000,000 dollars. Other institutions are the Rural Electrification Administration and the Farmers Home Administration. Great Britain has the government-sponsored Agricultural Credit Corporation which is authorized to lend for periods up to 60 years.
Nothing approaching this term is available in Australia. Canada has the Canadian Farm Loan Board, which is authorized to lend for periods up to 25 years. Again, this term is not available in Australia. The existence of these institutions shows the need for special agencies to cope with the problems of farmers and the need for long-term finance to primary producers.
I support my contention by reading from the 1961 report of the Rural Reconstruction Board of New South Wales. The board said -
Meantime, however, primary producers’ inability to compete for moderate term finance (since long term finance is no longer obtainable) at reasonable rates is forcing resort to the easily obtained but expensive and even shorter termed accommodation, the cost of which is completely eliminating profit margins in an increasing number of cases and steadily contributing to the accumulation of properties which cannot be operated by their present owners effectively, efficiently or economically; nor can they bc sold.
The board also said -
Until such measures as. are necessary are taken by I lie responsible authorities to ensure satisfaction of reasonable financial requirements of the rural community on reasonable terms, little benefit can be expected to accrue tq either the nation or primary producers, individually or collectively, from supplementary schemes or authorities (such as the Development Bank) no matter how genuine or generous their intent.
In its report for 1 962, the board said -
Whilst financial institutions have continued to extend the more sympathetic consideration noted in our last Report to farmers’ applications for seasonal expenses and, by arrangement concluded during the year between the Reserve Bank and the Trading Banks, additional provision was made for short to medium term loans in a field which, so far as rural industries are concerned, was already substantially catered for, wc regret that no attempt has been made to remedy the grave deficiency, commented upon at some length in our last and earlier Reports, in the long term finance available for any private enterprise with the possible exception of housing.
The so-called fringe institutions recognise the need and are prepared to cater for it on terms which, though more favourable than those applicable to the more rapidly depreciating assets commonly acquired on hire purchase, are still too onerous to be capable of satisfaction out of the reduced working profit margins available from present-day farming.
In the light of the foregoing facts, I consider that we in Australia have not scratched the surface in making differing and more generous forms of credit available to primary producers. A more up-to-date and progressive outlook is required by all connected with our primary industries.
I turn now to the subject of industrial development of country areas. As I have said in other speeches that I have made in this House, the Commonwealth Government must take a more active interest in this matter. Certainly, the policies of the Menzies-Fadden Government and the Menzies-McEwen Government in assisting primary industries have helped to develop country towns, have been a source of great income to many country businessmen and have contributed greatly to the gradually increasing population of country towns. However, the population and industrial development of the vast areas outside the great metropolitan cities of Melbourne, Sydney, Brisbane, Adelaide and Perth cannot be achieved without the establishment of secondary industries in those areas. The Commonwealth Government rightly., states that the administration of the major cost factors, such as freights, power, hospitals and schools, is the responsibility of the State governments. The Commonwealth Government is also restricted by section 51 (ii) of the Constitution, which prevents taxation concessions being given to one State and not to the others, or to one part of a State and not to the whole State.
In view of those facts I ask: Why not consider the use of the Commonwealth Government’s banking authority and powers to assist certain States or parts of States? Why not use th; Development Bank section of the Commonwealth Banking Corporation to make social long-term finance at low interest rates available to secondary industries which either are established or are willing to establish themselves outside a certain radius - say 50 miles - of our great capital cities? The capital cities are having a detrimental economic and social effect on the development of Australia as they become more and more crowded and demand more and more of the limited developmental finance that is available fron government and other sources.
In making the suggestion that the Government give the Development Bank a chance to take the lead in this rural industrial development, I point out that care would have to be taken to see that the private banks were given the same opportunities. However, I am sure that, as we have seen in other fields, they would soon follow the lead given by the Menzies-McEwen Government through the Development Bank. The bank states in its annual report for 1962-63 that there appears to be scope for expansion in the financing of both primary and secondary industries. I am sure that the Development Bank could be used for that purpose to greater advantage than it is being used at present.
– The bill before the House is designed to amend the Commonwealth Banks Act 1959-1962. In particular, it makes provision for an increase of £5,000,000 in the capital of the Commonwealth Development Bank. I have listened to speeches made on this proposal. I find in this Parliament a degree of unanimity that is altogether good; but I am quite certain that if some honorable members who have spoken and others who will speak later expressed themselves fully and told the whole story of their innermost feelings they would say that they would be quite happy if we exterminated the whole of the Commonwealth Banking Corporation lock, stock and barrel. There is no question about that. Everything that members of the present Government parties have ever done to the Commonwealth banking institutions - I say “institutions” advisedly because although it was formerly one institution there are now more than one - has been aimed at embarrassing the Commonwealth banking organization rather than extending it. It so happens that the organization has been managed so successfully that it has extended its activities and made ever-increasing profits. I am glad that honorable members are conscious of that fact and are prepared to support this proposed increase in capital. This proposal deals with assistance to basic and essential sections of the Australian community and life. The development section of the Commonwealth banking organization was established to assist primary industries and industrial undertakings, particularly in their developmental stages. To hear the speeches of some honorable gentlemen opposite, anybody would think that the Government that they support was responsible for the establishment of the development section of the organization. The plain fact of the history of the Commonwealth banking organization is that it was the creation of a
Commonwealth Labour government. Every action that could possibly be taken to destroy the organization and the government that created it was taken at the time of its creation. The section that is now called the Commonwealth Development Bank was formerly a section of the Commonwealth Bank called the Mortgage Bank Department, which was created by the Curtin Labour Government in 1941. Everybody knows that the Mortgage Bank Department had almost exactly the same functions as the present Commonwealth Development Bank. The honorable member for Moore (Mr. Leslie) is shaking his head, but I repeat that the functions of the Mortgage Bank Department were similar to those of the Commonwealth Development Bank.
– You are wrong.
– There is nothing wrong about my statement. The Mortgage Bank Department was established to give assistance particularly to the primary producers of Australia. It functioned until 1959 or 1960, when it was merged with the newly created Commonwealth Development Bank section of the Commonwealth Banking Corporation.
Despite the fact that this Government created the Commonwealth Development Bank, nobody is in doubt about the Government’s real attitude. This very simple statement appears at page 31 of the annual report of the Commonwealth Banking Corporation for 1962-63 -
Commonwealth Development Bank has branches in each capital city and applications may be directed to any branch of the Commonwealth Trading Bank or Commonwealth Savings Bank. In addition, all the major Australian Private Banks and cheque-paying State Banks are agents of the Development Bank for the receipt and transmission of loan applications.
– That shows how broadminded they are.
– Imagine the honorable member for Moore setting himself up in any line of business and then saying that he would be very pleased to act as the agent of his most active competitor! Being a keen businessman, he would snatch up all the most profitable business and recommend the transfer of the questionable and perhaps almost unprofitable business to his competitor. I have never heard of such a stupid business proposition in my life.
We are told that this bank is a developmental bank designed to lend money to people with propositions which might not be very attractive to the recognized financial institutions. There is a good deal of hocus-pocus in that statement, as I shall show. According to the annual report - the Treasurer (Mr. Harold Holt) in his secondreading speech said this, too - the Development Bank was created for that specific purpose, on a modest capital of about £25,000,000, yet last financial year it made a net profit of £890,000. So it was not taking much of a business risk. For the year ended June, 1962, it made a profit of about £600,000. Of course, it does not take too many risks, but it does provide loans at lower rates of interest and probably for longer terms than are available through some of the other lending institutions. But as long as its competitors are its agents, the most profitable business will go elsewhere than to the Development Bank.
A profit of £890,000 is a handsome profit. Within the bank clerks and other competent officers are entering figures in ledgers and keeping other records. They are not creating any wealth whatever. The people who provide the money for the bank are not creating any wealth. For this reason this kind of business should be in the hands of the people themselves, but honorable members opposite would not agree to that. The impression created by Government spokesmen and perhaps by other people that the Development Bank is some sort of benevolent institution, is false. The bank does give its customers a better deal than they could obtain elsewhere, but it should be giving an even better deal. The hire purchase lending rate on industrial farm equipment is 4i per cent. flat. That rate is lower than the rate available from any private banking institution in Australia or in any other country. That is a tribute to a government-owned institution. But despite the fact that the bank lends money at 4i per cent, flat, it is still able to make a net profit of £890,000. What profits are the other banking institutions making which are lending money at higher rates of interest? The other Commonwealth banking instrumentalities also are doing exceedingly well. We find that the Commonwealth Trading Bank made a profit of £1,064,000 and the
Commonwealth Savings Bank made a profit of £1,252,502. The Commonwealth banking institutions represent only a small segment of the Australian banking system. What a feast the others are having! One justification for the handsome profits of the Commonwealth banking institutions is that one-half of the profits goes to the reserves of the various institutions and the other half goes to the National Debt Sinking Fund. We know where the profits of the relatively few private banking institutions go. They go to people who trade in other people’s money - people who lend other people’s money. As a former colleague of mine in this Parliament once said, the private banks do not want you to get out of debt because the moment you are out of debt they are out of business. Banking is’ a game where you lend other people’s money at a profit. You do not risk your own money. Banking should be in the bands of the people of the nation and not in the hands of only a few people.
– Would you like to nationalize the banks?
– If I had my way I would nationalize them to-morrow. The Minister for the Army may think he has asked a trick question, but he should know that the Constitution prevents us from nationalizing the banks.
– Of course, you can nationalize them.
– Is the honorable member for Wentworth setting himself up as a better authority than the Privy Council? I know that the honorable member is more knowledgeable than the Privy Council. He would not have to be very knowledgeable to be in that state.
I hope that the Development Bank will continue to increase its profits because those profits go into the reserves of the bank. I hope that the bank will continue to extend its operations. I hope that it will always receive the capital necessary for its development, and that it will use that capital to advance the welfare and prosperity of our primary industries and our industrial undertakings, because any banking instrumentality owned by the people which can do that is doing something to the immense advantage of the people of this great Commonwealth of Australia.
I have heard it said that primary industry needs cheap money. There can be no doubt about that. The honorable member for Indi (Mr. Holten) stated that the Menzies-Fadden Government had conferred immense benefits on this country. In my opinion the Menzies-Fadden Government will be remembered in history, as far as financial matters are concerned, only for being responsible for an increase in our cost structure greater than occured in any other country. That increase in our cost structure forced primary producers to have recourse not only to the private banking institutions but also to the Commonwealth Bank institutions. Before very long primary producers will have to examine the extent to which the people’s own banking institution can help them due to the fact that there is no satisfactory wool marketing organization in this country. Primary producers should know that as soon as their wool goes in to be sold, many of them have to apply to their wool broker for an advance on the sale of their wool. They know that they pay a higher rate of interest on money borrowed in that way than they would pay if they were able to obtain finance on overdraft from the Commonwealth Bank or from any corporation that was able to raise money under guarantee as ari organized marketing authority through the Commonwealth Bank.
– You must have a poor lot of farmers in Victoria.
– All I can say to the member for Moore is that the wheatgrowers in Western Australia know the advantage of trading as a joint wheat marketing instrumentality because every year that instrumentality approaches the Minister for Primary Industry with a guarantee to be signed guaranteeing the Australian Wheat Board a sum of money sufficient to pay wheat-growers lis. a bushel on delivery. That avoids the necessity of the wheat-grower going to the private banking institutions or seeking, as the woolgrower is forced to do, an advance of 50 per cent., 60 per cent, of 70 per cent, at a rate of interest higher than is charged by the Australian Wheat Board for the money that is advanced under guarantee through the Commonwealth Bank. I may be digressing somewhat, Mr. Deputy Speaker, but one reason why the woolbroking organizations are so hostile to a wool marketing plan is because it would enable wool-grower3 to borrow money indirectly through their marketing authority - through the Commonwealth Bank - as wheat-growers have been doing ever since the wheat stabilization scheme was introduced by a Labour Government in 1949.
We give this bill our blessing. We hope that the Development Bank will rapidly expand. I hope that it will advertise itself in all of its branches throughout the Commonwealth. I hope that it will ask its opponents who are its agents - the private banks - to place suitable advertisements in their offices showing that they are in fact agents of the Commonwealth Development Bank.
.- As has been stated already, the purpose of this bill is to authorize an increase of £5,000,000 in the funds of the Commonwealth Development Bank. Before I go any further, let me refer briefly to what was said by the honorable member for Lalor (Mr. Pollard) when he sought to take issue with honorable members on this side of the house for claiming some credit for the establishment of the Commonwealth Development Bank. He directed attention to the existence of the Mortgage Bank Department which was set up by a Labour Government in 1941. I suggest that he is confusing the Mortgage Bank Department of those days with the Industrial Finance Department. In fact, the Mortgage Bank operated as an ordinary trading bank and the Industrial Finance Department was established by the Labour Government for the purpose of making funds available to industry in cases where the prospect of success rather than the security was the determining factor.
In those days this benefit was denied, or certainly was not made available to primary industries. By establishing the Commonwealth Development Bank this Government transferred the prospects-of-success factor to the operations of that bank. This has been immensely significant, as other honorable members have said, in developing rural industries. I have said before and I repeat now that I regard the establishment of the Development Bank under those terms as being one of the greatest benefits to our rural industries. The bank was established by legislation passed in 1959 and it commenced its. operations in January, 1960. In the three and a hali )’ears since then about 7,000 loans have been made to primary and secondary industries. Of the £37,000,000 made available in those 7,000 loans not less than £26,000,000 has been allocated to rural industries. In 1962 the Government increased the bank’s capital funds by £10,000,000 and with the additional £5,000,000 proposed by this bill the bank’s capital will be almost £31,000,000. In addition, the bank has available to it quite considerable reserves. With additional funds from the Commonwealth Savings Bank the overall resources of the Development Bank are in the vicinity of £71,000,000. Avenues of assistance other than the making of loans are open to the Development Bank. I refer particularly to the provision of equipment finance on hirepurchase terms. This, together with the loans made available, means that since commencing operations in 1960 the bank has made available £89,600,000 in one form or another.
The report of the Commonwealth Banking Corporation directs attention to the variety of uses to which the loans have been put. It points out that of the £33,000,000 in loans outstanding at 30th June, 1963, approximately two-thirds, or £22,500,000, have been made available to the Agricultural sector. As in so many other spheres, the total amount available is not necessarily the most important factor;. What is significant is the use to which the funds are put and, in particular, the branches of industry to which they are devoted and the level at which they are used. . I am pleased to note that reference is made on page 27 of the report to the fact that of 1,537 loans made to rural industry during the year 1962-63, 1,452 or 94 per cent, were in what I describe as the neeedy sector - that is, in the group requiring up to £10,000. It is also interesting to note that this 94 per cent, of successful applicants took up 80 per cent, of the total loan funds available. In that year approximately £5,000,000 of a total of £6,300,000 was used in this way.
The report makes mention of the rather significant fact that there was a reduced demand. The number of applications for loans was lower last year than in the preceding year. There must be reasons for this and I believe they are worth a little time and attention because they establish particular trends. Obviously there has been no overall reduction in the demand for loan finance. This indicates that there has been no increased reluctance to borrow in the low and medium borrowing fields. This is important particularly. In the last year or two we have heard about a lack of confidence and a reluctance to borrow and to invest in industry. Apparently this lack of confidence has not existed in smaller businesses and in farming activities because although there has been a reduced demand on the Development Bank there has been no reduction in the use made of the available funds.
The establishment of term lending facilities by the Commonwealth Bank and by the trading banks also certainly has been a determining factor in this reduced demand. These term-lending facilities, particularly of the Commonwealth Bank, have provided not less than £50,000,000. Undoubtedly the reduced demand on the Development Bank has resulted from the increased ability of the trading banks to provide the required funds from their own resources. Under the charter, of the Development Bank it is obligatory that finance be made available in cases where it is not available to the intending borrower through existing and normal channels or where it is available under such conditions as would make it unsuitable for his type of business. The association of the Commonwealth and private trading banks in term lending, with provision particularly for loans for development purposes, has contributed to reduced demand on the Development Bank. In addition, there has been increased lending by the savings banks on housing and to local and semi-government authorities.
All of these factors, regarded in total, point to the greater availability of funds which has resulted, I- claim without any attempt at exaggeration, from this Government’s policies. There should be a thorough appreciation of this situation. To gain this appreciation let us cast our minds back to the position that obtained ten or twelve years ago. I speak now as a farmer and what I have to say applies to a great many farmers who commenced operations after the Second World War.. In those days sufficient funds were not available as a general rule but as time went by and as funds became available the banks could be relied upon to provide money to assist a person to purchase a property and perhaps some for “ carry-on “ purposes. In those days, one waited some months with one’s name on the priority list. Western Australians, I know, will recall this, and perhaps the same situation applied in other States. We in Western Australia watched the seasons in the eastern States, beginning with Queensland, to see what sort of a season they had. Not infrequently, the seasons were not good and, as’ a result, there was a greater demand on the banks for extra overdraft finance. As the total sum available was limited, this reduced the amount available for similar purposes in both Western Australia and other States.
I return to the situation in which a farmer, having purchased a property, would need stock, plant or something else. A small businessman might be in a similar position, but I stick to the farmer for the purposes of my argument. In order to produce income, the farmer might need to buy stock in particular. The finance that he needed would not be available from the banks and so he would go to a stock firm for a bill of sale. The stock firm, in return for the bill of sale, would provide stock and later, perhaps, fertilizers. But, perhaps twelve months later, there would be the usual annual request by the bank for reduction of the farmer’s overdraft and what little income there had been from the property in the first , twelve months of operation would invariably be applied by the farmer for the purpose of trying to build up income-producing capacity by improving pastures, putting in fencing, purchasing better plant, and so on. This was done not only to produce a better income but also to enable the farmer better to meet his commitments and perhaps to discharge them.
To do this, once again, more finance was needed; so back to the bank one would go. This was the regular pattern in the farmer’s financial operations a few years ago. When one approached a bank with a request for funds for the development of a farm in order to enable’ one to increase one’s income, what was the reply? Always, it was: “ Sorry. There are no funds for development,” However, one was told, “If you go to an insurance company, it may have some funds available”. This makes the story even better. So what did one do? In order to make one’s ally good with the insurance company, one took out another life policy and then perhaps obtained the required funds on secondmortgage terms. This was the story of the small farmer who was starting out on a property. He was really in deep - first to the bank, then to a stock firm and then to an insurance company. He was tied up completely and still had insufficient funds to enable him to build up his incomeproducing capacity to a stage at which he could discharge his commitments. All I can say, Mr. Speaker, is that this was a shocking way to try to run any sort of business, and particularly a farming enterprise, for the prospects of farming can be considered only in the long term. What a deplorable method of trying to develop a country and to produce commodities for export cheaply in order to finance the country’s activities!
In saying these things, I have not dwelt on the sheer personal misery to those concerned, who battled against frustration and the problems of maintaining a decent standard of living and of educating a family. I believe that this bill, like its predecessors, which authorized the provision of additional capital for the Commonwealth Development Bank of Australia, shows that we have come a long way since the days that I have just described. I hope that we never return to them, and I look forward to further liberalizing of the conditions of bank lending. I note with some satisfaction that the latest annual report of the Commonwealth Development Bank, at page 26 of the document in which are published the annual reports of the banks that constitute the Commonwealth Banking Corporation, states -
Once again, I say that in my experience in the last ten or twelve years the greatest shortage has been a shortage of money for development projects, except where advances could be repaid within twelve months. Honorable members will recall that this has been the situation. I suggest that very few farmers indeed can repay loans within twelve months, and it is unlikely that there was any real personal need where a loan could be repaid within twelve months. “Bien we came to the period after the Development Bank was established. The bank made funds available purely for development under the terms that I have mentioned, and the prospects of success were the determining factor. Although there was and still is great scope for Increasing farm production by the expansion of existing, areas under cultivation, in my view there has been almost a preoccupation with this kind of development in the belief that it is <the only form of development. It is not. I ask: Who is he who can draw the line of distinction between farm improvement and farm development? Improvement generally implies a consolidation or the up-grading of an existing farm to bring about an increase in the net income-producing capacity without necessarily increasing the area, where the acreage already in use is considered to be an economic unit. This is a necessary stipulation, and it is important. When knowledge of soil conditions, of the’ use of fertilizers and of better grasses and crops was very scanty, farming by this method of using extensive areas was probably quite justified. But, nowadays, the knowledge is available - even if it is not being used, it is certainly available - and it permits rather more intensive practices.
Because of this, and because in many instances more economic use can be made of investment, I believe that more encouragement should be given to the use of development finance for what may have been regarded in the past as being strictly farm improvement. In saying this, I acknowledge the views of an extension officer of the Department of Agriculture who is stationed in my electorate and whose views are well backed by experience in farm management and the like. He has pointed out that in many improved agricultural areas it is cheaper to increase production of land already cleared than it is to clear more land. It is claimed that there is ample evidence to support the contention that the level of production can be doubled at much lower cost than is involved in doubling the cleared area.
– He knows what he is talking about.
– I agree: He does know what he is talking about. This is an immensely important factor in controlling the cost of production as well as increasing profitability for. the farmer concerned. I. should like to see the Government taking a rather deeper interest in this matter. I think there is a good deal of scope for further investigation of this aspect of development. I have noted, once again in the latest annual report of the Commonwealth Development Bank, and in inquiries that I have made, that the Development Bank and the Commonwealth Banking Corporation are not unaware of the situation.
This matter is not without importance, either, in a situation in which money for development is in short supply. Generally speaking, in Australia, that is a problem that, like thi poor, is always with us. Any attempt to restrict funds “available for the expanding of cultivated areas is fraught with real dangers, particularly if those funds are channelled instead into the more economic fields of farming. I realize that the dangers may be brought about in two ways. They may result from lack of farming knowledge on the part of those who administer the funds or from the imposition of too-rigid bank lending policies or, more commonly, perhaps, by a combination of both. These are problems that should be faced. I believe that if the solution of them is to our national advantage, we are justified in grappling with them. I may add that the Commonwealth Bank, and certain other banks, too, for that matter, have already done a very great deal in developing their farm management branches in recent years. It has provided a most useful service in increasing the commercial world’s knowledge of agricultural problems which once again must react to the benefit of not only the; rural industries but also the small secondary industries and commercial enterprises. I take note once again of that part of the report in which the bank directs attention to the fact that the fullest advantage is not being taken of the funds available at the Development Bank for use by the smaller enterprises and it is to be hoped that advantage will be taken of the funds available) by those who are qualified to use them and use them well.
I conclude on that note. I repeat that I am very pleased to see this additional money being made available for the Development Bank, and I look forward to the further expansion of the bank’s activities in a way which will mean not only financial assistance for the development of farms but also a better scientific approach to the use of the funds in order to increase the profitability of farms, which, after all, is a very important aspect of the problem.
.- The purpose of this bill is to provide £5,000,000 of additional finance for the Commonwealth Development Bank which was established for the purpose of financing the development of Australian industries, both rural and secondary. It is apparent that, under its present constitution, the bank’s sources of finance are limited. Certainly it does obtain money by way of loans from other banks, the Commonwealth Savings Bank in particular, but it is mainly dependent upon government appropriations such as that proposed by this measure. For that reason, the Opposition approves of the appropriation under discussion.
Since my colleague the honorable member for Melbourne Ports (Mr. Crean) resumed the debate earlier this afternoon, there has been a wide coverage of the measure by other participants in the discussion, and I propose to be as brief as possible in an endeavour to avoid engaging in tedious repetition. Upon reading the report of the Development Bank, I was struck by a reference on page 25 to the failure of small industrialists to take advantage of the bank’s lending facilities. That passage reads -
In general, however, while a significant amount of finance, both by way of loan and by way of equipment finance, has been provided for secondary industry, it would seem nevertheless that small industrialists are not generally aware of the extent to which the facilities of the Development Bank are available to them. These facilities will undoubtedly be used by more ‘ of these industrialists as they become more widely known and understood.
That is a rather strange circumstance because surely there is no shortage of small industrialists in Australia wanting finance for development, whether it be for a new building to extend their premises, or whether it be for new plant, new machinery and! so on. The question to be answered by the bank is: Why are not these small industrialists aware of the facilities offered by the bank? Television viewers, radio listeners, and newspaper readers are all aware of the functions of the Commonwealth Savings Bank and of the private banks because these functions are advertised widely. Apparently the Commonwealth Development Bank does not advertise to reach potential customers. It is apparent, too, that the bank has not lent to its full capacity. Therefore, in the field in which it does . work it can still do better.
It is disturbing to find that at a time when the Government is contemplating introducing legislation to deal with monopolies, at a time when copies of the proposed legislation have been circulated for perusal and comment, at a time when we know that monopolies do exist, and are tightening their grip on Australian industries; at a time when take-overs are almost daily occurrences and, at a time when the law of the deep prevails, when the big fish swallow the smaller ones, we should find that a government-lending institution regrets the fact that only a few small industrialists are coming forward for assistance. It is to be regretted that a reason why more are not coming forward is that they are not aware of the increased capacity of the bank to help. Surely that circumstance calls for greater publicity of the bank’s functions.
The passage in the bank’s report which I have read is of particular interest to all country people. Although there are some large industries in country areas, most of the secondary industries in rural districts are fairly small compared to those operating in the city areas. No doubt the country people, along with me, believe that greater emphasis should be placed upon the development of secondary industries in country areas, perhaps through the Development Bank. One of the greatest tragedies in Australian development in post-war years has been the abnormal concentration of secondary industries, with the consequent concentration of population, in the capital cities. This has been most unfortunate because, this abnormal concentration of industry in the capital cities, forces young people to leave the country towns. There is a continual drift to the cities, and in the last two, three or four years we have found that whole families have had to leave country towns and rural areas because, after completing their education to the leaving standard or even to the matriculation standard, young people have found that, because of the lack of secondary industries in the country districts they have had to go to cities like Melbourne to find jobs. It is very distressing indeed that the young people in cities like Bendigo and towns like Castlemaine, Maldon and Seymour should find that, after completing their education to the leaving or matriculation standard there is no possible hope of their obtaining employment adjacent to their homes and that they must leave and go to the cities for work. This trend is evident all over Australia. It1 is a matter of national concern and of concern for this Parliament. I have spoken on it on a number of occasions before.
The problem, of course, is that these young people - and the older ones, including whole families - have to join in this drift to the cities because of sheer economic necessity, and for no other reason. They do not want to go, but they are forced to go. When the youngsters of sixteen, seventeen and eighteen find they have to leave the country towns to go to the cities for work, their families feel that they must go with them. This is a great problem and here there is great opportunity for the Commonwealth Development Bank to place greater emphasis on the facilities it has available to assist secondary industries as well as rural industries in country areas. I would hope that in an effort to cope with this problem of national development this Parliament will have an opportunity in the future to write into the Development Bank’s charter a provision that will enable the bank to give more aid to secondary industries in the country. I know that all country people will join wilh me in wishing that this drift to the cities could be stopped and that some sort of flow in the other direction could be started. I repeat it is a matter of national concern and a matter that should concern this Parliament.
Naturally, because of the physical makeup of our country, primary industry has played a major part in its economy since the earliest days of its history. In recent years, farming practice has become more complex than ever before. Indeed, because of the costs involved in primary production to-day many farmers need a greater acreage of land from which to earn a living. That is evident in a number of primary industries. For instance, several months ago 1 visited the Sunraysia district of Mildura and it was evident there that in these days of high cost of living and high cost of production farms of thirteen and fourteen acres could not satisfactorily maintain a farmer and his family. I am sure the honorable member for Mallee (Mr. Turnbull) will agree with me that it is quite evident that because of the high cost of production and the increased cost of living the present acreage is not sufficient to maintain a dried fruits grower and his family. I noted with pleasure that across the river the New South Wales Labour Government had done something about this problem. There the smaller farms are at least 25 acres and, in normal times, were of sufficient size to provide a satisfactory living for the growers and their families. I again point out for the benefit of the honorable member for Mallee that this is the work of the New South Wales Labour Government.
For these reasons, and for many others, there is still a tremendous need for capital for development purposes in Australia. It is apparent that the total amount of land and of labour required to produce a given quantity of agricultural products has fallen greatly in recent years, because of the rapid development of mechanization. We can say that there has been a revolution in the design of farming machinery. Perhaps we could call it rural automation. Better farming methods have been developed and a great advance has been made in farming science. The Commonwealth Scientific and Industrial Research Organization and other organizations have helped to develop new farming methods. Unfortunately, by contrast, the amount of capital required to produce agricultural products has risen. Because of the greatly inflated prices of land in the post-war years - in particular, in the last ten or twelve years while the Menzies Government has been in office - more capital is needed to buy land. Additional capital is needed for equipment because of advances in mechanization. I have said that there has been a revolution
Unfortunately, the Commonwealth Development Bank has played what I term only a secondary role - a role not of assisting the development of rural industry on firstmortgage terms, but of playing second fiddle to the trading banks by taking up second mortgages which the trading banks have refused. Because of this practice it is becoming, in cricketing terms, a backstop. It is true that the role played by the Commonwealth Development Bank has been helpful to many of its customers. It has helped many industrialists and many customers in rural areas, but, to me, its methods have not been entirely satisfactory.
One great deficiency in the financial system as it is related to primary industry is the lack of opportunity for people to gain long-term loans to enable them to buy properties. A great many graduates of agricultural colleges and tens of thousands of farmers’ sons have the experience, the knowledge and the desire to take up farming but lack the capital. This is a problem which should be tackled by some authority. I was interested to note some comments of the Premier of South Australia. He was reported recently in the following terms: -
Australian banking houses have always considered their function was to look after overdraft banking rather than make long-term advances. At present there was no authority which provided longterm loans to enable farmers to buy property. Even where money was available, it was of a very restricted nature. Anybody who wants to go into farming in South Australia to-day needs a big bankroll in the family.
It is quite obvious that a great deal of money is needed by a farmer’s son or a graduate of an agricultural college if he wants to go on to the land. Tens of thousands of pounds are required. Unfortunately, over the last few years, because of the cost-price squeeze -
Sitting suspended from 6 to 8 p.m.
– Before the suspension of the sitting I was relating the unfortunate story of the countless young Australians,
During this debate, some honorable members have referred to part of the report of the Commonwealth Banking Corporation, which mentions the scope for expansion of the bank’s activities. At page 26 of the report appears the following passage: -
There is scope for expansion of the Bank’s activities. The experience of the Development Bank, especially during the past 12 months, has confirmed that, in the rural sector, there is need for greater diversification of activity, including finance for the consolidation of properties to achieve more economic areas or efficiency of operation.
The general interpretation placed by honorable members on that statement is that it is a move for amalgamation, but of course this is already taking place. There is a move for the amalgamation of holdings into greater holdings held by fewer people on the land. It is interesting to note that the Commonwealth Bureau of Census and Statistics showed that the number of 493,298, engaged in primary production at the time of the June, 1954 census, had fallen by 34,413 by June, 1961; that the number engaged in manufacturing industries had increased by 113,005; that the Australian work force increased by more than 500,000; and that the population of Australia increased by more than 1,500,000. So there is still a drift away from the land and a move towards greater holdings of land held by fewer people.
There are several good reasons for these trends. Honorable members will understand, firstly, that with greater and more effective use of mechanization in the postwar period and especially in recent years it, is obvious that a man - and if necessary his family - can work a greater area of land in the time available. Secondly, it is obvious that with the cost of production so high in the last ten or twelve years and the fact that the prices of so many of our primary products have fallen on overseas markets, the farmer has needed a greater area to make a living. Those are the two principal reasons for the greater land holdings, but I suggest that while there are fewer men on the land and while the Development Band has mentioned the possibility of increasing the scope of its activities to cover this move towards consolidation and amalgamation, the young would-be farmers should not be forgotten. There is still great need for assistance and I appeal to the Government to make facilities available for young Australians to take up land and become primary producers. They should be given opportunity to get long-term finance to enable them to do that.
This additional £5,000,000 capital for the Development Bank is welcome, but, as I have said, the institution’s activities have been hamstrung by the conditions laid down in its original charter. I believe the time has come for the widening of its field of activities. There should be an emphasis on industrial development in country areas. This is most important.
As I said earlier, the drift to the cities has been accentuated over the last ten or fifteen years. The metropolitan areas of Melbourne, Sydney, Brisbane, Adelaide and so on have become overcrowded and the public authorities have a great backlog of public works to overcome in roads, footpaths, sewerage, water supply, overpasses and that sort of thing. The problem of the drift to the cities should be solved in this Parliament. It is a national problem and the Development Bank could assist in tackling it.
I repeat that there is need for greater publicity of the bank’s activities. The bank admitted, in its report, that far fewer small industrialists than it expected, or whose requirements it could have met, applied to it for assistance. Consequently, there is need for greater publicity for the bank’s activities and the facilities it has available for small industrialists. There are many small industrialists in the country areas and there is no shortage of such people that are in need of help.
I believe there is ample room for a reduction of interest rates. I understand that the Development Bank charges about 4i per cent, flat for hire-purchase finance. That is a lower rate than normally operates in the hire-purchase field, but rates as high as 6i per cent, apply in other fields. Interest rates of that order must add tremendously to the cost of production in both primary and secondary industries. I consider that the bank could play a greater part in the development of secondary, rural and primary industries. It has done good work so far, but I hope that this House will, in future, have the opportunity to give its approval to a much greater field of action for this institution.
.- The purpose of the bill before the House is to add £5,000,000 to the capital of the Commonwealth Development Bank. The Treasurer (Mr. Harold Holt) explained in his second-reading speech on the measure that this additional £5,000,000 will make a total of £31,000,000 available to the bank. This sum, together with substantial reserve funds and the bank’s ability to borrow from the Commonwealth Savings Bank, will bring the total available capital of the institution to £70,000,000.
This bank is a source of development finance and I do not think that the honorable member for Bendigo (Mr. Beaton) really understands the purpose for which it was created. You cannot create a bank for a special purpose and then open up the whole field of banking to it and expect it to work as well with limited capital over the whole range of banking. The operations of this bank are supplementary to the operations of the ordinary trading banks. The difference between a proposition for an ordinary trading bank and one for the Development Bank should be clearly understood. A trading bank looks, first, at the security of the proposition. Its first worry is whether the proposition is secure - whether there is enough security behind the proposed borrower for it to recommend a loan. That is not so with the Development Bank, because security is not its first criterion. It looks more for a sound development programme. It wants to be sure that integrity of the borrower is satisfactory, that he has good managerial capacity and that he has every prospect of success, not only in the short term but also in the long term. This is where the Development Bank specializes. The ordinary trading bank is not in that position, because it is answerable to its shareholders and cannot take the risks which the Development Bank was set up to take.
The Development Bank is most successful in assisting persons like the farmer who has a small block of land which does not give him high returns, who also has a working overdraft and who wants to improve his position. There are many farmers I know who just cannot get themselves over the top and into a position in which they can feel secure. Their financial position is such that the trading banks do not look upon them as good security risks. The banks feel that their prospects of returning the capital borrowed on the short term - and the loans seem to be mostly on the short term - are not good enough. Such a person can go to the Development Bank and borrow money on a much longer term. In fact the Development Bank in some areas lends on terms up to 25 years. This is particularly so in the case of loans to orchardists. I know that the trading banks do have a term lending programme, and that they will lend over periods of up to eight years, but the loans I usually hear about from my constituents are over periods of from three to five years.
– Nol long enough.
– This is not long enough, as the honorable member for Indi says. It is very hard for a borrower to clear land. 1 know this from personal experience of having cleared land. The land does not come into production soon enough for the producer to get any decent return from it. In the case of bush land in particular, such as abounds in my area of Gippsland, you cannot get anything from it for at least three years. It is more often five years before the land returns anything of any value.
The honorable member for Bendigo was also, I think, not fully aware of the Development Bank’s capacity to lend. The honorable member for Canning (Mr. McNeill) also seemed not fully informed on this point. The bank will lend for purposes that do not seem, on the surface, to be purely developmental. It will lend for fencing and for the construction of wool sheds or other important buildings on a farm. It will also assist in the purchase of machinery. It is prepared to assist in anything that will increase the productivity of the farm and assist the farmer in his battle to improve his position. The honorable member for Bendigo mentioned the hire-purchase rates charged by the Commonwealth Bank. The fact is, of course, that it does charge 4i per cent., as against the rate of approximately 7 per cent, charged by ordinary hire-purchase companies outside this field. While the rate is not altogether low enough, it certainly is a reasonable charge.
One point that I did notice with satisfaction is that out of the £37,000,000 mentioned by the Treasurer as having been on loan at 30th June, £27,000,000 had gone to rural producers. This shows that the bank is playing its part in the development of land in Australia. It is doing a magnificent job. I may say in passing that I have had dealings with the Commonwealth Development Bank on numerous occasions, particularly in Melbourne, and I have always had the greatest of help from the assistant managers and other people with whom I have dealt. They have always been prepared to listen to a case.
– How much do you owe them?
– I do not deal with that bank, as a matter of fact. One thing you can be sure of from the officers of that bank is complete courtesy. They will always give a case prompt and efficient attention. I have heard criticism by some prospective borrowers that the Development Bank takes too long to assess an application for a loan. My answer is that the Development Bank has become a kind of last hope for some producers. After having gone to the ordinary trading banks, they leave it until the last moment to ask the Development Bank for a loan. Then they need it in a hurry because of pressures that are being put on them. The bank has to assess these applications slowly. It has to make sure that the prospective borrower has every chance of success. That is why it takes a considerable time to get a loan from the bank.
I would like to read a portion of the “Reports and Balance-sheets” of the Commonwealth Banking Corporation for 1963. This has been read to the House before, but I would like to read it again for the benefit of those who have not heard it -
Despite the overall increase in farm income in 1962-63, some sectors of rural industry still appear to be characterized by low returns on capital invested. This is partly a legacy of the increases in farm costs during the 1950s and the lower level of commodity prices. In this situation, difficulties in servicing borrowings have been experienced by some rural producers. With the future of commodity prices and overseas markets uncertain, there is need for continuing close attention to rural productivity, mechanization and efficiency, not only by producers, but also by all concerned with rural activities. The cost problems of rural industry underscore the general problem of costs within Australia.
I think the key phrase in that paragraph is this-
In this situation, difficulties in servicing borrowings have been experienced by some rural producers.
I have said time and time again in this House that long-term lending to rural producers is essential - and I mean long-term lending. I do not mean the lending that is now called long-term, covering periods of from five to eight years. I have mentioned the case of a farmer borrowing £5,000. Over five years his capital repayments are £1,000 a year, while over fifteen years they are £333 a year. His situation is entirely different from that of a manufacturer who can borrow on the short term and put the cost of his capital borrowing on to the article he sells, and so get his money back. Therefore I say again that long-term lending to rural producers needs careful consideration as soon as possible. The fact is that short-term lending acts as a squeeze on the producer. A farmer may clear some land and spend his capital in doing so. The land is still not producing a return, and he is unable to carry on the good work by correct manuring and appropriate superphosphate treatment, getting rid of pests and ferns and so on, because he has to meet his capital commitments at the bank. He is unable to spend the extra money each year in treating his land properly. Thus the situation is aggravated and the land docs not return as much as it would if it received appropriate treatment.
There is no doubt that farmers are affected by the fall in commodity prices. The honorable member for Wannon (Mr. Malcolm Fraser) mentioned this matter this afternoon. Soldier settlers are in a particularly sorry plight in this respect. They were settled on the land by various State organizations. They were given enough land to carry a sufficient number of dairy cows, or perhaps fat lambs or sheep of some other kind, so that they could obtain a secure income and assure their future. But with the fall in commodity prices and the cost-price squeeze, these fellows no longer can look forward to a secure future.
The report of the Commonwealth Banking Corporation also mentioned improved productivity and efficiency. No doubt in some areas there is room for these improvements, but again the fact is that farmers have improved their methods so much since the war that productivity all around Australia has increased by 50 per cent., without one man being added to the work force.
– In some areas.
– The honorable member for Scullin is always interjecting and he always gives a wrong picture. He does not understand the facts of this business. Many of these soldier settlers, and other farmers too, have improved their properties to a remarkable degree even in the face of these falling prices and rising costs. They have managed to maintain the status quo, but if by any chance costs rise further they will be in the invidious position of not being able to meet their overheads. Therefore I say that there is a great need to ensure that we have no resurgence of creeping inflation in the economy. One thing the Government has done has been to stop inflation. This has meant more to the man on the land than anything else that has happened in this country. It has also meant a great deal to the nation, because the farmers earn the export income on which we all depend.
Some Opposition members have complained about the reference in the report of the Commonwealth Banking Corporation to the need for consolidation of farms. Under the system where commodity prices have fallen and a cost-price squeeze has developed, the only way that farmers who have improved their farms can increase their production is to purchase more land. They must acquire an extra paddock or two. They have sufficient machinery to work their land efficiently and they need to increase their total area to meet overheads and increasing costs. Very often they are not in a position to buy extra land, unless they can obtain long-term loans. To provide for this, there needs to be some change in the banking system. The trading banks should help the farmer by granting long-term loans. If this is not possible, the Commonwealth Government must face the fact that the Commonwealth Development Bank must be able to assist the farmers with the loans they need, not really for developmental work but for consolidation.
The honorable member for Melbourne Ports (Mr. Crean) read a passage from the report of the Commonwealth Development Bank, and I will read it again. It is -
The experience of the Development Bank, especially during the past 12 months, has confirmed that, in the rural sector, there is need for greater diversification of activity, including finance for the consolidation of properties to achieve more economic areas or efficiency of operation.
It is quite obvious that the bank has discovered what I have already discovered in my own small way. Many farmers are told by the trading banks that their security is not good enough for a loan for the purpose of buying more land. I know that the Commonwealth Development Bank does assist some of these people in a small way, but it has not sufficient capital to give farmers all over Australia the assistance they need. Many farmers are in this position and cannot increase the area of their farms. They are efficient farmers, but their farms are too small. Land is hard to buy and it may be dear. They may have to double or treble their working overdrafts to buy a little more land. The Commonwealth Development Bank has found that there is a shortage of finance for fringe farmers of this type - those whose finances are on the fringe - and it knows that some risk capital is needed for them. 1 think the addition of £5.000,000 to the capital of the Commonwealth Development Bank will encourage the bank to guard the rural sector closely. I am very pleased with the activities of the bank. .1 know, that some critics say that the bank’s activities, are’, not sufficiently wide. Perhaps the bank should be allowed to give assistance to those in, say, the tourist industry, which is very important to Australia. Perhaps assistance could be given to those who own motels, because there is no doubt that the tourist industry is a big industry. There seems to be a need for some sort of risk capital to be invested in some areas and for assistance to be given to motel and hotel proprietors. Perhaps the status of the Commonwealth Development Bank could be changed so that it could enter this field. I support the bill and congratulate the Government for increasing the capital of the bank by a further £5,000,000.
.- The honorable member for Gippsland (Mr. Nixon) has spoken of the consolidation of farms as a desirable aim. He has put to the House that all is well for the man on the land. Perhaps he should have given further consideration to primary industry generally, and he should have given the House some statistics about the number of persons who are at present engaged in farming pursuits in Australia. It is well known that between 1939 and 1961 the number of people farming properties declined by 2,000, although 17,000 exservicemen had been placed on the land. The Opposition must dissociate itself from this sort of consolidation of farms. We do not believe that this is a desirable end.
I propose to deal with the bill and not with the comments of the honorable member for Gippsland. The bill proposes to make an additional £5,000,000 available to the Commonwealth Development Bank. The very term “ development bank “ has an inspiring sound in the ears of every true Australian. We would think that a development bank charged with the responsibility of developing the nation would have a reserve of funds available to it so that it would be able to play its rightful role in development. Instead of this, the Parliament is called upon to vote an additional £5,000,000 this year, another £5,000,000 in some other year and £5,000,000 later on. This is like pocket money being doled out by the Government. The original purpose of the Commonwealth Bank is given in its charter as - - It shall -be°the duty of the Commonwealth Bank, within the’ limits ‘‘of- its ‘ powers, to ‘ pursue t monetary and banking policy directed to the greatest advantage of the people of Australia, and to exercise its powers under this Act and the Banking Act 1945 in such a manner as, in the opinion of the Bank, will best contribute to the stability of the currency of Australia; the maintenance of full employment; and the economic prosperity and welfare of the people of Australia.
The Opposition believes in that sort of charter. It is in conformity with the historic role of the Commonwealth Bank. Whilst the Opposition does not oppose the proposal to make available an additional £5,000,000 to the Commonwealth Development Bank, it has a responsibility to remind the Government of the fact that in 1959 the Commonwealth Banks Bill separated the functions of the Commonwealth Bank. In October, 1961, an additional £5,000,000 was granted to the Commonwealth Development Bank and in March, 1962, a further £5,000,000 was made available to it. Now, in October, 1963, it is proposed to make a further advance of £5,000,000 to the bank. When introducing the Commonwealth Banks Bill on 26th February, 1959, the Treasurer (Mr. Harold Holt) said -
The capital funds of the Development Bank on its establishment will consist of the capital and reserves of the Mortgage Bank and Industrial Finance Departments - amounting to almost £15,000,000 on the basis of 30th June, 1958, figures - plus an additional £5,000,000 capital to be provided from the reserves of the central bank. These funds, together with the borrowing powers that the bank will have and the provision, to which I shall refer later, for retention of its profits, should ensure that the Development Bank will have adequate resources for the discharge of its important responsibilities.
However, despite this statement by the Treasurer, he saw fit in October, 1961, March, 1962, and now again in October, 1963, to provide additional capital for the Commonwealth Development Bank.
The Labour view always has been and is to-day that the capital of the Development Bank is unequal to the major task of developing Australia. Of course, the conceptions of the Government and the Opposition differ fundamentally on the question of development. We are not happy with what has taken place in the past. We are impatient about the failure to develop this country. We believe that additional capital should be made available to the Development Bank to enable it to. carry out its duties in relation, to the exciting pro spect of developing this nation. The need for more money is quite obvious. What we want is a more adventurous policy, a policy under which we will go out to develop this nation and be less concerned with the orthodoxies and the ritualism to which the Government is tied so closely. We should like to see adopted a financial policy that will place national development first and other considerations second. For that reason we believe that the scope of this legislation and the provision of funds should be widened. We believe that if the Development Bank is to play its rightful role in developing Australia it must be given the opportunity to accept deposits. That would strengthen its resources and enable it to perform its duties on behalf of the Australian people.
In the past crippling restrictions have been imposed on the Development Bank. In addition to being frustrated, as it has been, by the lack of capital for the purpose of developing the nation, the bank was so restricted by the credit squeeze that the chairman of the Commonwealth Banking Corporation, Mr. Warren McDonald, had to speak up publicly in condemnation of what was taking place at that time under the control of the Treasurer. Mr. McDonald requested that additional funds be made available and that action be taken to free the bank from the restrictions imposed by Government policy. One of Mr. McDonald’s statements was reported in the “Sydney Morning Herald” of 23rd June, 1960, in this way -
The Commonwealth Development Bank has been set up to fill a special need in the economy, the chairman of the Commonwealth Banking Corporation, Mr. Warren D. McDonald, said yesterday.
In making that statement Mr. McDonald had all the optimism of many members of this Parliament, particularly members of the Australian Country Party, who saw in the Development Bank some ray of hope for finding money for the development of Australia. In one newspaper on 12th February, 1961, these words appeared in bold-type, banner headlines, “Credit Restrictions should be eased for Development Bank: Chairman - Legislation Amendment Urged as Necessary “. The article read -
The Reserve Bank should be given discretionary power in applying credit restrictions to the Commonwealth Development Bank, the chairman of the Commonwealth Banking Corporation (Mr. W; D. McDonald) said last night.
He was speaking a the annual dinner of the Latrobe Valley branch of the Australian Society of Accountants at Traralgon.
On that occasion Mr. McDonald spoke out quite freely in condemning the banking policies adopted by this Government and asking that the Development Bank be given an opportunity to serve this nation.
The crippling restrictions that have been imposed from time to time have stultified the development of the nation, hampered the progress of the nation and damaged the hopes and aspirations of many people not only in primary industry but also in secondary industry and other walks of life. 1 can only hope that the £5,000,000 which this Parliament is now called upon to make available to the Development Bank - inadequate as it is - will be made available and that in the future the Treasurer will not use his influence to restrict the operations of the bank and to prevent it from carrying out its duty on behalf of the Australian people. The attitude of the Development Bank is well known, but the restrictive policies of the Government have affected it quite severely and sorely.
Another matter which requires attention is the broad matter of the loan policy being pursued by the bank. At the outset I should like to say that in my opinion it is entirely wrong that the bank should have to rely on agents in private trading banks throughout Australia. That is not satisfactory. The private trading banks have their own commitments and their own manner of handling their business. Many of them are involved in fringe banking institutions in which they are substantial shareholders if not the dominant shareholders. If a person - whether he be a farmer, an industrialist or any one else - goes into a private trading bank seeking accommodation from the bank itself and then asks for finance from the Development Bank, it is easy for the private trading bank to say to that person, “ Money can be made available to you through the hire-purchase section of our bank “, and divert him from the possibility of obtaining finance from the Development Bank. If reports have to be completed, they can be coloured against the persons concerned.
I believe that the Development Bank has a responsibility to give leadership in financial affairs. For that reason it should establish its own organizations in all major centres of population in Australia and consider the propositions that are submitted to it from time to time. There should be less caution. It should be bolder. It should bc more adventurous in considering propositions that could develop the country, help to stimulate employment and populate the under-developed areas. The bank should go ahead with plans for decentralization in the older centres of population which have been neglected in the course of the years.
One suggestion that I make in that regard is that the Development Bank should come forward with a plan of trying to meet the industrialists and other people who want to develop a certain area, whether it be in north Queensland, Western Australia, New South Wales or any other State. If a proposition is beyond the financial resources of a vigorous industrialist or an imaginative Australian who wants to start a new industry, the Development Bank should come in. Its charter should be extended so that it could have a 50 per cent, share in the operation of that undertaking. The Commonwealth and the industrialists could share in the management and development of that industry and that area.
In regard to the broad question of finance, 1 know of many cases in whish people have applied to the Development Bank for finance for very reasonable propositions, such as farming propositions which have been beyond question. The applicants have been people of integrity; people who have been utterly sound in every way. Despite the fact that they have submitted to the Development Bank proposals that have been reasonable from every point of view, they have been refused the financial accommodation that they required. One case that comes to mind concerns a young farmer in the Bathurst district who sought finance to fence his property, to clear it of an infestation of serrated tussock, to top-dress it, plough it and generally to clean up the property. He owned a home valued at £5,000. He owned the freehold of the farm and of the home. He owned a lorry and a tractor, together with other equipment. But he was unable to obtain from the Development Bank the finance that he required. That case is one of many that have come to my attention involving genuine people on the land who desire financial assistance but who have not been able to get it from the bank. In my view the bank has not shown sufficient initiative in these matters.
It is not prepared to go ahead and do what must be done if we are to develop Australia. In the very area in which this young man sought financial assistance in order, amongst other things, to clear his land of serrated tussock, the local council is engaged in a campaign against this weed. Finance is constantly being sought from other avenues to combat serrated tussock, but here was a practical way of cleaning up an area and bringing it into productivity. This young man, after clearing his land, was prepared to top dress it and to sow the very best pastures suitable for the area, but he was unable to obtain finance from the Commonwealth Development Bank. This state of affairs is to be deplored and I place on record my disapproval of it.
Let me say something now about the profits earned by the Development Bank. The bank should not be concerned with making large profits. In the last financial year the bank made a profit of £890,675. That figure is too high. If a person is prepared to invest all his money and devote all his labours to a project that will contribute towards the development of this country the Development Bank should reduce its interest rate to a most competitive level in order to help him get on with the job. The views that I have expressed on this subject are, I am sure, shared by most people outside this Parliament. Our simple responsibility here this evening is to say “ Yes “ or “ No “ to the provision of an additional £5,000,000 to the capital of the bank. We will support the bill but we contend that the bank’s charter is not sufficiently wide. The bank should be empowered to accept deposits, which would help to strengthen the bank. If this were done we would tend to avoid the spectacle of the periodic niggardly and parsimonious ladling out of a few pounds to the bank and the bank in turn doing the same thing to borrowers. Our horizons and visions should be wider, higher and greater than that. We should be going ahead with vigorous development of this country. The Development Bank could and should play its part in this important work.
.- I support the bill, which has for its purpose the provision of an additional £5,000,000 to the capital of the Commonwealth Development Bank, bringing its capital to approximately £31,000,000. In typical Labour Party fashion the honorable member for Macquarie (Mr. Luchetti) said the bank was not as good or as big as it should bc and that Labour would do a better job if it controlled the country. I would like to direct the attention of listeners to the debate to the fact that this Government established the Commonwealth Development Bank in its present form. Before the bank was established there were the mortgage bank department and the industrial finance department of the Commonwealth Bank. The industrial finance department worked satisfactorily but the mortgage bank department had become practically defunct under Labour. For many years under the present administration the mortgage bank department had little use. However, since the Development Bank was formed it has been very successful and has provided a great deal of finance in areas of primary and secondary production which would not have been available otherwise. Up to the present about £32,000,000 has been made available in the form of loans to secondary and primary production. About £22,000,000 has been made available to primary production. Of that sum £11,000,000 has been made available to the sheep industry, £3,570,000 to the dairy industry £2,621,000 to the cattle industry, £1,145,000 to the fruit-growing industry, £600,000 to the poultry industry, £406,000 for the growing of grained crops other than wheat and £1,069,000 to other primary industries. It is interesting to note also that of the total amount made available to secondary industries, almost £1,000,000 has been made available for foodstuffs and preservation. Indirectly this is a contribution to assist the development of primary industry within Australia.
Some honorable members to-night have stated that the Development Bank should not make profits on the money that it lends. I think it is always good for a government instrumentality to pay its way. I do not say that its profits should be large but it should make some profits. After all, there are plenty of good uses to which those profits may be put. If the rate of interest charged by the Development Bank were to he lowered so that is was substantially less than the rate charged by the major trading banks, people would desert the trading banks and would flock to the Development Bank seeking finance. Obviously the demand would be too great. I think the present rate of interest charged by the Development Bank takes into account an element of risk involved in its dealings. The rate is still very attractive. It is 6 per cent. I doubt whether cheaper finance could be obtained elsewhere.
I note that £20,000,000 has been lent by the bank under its hire purchase activities. I want to direct attention to this aspect of the bank’s operations because many farmers are not aware that they may go to the bank and borrow money at 4i per cent, flat for the purchase of agricultural machinery. If people require money for the purchase of machinery to be used in manufacturing the rate charged is 4i per cent. flat. Those rates are about 2 per cent, less than the rates charged by other hire-purchase organizations. I know of many young men in my area who obtained finance from hirepurchase organizations in order to buy plant and equipment to be used in the cane industry. If they had been aware of the assistance available from the Development Bank they could have saved themselves a great deal of money. It is very important for primary producers to be able to obtain adequate finance to carry out their work.
As I have said in the House on other occasions, the primary industries are the greatest private enterprise business in the world. Not one socialist or Communist country has succeeded after having taken the free enterprise initiative from farmers. Farming is a specialized game that needs specialized attention. Every man engaged in farming is an expert. You cannot produce primary goods by bureaucratic direction and administration. You must rely on the initiative and the judgment of individual farmers. If a farmer wants to increase his production and can see ways and means of doing so he must have access to long-term finance.
Many honorable members on both sides of the House have referred to this aspect but I clearly recollect the honorable member for Gippsland (Mr. Nixon) stating that in Australia we. seem to be falling down in providing adequate long-term finance. The Development Bank fills the gap to a degree. Finance can be obtained from the Development Bank on twelve or fifteen years’ terms but you have to be lucky to get those terms. The major trading banks will not lend money with such a long repayment period. If you are lucky you can get ten years’ terms from them. That is not good enough. Farmers cannot produce if they must repay advances at the rate of 10 per cent, or more a year.
I was pleased that the Reserve Bank made special provision to enable the major trading banks to lend money on longer terms than they were able to do previously. In April last year the Reserve Bank decided that 3 per cent, of all major trading bank deposits could be used for term lending. This amounted to £57,000,000. In September this year the percentage was increased to 4 per cent, which brought the total amount available for term lending to £76,000,000. Two-thirds of this amount came from the statutory reserve deposits and one-third from liquidity assets and Government securities which more or less had been lying idle or certainly were not available for the major trading banks to lend to primary producers.
In travelling through my electorate and in other parts of Australia I have found many farmers who are keen to increase production and to improve their properties but they will not do so if they have to borrow money on short term. As an example let us take the case of a farm which costs £12,000. It would be a medium sized dairy farm but you need a farm of that value to make a reasonable living.
– And then it is not an easy living.
– It is not an easy living even on a £12,000 farm. The farmer may be able to raise £4,000 on his own and be very lucky and obtain a loan of £8,000 from a trading bank. If he is required to repay the loan at the rate of £1,000 a year for eight years he faces a considerable task because apart from repaying the £1,000 he will require another £1,000 to enable him to live reasonably and another £1,000 to purchase fertilizer, fodder, seed, fuel, to improve the property and generally to run it. The interest on £8,000 is £450 a year and taxation on his earnings will be £200 a year. If the prospective farmer is a young single man he will have to pay £300 a year tax but let us say that he pays £200. That £12,000 farm will have to earn him £3,650 annually. In other words he must have a gross profit of 30 per cent., which is a pretty big return for a dairy farm of that size. To repay £1,000 a year, to live on £1,000 a year and to pay his tax the farmer must show a net profit of 18.3 per cent, a year. How many farms in Australia show 18.3 per cent, profit? There are not too many. You are lucky if you can earn 5 or 6 per cent. If you double the term of repayment to sixteen years the farmer will need a gross annual profit of only 26 per cent, and a net profit of 14.6 per cent. He will have a much better chance of succeeding if the term of repayment is longer. When a young man is deciding whether to make the land his future he must be able to calculate his chance of success. If he can see that it will be very difficult to make his repayments in a short period he will not go on the land.
I am a great believer in the banking system. I would much rather see the banking system working well than see any person having to approach the fringe banking institutions for finance. It is refreshing that the attitude of the central bank towards the major trading banks has changed during the past year. The bank has adopted a policy whereby flexible interest rates are used more now than they were in the past. Term lending has provided slightly longer periods of repayment of loans and funds have been made available to assist our exports. But all this is not good enough. More financial assistance must be made available to farmers.
The trends within Australia show that the banking system is not working as well as it should. Money is not flowing into the banking system in as great a volume as it is flowing into the fringe institutions. I shall cite some figures which I took out to-day. I use 1957 as the base year only because I could not obtain earlier figures for pastoral finance companies, savings banks or the various hire-purchase organizations. From 30th June, 1957, to 30th June, 1963, advances by major trading banks increased by 37 per cent.; advances by pastoral finance companies increased by 34 per cent., and advances by savings banks increased by 113 per cent. Advances by the non-retail section of hire purchase increased by 86 per cent, whereas advances by the retail section increased by 159 per cent. I am seeking to show that the major trading banking section is not expanding at anywhere near the rate at which the savings banks or the hire purchase sections are expanding. I pinpoint this because it is on the major trading banks that farmers have to rely for finance. Funds in savings banks go to Government securities or to housing. Practically none is made available to the rural sector.
The trend is for the major trading banks not to expand their advances; so money will not be available to farmers. If this trend continues, the outlook is not as good as it ought to be and farmers will not be able to get sufficient money in the future. A farmer cannot go to the stock exchange and raise money in the way in which it is raised by firms in secondary industry. He cannot afford to deal in expensive money, because his rate of income is not good enough to enable him to pay the high charges involved. Therefore, it is allimportant that the banking section of the economy be kept as strong as possible. I believe that the kind of finance provided by the major trading banks is the best sort of money we can get in Australia. It is best because it is cheapest. This represents sound, ethical banking practice. It is the safest kind of banking activity, because proper banking principles apply to every loan that is made to a person. The character of the individual is taken into consideration and the project for which he borrows is carefully examined. I like the trading bank kind of finance, because it is made available on normal banking principles. It covers the whole vast field of human endeavour whereas hire-purchase finance covers only specialized fields in which people can afford to pay higher rates of interest.
In saying those things, I may have sounded a little critical. But I think that a little criticism is not an unhealthy sign.
One should speak out for what one believes in. I am indeed a little critical of the leaders of the major trading banks. I do not believe that they have given enough leadership in fighting their cause and in seeking a better deal than they have had in the past. I believe that the trading banks of Australia should build up a central figure who can be respected and can speak for all the trading banks of Australia. I recall the period between 1930 and 1940 when there was a royal commission into the Australian banking system. In that period, there was one central figure who stood out. I refer to Sir Alfred Davidson, who was general manager of the Bank of New South Wales. He said what he thought and he gave sound leadership. The people of Australia listened to what he said. But who is there among the managements of the major trading banks to-day who is widely known, who is a public figure and who can appear on television and adequately put the case for the trading banks of Australia? I believe that the banks have relied too much on paid public relations officers to do the job for them. These gentlemen have done a very good job, but one does not sell a cause to the people if one is paying a person to sell it. One has to have a top man who is responsible for running one of the leading banks and who is able to put the case for all the major trading banks. If we were to enter a period of socialist government - I say “ if we were “ - it would be a bad thing if there were not among the leaders of the banks a man who had been built up as a public figure and who could fight against a socialist government and strongly put the case for the private banks.
As I said before, I believe that the basis of a free economy is a free banking system which will make finance available to any enterpreneur who wishes to take the risk of developing an industry. But if the banking system is put under socialistic control, any one who wants money will have to go to bureaucrats and ask whether the money that he wants will be made available to him.
I want just to touch on one other aspect of the problem, which relates to the trend that has developed in banking over the last five years or so.
– Order! I remind the honorable member that we are dealing with the Commonwealth
Development Bank and not with general banking.
– What I am about to say will be related very closely to the Commonwealth Development Bank of Australia, Mr. Speaker. It will emphasize the importance of having a development bank - a bank from which farmers can obtain money on reasonably long terms. The trend that has developed in the trading banks in recent years requires farmers to make annual repayments of advances. A farmer may have taken a mortgage 30 years ago and carried it year after year without being requested or pressed to repay, until the last five years. There is now a definite banking policy in Australia under which everybody who has a mortgage has to make annual repayments of perhaps £100 or £200 or even £500. The effect of this is that, within the last few years, all farmers have been cajoled or forced by pressure to fall in with some agreement under which overdraft advances are subject to annual repayments. Hundreds - indeed, thousands - of farmers are trying to reduce their mortgages as quickly as possible, and the effect is that money is being drained out of country areas.
For some considerable time, I have been trying to work out why country towns are not thriving as well as they should be. I have studied the problem not only all over New South Wales but also in other States. In my electorate, the sugar cane industry has never been better, the meat industry is going strongly and the dairy industry has had seasons that even though not as favorable as they could have been, have been fairly good. Therefore, industry in country towns should be running fairly strongly, but it is not. I believe that one of the reasons for this is that too much money is being sucked out of country areas because farmers are being compelled annually to reduce their mortgages or overdrafts, which normally might have been continued for many years without a requirement that they be reduced.
I give as an example my own district, where there are something like 3,400 dairy farms and well over 1,000 banana farms. There would probably be several hundreds of cane farms and hundreds, if not thousands, of small crop farms, also. Roughly speaking, I would say that threequarters of all these farms are operating on overdrafts. If the banks force the farmers to make annual repayments to reduce their overdrafts, one can imagine the amount of money that is being sucked out of the district. Even if it represented only £200 in respect of each farm, at a conservative estimate of at least 4,000 farms, a total of £800,000 a year would be taken out of the district. Believe mc, not too much money comes back into the district, because farmers cannot afford to borrow money on short terms. I should nol like to borrow money on terms of five, six or seven years on a dairy farm. I would be very much encouraged to borrow if I could get terms of twelve, fifteen or twenty years. There is a heavy flow of money out of the district. That money might have been used to buy motor cars or new refrigerators or to improve properties, and it could have been circulating in the district.
The trend of compelling farmers to reduce their overdrafts annually, which has developed in recent years, is having quite an impact on the economy of country towns. This aspect of the matter must be looked at closely by banking leaders and by the Reserve Bank of Australia. We must stem the drift of people away from country areas. We must keep the economy running as strongly as possible in rural areas. I believe that this is one of the aspects of the problem that must be investigated. Farmers should not be compelled to make the annual repayments that are now customary. I know that the banks will say: “We do not compel people to make these repayments. If a person cannot meet the repayments, we do not take them.” That is just common logic. However, I do know that a farmer, once he has signed an agreement that requires him to make annual repayments, will stint himself and will make the repayments, even if he is forced to refrain from buying a new car or a better second-hand car, because he knows that his bank manager will be on his back if the repayments are not made. He knows, too, that if there is a drought and he wants additional finance to tide him over, he will not get it unless he has honoured his agreement to make annual repayments. So an investigation of this aspect of the problem is awfully important. I may be wrong. But I believe that there is a strong case for a proper investigation of this banking rule that compels farmers to make annual reductions of their overdrafts or mortgages.
I rose to speak about the legislation relating to the Commonwealth Development Bank. The Development Bank has been a very successful institution. I have been told by branch managers of the Commonwealth Bank in my area that 50 per cent, of the applicants for money have been satisfied by the Commonwealth Development Bank. This is rather a different story from that told by the honorable member for Macquarie (Mr. Luchetti) tonight. He referred to the case of a man who had plenty of assets and who, although he was a very reliable gentleman, was refused a loan from the Development Bank. I find that very hard to believe. I think that in the case cited by the honorable member there must be a nigger in the woodpile somewhere because my experience in the cases that I have taken up has been that the Development Bank has been very considerate and very reasonable. Many primary producers could not have developed their properties to the extent that they have done but for the aid they received from the Commonwealth Development Bank.
I should like to say also that the Development Bank is playing a very important part in furthering the growth of the fishing industry in northern New South Wales. The prawn trawling industry there is going through quite a prosperous period at the moment. Many of the young men there have sought to buy their own boats. Some of them would have very little equity to offer as security for an advance to buy a new boat, but I have heard of cases in which the Development Bank has lent as much as 80 per cent, and 90 per cent, of the cost of a new trawler. Certainly the annual repayments are fairly high, but these young men seem to be able to meet them. If there were no Development Bank, these young men would not be able to obtain the finance necessary to buy boats. As it is, prawn trawling is an expanding industry and the Development Bank has lent a great deal of money in order to promote that expansion.
Mr. Speaker, I have very much pleasure in supporting the proposal to increase the capital of the Development Bank by £5,000,000.-. This institution will play a very important part in the future development of primary and secondary industry in Australia. I shall be very pleased if the matters that I have brought to the notice of the House are examined closely by people in positions of authority.
.- The Opposition supports the measure but offers the criticism that the capital of the Commonwealth Development Bank is completely inadequate for bringing to fruition the objectives for which the bank was established. I was rather interested and quite surprised to hear the honorable member for Richmond (Mr. Anthony) criticize the private banking interests so strongly, but I feel that the faults which he sees are of his own Government’s making. I say that because it has been the policy of his Government to remove competition from the private banking interests. It is that policy which has led to the inefficiency of the private banking institutions about which he complains. We believe that an effective and progressive Commonwealth banking organization entering into full scale competition with the private banking organizations would benefit both the community and the economy and also remove those defects which give rise to the criticism which the honorable member has levelled at the private banking system tonight.
I think it is very important for us to realize that the object of setting up the Commonwealth Development Bank was to establish an- organization to finance people with new ideas and with ability in a more liberal manner than do the private banks, and to provide this finance without looking at the normal criteria which guide the conventional banking system. Unfortunately, the history of conservative governments has been one of great political interference with the Commonwealth Bank right from its inception. The Labour movement is very proud indeed to be able to boast that the Commonwealth Bank is its own brain child and that it was a Labour government which introduced legislation in 1911 for the establishment of this organization. It is a brain child of which we are very proud. It is a brain child which has done a great deal for the development of Australia. It has done much for Australia both in times of peace and times of war and I think it is good that we look briefly at past history in order that we- might understand where’ we must go in the future. First, the bank was formed in 1912. Its first governor Sir Denison Miller, was given a completely free hand.
– Order! I remind the honorable member that we are dealing with the Commonwealth Development Bank and I ask him not to go too wide of the subject matter under discussion.
– Very well, Mr. Speaker, but I think that we should look at the past in order to see where we are to go in the future. In those early days, the Commonwealth Bank was given a completely free hand as to the type of business it should take. No restrictions were placed upon it, and no governmental interference in its administration was allowed. For that reason, it made progress. We all remember how it was able to go to the continent and capture much of the wool business there. In 1926, with the appointment of the first Commonwealth Bank Board, its operations were very severely restricted indeed. We also know that, with the implementation of national security regulations during the last war the bank was still able to intervene and to help and guide the economy of Australia-
– Order! The honorable member is persisting in discussing the Commonwealth Bank. The subject-matter before the Chair is the provision of additional capital for the Commonwealth Development Bank, and I ask the honorable member to confine his remarks to that subject. A discussion of the history of the Commonwealth Bank would be out of order.
– One of the main points I am trying to make relates to the operation of the Commonwealth Development Bank in the hire-purchase field, and I suggest that it is very important for us to look at what was done in this field in the past, especially under the 1945 Banking Act. I remind honorable members that that Act gave the bank power to enter into the hirepurchase field. It was given adequate capital and power to lend money at low rates of interest with the result that in a very short space of time it became one of the biggest financiers of the purchase of new motor cars in Australia. But one of the first- actions- of- this Government when it came to office was to restrict the activities of that bank in the hire-purchase field. First, the Government limited the bank’s capital, and it is that action which has a bearing on our suggestion now that the capital of the Development Bank is inadequate. The first action taken by this Government when it attained office was to restrict the Development Bank’s hirepurchase business to the lending of money that had been repaid to it by borrowers. When we remember that the cost of each unit was increasing daily we must appreciate that the number of units that the bank could finance under this restriction of its activities was decreasing daily. Later, the bank was ordered right out of the field altogether.
– Order! I warn the honorable member that he is ignoring the ruling of the chair.
– No, Mr. Speaker.
– Order! The honorable member will refer to the Development Bank and not the Commonwealth Bank.
– I come to that point now. The criticism we offer of this legislation is that it does not provide for the voting of sufficient capital to the Development Bank. The Labour Party maintains that this bank must once again enter the hire-purchase field in a strong and virile manner. If it is to do that, it is essential that the Development Bank have far greater capital resources than it has to-day. A tremendous ramp is being worked against the community to-day by the private hirepurchase organizations, and one of the most effective methods by which a pattern may be set for private industry is for the Commonwealth Development Bank to. enter into the field of hire-purchase. The Labour Party advocates that course. This can only be done by a very great increase in the capital of the organization. That was my reason for tracing the history of the bank. We advocate an appreciable increase of its capital and we criticize this legislation because we feel it is inadequate in that respect. We believe it is vitally important that an organization such as the Commonwealth Development Bank be given its head, and we find it very difficult to understand why this Government, which claims to be the champion of free enterprise and. to believe in competition, deliberately restricts the operations of the bank. The Government allows the private banking organizations to move as far and as wide as they wish. There are no restrictions on the capital they may raise or on where they may obtain the necessary money for hirepurchase activities. Yet this Government instrumentality, which could do so much in establishing a pattern of assistance for industry, is restricted in its capital requirements. We believe that the shackles must be removed.
Now is the time for a re-appraisal of the important question of hire-purchase finance. The Commonwealth Development Bank should be removed completely from any obligation to follow the normal criteria laid down for the assessment of risks. Not only should the bank be allowed to enter the hire-purchase field, but it should be able to assist all forms of industry and agriculture and to go into the field of small loans to individuals. To do this, it must receive a far greater increase in its capital. We ask the Government to remove the shackles and give the Development Bank an opportunity to do the job required of it. History shows that the Commonwealth Bank has done a wonderful job to assist the development of this country both in war and in peace. It has done the job in the past. If the Development Bank is given the capital to enable it to operate freely, we believe it could compete effectively with the hire-purchase organizations and private banking instrumentalities referred to by the honorable member for Richmond (Mr. Nixon). In doing so, the bank could really help this country to progress.
.- In the course of this debate there has been a series of criticisms from members of the Labour Party. I would like first to deal with the criticism offered by the honorable member for Lalor (Mr. Pollard), who stated his belief that the decision of the Privy Council in the bank nationalization case will effectively prevent the nationalization of banking by any incoming Labour Government. If I have misrepresented the honorable member, I apologize for it, but I have stated what I understood to be the substance of his remark. Surely the bank nationalization legislation was rejected by the Privy Council merely on a minor point - on the basis of one., provision. . .A bank .having been nationalize^ the, effect of* the pro.vis.ion in the bill was that it could no longer carry on business in Australia. The Privy Council ruled that that provision contravened Section 92 of the Constitution and declared that the legislation was invalid. There is nothing to prevent a future Labour Government, with careful expert drafting based on previous experience, and having paid adequate compensation to the owners of the banks, from nationalizing the banks outright.
A number of other criticisms were made, including a curious one which indicates that a number of honorable members opposite have not read the charter of the Commonwealth Development Bank. That criticism was to the effect that the bank could not accept deposits. The fact is that there is every opportunity for it to accept deposits. There is no bar on the bank at all in this respect. In fact, some of the other banks - largely the Commonwealth Savings Bank and probably some others - have made deposits with it. There may be other deposits. Any one who feels inclined to do so can make a deposit there. Of course, the Development Bank does not actively seek deposits, because in so doing it would be in competition with the Commonwealth Trading Bank and the Commonwealth Savings Bank.
Another criticism was that the Development Bank relies on agents. In fact, most of its business comes from the trading banks - from the private trading banks and the Commonwealth Trading Bank. Naturally, every one in business or likely to be in business has his own banker. It is quite natural that if a businessman is discussing a project with his banker and it is found that for various reasons the project cannot be financed by that bank, he should be referred to the Development Bank. This does not mean that the Development Bank gets only bad business. To say that would be to completely misrepresent the proper function of the Development Bank. The man may need long-term finance or other assistance which could not be provided by the Commonwealth Trading Bank or any other such financial institution. It would be a great mistake if the other banks ceased to act as agents for the Commonwealth Development Bank.
It is apparent that the thought that runs through the minds of many honorable members opposite is that the, Development Bank should be turned, into something .that it . is not intended to be and that it should take over a very large sector of the banking functions in the country, without regard even to the Commonwealth Trading Bank. Obviously the resources which can be made available for the things which the Development Bank is designed to do must necessarily be limited. It would be a gross mistake to squander them on ordinary trading bank activities. The fact that Development Bank loans fell last year is an indication that the rest of the banking system was no longer being subjected to the degree of squeeze that it had previously received and was able to lend more freely, as well as being able to lend under the term loan arrangements. That is a development which is probably healthy, as the honorable member for Richmond indicated in his remarks, because for many years the trading banks were officially encouraged to get out of long-term loans into short-term loans. This process of exportation by the authorities started in the days of the Labour Government and continued into the days of this Government, on the grounds that in the rest of the world commercial banks lend on short terms and that long-term finance should come from other sources. This was the reverse of the historical trend of the Australian banking system, and a course of action for which I have no sympathy.
The fact is that much of the demand for finance is due to the restriction of the rest of the banking system to prevent inflation by holding down the supply of money, but the effect has been to engender a strong demand for institutions which have come along and picked up those loans which were refused by the banks. In this last year the Development Bank has come more to its true function, which is to finance those things which do not properly belong to the commercial banking sphere.
Honorable members opposite have criticized the profit which the Development Bank made. Its profit, £890,000, was made on capital provided very largely free of charge by the taxpayer. This £890,000 which has gone into reserves will, as is made clear at page 29 of the report of the Commonwealth Banking Corporation, be available for further lending. It is perfectly reasonable that this money should be used to provide loans that may be desired in the future. Much has been made of the fact that many small industrialists are not sufficiently aware of the facilities provided by the Development Bank. This is perhaps reflected in the fact that three-quarters of the bank’s total business last year arose from non-metropolitan sources. This goes hand in hand with the fact that this bank is providing a very useful service to industrialists and to many others. It is a service which, if it were more widely known, would be more widely used. The Development Bank has done an extremely good job in guiding and financing producers of many kinds.
The honorable member for Macquarie (Mr. Luchetti) referred to a number of cases in which loans had been refused but, in my experience of the banking system, the man who turns to politicians to establish his creditworthiness virtually has none. This is the brutal truth. I do not know the details of the cases mentioned by the honorable member; all I say is that I greatly suspect them. The virtue of the Development Bank is that it provides longer term finance for the rural sector of the economy and also makes tailor-made loans to small industrialists. These loans otherwise would not be forthcoming because they are of a kind of finance which cannot be obtained from a stock exchange or other sources and do not legitimately come within the banking system. It will be noted in another part of the Commonwealth Banking Corporation report, which hitherto has apparently eluded the censors, that loans for the development of more remote areas and Territories are the subject of special attention. This means that the bank is guiding development in the Northern Territory and Papua and New Guinea. Many of the projects in those places are far outside the normal province of the banking system but at the same time deserve a great deal of encouragement.
If the Development Bank were to do what so many honorable members opposite wish it to do and provided finance for all kinds of other things, that would subtract from the total resources which can now be made available very properly for projects which cannot be brought within the compass of the trading bank system, particularly as that system is subject to strict official controls and is bound by central bank policy and government edicts.
I hope that when the question of increasing the Development Bank’s capital again arises, the sources from which it is to be increased will be examined, because the charter of the bank is extremely wide. So far a very large proportion of its capital has come directly from the taxpayer. Some of it is derived in the form of balances due to other banks and largely the Commonwealth Savings Bank, to the extent of £14,000,000. The Commonwealth Savings Bank has deposits of £939,000,000 and that is a large start in regard to what is lent so far to the Development Bank.
The honorable member for Melbourne Ports (Mr. Crean) claims that the Development Bank has not been provided with all the capital that is required. The Treasurer (Mr. Harold Holt) made it quite clear from the outset that when this institution requires more capital its requirements will be carefully considered in relation to the situation which then exists.
I cannot really believe that even the Australian Labour Party could follow the logic of the honorable member for Macquarie’s suggestion and I doubt whether he has fully considered all the implications. He suggested that the Commonwealth Development Bank should make loans and that this should be the road for the Commonwealth to come into management and ownership - up to 50 per cent. - of the undertakings. This would indeed be a high road to the kind of society which I hope we shall never see.
– Did he say that?
– I understood him to indicate it. He is one whom most of us regard as being a very moderate member, but it would be interesting to find out how deeply and why this particular thought has taken root in the Labour Party. But if, in fact, we were threatened with the possible nationalization of the banking system and if the financial position were used to take over in the field of ownership and management the undertakings so financed, we would indeed have a very undesirable form of society.
– Was he saying that farms and properties should be taken over?
– Perhaps at some future time the honorable member for Macquarie will explain his remarks.
The Development Bank is performing a very useful function. Its aim is not so much to ensure security for the money advanced as to increase productivity in various activities by loans, whether to individuals or to industrial concerns. It is making loans, for an average term of ten years, which would not be available from other sources and it has to bear a high cost in processing individual cases. It is giving extremely valuable advice to those concerned although it does not always make loans to them. Such a service is a most desirable use of public funds, but I suggest that if further capital is required in the future we should have a look at the sources from which it is to come. This is a very constructive measure and I have great pleasure in supporting it.
Question resolved in the affirmative.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr. Fairhall) read a third time.
In committee: Consideration resumed from 19th September (vide page 1253).
Department of Civil Aviation.
Proposed expenditure, £15,537,000.
Department of Shipping and Transport.
Proposed expenditure, £12,139,000.
.- I move -
That the proposed expenditures be reduced by £1-
As an instruction to the Government -
I approach the first matter in the context of the Government’s frequently expressed policy of ensuring competition between two chosen instruments, Trans-Australia Airlines and Ansett Transport Industries Limited. This policy was re-asserted quite strongly after Ansett Transport Industries Limited took over the old Australian National Air ways. Since then the position has been greatly distorted by further take-overs by Ansett Transport Industries Limited. In February, 1958, the company took over Butler Air Transport Limited and re-named it Airlines of New South Wales Proprietary Limited. In the same month the Butler subsidiary, Queensland Airlines Proprietary Limited, was also taken over by the company. In August, 1959, it took over Guinea Airways Limited and re-named it Airlines of South Australia Proprietary Limited, in January, 1961, Mandated Airlines Limited, now operating as Ansett-M.A.L., and in April of this year MacRobertson-Miller Airlines Limited.
The consequences of these take-overs appear very clearly from the report of the Department of Civil Aviation, given to us last month. The Minister for Civil Aviation (Senator Paltridge) estimated that for. the present financial year the total traffic’ on the mainland non-competitive routes of the commission - that is, the routes operated by Trans-Australia Airlines - would be 3,886,000 ton miles, while the figure for the company would be 21,464,000 ton miles. As a result of that estimate he determined that the commission should have a maximum aircraft capacity for these mainland non-competitive routes of 6,858,000 ton miles, and that the company should have a capacity of 37,776,000 ton miles. It is clear, therefore, that on noncompetitive routes Ansett Transport Industries Limited operate five or six times as great a mileage, and has five or six times as great a capacity, as T.A.A. In interstate operations the organizations are granted the same capacity. T.A.A. more than holds its own in this field. T.A.A. has to share its interstate routes with Ansett, but Ansett maintains a monopoly of many of its routes
In Australia and New Guinea. What Ansett has it holds; what T.A.A. has it must share.
The number of aircraft of the two organizations has grown disproportionately as appears from another appendix to the report. T.A.A. has on the mainland 41 aircraft, while Ansett and all its subsidiaries have 69. In New Guinea T.A.A. has 19 aircraft and Ansett has 23. It is quite plain that the Government’s declared policy of equal competition between two chosen competitors is breaking down, and is being broken down quite deliberately.
There are some unusual features about this. The Minister stated in 1961 that in order to meet reasonable private enterprise standards Ansett Transport Industries must have a target of the order of 10 per cent, after tax and a reasonable alloocation to reserves. Parliament has never been given audited figures for A.T.I.’s operations, and certainly not figures for its airlines operations as distinct from its road transport, accommodation and now television operations. Another feature is that court decisions have shown that T.A.A. cannot operate helicopter services, for instance, as Ansett can, and the Minister has bluntly told Senator Kennelly in another place that he will not alter the act to permit T.A.A. to carry out such ancillary services. Again, the Minister has made it plain to all the mainland States that he will not introduce legislation to permit T.A.A. to operate intra-state, even in those States which pass legislation permitting it to operate within such States. In August of this year, for instance, Sir Thomas Playford told the Leader of the Opposition in the South Australian House of Assembly -
I told the Minister for Civil Aviation that South Australia would be prepared to allow T.A.A. to operate air routes in South Australia if the Commonwealth Government would permit it. The Commonwealth Government has refused South Australia as it has refused Western Australia, Victoria and New South Wales.
It is plain that the Government, by inaction as well as by deliberate action, is seeing that T.A.A. is kept smaller than Ansett-A.N.A. It is not allowing T.A.A. even to operate in those fields where it can do so without an alteration to the Commonwealth Act or the passage of complementary
State acts. The clearest example of this has arisen in the last few months. T.A.A. is still awaiting a decision on its application to fly between Darwin and Perth in competition with the Ansett subsidiary, MacRobertson-Miller Airlines Limited. There are other cases in which T.A.A. could operate without any complementary State legislation and without new Commonwealth legislation. These include services between the Northern Territory and Western Australia and New South Wales, where it is not allowed to operate. T.A.A. could also provide intra-state air services, incidental to interstate and territorial services, for instance through Coffs Harbour, Cooma, Wagga, Broken Hill, Mildura, Mount Gambier, Kalgoorlie and all the South Australian and Western Australian ports. The Government should permit T.A.A. to compete with its competitor. It should allow it to remain just as large as its competitor, if it really adheres to the policy of equal competition between two chosen competitors.
The next of the instructions to the Government concerns the Australian Coastal Shipping Commission. It is now generally realized that Australia ought to operate ships overseas. The commission in fact has the function, under sections 15 and 16 of the relevant act, of carrying out such overseas trade. For generations Australia has exported agricultural, horticultural and pastoral products to Britain and Europe, but the freight on them is subject to more and greater rises than is the freight on similar products to the same markets from New Zealand, Argentina and California. Australia is among the ten or twelve largest trading countries in the world and all her trade must go by sea, but she is among the very few nations which do not own a single ship engaged in overseas trade. Australia is among those nations whose principal products are manufactured goods, but she is the only such nation which has no public or private shipping services at her disposal to carry and promote her own manufactures.
The position has been that under this Government the freight payable overseas on imports has doubled, and the amount of money that we have to forgo on our exports has also doubled. I invite honorable members to look at the reply given by the Minister for Trade (Mr. McEwen) to a question asked by the honorable member for Newcastle (Mr. Jones) on 15th August last.
Our marketing boards make the same reports to us. This year the Australian Dried Fruits Control Board in its report said -
As Australia is so dependent on export income, it is the Board’s firm conviction that it will be essential for the Australian nation as a whole to accept some responsibility for primary industry freights, if present standards and progress in this country arc to be continued.
The Australian Canned Fruits Board in its report for this year said -
It has been announced that freight rates for sea carriage of general cargo (which includes canned fruits) to the East Coast ports of North America and to the West Indies are to be advanced by 10%, operative as from 1st November 1963. When implemented, this sharp increase must add to the difficulties of our exporters in successfully meeting competition for East Canadian trade.
The board also said -
Although the volume of our trade wilh Singapore and Malaya is being maintained at a modest level, it could be developed, perhaps materially, if the high cost of sca transport could be satisfactorily adjusted. Currently the freight rate, Australian Eastern ports/Singapore is 249/- A.C. per cubic ton, which highlights an apparent’ anomalous situation whereby carriage of the same commodity over an appreciably longer haulage from South Africa-Singapore/Malaya incurs a charge equivalent to 125/- A.C. per ton - approximately onehalf of that applicable to Australian shipments.
The Australian Meat Board has frequently pointed out that Argentina has to pay only about two-thirds of the freight that Australia pays on chilled and frozen meat sent to the British market and New Zealand pays somewhere in between. On canned meat, the board reports that the freight rates to the United Kingdom are as follows: -
From Australia, 224s. 8d. per ton measurement,
From New Zealand, 162s. 6d. per ton measurement,
From Argentina, 150s. Od. per ton weight.
The honorable member for Petrie (Mr. O’Brien) elicited from the Minister for Primary Industry that the board has been dealing with the increase of freights to the United States of America. The galling feature is that the 10 per cent, increase will not apply to meat consigned from New
Zealand to the same destination. In fact, there will be no increase at all for meat sent from New Zealand to the same destination.
This state of affairs does not concern only the primary industries. In November of last year, the Associated Chambers of Manufactures of Australia unanimously adopted the following resolution: -
That mis Annual Meeting of A.C.M.A. records its apprehension and concern that high shipping freights from Australian ports to neighbouring countries are handicapping increased exports of manufacturing companies and this may jeopardise the increased exports which this country so urgently needs and which were stimulated by the export incentives.
It urges that the Government should take such action as may be necessary to secure for Australian exporters shipping freights competitive with those from other exporting countries to the markets which are logically considered suitable for Australian goods.
We know of the disparity in freight rates on steel, lt costs more to send steel 4,000 miles from Australia to Indonesia than to send it 10,000 miles from Great Britain to Indonesia. It costs half as much again to send steel 8,000 miles from Australia to the west coast of America or Canada as to send it from Britain or Europe 9,000 miles to the same destination. It costs half as much again to send steel 4,500 miles from Australia to Singapore as to send it over twice the distance from Britain to Singapore. This applies also to steel sent to Hong Kong.
Earlier this year, a New Zealand trade mission visited us. A newspaper at the time published the following report: -
The leader (Mr. G. W. Lane) said inadequate freight services were hampering trade between Australia and New Zealand. “One of the first things you are asked after you get an order is ‘ When can you deliver? ‘ “ said Mr. Lane. “We need a regular and dependable freight service across the Tasman, It is as vital to you as it is to us, for you, too, want to build up your exports “.
To give an illustration of the New Guinea position, I found when I was there last February that it costs more to transport cocoa to Sydney from Lae than from Ghana, coffee from Rabaul to Sydney than to Hamburg and canned beef to New Guinea from Australia than from Argentina. Quite clearly, the only way to curb the monopoly practices of the overseas shipping conferences is through competition, by the select charter of vessels and the growing use of our coastal fleet for overseas trade. The emphasis must be on participation in overseas trade and steady expansion. This can be done under the act as it stands. But the Government has prevented the Australian National Line from competing in this field, as all our primary-producing bodies, our manufacturing concerns and our trading partners have pointed out again and again.
It would seem that I have not time to speak now on the third and fourth points of my motion. Perhaps I may continue by leave of the Committee now or after the next member on the Government side has spoken.
.- The Deputy Leader of the Opposition (Mr. Whitlam) has moved that the proposed expenditure for the Department of Civil Aviation and the Department of Shipping and Transport be reduced by £1. He has referred to Trans-Australia Airlines, the Australian Coastal Shipping Commission, the presumed failure to make full use of Australian shipyards and to draw up a national roads plan in time for the next period of the Commonwealth Aid Roads Agreement. I wish to refer to Commonwealth aid for roads. I certainly do not propose to support the Opposition’s proposal to reduce the estimate by £1. This is tantamount to a motion of want of confidence in the Government for its administration of transport in Australia. 1 want to make a few observations about the Commonwealth Aid Roads Act 1959. As honorable members know, the agreement under the act comes up for review during this financial year. The act provides for a specific grant of money to the five mainland States on a well-known formula - that is, one-third in respect of the area of a State, one-third in respect of population and one-third in respect of the registration of vehicles. Provision is made for Tasmania, which receives one-twentieth of the total grant. In 1959, the Government made available £220,000,000 to be paid over five years, starting with a first payment of £40,000,000 and ending this year with a final payment of £48,000,000. A matching grant for roads was also paid to the States during this period. In the briefest terms, this was a sum of £30,000,000 made available to the States also on a formula basis. It started in 1959. with the initial payment of £2,000,000 and concludes this financial year with a grant of £10,000,000. Only States that spent over their Commonwealth grant were qualified for the extra allocation.
The payments to the States mean two things. They mean, first, that in this current financial year £58,000,000 will be distributed amongst the six State governments for road development and maintenance. This does not include the financial provisions for beef roads in Queensland and cattle roads in Western Australia. Secondly and more particularly, this is the last financial year that money will be available under this grant. If money is to be made available from the Commonwealth to the States for 1964-65, a new act will have to be passed by the Parliament. If precedent is followed, the States will be consulted by the Government during this financial year as to what kind of financial agreement they require for the future. I think the committee should remember this when considering the motion of the Deputy Leader of the Opposition. The reasons for this consultation are well known. In simple terms, the Commonwealth Government has no constitutional powers or responsibilities in the field of road building or planning. In brief, the Commonwealth provides the money to the States, but the Commonwealth has no say in its management.
Having briefly described the present act, I will now say something about the road grants in general. The present act will lapse in this financial year. I imagine that the Minister for Shipping and Transport (Mr. Opperman) is receiving from organizations all over the Commonwealth an abundance of advice on what the Government should do to solve Australia’s road financing problems. One suggestion that is freely canvassed is that the whole of the proceeds of the petrol tax should be made available for roads. There is a misleading idea in the minds of many road users, namely, that the petrol tax is a federal levy for road finance, specially struck for that purpose. In truth, it is a revenue tax in the same way as the excise duty on liquor and the excise duty on tobacco. In my opinion, if we were to make available the whole of the proceeds of the petrol tax, they would not be sufficient for the development of the roads system throughout the Commonwealth. That would be the position if the problem were solely one of money; but I believe that it is not solely one of money. I propose to say something about that later.
It is well to remember that the amount of money paid by this Government to the States each year represents about 80 per cent, of the amount collected on the sale of petrol. However, if the Government adopted the suggestion that the proceeds of the petrol tax should pay for roads - I know that that proposition has been recommended by the Labour Party on many occasions - it would inflate the transport cost structure which is already a heavy burden on road users. The effect that it would have on our export trade would not be inconsiderable. To adopt that suggestion at the present time would be highly dangerous to the cost structure of our primary and secondary industries.
There is no need for me to remind the committee that internal transport costs in a huge land mass such as Australia could well be the key to competitive prices for our exports. Loading the cost of road maintenance and development on to the petrol tax would do the very thing that we do not want to do, namely, increase transport costs. Road transport is a prime cost in our national housekeeping. We do not want to inflate costs in that way. In the present situation of traffic congestion, particularly in the inner areas of all the big cities, the cost of wasted fuel, wasted time, wasted manpower and wear and tear is already a big percentage of the cost structure of both primary and secondary industries.
In this financial year the Government has a real opportunity to rethink the question of Commonwealth road finance, based on the experience gained ir the last five years and an accurate assessment of our present and future needs. We must think nationally and plan accordingly if we are to make any impact on this very important Commonwealth problem. As I said previously, it is not simply a matter of providing more money; it is also one of distributing the money according to need and not according to political expediency.
Since 1923 the Commonwealth Government has been financing a system under a variety of formulae. I suggest that that has been done on a very unsound basis. It appears that a State which in past years received payments much below its requirements has had portion of the gap made up later in Commonwealth grants. Surely that is a wrong approach to the future planning of a national roads system. A grant for roads should be based on arterial needs, not on a compromise. It should be based on actual needs, not on a metropolitanversuscountry or State-versus-State basis; no one area or State is more important than the whole country.
– Come to the point.
– There must be planning not only between one State and another but also between the metropolitan areas and the country areas. Traffic congestion and wasted fuel and manpower in the city areas, caused by out-of-date road planning, are indirect expenses just as much to the primary producers as they are to the secondary producers. I want to make that point very clear to the honorable member for Mallee who just interjected.
– The point is very weak, anyway.
– I say this to the honorable member: If I assert that the need is reaching a crisis in the metropolitan areas in the eastern States, that is not to imply that country roads should be neglected. All roads need maintenence and improvement in keeping with these modern times. It is in the cities that the boom in vehicle use is greatest, traffic congestion is worst, and the cost of rectification is greatest. That is why, when the honorable member for Mallee was speaking recently about Commonwealth aid roads grants and ‘the importance of making bigger allocations to country areas, I said to him that the money should be spent where the need is greatest.
– I agree with you wholeheartedly; and the need is greatest in the country.
– There you are. The honorable member is prepared to give his answer to a question which I believe should be examined thoroughly and answered on the basis of the actual needs and requirements of both metropolitan and country areas.
The Commonwealth has a positive role to perform in the development of a roads system in Australia, particularly in regard to arterial roads- on which our defence needs’ are so ‘dependent: At present the
Commonwealth Government finds the finance for such roads, but has no say in the management of the finance. I have always said in this chamber - almost ad nauseam - that we should have a national roads plan governing our interstate roads. At present we have six authorities managing the one highway. One has only to drive north from the city of Melbourne, in which I live, for 1,000 miles to see the tremendous gaps and variations of standards of road maintenance on one highway. I see no difference between the Commonwealth accepting responsibility for the administration and financial development and maintenance of national highways and the Commonwealth accepting responsibility for the administration of other national transport systems, such as sea and air transport systems.
I believe that the next six months will present a challenge to the Commonwealth Minister for Shipping and Transport, and also to the six State ministers for transport, to get together and by co-operation to produce a plan that will unify State thinking on at least our national highways. During the last 40 years we have had a system under which road grants have been paid to the States out of taxation revenue. With an increase of 95 per cent, in the vehicle population in the last ten years, I believe that that system is now out of date. It is not good enough to put down highways for future generations to use and to expect to-day’s taxpayers to meet the cost. The Commonwealth Government must take the lead in setting up a central authority capable of determining the arterial road requirements of this country.
By June of next year this Government, since 1959, will have distributed £250,000,000 for Australian roads. As I said before, that amount does not include grants for beef cattle roads in Queensland and Western Australia. Most of that money was provided out of taxation revenue. Surely our experience of loan raising during the last twelve months offers a better solution than that for financing one of Australia’s most valuable assets. I believe that in future construction of roads can be financed by raising loans. The Commonwealth’s role in the financing and maintaining of arterial roads in this country .-.is positive and ‘dean. Finally I trust that the opportunity that presents itself to the Commonwealth this year with the termination of the Commonwealth aid roads grants scheme of 1959 will not be lost for want of a realistic approach to this most important national matter.
.- I thank honorable members for allowing me to take a second period in which to elucidate the motion that I proposed earlier. I was concluding my comments on the proposition that the Government should permit the Australian Coastal Shipping Commission to operate in overseas trade. It is often said that wages make it unprofitable for Australia to operate in international trade. Even if the operation of Australian ships did result in a trading loss, the net benefits of such trading would still be to our national advantage because exports have been a critical limiting factor in general economic development. It is difficult to compare shipping profits and losses within Australia with those overseas. Most maritime countries give some form of subsidy or tax assistance which is not available in Australia.
What could be so deplorable about subsidizing shipping when Australia’s internal airlines are subsidized by £13,000,000 a year? Though our shipping wage costs are high, Australian wages and manning scales are comparable with those of the Common Market and Scandinavian countries which trade to and from Australia. They are only a fraction of those of Canada, the United States and, indeed, the American ships which sail under flags of convenience.
The chartering and operating of ships in overseas trade is not proposed by the Labour Party only to save some of the considerable cost to our balance of payments. Through competition it would strengthen the bargaining position of our exporters and so force down or at least stabilize freight rates and through new and direct services it would promote exports to markets in the south seas and around the Indian Ocean which otherwise would not be open to us.
Sir, the question of overseas shipping is related to the subject of shipbuilding. This aspect was dealt with earlier in these estimates by my colleagues the honorable member for Newcastle (Mr. Jones), the honorable member for Batman (Mr. Benson) and the honorable member for Grey (Mr. Mortimer). On three occasions the Government has referred the subject of the shipbuilding industry to the Tariff Board. It did so in March, 1954. It received a report in June, 1955, which it tabled in April, 1956. Again the Government sought a report in December, 1957. It received the report in June, 1959, and tabled it in November, 1959. On that occasion the Tariff Board made several proposals for increasing Australia’s shipbuilding. It pointed out that Australian companies primarily engaged in overseas trade had not, at least since 1942, placed any orders for new vessels with Australian yards. It pointed out also that the right form of inducement might bring orders to local yards from Australian subsidiaries of overseas oil companies for some tanker requirements for employment in the coastal trade as well as the overseas trade. The board pointed out that the possibilities of government action to encourage Australian bulk cargo vessels to engage in two-way overseas trade in certain limited commodities were not to be overlooked. The board pointed out also that there would be possibilities of inducing orders from New Zealand operators provided assistance were extended to enable them to purchase an Australian-built vessel at no greater cost than that of a vessel purchased from other sources. The Government rejected all those proposals. The Minister at the time said that it was the Government’s intention to aim at a shipbuilding industry of no greater capacity than would be needed to meet the likely level of orders for the coastal trade.
Even by that test our production is not being maintained. The honorable member for Bass (Mr. Barnard) was told recently by the Minister for Shipping and Transport (Mr. Opperman) that in the last ten years the number of coastal trading vessels in Australia had declined from 201 to 125 and that tonnage bad declined from approximately 800,000 tons to about 600,000 tons. The Minister told the honorable member for Hughes (Mr. L. R. Johnson) that shipyard employment on merchant shipbuilding at the principal shipyards was no greater to-day than it had been ten years ago.
We are in fact paying subsidies to use foreign ships. The Prime Minister (Sir Robert Menzies) told me that last year the Department of External Affairs chartered the “ Thala Dan “ and the “ Nella Dan “ for annual relief voyages to Antarctica, that the Department of Trade guaranteed financial assistance not exceeding £100,000 a year for a shipping service to the west coast of South America and the Caribbean and a similar sum for a shipping service to the east coast of South America, that a subsidy of £150,000 was paid for Australian ships operated by Australian crews in the AustraliaNew Guinea trade and a subsidy of £4,250 for shipping services to Northern Territory ports in the Gulf of Carpentaria and that arrangements were made with the Sitmar Line and the P. and O.Orient Lines to carry assisted British migrants. The Minister for Trade (Mr. McEwen) told the honorable member for Hughes that Australian trade missions had to use the “Delos”, the . C……. Banka “ and the “ Chandpara “ and that Australian wheat was transported to China in British, Greek, Panamanian, Scandinavian and Dutch ships chartered by China.
This is an extraordinary position surely - that Australia should carry out her scientific and trade missions and her overseas, island and Tasman trade in ships which wc subsidize or charter from overseas. There is a regular demand for ships for Australia’s own purposes and we pay other people to provide them. Our present shipbuilding position is related to orders for the Navy. The Minister for the Navy (Senator Gorton) told the honorable member for Wide Bay (Mr. Hansen) that the Royal Australian Navy has an anti-submarine frigate and a survey vessel under construction and an escort maintenance vessel on order in Australian shipyards, but has two D.D.G. destroyers under construction and one on order in the United States and four submarines on order in the United Kingdom. The Minister told the honorable member for Newcastle that since the inception of the Royal Australian Navy 82 of its ships have been built in Australia and 53 have been built overseas. Of its vessels still in service, six were laid down in Australia since the present Government came to power and seven were laid down overseas.
This position arises despite the fact that at the current Tariff Board hearing the chairman of the Australian Shipbuilding Board swore that Australian shipyards are equal to any yards in the world and their costs are comparable. He swore also that Australian shipyards are operating at no more than 45 per cent, of their capacity.
The most glaring example of the Government’s unpatriotic attitude towards shipbuilding concerns coastal tankers. In 1951 very little petrol was refined in Australia. At that time there were no continuing permits for overseas tankers to operate on our coast and there were only 48 single voyage permits. Last year, however, eleven continuing permits and 121 single voyage permits were granted to overseas tankers to operate on the Australian coast without paying Australian award wages. The honorable member for Grayndler (Mr. Daly) asked the Minister for Shipping and Transport why tankers were not subject to the same laws as all other shipping on the Australian coast. The Minister replied -
No amendment of the Navigation Act is required for the purpose of providing the same measure of protection to licensed tankers as is available to licensed dry cargo ships.
In other words, for the last twelve years during which the principal growth of coastal traffic has been in tankers the Government, as a matter of settled policy, has exempted from the Australian law every tanker which chose to operate on the Australian coast.
In May last year the honorable member for Griffith (Mr. Coutts) asked the Minister whether the Government proposed to permit the importation from Yugoslavia of some cattle-carrying ships. The Minister replied - 1 am not aware of any such negotiations that may have taken place.
However, in April and May this year he granted import licences for two such ships, in one case twelve days and in the other case three days before his approval was presented to the Collector of Customs. He worked with amazing rapidity when at last he was confronted with the matter but he would have us believe that he did not know it was imminent. There is one concluding aspect on this. The Minister for Territories (Mr. Hasluck) has allowed scores .of overseas ships to be brought into the New
Guinea or island trade which could have been built in Australia, particularly in the yard at Maryborough.
I pass now to the question of a national roads plan. The present Commonwealth Aid Roads Act will expire at the end of next June. The National Association of Australian State Road Authorities reports that for the ten-year period 1960 to 1970 there will be an estimated deficiency of £810,000,000 in the funds required to bring Australian roads up to the standard which they all agree is required. In other words, there is a deficiency of over one-third of the amount of money that is required.
Since the 1955 High Court and Privy Council decisions on the State ton-mile taxes it is clear that the only tax which can be imposed evenly on all road users is the petrol tax, which is a Commonwealth monopoly. Under section 96 of the Constitution this Parliament can grant financial assistance to any State on such terms and conditions as it thinks fit. The Government can make its petrol tax or other grants to the States on condition that they build roads on specific routes or to specific standards or for specific purposes. A State government cannot make a neighbouring State government co-ordinate their two road systems. Queensland, for instance, has shown great resistance to road links between the channel country and South Australia and New South Wales. Other States have too often used their road systems to centralize trade in their own capitals. Similarly, local government authorities cannot compel each other to co-ordinate their road systems. You can always detect the shire boundary by the difference in the road surface.
The present formula is grossly unfair to some States, particularly to Queensland. Queensland has 25 per cent, of the main road mileage in Australia and receives 18 per cent, of the Commonwealth aid roads grants. Stating this in another way, whereas the average amount granted by the Commonwealth under the act for main roads amounts to £750 a mile, Queensland receives for its main roads, under this act and the beef roads act, £616 a mile. A State is required to spend 40 per cent, of its grant on rural roads. With this exception, however, the Commonwealth has left the States free to spend the grants in any way they wish. The Commonwealth has failed conspicuously to meet the problems of centralization and congestion in the State capitals, as the honorable member for Isaacs (Mr. Haworth) mentioned so persuasively in his speech.
The motoring public cannot be expected to tolerate an increase in petrol tax unless it is satisfied that the whole of the increased funds will be spent on roads. The Commonwealth cannot be expected to increase the petrol tax unless the States inform it how they will spend their increased grants. The States cannot expect the Commonwealth to accept the proposition that they can spend the Commonwealth’s revenues better than the Commonwealth can spend those revenues. Accordingly, the Commonwealth and the States must confer much more fully and frankly before the end of this financial year on how much money is required for roads and how it can best be spent. This involves more revenue from the Commonwealth and more co-ordination by it. The Commonwealth should establish an authority such as the United States Bureau of Public Roads, which was set up in 1894. It determines the routes and standards and allots one-half of the funds for national highways, while the States construct them.
I conclude by pointing out that the Commonwealth has never carried out its responsibilities in the transport field. No aircraft can be imported into Australia without the Commonwealth’s permission. No aircraft can be operated unless the Commonwealth allows it hangar space on one of its aerodromes. No ship is built in Australia without Commonwealth assistance. No railway track has been standardized or rebuilt for the last 50 years without Commonwealth assistance. The fairest form of road finance is a Commonwealth monopoly. In all these fields the Commonwealth has a prime initiative and responsibility and all these forms of transport should be dovetailed. The economics and the facts have not interested this Government as yet, but Australia cannot properly develop its own vast continent with its limited material resources until the Commonwealth does in fact take the initiative and accept its responsibilities in transport.
.- Nothing would give me greater delight than to be able to agree with the Deputy Leader of the Opposition (Mr. Whitlam) that we should build up a shipping line to carry our goods overseas, but unfortunately this is not feasible. Any one who knows anything of this problem will agree that the honorable gentleman has based bis arguments on fantasy. Primary producers, who obviously have greater representation on this side of the chamber than on the Opposition side, are very concerned about freights because they form a major portion of their costs. The honorable member stated that overseas freights had doubled and he suggested that we should pattern an overseas shipping line on happenings in our coastal trade. He did not state in what period the overseas freights have doubled. I shall take the period from 1939 to the present time. In 1939 freight on general cargo between Sydney and Melbourne was 22s. a ton. To-day it is £9 a ton. If that basis were applied to overseas freight, how on earth would our primary producers meet their freight costs?
I believe that it would be possible to operate an Australian-owned overseas line if we had in the industry a union which was determined to assist in the building up of such a line, but unfortunately we have in Australia a Communist-led seaman’s union which is out to destroy anything that is built on the Australian waterfront. As the Deputy Leader of the Opposition has stated, we had a most efficient cargo service on our coast. I think he mentioned about 200 ships, but they have been put out of action because of the irresponsible tactics adopted by the union. I shall mention a number of cases that were quoted from time to time by the “ Sydney Morning Herald “. I know that the honorable member will place great value on that newspaper. One ship was held up in 1950 because a demand was refused to replace the ship’s iron-tired wheelbarrow with a rubber-tired one, the delay costing the shipping company a large sum of money.
– Have you ever heard one in action?
– I have wheeled many of them. The “ River Loddon “ was held up in the same year on a demand for carpets in the cabins, stainless steel wash basins and larger bath towels. The account given by the “ Sydney Morning Herald “ continues -
Still another move, somewhat later held up Kooralya in the Hunter River because the men insisted on having two pieces of fruit every day, a choice of two sweets and a change in the brand of soap issued.
Coolana was tied to her moorings in 19S1 while the men demanded percolators instead of coffee pots in their mess room.
All these affairs and a hundred similar ones oer a considerable period of time were carried on with a jeering derision against a background of “ peace campaigning “ . .
A report of the remarks of Judge Foster in relation to the ship “ Iron Spencer “, which is owned by the Broken Hill Proprietory Company Limited, reads as follows: -
In January somebody in Iron Spencer declared that he saw a cockroach. A secret meeting of seamen was called and refused to sail. Never before, of course, had a cockroach been seen in a ship, or presumably in a seaman’s home. They demanded complete and expensive fumigation of the ship with cyanide.
The Health Department was called in and operated. “ Still,” (said His Honour), “ these brave seamen were unimpressed and demanded a Board of Reference.”
The Judge directed that the ship should sail and after “ considerable delay the men unlocked the doors, came out of their secret meeting and took (he ship to sea,” but on their return decided not to go to sea again unless he went to Newcastle.
Those are some of the reasons why we cannot operate a national shipping line in overseas service. We very successfully operate a national shipping line on our coast for the handling of bulk cargo. For obvious reasons, bulk handling is very much cheaper than the usual methods of handling general cargo. We would not have a hope in the world of competing even with rail freights under the present system of loading and unloading general cargoes carried in our coastal trade.
Much has been said in this chamber about the imposition of an additional freight of three-eighths of a penny per lb. on beef shipped to the United States of America. I have some figures for the calendar year 1962 in respect of the Cairns waterfront. They show a loading rate of 6.7 tons per gang-hour. Pre-war loading rates were from 14 to 16 tons per gang-hour.
– What is the rate now?
– The rate now is 6.7 tons per gang-hour. In one instance, 80 men took a whole day to load 5 tons of meat into a ship. Those are the things that we pay for. The present freight rate of beef shipped to America is 4d. per lb. That is equivalent, I suppose, to about £5 10s. for each live beast. If we could raise the rate of loading to even the pre-war figure of about 15 tons per gang-hour, we would save, on my estimate, 24s. a ton in freight charges. This would be the best way to lower our freight costs. We want only a decent day’s work. The figures that I have in respect of the Cairns waterfront for the calender year 1962 show that in one instance cargo was loaded at the rate of 23 tons per gang-hour. Gangs can load at that rate when they are in a hurry, perhaps wanting to go to the races, or something like that. They can really turn it on when they want to.
All these circumstances are reasons why we cannot possibly conduct an overseas shipping line owned by Australian operators and dependent on Australian seamen paid Australian award rates and working under Australian award conditions. Under these conditions, all sorts of penalties operate when Australian ships leave Australian waters, and this makes the whole proposition absolutely prohibitive. I have some figures which show that operating costs of a 10,000-ton cargo ship operating under the Australian flag and Australian award conditions are just double the operating costs of a similar ship operating under the British flag. I would advocate that instead of ourselves entering into overseas trade we throw our coast open to ships operating under foreign flags. After all, Australia has a coastline of 12,000 miles. Shipping formerly provided the cheapest and most efficient transport that we have ever had, serving ports such as Cairns, Port Douglas, Cooktown, Thursday Island, Karumba and Burketown, on the north coast of Queensland, and Darwin. But the Communistcontrolled elements in the trade unions have altered that. I am afraid that the Australian Labour Party does not give much assistance to the large majority of union members who do not support the practice of communism in the unions. We have to make the best of the situation, and the only way in which we can beat these Communist elements ‘and keep our costs down is to allow ships flying foreign flags to trade on our coast until our own trade unions get a bit more sense and ensure that their members do a better day’s work for a good day’s wages.
I have heard the Deputy Leader of the Opposition suggesting previously that we pay, I think, £150,000,000 a year in overseas freights, insurance and that sort of thing. But he does not mention the fact that the overseas shipping lines spend £90,000,000 a year in Australia on supplies, maintenance and other facilities required by their ships when they come here. We do not hear anything about that side of the picture from the honorable gentleman. He suggested not only that we should operate our own ships overseas but also that we should build in our own shipyards all the ships that we need. There again, what sort of costs would we have? Our shipbuilding costs are higher than shipbuilding costs anywhere else in the world. Britain, Germany and the Scandinavian countries, and especially Japan, with her lower costs, are gradually increasing the tonnage built in the world to-day.
– So far, the honorable member has said everything bad about Australia and Australians.
– I am concerned about the position of primary producers. Let the honorable member answer my arguments if he can. All these things amount to a situation in which, under present conditions in Australia, we cannot conduct our own overseas shipping line.
While I am discussing the subject of shipping, I should like to mention to the Minister for Shipping and Transport (Mr. Opperman) a matter relating to the construction of tugs. A tug built in Australia costs £300,000, whereas a similar tug imported would cost only £150,000.
– Where are the honorable member’s facts? . Give us the facts.
– I have looked these points up. The honorable member can look them up for himself. A tug built in Australia does not attract any government subsidy as do other kinds of shipping constructed in Australian shipyards. I hope that the Minister will look into this situation, because it is very serious. It greatly affects our shipping operations and freight charges.
Finally, I want to comment on the concern for Trans-Australia Airlines that was expressed by the Deputy Leader of the Opposition. It is a very long time since Labour was in office, of course, but I remember that when it was in office it was determined to completely destroy the only alternative to that airline. Had Labour been in office any longer, we would certainly have had only one airline operating in Australia. There is no doubt about that. This Government has ensured excellent competition in civil aviation in Australia, and that competition has given us probably one of the best and safest airline systems in the world. There is no doubt that if Labour got into office again it would continue this policy of operating only nationalized services both in the air and on the sea. That would be a very serious matter for Australia because, as I said before, with our vast distances, transport costs not only in the air but overseas are one of our great problems. In our own interests, in the interests of the people of Australia, and in the interests of the primary producers in particular, we must keep costs down to a minimum.
.- It was rather amazing to hear the honorable member for McPherson (Mr. Barnes), a Country Party member, speaking in opposition to a proposition from this side which would mean a reduction in shipping freights. The speech which he has just delivered demonstrates quite clearly that he is either not aware of the true position or is not interested in it. It clearly demonstrates that he is merely opposing Labour’s proposition on the principle that it runs counter to what his hillbilly corner supports.
I should like to speak on the estimates for the Department of Civil Aviation. In doing so, I support the amendment proposed by the Deputy Leader of the Opposition (Mr. Whitlam), and all that he has said. While emphasizing that I believe that the Minister and the Government should be severely criticized for their actions over the whole field of civil aviation, I propose in the short time at my disposal to refer particularly to the position with relation to civil aviation in Western
Australia. There is no doubt that the air services in Western Australia are inadequate and, in many cases, wholly unsatisfactory. In saying that, I want to make it perfectly clear that no blame for this lies at the feet of the employees of the airline companies. As a matter of fact, my experience has been that the members of the staff are always very courteous and only too willing to go out of their way and beyond what I think would be the normal course of their duties in an effort to give a decent service under completely impossible conditions.
The Minister must know of the dissatisfaction that exists in respect of air services in Western Australia, but he has made no attempt whatever to improve them. In fact, he may have even worsened the position this year when, without receiving or asking for any assurance that the service would be improved, and without giving Trans-Australia Airlines any opportunity at all to enter the field, he handed over to Ansett-A.N.A., an eastern States company, the controlling interest in the only airline that operates in Western Australia. By failing to ensure that the service would be improved, the Minister paid no heed to what the people of the area needed. His only thoughts were to as how best the interests of the Ansett organization could be served, and he followed that course right through because, not only did he refuse T.A.A. the right to enter the intra-state field but he also refused to allow that airline to enter the interstate run between Darwin and Perth which may be said to be solely in the hands of the Ansett company, a complete monopoly. There is no competition and therefore no need to worry about whether the service is good, bad or indifferent; nor is there any need to worry about the possibility that some other airline will move in and take the business.
The Minister and some of his colleagues in another place tried to substantiate their actions by referring to a few approving comments which have appeared in the press. They claim that those half dozen expressions of opinion prove that their action was correct; but that is not the position. Those expressions of opinion were made simply because the people are looking for a better service and, had T.A.A. or any other airline gone into that area, they would have expressed themselves in the same manner, and perhaps even more strongly.
The people in the isolated areas of Western Australia have reached the stage at which they would support any move which they thought might bring them some improvement in the service. I am very doubtful whether this take-over by Ansett will bring about any marked improvement. Hie Minister has admitted that MacRobertson Miller Airlines Limited cannot cope with the needs of the north. In a statement published in “ Jetstream “, the official publication of MacRobertson Miller Airlines Limited, this is what the Minister said in connexion with the granting of a second Fokker Friendship to the company -
Its purchase has been approved to meet the increasing traffic demands on M.M.A.’s North West and Darwin routes. . .
Traffic figures produced by M.M.A. in support of the application for the new aircraft have established the need for its acquisition. They reflected a picture of rapid development in the north and an ever-growing reliance on air transport.
So he admits the increased traffic demands between Perth and Darwin. Therefore, even if he was not prepared to allow T.A.A. to enter into the intra-state field there was a very good reason why that airline should be allowed to enter the route between Darwin and Perth. Surely that run, like other interstate runs, must now be classed as a trunk route. If that is so, then, under the law, both airlines should be competing for the business. Recently, in an attempt to defend himself on the subject of monopolies, the Minister relied upon a section of the Airlines Agreement Act which reads -
And whereas one of the objects of the parties to this agreement is to secure and maintain a position in which there are two, and not more than two, operators of trunk route airline services, one being the Commission, each capable of effective competition with the other, and the parties intend that this agreement shall be construed as having regard to that object.
He said -
No provision is made there for a government monopoly airline or a privately owned monopoly airline.
If the Minister’s interpretation of that section of the act is correct, then I suggest that, by refusing to allow T.A.A. to fly the Darwin-Perth route, the Government is allowing a monopoly to exist. It is also denying T.A.A. the right which it has under the act to compete effectively with the other airline on trunk routes, and while this state of affairs is allowed to continue I suggest that the Government is not observing the provisions of the act as it should do, and as it is obliged to do. But, even apart from that, if T.A.A. were allowed to fly that route, it would to some extent relieve MacRobertson Miller Airlines Limited and release some of its aircraft which could be diverted to other routes and provide a better service. If the Minister had been serious in his statement as published in “ Jetstream “ which I have quoted, he would have accepted the opportunity to place additional aircraft in the area and so provide a better service. But, of course, it is becoming more evident every day that the Minister and the Government are allowing Ansett to dictate the terms of competition and the charges and services relating to air travel in Australia.
The agreement refers to effective competition between the two airlines. Surely the real function of T.A.A. is to operate as a competitor and not just as a buffer for Ansett. What actually happens in regard to profit and competition? The profit target set for T.A.A. for 1962-63 was 6 per cent., but it was subsequently found that the profit of the airline was sufficient to pay 7 per cent., and this was done. But the Minister was not satisfied with that position. Now, with the approval of the Treasurer (Mr. Harold Holt), he has set a target of 7 per cent, for T.A.A. for next year. Surely it would be more in keeping with the purpose and function of T.A.A”. to leave the target at 6 per cent, and so allow this airline a margin to enable it to improve its services or to reduce charges and generally provide real competition for Ansett to measure up to. But, of course, if that were done it would immediately put Ansett in the position of having to sacrifice some profit in order to give better service, and that would not suit Ansett. Apparently it does not suit the Minister, either.
The Minister has said that he is glad to report that the progress of the privatelyowned airline and its associated companies has matched that of its government-owned competitor, T.A.A., with which it has competed vigorously on major trunk routes throughout the year. I suggest that the Ansett organizations would not need to be over-vigorous to match the competition which this Government allows because, whenever T.A.A. looks like providing some serious competition, the Minister is quick to throw a spanner in the works. Ansett has the right to operate right round Australia, a right that is not enjoyed by T.A.A. Despite the provisions of the Airlines Agreement Act, the two airline policy, and all this rubbish regarding vigorous competition, neither the Minister nor the Government is prepared to allow T.A.A. to enter into the interstate run between Darwin and Perth so that it also may have a complete air route right round Australia.
I said earlier that I was not satisfied that this take-over by Ansett would bring about any great improvement in services in Western Australia. The press report of the statement made by the chairman of MacRobertson Miller Airlines reads -
M.M.A. would continue to seek to conduct its business of providing good and efficient airline services far W.A. and the N.T.
There would be no change in the management structure of the company. . . .
M.M.A. had contractual obligations to the Commonwealth Government. These obligations involved terms which largely determined the way in which the company did things and influenced its dividend-paying capacity.
The Minister expressed himself as being completely satisfied with the service. This is the report of what he said -
He had no doubt that the high operational standards set by M.M.A. would be maintained.
He believed that the association M.M.A. would have with a big airline might well produce advantages, both to the airline and to the public who relied upon the service.
That statement proves to me that the Minister did not ensure that even the present service would be retained, let alone ensuring that any improvement would be effected. He certainly did not interest himself in ascertaining whether it would be in the best interests of the people to put Ansett-A.N.A. or to put T.A.A. in the field. If the Minister means that, he will, continue to police the agreement between the
Commonwealth and the MacRobertson Miller Company as he policed it previously, we cannot expect very much.
As we all know, under the agreement the Minister and the Director-General of Civil Aviation can run a ruler over the whole business and they have the final say about what will be done in relation to routes to be flown, services to be provided, frequencies, charges for freight and passengers and so on. On 30th April last the Minister said that the prime object of the subsidy was to help the public and not the airlines. We all know that M.M.A. is receiving an annual subsidy of approximately £130,000 and has paid a steady dividend of 7i per cent, ever since 1959. So we should expect the Minister to ensure that the time-tables and so forth would be in the best interests of the people. But apparently that is not happening and very little interest is taken in the air services provided by M.M.A.
I wish to refer now to a recent change in the time-table. Complaints were received about the previous time-table and we expected that when it was changed for the summer season some improvement would be effected. Unfortunately the situation has worsened. One of the local governing bodies has pointed put that one fortnightly service will bring only portion of the mail and one daily paper, that all weekend papers will be at least five days old and some seven days old. It is also pointed out that it will now take fourteen days to receive a reply to a letter whereas the time taken before the change in the time-table was only seven days. It is pointed out in another complaint that now that the air mail arrives on Thursday there will be three outgoing mails on the one day and no more for a week. What a silly, stupid, state of affairs that is! It is pointed out in yet another complaint that eleven station properties on one mail run alone will be adversely affected and that there will now by only one mail a week as against two in the past. I have several other complaints of the same nature. In addition, I have received other complaints about freight being off loaded along the track hundreds of miles from its proper destination and not being picked up until several days later. I have heard of perishables being put off and not picked up for several ‘days. «.- >’.
If the Minister were to police the agreement as he should, we would not have these complaints. The Minister asks the people to accept his assurance that he will closely watch the position and see that this high standard that he talks about is maintained. I hope that he will pay some heed to my remarks and that he will have a good look at the position instead of treating it with the scant regard that he has shown in the past. I hope he will seriously consider putting T.A.A. on to the run between Perth and Darwin and giving that airline the same rights as Ansett-A.N.A.
.- Mr. Chairman, competition between Australia’s two major airlines is quite a healthy, invigorating influence until misguided enthusiasm brings about unethical business dealing. In Perth, Western Australia, it has been reported to me that for some months TransAustralia Airlines has been concerned about its loss of ticket sales to the opposition airline. While the existing Trans-Australia Airline office is situated in the main commercial street, St. George’s-terrace, Ansett-A.N.A.’s office is a little more central in William-street. What has happened in recent weeks appears to me to be a good example of panic action on the part of T.A.A. with the outlay of substantial funds and the use of questionable procedure to achieve its ends.
The “Weekend News” published last. Saturday evening in Perth directed attention to the fact that T.A.A. is bidding big money to get tenancy of a prime central Perth site for a ticket office. The site is. the key position at the corner of Hay-street and William-street in the Gledden Building, which is owned by the University of Western Australia. I am suggesting tonight that behind T.A.A.’s anxiety and pressure to get this particular site is the general competition with Ansett-A.N.A. in all capital cities for handy and popular central positions for ticket sales and booking offices. Apart from a personal desire to see any Government instrumentality set a sound example of business methods and procedure and ethical dealing, I find myself speaking tonight in the interests of constituents of mine - the Corica family of South Perth - who stand to lose not only their existing business in the Gledden Building but also substantial capital because of the determination of this noted airline organization, T.A.A. to get at all costs a business site at this particular location in Perth.
At my request the Corica family has given to me a statutory declaration covering the whole sequence of negotiations, in this matter. I have the declaration before me. It was my wish to have the full facts of this case, as I have noted that both T.A.A. and the University of Western Australia, through their representatives, were quick over the weekend to claim that everything about this deal was correct and above board. The site which is so attractive to T.A.A. comprises an area of 30 feet by 15 feet which was previously occupied by Spry’s hosiery shop and an area of 30 feet by 18 feet which is still occupied by the Corioa family and is used as a coffee lounge. Some seven years ago the Corica family acquired their area by purchase from a florist for £4,500, and they converted the premises into a tea room and coffee bar. The statutory declaration states -
When we bought the business of Mrs. Frape we enquired from the agents of the university . . as to the possibility of obtaining a lease of the ground floor shops and were told that it was not the policy of the university to grant leases and that we had nothing to fear and that in fact Mrs. Frape has been a periodical tenant for a considerable number of years.
It is interesting to note that during the last seven years the University of Western Australia, which is the owner of the building, demonstrated without a shadow of doubt complete satisfaction with the Corica family as tenants by offering them additional space in the building. In 1959, room 13 on the first floor immediately above the ground floor shops was taken over also on a monthly tenancy. In 1960 the basement of the building was token over and conducted as a modern restaurant. As recently as eight months ago, room 14 on the first floor was taken over, again at the request of the university. It is a material point that rooms 13 and 14 on the first floor are linked by a new stairway, installed by the Corica family, and would be of no use to them without the accompanying use of the ground floor shops.
Last July Mr. Corica was visited by a representative of a Perth real estate agent.
In the statutory declaration Mr. Corica says -
He told me that he had a potential buyer for the ground floor shops and that the buyer wished to acquire the business so as to have vacant possession of the shops but would not carry on a business in any way similar to mine. He did not indicate to me the type of business. He asked me would we sell and I told him “No”. There was further discussion and ultimately in an effort to get rid of him I told him I would discuss it with my parents. Some days later the same gentleman called again and I told him we would not sell. Again there was further discussion and ultimately I said we would not consider less than £20,000 as our price and went on to add that I could not imagine any buyer giving that figure for an empty shop. I told him of another building in the vicinity which I knew was for sale but he told me that building had been sold and in any event that building was not suitable. After a further delay of some days the same gentleman called on yet a third occasion and asked me if he were to make a firm offer would we consider it and I told him he was wasting his time. At no time in any of these interviews was it indicated to me that the Agent was representing TransAustralia Airlines or was it disclosed to me that there was a possibility of my being served wilh a notice to quit. I regarded these visits purely as a normal business enquiry. I was not an anxious seller and I did not appreciate that our future business activities were in any way in jeopardy.
A few days later Corica learned that this estate agent had purchased on behalf of T.A.A. the hosiery shop run by Miss Spry for a price of £10,000. This was for a 30-foot by 15-foot space, without any stock or fittings. Corica wrongly assumed at this point that Trans-Australia Airlines had diverted its attention to Miss Spry, now had its ticket office and was no longer interested in the area he occupied. On 12th August, without any discussion or warning, the University of Western Australia issued to the Corica family a notice to quit the ground floor shop area of 30 feet by 18 feet.
It transpired that Trans-Australia Airlines changed its approach entirely. After dealing direct with Miss Spry as a tenant and paying her £10,000 - a large enough sum, I suggest, to cause the directors to be asked to justify that outlay - the airline then turned to the university for direct negotiations, well knowing that the Coricas would be involved in a drastic curtailment of their established business without any compensation. What amazes me - I trust it will’ amaze the honorable member for
Phillip (Mr. Einfeld) also- is that T.A.A. offered and the University of Western Australia accepted a further payment of £10,000 for the coffee shop and, in addition, a rent of £100 a week, for the two business sites.
No recognition appears to have been given by the university authorities to a moral obligation to be fair to the Corica family, as tenants of seven years’ standing. No endeavour appears to have been made by T.A.A. to treat with the Coricas on the basis of a full disclosure that the premises were required by T.A.A. and that a substantially increased rent would be offered to the university. Here we have a very good case of a government instrumentality moving in for the kill and bringing about the crash of a family business which, incidently, is giving excellent service to the public of Perth and is just becoming profitable after years of sacrifice. This action will render virtually useless the plant and fixtures in the coffee bar.
There is a reference in the statutory declaration by the Coricas to the fact that their outlay for the ground floor of this building amounts to £9,500 or thereabouts, representing the initial purchase price and the expenditure in equipping the shop, including plant and fixtures. The statutory declaration also states -
It is difficult to estimate but we would certainly suffer a capital loss of not less than £7,500 if we had to vacate the shop with no compensation.
It seems to me that the University of Western Australia said to the Coricas early in the negotiations, “ It is not our policy to give leases “, but quickly changed its policy when Trans-Australia Airlines entered the field. Furthermore it took from TransAustralia Airlines a premium of £10,000 and I suggest it is abundantly clear to the House that that was equitably due to the Coricas as compensation similar to that paid to Miss Spry. In my opinion there is a special obligation on any government or semi-government authority or instrumentality to be ethical in business deals. The public expects - and I think it is entitled to expect - that such bodies will not drive extremely hard or unfair bargains and will not put a man out of his livelihood. It is bad enough if that sort of thing occurs in normal business, but the public does not expect it from a government instrumentality. I am disappointed, first, in the management of Trans-Australia Airlines as far as the negotiations are concerned. I am equally disappointed and surprised that the authorities of the University of Western Australia have been associated with such a deal.
It is my desire, in speaking on this matter to-night, that the Minister for Civil Aviation (Senator Paltridge) should ask TransAustralia Airlines for a full explanation of the whole of this transaction. To do justice to the aggrieved people - the Corica family - I ask the Minister to investigate, with Trans-Australia Airlines, in the first place whether the notice to quit the two ground floor shops in Gledden building should be withdrawn. There is something about this matter which is not satisfactory. If that cannot be done, I hope that the University of Western Australia will be asked to pay the premium of £10,000 received from Trans-Australia Airlines, over to the Coricas as just compensation. It is my understanding that the family has not quit the premises. Until their request for equitable treatment is satisfied I hope they will stay where they are in the premises and will use every possible legal form to prevent these grossly unfair negotiations from being completed.
I am grateful for this opportunity to praise the competition between the two major airlines of Australia. That is the competition that this Government stands for. But again I underline the responsibility that rests upon this government instrumentality, and other similar bodies, to set a higher than normal standard in business dealings. I think this is what the public expects, and I am sure they will support me, nothwithstanding the comments of honorable members opposite. I am glad to have had this opportunity to deal with this matter and I trust that the Minister for Civil Aviation will ask for the report that I have requested.
House adjourned at 11.11 p.m.
The following answers to questions were circulated: -
m asked the Prime Minister, upon notice -
What payments were made by federal departments and instrumentalities during the last financial year to (a) subsidiaries of Ansett Transport Industries Limited and (b) Trans-Australia Airlines for flights to and from (i) Cooma and (ii) Woomera?
– The answer to the honorable member’s question is as follows: -
The honorable member should be aware that Trans-Australia Airlines does not serve either Cooma or Woomera other than in the form of occasional charter flights. As to the remainder of the question, information on payments made by federal departments and instrumentalities during the last financial year to subsidiaries of Ansett Transport Industries Limited for flights to and from Cooma and Woomera is not available and a great deal of time, expense and effort would be required to obtain it.
y asked the Minister for Immigration, upon notice -
– The answers to the honorable member’s questions are as follows -
August, 1963, I announced a campaign to make non-Briitsh migrants more aware of their opportunities for becoming Australian citizens. The campaign involves the distribution throughout Australia of a new series of colourful posters and pamphlets. One publication is directed to new settlers themselves, and another to Australians who may wish to explain the advantages and conditions of citizenship to their migrant friends. A form of application and a reply-paid envelope are being distributed with these pamphlets which are also included with my personal letter to migrants as they become eligible to apply for citizenship. Concurrently with this campaign a survey is being conducted by field officers of the Department of Immigration to ascertain the reasons why eligible migrants do not seek citizenship. When the results of this survey are known, I will consider what further steps can be taken to overcome any factors which may be impeding naturalization. The honorable member will appreciate that the purpose of all these activities is to invite settlers who are eligible to join us in citizenship, but not to persuade them against their will. The Government recognizes that the question of citizenship involves personal, intimate, and often very complex decisions which must be left to the individual migrant himself.
Immigration. (Question No. 197.)
y asked the Minister for
Immigration, upon notice -
– The answers to the honorable member’s questions are as follows: -
United Kingdom- -1st April, 1947. 31st March, 1967.
Malta- 1st January, 1949. 30th June, 1964.
Netherlands- 1st April, 195 1. 31st March,
Cite as: Australia, House of Representatives, Debates, 8 October 1963, viewed 22 October 2017, <http://historichansard.net/hofreps/1963/19631008_reps_24_hor40/>.