17th Parliament · 3rd Session
The President (Senator the Hon. Gordon Brown) took the chair at 3 p.m., and read prayers.
– Will the Minister representing the Minister for Commerce and Agriculture give the reason for making available to South Australia only 180,000 bushels of wheat for feed purposes for August, as that quantity represents only 50 per cent. of the feed wheat allotted for July? Will the Minister immediately review the situation in South Australia with a view to increasing the quantity of wheat to be made available for feed in that State?
– I shall bring the honorable senator’s question to the notice of the Minister for Commerce and Agriculture.
– I ask the Minister for Trade and Customs the following questions: - (1) Is the Government aware that thousands of British and Allied scientists and experts followed the Army of Occupation into Germany for the purpose of investigating new German scientific inventions? (2) What measures has the Commonwealth Government taken to obtain from Germany as reparations, technique, data, drawings, flow charts, and processes which, if conveyed to Australia promptly, could be of inestimable value to manufacturers and primary producers? (3) If the Government has not already taken steps, in company with the Governments of the United Kingdom, the United States of America and Canada to obtain such information, will it immediately ascertain from primary and secondary industries in Australia their requirements, and then despatch experts by air to Germany to ensure that Australia will obtain a fair share of this valuable form of reparations? (4) Will the Government give consideration to the making of representations to United Kingdom and Allied countries that as part of its indemnity, all German patents should be made available to the world? (5) Will the Government also request that all information secured by the United Kingdom experts shall be made available to the Dominions ?
– The matter referred to by the honorable senator is under consideration, but it is not usual to disclose Government policy in reply to a question.
– In view of the many complaints that have been made about the quality of Australian woollen cloth, can the Minister for Supply and Shipping say what steps the Government has taken, or proposes to take, to raise to the pre-war level the standard of tweed and other woollen textiles manufactured in Australia?
– I assume the honorable senator is referring to double weft cloth.
– Practically the same quantity of double weft cloth is being manuf actured to-day as in pre-war years. Any limitation of manufacture is due to insufficient man-power being available.
– by leave - On the 22nd June, Senator Cooper drew attention to the serious losses of sheep occasioned by dingoes, and asked for the release of more rifles and. ammunition to enable pastoralists to combat this menace. The gravity of the matter raised by the honorable senator is fully appreciated by the Minister for the Army (Mr. Forde) and by me. A report was called for, and the Minister has advised me that the position regarding the release of rifles and ammunition is at present as follows: A total of 9,586 impressed . 303 rifles has been released for sale in the various
States for the purpose of destroying dingoes and other pests. Of this total, 3,382 have been sold in Queensland, or an average of 235 a month, which is four times greater than the average monthly sale in any other State. The balance at present available for sale in Queensland is 487 rifles. When stocks in Queensland are exhausted, further sup~plies will be made available from holdings in New South Wales, and, if necessary, from Western Australia, where the demand has not been so great as in Queensland. Impressed rifles of .303 calibre have not at any time been available in sufficient quantity to meet all demands. Consequently, sales have been restricted, to pastoralists and other bona fide purchasers who need the weapons for the destruction of pests. In addition to the sale of impressed .303 rifles, steps are being taken to make available a number of standard service rifles through the Commonwealth Disposals Commission. It will be appreciated, however, that this number must be limited, when I mention that during the past year 80,000 such weapons were released to the United Kingdom to assist in meeting operational requirements in Europe and in the SouthEast Asia theatre. As regards ammunition, SOO rounds are sold with each rifle. In addition, since March of this year, 700,000 rounds of .303 ammunition have been released to the trade for resale; and on the 28th March a further 4,000,000 rounds were offered to the Commonwealth Disposals Commission. In addition to the weapons mentioned above, a total of 2,804 rifles of .22 calibre have been offered to the Commonwealth Disposals Commission. Ammunition for this type of weapon is available through trade channels. As reductions in the order of battle permit further quantities of rifles to be released from Army stocks, they will be offered to the Commonwealth Disposals Commission for sale.
asked the Minister representing the Prime Minister, upon notice -
– The Prime Minister has supplied the following answers : -
asked the Minister representing the Prime Minister, upon notice -
– The Prime Minister has supplied the following answers : -
asked the Minister representing the Minister for Immigration, upon notice -
SenatorCOLLINGS.- The Minister for Immigration has supplied the following answers : - 1, 2 and 3. All these questions are at present receiving the careful consideration of the Government, and negotiations are proceeding with the United Kingdom Government in respect of the questions raised and other matters affecting the migration to Australia of ex-service personnel and other intending British migrants.
SenatorCOLLETT asked the Minister represen ting the Minister for the Navy, uponnotice -
– The Minister for the Navy has supplied the following answers : -
For pay purposes the various rates are grouped as follows: - Group 1. - Telegraphist, draughtswoman, dome teacher operator, regulating Wran. Group 2. - Signaller, signaller (A/M) driver, writer, stores assistant, cook, seamstress, coder, hairdresser, Wran qualified ordinance, Wran qualified ordinance (optical), teleprinter operator. Group 3. - Telephonist, assistant teleprinter operator, tracer, sick berth attendant, dental attendant, assistant writer, assistant stores assistant, plotter. Group 4. - Telegraphic probationer, signaller probationer, assistant cook, stewardess, messenger, range marker, Wran general, regulating Wran probationer.
Censorship of Mails
asked the Minister representing the Minister for the Army, upon notice -
– The Minister for the Army has supplied the following answers : -
The practice in the other services is a matter for those services. It is understood, however, as regards the Navy, that Royal Australian Navy censorship regulations provide for -
It is understood, however, that the practice varies and that normally, in a large ship or establishment a censorship officer is appointed to censor officers’ mail. In other cases, officers submit their mail to an officer higher in rank for censorship. Officers of the rank of commanders and above censor their own mail. In a small ship, on the other hand, permission is frequently given for officers to censor their own mail.
It is understood that in the Royal Australian Air Force, up to about eighteen months ago, officers submitted their letters to another officer for censorship. Since then, I understand all officers censor their ownmail.
It may be added for the honorable senator’s information that, in view of the satisfactory progress of recent operations and in view of warnings that havebeen issued to officers in regard to breaches of security, it will not be necessary to continue the order any longer in its present form. Arrangements have been made with the Commander-in-Chief for its provisions to be relaxed by transferring the responsibility to commanding officers, who will be authorized to suspend the directions of the order wholly or in part when they consider conditions so warrant.
Bill received from the House of Representatives and (on motion by Senator Keane) read a first time.
In committee: Consideration resumed from the 24th July (vide page 4414).
Clauses 1 to 7 agreed to.
Clause 8 - (1.) A body corporate which desires authority under this Part to carry on banking business in Australia may apply in writing to the Treasurer for authority accordingly. (2.) Where any such application is made, the Governor-General -
if the applicant is a body corporate specified in the First Schedule - shall; and
b ) if the applicant is a body corporate not so specified - may, grant to that body corporate an authority to carry on banking business in Australia.
.- I move -
That sub-clauses (1.) and (2.) be left out with a view to insert in lieu thereof the following sub-clauses: - “ (1.) The Governor-General shall, within seven days after the commencement of this Part, grant to each body corporate specified in the First Schedule an authority to carry on banking business in Australia. “ (2.) A body corporate (not being a body corporate specified in the First Schedule) which desires authority under this Part to carry on banking business in Australia may apply in writing to the Treasurer for authority accordingly. “ (2a.) Where any such application is made, the Governor-General may grant to that body corporate an authority to carry on banking business in Australia.”.
It is the intention of the Government that those institutions which are at present carrying on the general business of banking, or the general business of a savings bank, and are listed in the First Schedule to the bill shall receive an authority from the Governor-General as a right. Clause 8 as at present drafted provides that each such institution shall go through the formality of making an application for an authority, and a period of six months is allowed to it in which to make the application. In view of the fact that the institutions listed in the First Schedule, other than the two savings banks, are already in possession of an authority under the National Security (War-time Banking Control) Regulations, and that it is intended to issue the authority automatically, it has been decided to amend clause 8 to provide that all the institutions listed in the First Schedule shall automatically receive an authority from the Governor-General within seven days after the commencement of this part without the necessity for making an application. In addition to eliminating the unnecessary step of making an application, the amendment will also facilitate the machinery arrangements necessary for that change-over from operation under the War-time Banking Control Regulations to operation under the proposed act. Sub-clauses 2 and 2a continue the provision in clause 8, as now drafted, that any other body corporate desiring an authority to carry on banking business shall make application in writing.
– The Opposition is glad that the Government has accepted its advice. The amend: ment will make the position more acceptable to honorable senators on this side.
Amendment agreed to.
Clause, as amended, agreed to.
Clauses 9 to 12 agreed to.
Clause 13- (5.) Where the Commonwealth Bank has; in pursuance of sub-section (2.) of this section, assumed control of the business of a bank, the Commonwealth Bank shall remain in control of, and shall continue to carry on, the business of that bank until such time as -
– I move -
That, at the end of the clause, the following new sub-clause be added : - “ ( 7. ) In exercising any of its powers under this section the Commonwealth Bank shall not be subject to direction by the Governor-General or by the Treasurer.”
This matter was dealt with fully during the second-reading debate. The amendment will leave full powers: in the hands of the Commonwealth Bank, and will not place any bank under the direction of the Treasurer of the day or of the Executive. I take this opportunity to intimate (that in view of a foreshadowed amendment by the Minister for Trade and Customs (Senator Keane) to provide for a right of appeal by banking institutions, I do not propose to move an amendment to that effect of which notice has been given.
– Clause 9 of the Commonwealth Bank Bill provides that, in the event of a difference of opinion between the Government and the bank on questions of monetary and banking policy, the Treasurer may inform the bank that the Government accepts responsibility for the adoption by the bank of policy in accordance with the opinion of the Government and that the bank shall then give effect to that policy. The exercise by the Common.wealth Bank of its powers under this clause is dependent, not on the bank’s monetary .and banking policy, but on its assessment of the facts relating to the financial position of any particular trading bank. The terms of the Commonwealth Bank Bill and of this bill do not, therefore, empower the Treasurer to direct the Commonwealth Bank in the exercise of its powers under this clause. The amendment proposed by the honorable senator is, therefore, unnecessary and unacceptable to the Government.
– I move -
That, in sub-clause (5.), the words “shall remain in control of, and shall “ be left out with a view to insert in lieu thereof the following words : - “ shall, subject to the next succeeding sub-section, remain in control of and “.
During the course of the debate in the House of Representatives the Leader of the Australian Country party (Mr. Fadden) expressed general agreement, with the purpose of this clause, but pointed out that there was no provision for a bank which had been assisted to escape from its difficulties to regain control from the Commonwealth Bank. The Government has given consideration to the point raised by the right honorable gentleman. The purpose of the amendment now proposed is to provide that where, for the protection of depositors, the Commonwealth Bank has assumed control of any trading bank and, sub sequently, that trading bank considers that its financial position has so improved that it is no longer necessary for the Commonwealth Bank to continue in control of its business, the trading bank may apply to the High Court for an order that the Commonwealth Bank shall cease to control its business. Under the clause as proposed to be amended, the Commonwealth Bank will still have the right to release from its control, without an order of the High Court, any trading bank whose business it no longer considers it necessary to control. This amendment will not in any way prevent the Commonwealth Bank from taking immediate action to assume control of a trading bank should this at any time be considered necessary to protect the interests of the depositors in that bank.
Amendment agreed to.
.- I move -
That, after sub-clause (5.), the following new sub-clause be inserted: - ” (5a.) Upon the application of a bank of whose business the Commonwealth Bank has assumed control in pursuance of sub-section (2.) of this section, a Full Court of the High Court constituted by not less than three Justices may, if it is satisfied that it is n<< longer necessary, for the protection of thu depositors of that bank, that the Commonwealth Bank should remain in control of thu business of that bank, order that the Commonwealth Bank shall cease to control the business of that bank, as from a date specified in thu order “.
The explanation is the same as for the previous amendment.
– The Opposition appreciates the fact that the Government has seen fit to accept the suggestions made by members of the Opposition in both the House of Representatives and this chamber. These amendments will greatly improve the bill by safeguarding the interests of those affected by the clause.
Amendment agreed to.
Clause, as amended, agreed to.
Clauses 14 to 20 agreed to.
Clause 21- (1.) Except with the consent of the Commonwealth Bank, a bank shall not be entitled to withdraw any sum from the Special Account established by it under this Division.
– I move-
That, in sub-clause (1.), after the words “ Commonwealth Bank “, the following words lie inserted: - “which shall not be unreasonably withheld in any case where the proposed withdrawal is for the purpose of meeting commitments by depositors.”
In my second-reading speech, I stressed the need for placing the definite obligation upon the Commonwealth Bank, in the event of a private bank requiring portion, or all, of its surplus funds for the purpose of meeting the requirements of the bank to fulfil its obligation to its depositors, of releasing such funds.
.- The amendment relates to withdrawals from the special account which, under the bill as drafted, are left entirely to the discretion of the Commonwealth Bank. After very careful consideration the Government has drafted the provision in its present form to ensure that the Commonwealth Bank’s control over the liquid reserves of the trading banks will be as effective as possible. A strong and unimpaired control of credit conditions by the Australian central bank is vital to the future well-being and prosperity of Australia. As far as we can see ahead at present the war-time’ accumulation of spending power will, unless firmly controlled, constitute a threat to the stability of the currency and to the whole economic life of the community. As the leaders of the Government have indicated on many occasions this threat will be particularly serious during the years immediately following the cessation of hostilities. The Government has given long and careful consideration to the best methods to be ‘adopted to protect the value of currency and, after considering the experience of the operation of the special accounts system during war, it has decided that the interests of the public can best be served by a continuation of that system. As honorable senators will know withdrawals from the existing wartime special accounts are left entirely to the discretion of the Commonwealth Bank. In this connexion, the recommendations of the Royal Commission on Monetary and Banking Systems in Aus tralia were also carefully studied and I am advised that there is no doubt that the provisions of this division and in particular of clause 21 regarding withdrawals from special accounts are entirely in accordance with the spirit of the banking commission’s recommendations.
I also emphasize that the Government has already made clear in the earlier provisions of this bill that one of the major responsibilities of the Commonwealth Bank is to ensure that the interests of depositors in the trading banks are fully protected. Considered therefore from the point of view of the further protection of depositors the amendment proposed by Senator Foll is quite unnecessary. I also point out that the Government’s amendment to clause 13 which was accepted a little while ago is adequate to prevent any arbitrary exercise of its powers by the Commonwealth Bank to the injury of the trading banks. The Government considers, therefore, that adequate protection has been afforded both to depositors and trading banks. In the circumstances it cannot agree to any amendment which would weaken the system of credit control provided for in Division 3 and of which the provisions relating to withdrawals from special accounts are an essential part. The amendment is unacceptable.
– I regret that the Government will not accept my amendment, which I regard as vital. If a private bank finds it necessary to draw upon its surplus funds in order to meet the requirements of depositors it should have the right to obtain such funds. I do not agree with the Minister that the amendment we have agreed to with respect to the right of appeal covers this point. The clause as drafted will enable the Commonwealth Bank to get a stranglehold upon the private banks. The Government, of course, has the numbers to enforce its will, but I regret that it will not accept my amendment. I can only say that the time will come when the Government will see that my amendment is necessary.
Clause agreed to.
The Commonwealth Bank shall pay interest, at half-yearly intervals, to each bank on the daily balance of that bank’s Special Account at a rate, not exceeding Seventeen shillings and sixpence per centum per annum, determined from time to time by the Commonwealth Bank with the approval of the Treasurer.
– I move -
That the following words be left out : - “ not exceeding Seventeen shillings and sixpence per centum per annum,”.
I dealt with this matter fully in my second-reading speech.Under the clause as drafted the Government is tying the hands of the Commonwealth Bank, and also of the Treasury, by fixing an arbitrary maximum rate of interest with respect to the surplus funds. At present, although an arbitrary maximum rate of 7/8ths per cent. is fixed I understand that the rate of interest actually paid by the Government is 15s. per cent. My amendment is not vital, but it would improve the measure by making the position easier from the point of view of the Commonwealth Bank. It would also enable the bank, in cases where a maximum rate of 17s. 6d. per cent. would be obviously unfair, to pay a reasonable rate of interest. When the Minister for Trade and Customs (Senator Keane) was dealing with the rate of interest to be charged to ex-service personnel under the Re-establishment and Employment Bill, he emphasized that no one could foretell what would be the ruling rates of interest in the future. Whilst it is most desirable to keep interest rates as low as possible, the Government is only weakening its position by fixing an arbitrary maximum of 17s. 6d. in this instance.
– What rate of interest is the Bank of England paying in respect of funds of this kind?
[3.391.- The rate of interest paid on the special deposits of the trading banks with the Commonwealth Bank is at present 15s. per cent. per annum. This rate has been in operation since the inception of the National Security (War-time Banking Control) Regulations. During the period of the operation of these regulations it has been found that the rate of 15s. per cent. is more than adequate to cover the administrative expenses incurred by them as a result of the increase in their deposit liabilities which are reflected in the amounts placed by the trading banks on special deposit with the Commonwealth Bank. The Government has given long and careful consideration to the maximum rate of interest to be paid on these special deposits and it has decided that, in the circumstances, a maximum rate of 17s. 6d. per cent. is entirely adequate. The amendment is unacceptable.
– The statutory fixation of the rate of 17s. 6d. per cent. as the interest to be paid on the special deposits is contrary to the principle of flexibility operating in respect of all war-time controls, such as the control of prices and the pegging of wages. It may be found that the rate is too low, but, unless this legislation be amended, it will be impossible to vary it. Money is no less a commodity than any of the commodities brought under prices control and just as the prices-control system is sufficiently flexible to allow adjustment of prices, upwards or downwards, so should the rate of interest to be paid on this money be equally flexible. I ask the Government to reconsider this matter on those lines.
Clause agreed to.
Clause 23 - (1.) The Commonwealth Bank may, from time” to time, by notice in writing, require each bank to transfer to the Commonwealth Bank an amount of sterling equivalent to such proportion as is specified in the notice of that bank’s excess receipts of foreign currency as at the close of business on a date specified in the notice, not being more than twenty-one days before the date on which the notice is given. (2.) The proportion specified in any notice under the last preceding sub-section shall he the same in respect of each bank.
.- I move -
That, after sub-clause (2.), the following new sub-clause be inserted: - “ (2a.) Where, as at the close of business on a date specified in a notice under subsection (I.) of this section, a hank has not transferred an amount of sterling which it lias been required to transfer in pursuance of any previous notice under that sub-section, the excess receipts of foreign currency to which that amount of sterling is equivalent shall not, for the purpose of calculating the amount of sterling required to be transferred in pursuance of the first-mentioned notice, be taken into account as part of the excess receipts of foreign currency of that bank.”.
During the debate in the House of Representatives the Leader of the Opposition (Mr. Menzies) stated that, in his view, the clause as now drafted made it possible for the Commonwealth Bank to require a trading bank to transfer approximately twice the amount of its excess receipts of foreign currency on the date specified in the notice.
The point raised .by the right honorable gentleman has been examined by the Government, and the purpose of the amendment now proposed is to make clear beyond all doubt that the Commonwealth Bank cannot require a trading bank to transfer the same amount on more than one occasion.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 24 agreed to.
Clause 25 -
The Commonwealth Bank may sell foreign currency to a bank -
where the Commonwealth Bank is satisfied that that bank has complied with the provisions of this Division and is likely to suffer a shortage of foreign currency; or
if the Commonwealth Bank considers that, for any other reason, it is desirable to do so.
.- I move -
That paragraph («) be left out.
This amendment, with the two subsequent amendments that, I propose to move when this one has been dealt with, makes it obligatory on the Commonwealth Bank to make foreign currency available to a private bank that needs it if that bank has complied with the provisions of this Division. As the clause now stands, it is optional for the Commonwealth Bank to do so. Honorable senators know that the trading banks, particularly the larger institutions, operate extensively in the buying and selling of foreign exchange in connexion with Australian trade and commerce. After the war, Australia’s import and export trade will be greatly increased and the need of the private banks for foreign exchange will be correspondingly increased. I therefore .urge the Minister (Senator Keane.) to accept the amendment so that it shall be mandatory on the Commonwealth Bank to provide foreign exchange to the private banks. If this amendment and the two subsequent amendments are agreed to, the clause will read - (1.) The Commonwealth Bank may sell foreign currency to a Bank if the Commonwealth Bank considers that, for any reason, it is desirable to do so. (2.) The Commonwealth Bank shall sell foreign currency to a Bank where that Bank has complied with the provisions of this division and is likely to suffer a shortage of foreign currency to meet legitimate requirements.
– This clause fundamentally changes the system under which the private banks normally deal in foreign exchange. The Minister in charge of the bill should tell the committee how the country has been so detrimentally affected by the present system as to necessitate the change. The Commonwealth Government must control finance in time of war, but I fail to comprehend why the Government considers it necessary to provide for the continuance of the emergency controls as a permanent statutory measure. No attempt has been made by the Minister to show that the activities of the private banks in dealing with foreign exchange in the past have been to the detriment of this country. Organizations such as pastoral companies which have had long experience in handling wool and other primary products, have dealt with foreign exchange as a substantial part of their business. The Government is entitled to ensure that provision shall be made to safeguard the interests of this country, but I contend that in cases where banks have observed all the conditions specified, further sanction by the Treasurer should not be necessary. Why should a pastoral company, or any other financial institution which complies with the conditions laid down, not be free to handle foreign exchange without further restriction? It is clear to anybody who has taken an interest in this matter that this clause represents a direct challenge to the private banking institutions, and is an attempt to deprive them of a substantial portion of their business.
– It puts the interests of the nation before those of the financial institutions.
– Ample provision exists in this measure for the protection of the nation’s interests. At present, under the National Security Regulations full control may be exercised, but this measure imposes restrictions for peace-time operation. Honorable senators opposite have said frequently that with the passage of this legislation the trading banks will be able to carry on business as they have in the past, but in this provision, there are all the elements of direct control by the Treasurer. The clause provides that certain things may be done by the Governor-General. That, of course, means in effect that government policy will prevail. Are the private banking institutions not to retain any freedom of operation at all? This clause is an attempt to whittle down the legitimate business of these organizations. The Government would be well advised to accept the amendment moved by Senator Foll.
– Senator Foil’s amendment presumably must be considered in conjunction with the two succeeding amendments which he has foreshadowed, namely, the omission of the word “ other “, and the insertion of a new sub-clause. Similar amendments were moved in the House of Representatives, and the Government has given full consideration to the issues involved. The purpose of Division 4 of Part II. of the bill is, first, to provide that the Commonwealth Bank shall be fully empowered to make provision for national commitments abroad, including Commonwealth overseas debt service; and, secondly, that while having regard to its obligations in relation to the foregoing provision, the Commonwealth Bank should sell to the trading banks the foreign currency which they require to meet their normal business needs. Senator Foil’s amendment would make it obligatory for the Commonwealth Bank to sell foreign currency to a trading bank, to meet that bank’s “legitimate commitments”, regardless of the national commitments. Thus, the Division would be rendered ineffective, and the effect would be to place the business of the trading banks before the needs of the nation in a time of difficulty. The Government cannot accept this amendment, and for the same reasons, it cannot accept the two subsequent amendments which Senator Foll has foreshadowed.
– I move -
That, in paragraph (6), the word “other” be left out.
The omission of the word “ other “ will give wider scope for the Commonwealth Bank to make foreign currency available to the trading banks.
– As no good purpose could be served now by moving the third of the series of amendments to this clause which I have circulated, I do not propose to do so.
Clause agreed to.
Clause 26 agreed to.
Clause 27- (1.) Where the Commonwealth Bank is satisfied that it is necessary or expedient to do so in the public interest, the Commonwealth Bank may determine the policy in relation to advances to be followed by banks and each bank shall follow the policy so determined.
Penalty: One thousand pounds. (2.) Without limiting the generality of the last preceding sub-section, the Commonwealth Bank may give directions as to the classes of purposes for which advances may or may not be made by banks and each bank shall comply with any directions so given.
Penalty: One thousand pounds. (3.) Nothing in this section shall -
– I move -
That nil the words after the word “ may first occurring, in sub-clause (1.) to the end of She clause lie left out, with a view to insert in lieu thereof, the following words: - “ advise the banks as to the directions m which it is desirable in the national interest that advances should be made.”.
This is one of the most vital clauses in the bill, because it gives to the Commonwealth Bank complete control over the policy of the private trading banks. An amendment moved by the Minister for Trade and Customs (Senator Keane) earlier in this measure, made clear the provision that licences shall be granted automatically to those banking institutions specified in the first schedule of the bill. ,’Su-rely that is a definite indication that the Government is satisfied that these institutions are proper organizations to carry on the business of banking. In clause 27, however, power is given to the Commonwealth Bank to assume complete control of the affairs of any of these organizations, despite the fact that a licence to carry on banking business has been granted. This is a most undesirable provision. It confers- far too much authority upon the central bank. iSo far as I have been able to gather, in no other country in which the central banking system operates - including Great Britain and Canada - is complete power given to the central bank to control the policy of private banking institutions to which authority to trade has been given. The amendment is reasonable. The Commonwealth Bank is to advise the private banks of the directions in which, in the national interest, advances should be made. In a time of emergency, such as exists now, that advice is freely given, and is just as freely accepted. During the whole war period the surplus funds of the private banks have been held by the Commonwealth Bank, but now it is proposed that the same power shall exist in times of peace. Complete power to dominate the policy of the private trading banks is to be given to the Central Bank. On further reflection, I am sure that thf Government will realize how unfair its proposal is, and therefore I urge the Minister to accept the amendment.
– After full consideration, the Government decided that the Commonwealth Bank not only should be able to advise the trading banks with respect to advance policy but also should be given statutory power to ensure that the trading banks followed that advice. The effect of the amendment proposed by the honorable senator would be to leave the Commonwealth Bank in the position of being able to give advice without being able to ensure that that advice was followed. The amendment is therefore contrary to Government policy and unacceptable.
– I join issue with the Minister for Trade and Customs (Senator Keane) with regard to this clause. The disadvantages and difficulties of control of policy in respect of advances are many. In the first place, it assumes that the knowledge of the Governor, or of the Treasurer, of the requirements of Australian industry is greater than the combined, knowledge and experience of the managers of nine trading banks exercising commercial judgment, based on the free play of competition and public demand. Moreover, the trading banks make mistakes only on a small scale; otherwise they could not exist. A government or a government institution can make mistakes on a very large scale. As Bernard Shaw has said in Everybody’s Political What’s What-
The power of a government to do good is greater than that of any private company; but so also is its power to do mischief.
– He is not a banker.
– That may be, but he is a clever man. An industry, or a firm, may get greater financial assistance than sound policy would permit by approaching the bank through political channels. This measure virtually makes industrial lending a government monopoly, since the governmentcontrolled Commonwealth Bank can say whether an industry is entitled to borrow or not. Such a situation can easily lead to corruption. To quote Professor Alfred Marshall -
Corruption seems generally to have increased when there has been much money to be gained by political influence.
This is an historical fact. Moreover, it might lead to a “ black market “ in finance by forcing industries denied finance through the banks to seek funds outside the banks, encouraging the diversion of moneys, which would ordinarily be deposited with the banks, to meet this demand. Risks and interest rates would necessarily be higher, partly on account of inexperience and partly because of reduced possibilities for lenders to spread risks. The term “ black market “ as used here does not imply law breaking. This power could also be used to give a government a great deal of the control over production, which was refused at the referendum in 19-44. The clause should be carefully scrutinized because of the tremendous power which it confers on the Commonwealth Bank and ultimately on the Treasurer of the day in respect of advances and investments generally. It will give to the Treasurer complete monopolistic control of banking. He will be able to close down absolutely on investments and advances by trading banks to individuals and business concerns. The amendment moved by Senator Foll will go a long way to meet my objections to the clause. I urge the Minister to accept it.
– I support the amendment, because in its present form the clause is dangerous, especially when it is linked with provisions of the Commonwealth Bank Bill which take away from a board the management of the Commonwealth Bank and place it in the hands of a governor who, in turn, will be subject to direction by the Treasurer of the day. In considering this clause we must have regard to the whole set up, and must place things in their proper perspective. It is clear that the Treasurer will be able to direct what any private banking institution shall and shall not do. In paragraph 621 of its report the Royal Commission on Monetary and Banking Systems recommended -
T.n order to promote a wise distribution of credit, the Commonwealth Bank should equip itself with all possible facilities for ascertaining economic trends in Australia and abroad, so- that it can advise trading banks as to the directions in which it is desirable in the national interest that advances should be made.
It will be seen that the royal commission recommended that the Commonwealth Bank should advise what advances should be made and what industries should be assisted. That recommendation was sound, because it left a discretionary power with the private banks. Naturally, no financial institution would go out of its way to make advances to undertakings which it did not consider worthy of assistance. ‘Clause 27, however, makes it mandatory that the private banks shall do what the Commonwealth Bank directs them to do. The clause gives to them no opportunity to pool their knowledge of industry generally, but leaves the Commonwealth Bank as the sole arbiter. The provision is dangerous, especially in a young country where industries spring up quickly and develop rapidly. I believe that such a provision will tend to stifle industry rather than to encourage it, and therefore I hope that the Minister will pay heed to suggestions from this side of the chamber for the improvement of the bill, and will accept the amendment.
– During the second-wading debate on this bill this, clause was given a good deal of attention. So long as this measure remains on the statute-book, the trading banks will have to obey the directions of the Commonwealth Bank with’ regard to foreign exchange. Honorable senators on this side emphasized during the second-reading debate that this bill gives to the Treasurer of the day the power to nationalize the whole business of banking. At the moment, only three’ supporters of the Government are in the chamber, yet when the division bells ring they will vote for the Government’s proposals without having heard the arguments advanced by the Opposition. The bill aims at giving legislative effect to the banking policy of the Labour party. With this legislation in operation, the associated! banks will become, in effect, branches of the Commonwealth Bank. Everything tilley may -do in the future will be governed by the handling of foreign exchange, that is, their overseas business. That view is confirmed beyond doubt by this clause. The private financial institutions have established themselves in this country in good faith, and in accordance with the law of the land. They operate under charter, and their business is rooted in this country. Therefore, this provision is unjust. It is foreign to all principles of fair dealing; and it is undemocratic. This clause will decide the fate of the private banks. The Opposition parties in this Parliament represent a substantial section of the Australian people, and I venture to say that after the next general elections they will be returned to office. Whatever the Minister in charge of the bill may say to the contrary, this provision is distinctly party political. It will implement the Labour party’s policy of socialization of the means of production, distribution and exchange. That is the story of the clause which all who run may read. 1 repeat that the Government has no mandate from the people to enact such i) provision; and it is doing so behind the backs of the people. The Government cannot argue for one moment that the provision is necessary. In -a democratic country the right and proper course which a government desirous of Mulcting such a provision should take is to refer the matter to the people. This is the crucial clause of .the bill. It will enable the government to obtain a stranglehold on the private banks, depriving them of their fundamental rights. Is it not strange that a Labour Government should take this action which the so-called Tory Opposition parties would never contemplate?
Senator MATTNER (South Australia) 1 4.17].- -As Senator Herbert Hays has said, this is the crucial clause of the bill. It is the corner stone of the monetary structure which the Government proposes to erect under its banking powers. Honorable senators opposite advocate the establishment of an absolute financial dictatorship under the Treasurer of the day. Senator McKenna cited the founder of the famous banking house of Rothschild as saying that whoever controls the finance of a country controls the destiny of that country. If it is bad for a Rothschild to hold such power, it is equally bad for any individual to hold it, whether he be the Treasurer of the day, or not. Tinder the clause, the Treasurer of the day will be enabled to obtain a financial stranglehold on our industries as a whole. I am closely associated with primary industry. When this bill becomes law, it may happen that a future Treasurer is biased towards the development of secondary industry at the expense of primary industry, or vice versa. Should the interests of those two sections of industry conflict, his decisions will invariably be in favour of one section, to the detriment of the other section. I repeat that the clause gives to the Treasurer of the day complete control over our industries as a whole. No one will be able to obtain adequate financial accommodation without the consent of the Treasurer of the day. For these reasons, I support the amendment. I again urge the Government to consider it carefully. It is unwise to allow the claims of industry to be decided at the whim of one individual.
.- This clause will make the existing trading banks the tools of the Commonwealth Rank, because the latter is empowered to lay down the policy to which all banks must conform. I venture to say that the Commonwealth Bank will not adopt an effective policy with respect to the development, of the mining industry, for instance, because from a financial point of view, mining undertakings involve speculation rather than investment. However, the trading banks to-day are prepared, despite the risks, to advance huge sums of money to mining companies. If the policy of the Mortgage Bank Department, which has been in existence for only a short period, can be taken as an indication of the policy of the ‘Commonwealth Bank in the future, this clause stands condemned. The Mortgage Bank Department will make advances only up to 70 per cent, of the value of the security. If the Commonwealth Bank adopts the same attitude in respect of private banks, I can only say, “ God help our industries “. To-day, they are financed by the trading banks, but under the new conditions, they will go to the wall. I am glad to know that pastoral companies will be enabled to act as banking institutions. I again express regret that the Government intends to place private banks at a disadvantage under the clause.
– They will merely become branches of the Commonwealth Bank.
– That is so. What will happen will be this: The Commonwealth Bank will extend throughout the length and breadth of Australia, establishing new branches which will take all the good business from the trading banks, and leave to the latter only the doubtful business. At the same time, the Commonwealth Bank will fix the rates of interest which the trading banks will be permitted to charge. In this respect, the trading banks will not be able to differentiate between sound accounts and doubtful accounts. In such circumstances, the trading banks will be driven to the wall. I urge the committee to divide on the clause in order to let the public know what the Government is really doing under this provision.
Question put -
That the words proposed to be left out (Senator Foll’s amendment), be left out.
The committee divided. (The Chairman - Senator B. courtice.)
Majority . . . . 6
Question so resolved in the negative.
.- In the debate on the second reading of the Commonwealth Bank Bill 1943 in the House of Representatives, the following verse was quoted by a right honorable member -
Have you ever felt the burden of a mighty overdraft,
When your implements and stock were up the spout,
When an inch of rain would make you or a wind from south would break you.
Did you every try to sit and sec it out?
Have you interviewed the banker, and crawled for all you’re worth?
Have you waited his reply with thoughts that burnt?
Have you ever tried a fake for the wife and kiddies’ sake
When he’s told you that he’s sorry but he durn’t?
Oh! the strainin’ and the strivin’, and the plannin’ and contrivin’
When the bank begins adrivin’ and puts off polite pretence,
When it comes to plainly statin’ that it’.gettin’ tired of waitin’
Tho’ it’s most accommodatin’ when the crop’s above the fence.
That will be the relationship of the country branch managers of the Commonwealth Bank and the primary producers under this legislation.
Senator FOLL (Queensland - Acting Leader of the Opposition [4.31]. - The result of the last division ensures that the Governor of the Commonwealth Bank will be the dictator of Australian finance, and that the private banks will be bound to carry out his instructions. I desire to insert another safeguard not so strong as that just rejected by the committee, but, in our opinion, equally necessary. I move -
That, after sub-clause (2.), the following new sub-clause be inserted: - “ (2a.) No bank shall be compelled to make any particular advance.”
Under this clause, the Governor of the Commonwealth Bank will be able to forbid private banks from making certain advances. The Commonwealth Government, particularly this Government, may be engaged in some form of industry and it will be possible for the Commonwealth Bank, on the instruction of the Treasurer, to stifle competition by refusing to allow the private banks to provide finance to enable intending competitors to establish themselves. Unless the proposed new sub-clause is inserted, the Commonwealth Bank will also have power to demand that private banks shall make certain advances that they do not wish to make because they regard them as unsound. The private banks should not be placed in that position.
.- Subclause (3) (a) of clause 27 provides that nothing in the section shall authorize the Commonwealth Bank to make any determination or give any direction with respect to an advance made or proposed to be made to any particular person. I am advised that this sub-clause prohibits the Commonwealth Bank from compelling any trading bank “ to make any particular advance “. The point raised by the honorable senator has therefore already been covered.
Clause agreed to.
Clause 28 agreed to.
Clause 29- (1.) Where the Governor-General is satisfied that it is expedient so to do, for the protection of the currency or of the public credit of the Commonwealth, or in order to conserve, in the national interest, the foreign exchange resources of the Commonwealth, he may make regulations, not inconsistent with this Act, making provision for and in relation to the control of foreign exchange and, in particular, but without limiting the generality of the foregoing, for or in relation to -
. -I move -
That, in sub-clause (1.), after the word “he”, the following words be inserted: - “ may declare a state of emergency after submission to Parliament and “.
My amendment brings again to the fore a matter raised by honorable senators in the second-reading debate of this bill and in the second-reading and committee stages of the Commonwealth Bank Bill. The amendment would ensure that the Parliament would have the final say on the existence of a state of emergency. Under the Commonwealth Bank Bill, the powers of the Treasurer will be almost unlimited. In the event of a dispute between him and the Governor of the Commonwealth Bank, the Treasurer’s decision will be final. We believe that the Parliament should be paramount and that, before any state of emergency may be declared by the Governor-General, the matter should be submitted to the Parliament for decision. This division will operate only when the Governor-General is satisfied that it is expedient that it should operate, and, obviously, it would operate only in the event of war or some other serious crisis in relation to our internal or external economy. So that the Parliament shall control the Executive in the event of such an emergency, I move my amendment.
. Subclause 1 of clause 29 already provides that the Governor-General may make regulations under this part only if he is satisfied that it is expedient to do so for the protection of the currencyor of the public credit of the Commonwealth, or in order to conserve in the national interest the foreign exchange resources of the Commonwealth. The Government considers it undesirable, however, to provide that the regulations may be made only after consideration by Parliament. Existing procedure, under section 48 of the Acts Interpretation Act, already provides adequate safeguards in respect of parliamentary scrutiny of the action taken. Under that act, all regulations made must be laid before Parliament, and a motion for the disallowance of the regulations may he moved in either House of the Parliament. Further, if the motion is not disposed of within fifteen sitting days, the regulation is automatically disallowed. As honorable senators know from experience, threats to our international exchange resources may develop very rapidly and require immediate action. The procedure proposed by the Governwent would give Parliament full power of debate and control of the actions of the Government without exposingus to the risk of a panic flight of capital while the debate was in progress. I cannot accept the amendment.
Senator FOLL (Queensland - Acting Leader of the Opposition [4.40].- The safeguards that the Minister for Trade and Customs (Senator Keane) referred to do not exist in practice because a state of emergency could be declared while the Parliament was in recess and the Parliament might not have the opportunity to nullify the declaration for months. When the invasion of the British Isles appeared imminent, indeed, throughout the war in Europe, the Parliament of the United Kingdom was in almost constant session, and it had full control over the country’s affairs. It would he possible for most undesirable regulations to be brought into force under this provision and for the Government to evade the provisions of the Acts Interpretation Act in relation to the tabling of regulations by not summoning Parliament. My amendment is necessary to make the immediate summoning of Parliament mandatory should an emergency arise.
– I direct the attention of the Minister for Trade and Customs (Senator Keane) to the provision in paragraphf, empowering “the prohibition of the importation or exportation of goods unless a licence under the regulations to import or export the goods is in force “. Is that a matter of banking? Surely, it comes more within the ambit of the Department of Trade and Customs or the Department of Commerce. If the Government considers such a provision is necessary, I think it should make it the subject of a separate bill. I do not see the relationship between the proposed power and foreign exchange and I should be glad of an explanation why it is included.
– I support the amendment. The Minister for Trade and Customs (Senator Keane) said that Parliament would have the opportunity to allow or disallow regulations made under this clause, and that to provide that the declaration of a state of emergency should be made by legislation would make for unnecessary delay while the legislation was being debated. But would that not be the case in regard to regulations? There would be a full debate on their disallowance or continuance. This is an important matter. I do not see any valid reason why Parliament should not be called together in time of emergency to take whatever legislative action may be necessary. As the clause stands, should Parliament go into recess for a long period, a regulation promulgated immediately Parliament adjourned could remain in force for several months before either this chamber or the House of Representatives had an opportunity to consider it. It is foolish for the Minister to argue that this matter can be better governed by regulation because undesirable publicity might be caused if it were brought before Parliament. Obviously, the same publicity will be given to the debate which takes place when the regulation finally is submitted to Parliament. I remind honorable senators opposite that this is not a wartime measure; it is to operate in time of peace. We look to the Government to ensure that when normal conditions return, the ordinary democratic principles of government shall be observed. This provision may create a dangerous precedent and I ask the Minister to reconsider the views which he has expressed in opposition to this amendment.
Question put -
That the words proposed to be inserted (Senator Foll’s amendment) be inserted.
The committee divided. (The Chairman - Senator B. courtice.)
Majority . . . . 5
Question so resolved in the negative.
– I move -
That paragraph (f) of sub-clause (1.) be left out.
Senator Sampson very ably stated the reasons for this amendment. Paragraph f is quite unnecessary. Control of the importation and exportation of goods is not part of the banking system of this country.
– Power to control the importation and exportation of goods under licence is an essential part of exchange control. Without it, measures to conserve and protect the foreign exchange resources of a country would be ineffective. I point out also that already the Government has this power under Customs legislation, and that the omission of paragraphf would not in any way reduce that power. The power has been repeated in this bill merely for convenience in drafting any regulations which may be necessary. The Government cannot accept the amendment.
Clause agreed to.
Clauses 30 to 38 agreed to.
Clause 39- (1.) The Commonwealth Bank may, with the approval of the Treasurer, make regulations -
– I move -
That, at the end of sub-clause (1), the following provisos be added: - “ Provided that such regulations shall be made solely for the purpose of the regulation of credit and currency in Australia in terms of the general objectives set out in section eight of the Commonwealth Bank Act 1945:
Provided further that nothing in this Part shall be construed as empowering the Commonwealth Bank to make regulations for the control of interest rates with respect to any transactions between a bank and any member of its staff or trustees of its pension, provident or like funds.”.
This clause is of great importance to employees of the private banks, every one of which has its own internal provident funds relating to retiring allowances, pensions for employees and the like. Cer tain concessions in relation to advances for home construction, marriage and other matters are also granted by at least some of the financial institutions affected by this bill. Although the Government seeks to assume full control of national finance, it will hardly wish to interfere with purely domestic arrangements between the banking institutions and their employees. There is no need for me to stress the necessity for this amendment. The justice of it must be obvious to honorable senators opposite. Its object is to protect the employees of private banking institutions and I hope that the Government will accept it.
– In regard to the first portion of the amendment which refers to the “general objectives set out in section 8 of the Commonwealth Bank Act 1945 “, I am advised that that section makes clear that the bank’s duty in relation to these objectives shall govern its activities in general. Therefore, it is quite unnecessary to refer to that duty specifically in relation to any particular function of the Commonwealth Bank.
The second part of the amendment refers to interest rates relating to any transaction between a bank and a member of its staff or trustees of its pension, provident or life funds. The Government’s view is that a question of this nature can best be dealt with when the regulations are being drafted. Full account will then be taken of the varying conditions under which the various provident and like funds are established. The Government cannot accept the amendment.
– In his comment on the second part of the amendment, the Minister for Trade and Customs (Senator Keane) has indicated that the Government has some intention of interfering in these matters, because he has said that the Government will take into consideration the various types of provident funds in operation. Does that mean that an endeavour will be made to secure uniformity, and that to this end benefits in some cases may be reduced to a lower level? The fact that the Minister has said that this is a matter which can be dealt with by regulation is an indictaion that there is some concern in the Government’s mind as to the need for an amendment such as this. Obviously, the rights of the employees of private banking institutions could easily be seriously jeopardized unless a safeguarding provision be placed in the bill. I shall press the amendment to a division.
Question put -
That the provisos proposed to be added (Senator Foll’s amendment) he added.
The committee divided. (The Chairman - Senator B. Courtice.)
Majority . . 7
Question so resolved in the negative.
– This clause makes provision for uniform interest rates, but it is practically impossible in practice, to have uniform rates. As Senator Gibson pointed out in his second-reading speech, interest rates may vary according to the risk and the type of loan. This provision will force people who require financial accommodation to obtain it from money lenders, which is not desirable. A man who wishes to obtain financial assistance in connexion with a risky transaction may be willing to pay a high rate of interest for such accommodation. This clause places the Commonwealth Bank in an extraordinarily advantageous position compared with other banking institutions, because it will have the use of nearly £250,000,000 of surplus funds belonging to the trading banks on which it is now paying interest at the rate of 15s. per cent., which rate, under this legislation, cannot be more than 17s. 6d. per cent. Should the Commonwealth Bank fix the rate of interest on overdrafts at 4£ per cent., which is the present rate, it will make a profit of over 300 per cent. on funds deposited with it by the private banking institutions. This clause makes it clear that the aim of the Government is to drive the private trading banks out of existence. Hitherto, the Commonwealth Bank has charged a slightly lower rate of interest on overdrafts than is charged by the trading banks, but people who have transacted their banking business with private banks have not necessarily transferred their accounts to the Commonwealth Bank. Many of them have preferred to deal with bank managers who know all about their financial position and are prepared to give them accommodation whenever required. This clause will put a further stranglehold on the private banks.
– This clause does not make uniform interest rates mandatory. As the Commonwealth Bank will be able tofix different rates of interest for various classes of transactions, there is no need to amend the clause.
Clause agreed to.
Clauses 40 to 45 agreed to.
Clause 46 (Penalty).
– This clause reads -
A bank shall not contravene or fail to comply with any of the provisions of this Part which are applicable to it.
Penalty: Five hundred pounds.
A bank may unwittingly or without knowledge of its manager, commit a trivial offence, yet under this clause, the penalty is fixed arbitrarily at £500. I suggest that the penalty should be “not exceeding £500”.
– Under the Acts Interpretation Act, the penalty under this clause will be a sum. not exceeding £500.
Clause agreed to.
Clause 47 agreed to.
Clause 48 - (1.) Except with the consent in writing of the Treasurer, a bank shall not conduct any banking business for a State or for any authority of a State, including a local governing authority.
SenatorFOLL (Queensland - Acting Leader of the Opposition) [5.14]. - I move -
That, in sub-clause ( 1. ) , the words “ including a local governing authority” be left out.
This clause makes it mandatory that local governing bodies shall do their banking business with the Commonwealth Bank. At present, many such authorities conduct their banking business with that institution, but others do not. In various parts of the Commonwealth, private banks have been closely associated with the development of local governing bodies, and, in such circumstances, it is natural for those bodies to do their banking business with those banks. I can understand the Government requiring federal authorities to conduct their banking with the Commonwealth Bank, but local governing bodies should have the right to transact their hanking business with whatever bank they choose. Where such bodies have received satisfactory treatment at the hands of private banking institutions, they should not be forced to transfer their accounts to the Commonwealth Bank. Furthermore, in many parts of Australia, it will be impossible for the Commonwealth Bank to do this work for many years to come, because that institution has not expanded to anything like the degree that some of the private banks have expanded. It is outrageous to provide that every local government authority in Australia shall bank with the Commonwealth Bank. Let the Commonwealth Bank compete for this class of business. If it can offer terms to local government authorities more attractive than they now obtain from private banks they will readily divert their business to the Commonwealth Bank. It is unjust to compel them to bank with the Commonwealth Bank.
– I support the amendment. This provision infringes on State sovereignty. The Senate is the States’ House, and, therefore, we at least, should protect the interests of the States. I strongly object to the clause which will compel all State and local government authorities which now bank with private bank? to transfer their accounts to the Commonwealth Bank. The Government ha? not advanced any reason whatever for this extraordinary proposal. We have merely been told by the Treasurer (Mr. Chifley) that the Government believe? it is reasonable that the accounts of all State and local government authorities should be placed with the Commonwealth Bank. This proposal is outrageous.I support the amendment.
.- I support the amendment. The Government is adopting an extraordinary attitude in overriding the States by compelling them to do their banking business with the Commonwealth Bank. Surely State and local government authorities are entitled to bank with institutions of their own choice.
– The States do not hesitate to come to the Commonwealth for grants.
– Since the introduction of uniform taxation, the States have been debarred from entering the income tax field ; and they have no other source from which to obtain grants. There is no local government area without a town of sufficient size to warrant the establishment of a Commonwealth Bank unit; and the head-quarters of all local government authorities are situated in such towns because of the availability of banking facilities. Therefore, the Commonwealth Bank will obtain all this business. However, my main objection to the clause is that it will, to some degree, control State Parliaments. As Senator Sampson has pointed out, the Senate is the States’ House, and we at least should ensure that the States receive justice. It is unjust to dictate to them where they shall bank. I support the amendment.
– Generally, the money received in the form of revenue of all kinds by State governments, semi-governmental institutions, and local government authorities is the people’s money. That is a broad generality. Under the clause, we are merely proposing that that money shall be controlled by the Commonwealth Bank. That proposal is not unreasonable. It will notbe implemented hastily. Care will be taken not to cause inconvenience to any body affected by the provision. The clause as at present drafted, expresses the view of the Government that public bodies which are responsible for public moneys should conduct their banking business with a publicly owned and controlled bank. The amendment proposed by Senator Foll is in direct conflict with this view and is, therefore, unacceptable to the Government. I point out, however, that it is not intended that the requirements of the clause should cause any inconvenience to local government authorities in conducting their normal banking transactions. As is indicated in the clause, the prohibition against private banks conducting banking business for State authorities will not apply generally until a commencing date has been published in the. Gazette, and, even then, the Treasurer (Mr. Chifley) may permit the continuance of existing arrangements where local circumstances justify it. Further, until the clause has been brought into general operation, it will apply only to bankingbusiness conducted for State authorities specified by the Treasurer by notice in writing. It will be seen, therefore, that the clause has been drafted to enable the necessary transfers of business to be effected gradually. The Government does not intend to compel private banks to close the accounts of any State authority until the Commonwealth Bank is in a position to offer equivalent facilities. The Government cannot accept the amendment.
Question put -
That the words proposed to be left out (Senator Foll’s amendment) be left out.
The committee divided. (The Chairman - Senator B. Courtice.)
Majority . . . . 7
Question so resolved in the negative.
– For the reason which I gave when I was speaking on my amendment, and because the Opposition does not believe it will be in the best interests of Australia that the banking business of the State governments and local government authorities should be placed with the Commonwealth Bank, regardless of their wishes, the Opposition will vote against the clause. Although the Minister in charge of the bill has said that the transfer of accounts from private banks to the Commonwealth Bank would not be effected immediately, he left no doubt that the Government’s objective is that every State government and every local government authority shall be compelled eventually to bank with the Commonwealth Bank. The Opposition cannot agree with such a policy.
– I shall vote against the clause. All honorable senators believe in federation; but under federation the States retain exclusive rights under their own constitutions. No one will dispute the power of the Commonwealth Government to take this action, but such action directly cuts across a basic principle of federation. Further, the Senate is the States’ House: and we, at least, should preserve the rights of the States. By agreement, the States surrendered their borrowing powers to the Loan Council; and following the introduction of uniform taxation in more recent years, they are now debarred from entering the income tax field. Now, the Government proposes to whittle away the last vestige of the States’ power with respect to finance. They are to be denied the right to choose their own system of banking. The objective of this proposal is to give to the Commonwealth Bank a complete monopoly of banking. I fail to see how such a proposal can be justified. Surely, the States should be allowed to bank with institutions of their own choice. Certainly, the Commonwealth has power to enact this provision; but I say, definitely, that it is wrong in principle. Each of the States is equally represented in the Senate which is the States’ House, and all honorable senators should resist attempts on the part of the Commonwealth to whittle away the rights of the States. This is the last straw in the regimentation of the States. Most of the State governments already bank with the Commonwealth Bank. Why not leave it to the States to decide for themselves the bank they shall bank with? At all events, I consider that the State of Tasmania, which I represent, should be left free to decide to bank with the Commonwealth Bank if it chooses to do so.
– If the honorable senator Fad his way there would be no Commonwealth Bank.
– On the contrary, I am such a supporter of the Commonwealth Bank that I have been one of its customers for twenty years. But I have a sense of fair play and a duty to my constituents to safeguard the rights and interests of, first, the nation and, secondly, the State I represent. Therefore, I join with other honorable senators in protesting against compelling State governments and State authorities to bank with the Commonwealh Bank. I challenge the Minister to justify the provision.
– Senator Sampson described this clause, which provides that States and State instrumentalities, including local government authorities, shall bank with the Commonwealth Bank, as an attack on the sovereignty of the States. He was followed by Senator Herbert Hays, who, in a plea on behalf of the States, said that the National Parliament was taking away the last iota of self-control left in their hands. I remind both honorable senators that, although the Senate is a State House, in that the members represent “the various States, it is also a part of the National Parliament, and our outlook should be national and we should be concerned with the needs of all the people, not the needs of the people in individual States.
– Australia is a federation.
– Exactly. The States still have an alternative, which has been ignored by members of the Opposition. The Constitution provides that the Commonwealth Parliament shall have power over banking,but not State banking. Any State, not willing to bank with the Commonwealth Bank, which is the national bank, is free to establish a State bank. So in that regard, the States have complete sovereignty. Therefore, this clause is not an attack upon them. Senator Herbert Hays referred to the plight of the States in that the Financial Agreement had taken away their rights to borrow. It is not necessary for me to remind him, surely, that the Loan Council was formed in the interest of the whole Commonwealth and the individual States in order to eliminate competitive borrowing.
– I remind Senator McKenna that I said that the Financial Agreement was reached with the consent of the States and the Commonwealth.
– But the honorable senator instanced the Financial Agreement as a whittling away of State rights. That was a part of the sad story he unfolded. The Financial Agreement was not only agreed to by the States and the Commonwealth, but also was implemented in the Commonwealth and State legislatures.
– That is what I said.
– The honorable senator was perhaps on firmer ground when he referred to the uniform tax, because the States did not agree to it. The Commonwealth, however, found constitutional authority; for it in the emergency created by the war. I think everyone in Australia recognizes it as wise that there should be one taxing authority in order that the resources of this nation may be directed to the prosecution of the Avar, which at one stage placed our very existence in jeopardy and the winning of which still requires a big effort. I strongly support the statement of the Minister (Senator Keane) that it is right that authorities concerned with the government of the people should bank with the national bank, set up for the advancement of Australia and the betterment of its people, and which has played so great a part in the reduction of the national debt.
– Senator McKenna gave the States a way out when he said that they could overcome this provision by themselves legislating for the establishment of Statebanks, but he thereby destroyed his whole argument.
– Would the honorable senator say that there would be any disability if the States did bank with the Commonwealth Bank? What would they lose?
– That is not the point. This clause compels the States and State instrumentalities to bank with the Commonwealth Bank.
– Where possible.
– The clause does not say so.
– I have already explained the clause.
– In many localities there is no branch of the Commonwealth Bank.
– That is all provided for. I have already explained that.
SenatorGibson. - Branches of the Commonwealth Bank will be established in towns in which they do not already operate.
– If there is no branch of the Commonwealth Bank in a locality, we will allow existing conditions to continue, in the hope that one day a branch of the Commonwealth Bank will be established there.
– I do not share the Minister’s optimism. I cannot see the slightest justification for this clause.
– Senator Mattner is under a misapprehension. I have already told him that nothing stupid will be done in the transferring of accounts of State Governments and authorities to the Commonwealth Bank. Every opportunity will be given for the transfer to be made smoothly and without dislocation. Senator Herbert Hays has made a mouthful of this clause, but what does it matter to the State of Tasmania or to any Tasmanian town or shire what bank they deal with ? The same organization exists in each bank with the same local handling of the account regardless of whether it is a private bank, a State bank or the Commonwealth Bank. The honorable senator knows that it does not matter to the depositor what bank he deals with because the conditions are generally the same. The rate of interest does not vary greatly as between banks. The honorable senator has made so much of this clause because he never misses an opportunity to champion State rights against national rights, as he and the members of his party, I am sorry to say, did on the occasion of the recent referendum. It is the same old story every time national measures are taken. Under the uniform tax legislation, every State, with the exception of Victoria, which I represent, has benefited. Victoria has, to a degree, lost money, but every other State has benefited handsomely. The State governments, most of which are reactionary, get the revenue without the trouble of collecting it, and are able to disburse it without interference.
– Why, then, do they want to revert to the previous system ?
– Honorable senators from Tasmania and South Australia ought to he thankful for the existence of the Commonwealth Parliament from which those States have derived so much financial and other benefit. Without a Commonwealth Government, those States would have to “go out of business “. I do not resent the fact that all the States have equal representation in this chamber, but under that system about 250,000 Tasmanians have as many honorable senators to represent them as do nearly 3,000,000 people in New South Wales. That is as it should be in a States’ House. I do, however, resent Senator Hays asserting that the States have suffered injustices from this Parliament. The people he represents are the luckiest in the world that the men who drafted the Commonwealth Constitution thought as they did. Without a national Parliament, how could Australia have been defended in the last two world wars? Who would have conducted the postal services? Who would have done all the things too numerous to name that it is essentia] should be done on a national basis ? The honorable senator is splitting straws. He knows that nothing foolish will be done in giving effect to this provision.
– I am compelled to answer the attempt by the Minister for Trade and Customs (Senator Keane) to lecture me. I have heard him say many times in this chamber that he is a federalist, but I have never heard him imply before that he is a unificationist.
– I am. I believe in one people and one Parliament.
– Australia is a federation. The Constitution makes it a federation and safeguards the rights of the States.
– Order ! The honorable senator may not proceed on those lines.
– I submit, Mr. Chairman, that I am privileged, even if not strictly within the Standing Orders, to reply to the Minister, who must himself have transgressed standing orders in making the statements that I am now replying to. I have never said or implied that the States should not bank with the Commonwealth Bank. I said that they should have the liberty of choice and that there should be no compulsion. Senator McKenna referred to the Financial Agreement. I did not say it was forced on the States. I said that it was enacted by the common consent of the . States and the Commonwealth. I did not say that the uniform tax was detrimental to the States. I said that the Commonwealth Government now had complete power over finance. I said that the Financial Agreement ended the rights of the States to borrow without the consent of the Loan Council. I said that the uniform tax ended the rights of the States to levy income tax. I said that the Commonwealth Government was now telling the States where they were to bank and was ending their right to bank with whichever bank it pleased them to bank with. That is all I said. I am as much a federalist as the Minister.
– I am not a federalist.
– I will not allow myself to be put in the wrong, even by the Minister. I did not say the things he attributed to me. I hope his distortion of what I said was not deliberate, because if it was he has done himself a grave injustice by departing from his usual fairness.
Question put -
That the clause stand as printed.
The committee divided. (The Chairman - Senator B. Courtice.)
Majority . . 7
Question so resolved in the affirmative.
Clause agreed to.
Clause 49 - (1.) The Auditor-General shall investigate periodically the books, accounts and transactions of each bank and shall furnish to the Treasurer and to the Commonwealth Bank such reports upon the affairs of each bank as the Treasurer directs. (2.) The Treasurermay at any time direct the Auditor-General to make an investigation of the books, accounts and transactions of a bank specified by the Treasurer and to furnish to the Treasurer and to the Commonwealth Bank such reports upon the affairs of that bank as the Treasurer directs and the AuditorGeneral shall make an investigation and furnish reports accordingly.
– I move -
That, after sub-clause (2.), the following new sub-clause be inserted: - “ (2a.) Nothing in this section shall authorize the Auditor-General to furnish a report with respect to the affairs of an)’ individual customer of a bank.”
The purpose of this amendment is to make clear that the Auditor-General shall not be permitted to furnish to the Treasurer or to the Commonwealth Bank any report on the affairs of any individual client of a trading bank. The amendment is similar to one circulated by the honorable member for Bendigo (Mr. Rankin) when this measure was being considered by the House of Representatives.
– The Opposition appreciates the Minister’s action in moving this amendment which will cover our objections to the clause. It will not be necessary now for me to move the amendment which I have circulated.
Amendment agreed to.
Clause, as amended, agreed to.
Clauses 50 to 59 agreed to.
Clause 60 (Regulations).
– The bill makes provision for the taking over by the Commonwealth
Bank of any of the private banks, but it prevents the merging of one private bank with another. I should like to know what provision will be made by regulation in regard to the staff of a private bank which is taken over by the Commonwealth Bank. What obligation will rest upon the Commonwealth Bank to take over the entire staff of a private bank, and to safeguard the superannuation and other rights which they enjoyed in their previous employment? Will these employees be adequately compensated for any loss which they may suffer ?
– Provision is made in the Commonwealth Bank Bill to safeguard the interests of the employees mentioned by the honorable senator.
Clause agreed to.
First and Second Schedules agreed to.
Title agreed to.
Bill reported with amendments.
Standing and Sessional Orders suspended; report adopted.
Motion (by Senator Keane) put -
That the bill be now read a third time.
The Senate divided. (The President - Senator the Hon. Gordon Brown.)
Majority . . 6
Question so resolved in the affirmative.
Bill read a third time.
Sitting suspended from 6 to 8 p.m.
Debate resumed from the 4th July (vide page 4008), on motion bySenator Ashley) -
That the hill be now read a second time.
– In this amending bill there is a good deal’ to commend and very little to criticize. , It is to matters that it disregards that I shall direct most attention. Before dealing with the provisions of the bill, I wish to make some general comments on matters affecting the Commonwealth Public Service. It is generally recognized that the Commonwealth Government is the greatest employer of human effort in this country. Permanent Commonwealth public servants number about 40,000, and, in addition, about 176,000 other persons are employed in the Government’s many and varied activities. The war accounts largely for those in the last-mentioned category, but, generally speaking, the figures indicate the importance that must be attached to measures for the control, as well as the reward, of those who take so large a part in government administration. As regards permanent public servants - and it is with those only that I am concerned to-day - I am confident that I shall receive the support of honorable senators generally when I say that no government will fail to acknowledge the debt that it owes to the men and women who give effect to its wishes. That, at least, is due to the members of the Public Service. Although great care is taken in selecting those who are appointed to the Service, it is desirable to raise the standard of efficiency to even greater heights. In order to obtain that result in the face of the inevitable competition of general outside business openings for good and promising men, the rewards must be increased and the con ditions liberalized. In the matter of travelling allowances alone, senior public servants must sometimes be at a disadvantage when accompanying their Ministers, or representing Ministers on important occasions. Of the loyalty of the Public Service I feel that one cannot speak too highly. Every Minister must realize his indebtedness in this respect. And so, whilst we may legislate to make the emoluments of any office fit the effort demanded, it is most desirable that adequate provision shall be made for the years of retirement. It is in regard to that period, as honorable senators well know, that the Superannuation Fund was devised and established by Act of Parliament in 1922, which has been amended in 1924, 1930, 1931, 1934, 1937, 1942 and 1943. The mechanics of the superannuation system are probably well known to honorable senators. According to the report of the Superannuation Board for 1942-43, the latest that I have been able to obtain, there were 47,358 contributors to the Superannuation Fund and the annual liability to pensioners at the end of that period was £702,050. The number of persons who retired on pensions during the year was 1,555. A noteworthy feature of the fund is that the cost of administration was only 1.088 per cent. of the contributions. Another feature which is not so satisfactory is that the statutory actuarial investigation of the fund, which must take place every five years, revealed a drift of about £300,000 to the wrong side of the ledger. No doubt, means will be found to adjust that difference. It is primarily a matter for action by the Government and the Superannuation Board.
I have said that there is something in the bill to commend. For example, it defines the term “ an indefinite period “ as affecting temporary employment as “ a period of at least ten years “. It also settles the rights of women contributors upon marriage; it gives some protection to member.5 who have been injured as the result of war service; and it assists the wife and children of a contributor in the event of certain domestic misfortunes. It also permits of a man who recovers his health after being invalided to be re-appointed to the Service, and it confers other benefits by means of minor adjustments in the wording of the principal act. One of the most important provisions is clause 9, which affects persons with transferred rights under section 84 of the Constitution Act and section 57 of the Superannuation Act. It liberalizes conditions by ensuring a revaluation of those transferred rights at the date of retirement, and makes provision for women and children. The general scale of pensions runs from £52 to £416 per annum, and covers all grades of salaries from £130 per annum to the highest salary paid in the Service. I understand that the maximum pension which can be earned is £8 a week. Contributions range from two units to sixteen units. A boy of sixteen years of age who joins the Service must subscribe for two units of pension which cost him 2s. 2d. a week.Other contributions have some relation to the age of the individual and the date of entry into the Service.
I now come to my main reason for speaking on this measure. There is a defect in this and the existing legislation. I should like to see provision made for alleviating the position of pensioners who have been contributors, or have transferred State rights. In these days of rising costs these people find themselves in a grievous plight. On. the 19th September, 1944, I asked the Minister representing the Treasurer the following question : -
Has the Government received a request for an increase in the first four units of all pensions payable to former members of the Commonwealth Public Service? If so, what decision has been arrived at?
The Government’s reply was that it would cost £154,000 per annum to grant the request, that the cost would rise by £5,000 per annum, and that the Government regretted that the request could not be acceded to. In a letter addressed, in October, 1944, to the then Prime Minister by the honorary secretary of the Commonwealth Public ServiceRetired Officers Association, the case was stated in the following terms: -
As you are aware on 19th September, 1944, Senator Collett asked a question in the Senate - “ Has the Government received a request for an increase in the first four units of all pensions payable to former members of the Commonwealth Public Service; if so, what decision has been arrived at?” and the Government’s reply that it would cost £154,000 per annum to grant this and rising £5,000 per annum and regretting the request could not be acceded to.
In this present age of special service benefiting so many classes of the people the outstanding only sufferers are the Commonwealth Service superannuation pensioners who, no matter how the purchasing power of the £1 diminishes, battles along on the same amount of income equal to his pension and some have been receiving the pension for upwards of fifteen years and every one knows how conditions have altered, resulting in higher basic wage, and increases of most incomes.
May we plead for further consideration, for be it noted the Government’s reply docs not make any reference that hardship upon pensioners is recognized as the circumstances of to-day compared with the past decade.
Under date of 18th December, 1943, the Treasurer, Mr. Chifley, for the Prime Minister (reference number A3/1/12) wrote to Senator Collett in reply to representations made by the Commonwealth Public Service Retired Officers Association, Perth, and refers this association to the fact that a man of 65 and his wife of 60 may together receive a total income from Superannuation and old-age pensions, £3 19s. a week.
In view of the Government’s reply to Senator Collett on 19th September, 1944, last, it is now expected a considerable number of Service pensioners will now take full advantage of the £3 19s. a week as indicated in the preceding paragraph.
As old-age pensioners are paid from Consolidated Revenue, we respectfully submit the eventual cost will be greater than had the Government been able to grant the 10s. a week on the first four units of pension.
All the superannuated pension associations of the Commonwealth Services have a preference for the increase of the first four units scheme than the combined superannuation and old-age pension scheme.
If not too late can further consideration be given to some form of relief to our pensioners.
On the 6th October, 1944, the general secretary of the Amalgamated Postal Workers Union of Australia, at Sydney, set the position before the Treasurer (Mr. Chifley) in the following terms: -
Referring to your letter of the 19th September, in reply to representations submitted to you at Canberra by representatives of the combined Federal Service unions for an increase of the unit value of superannuation pensions from 10s. to 12s. 6d. up to the limits of four (4) units of pension, I am directed by the organizations concerned to mention that there are a number of angles to this question, in addition to those referred to in your correspondence, such as the following: -
The great majority of pensioners under the Superannuation scheme do not, for various reasons, receive any payment under the Old-age Pensions Act.
Only a small proportion of pensioners under the Superannuation scheme receive payment under the Old-age Pensions Act in addition to their superannuation pension, and then only in a limited measure.
Since the introduction of the Super annuation scheme in 1923, old-age pensions have been appreciably increased, but there has been no increase in superannuation pensions.
Tile savings in old-age pensions must be set off against payments made by the Commonwealth in respect of superannuation pensions.
The proportion of the. cost of superannuation pensions met by the Commonwealth must gradually drop as the older contributors and pensioners pass on. In due time the proportion of the cost charged to the Commonwealth will drop approximately to 50 per cent.
Commonwealth employees are taxed, in common with all other citizens, to meet the cost of old-age pensions, and, in addition, they are required to contribute towards the cost of superannuated pensions.
The reference to the amount which a married ex-officer and his wife can receive in superannuation and old-age pension (viz., £3 19s. a week) is answered by sub-paragraph (1 ) above.
We would be thankful, therefore, if further consideration could be given to our representations in this matter in the light of the foregoing.
That letter was signed by Mr. J. V. Dwyer on behalf of the combined service unions. He received the following letter from the Treasurer, dated the 19th October, 1944:-
I refer again to your letter of the 6th October, regarding your request for an increase of the unit value of superannuation pensions from 10s to 12s 6d. up to the limit of four units of pension.
Before a decision was given in this matter, representations made by Members of Parliament, the Federal Council of the Superannuation Commonwealth Officers’ Association and some of the State branches of this association, were given very careful consideration. These representations covered many angles, including those now mentioned by you and were illustrated by several examples submitted by the Superannuation Board.
I regret, therefore, that I must confirm my previous advice that the Government cannot see its way clear to accede to your request.
The position of these people is unfortunate. The Government is cognizant of the fluctuations in the cost of living; and, in order to assist members of the Public Service to meet the impact of such increases, it makes a basic allowance of £40 a year, this amount rising or falling in accordance with the changes of cost of living. But those who have already retired receive no such consideration. In these circumstances, the association concerned has asked the Government to make an additional, but provisional, contribution of 2s. 6d. a week in respect of the first four units of the pension, this increase to disappear should the cost of living decrease sufficiently. The Government has refused that request. What is the alternative? In Western Australia there are 380 ex-Commonwealth public servants living in retirement on a pension of £2 a week or less, and in New South Wales the number of such persons is approximately 700. I have not the figures with respect to ex-Commonwealth public servants living in other States. We should remember that all of these people have contributed a portion of the pension which they are now receiving. Yet their pension remains static while the cost of living soars, and their only recourse is to apply for old-age, or invalid, pension, which is available to other people without any contribution whatever on their part. I shall now compare the position of persons coming within these two groups. A man and. his wife who are eligible for the maximum rate of the old-age pension receive 32s. 6d. a week, with the right, which is justifiable, to add to this income up to a limited amount. A retired public servant, with a wife, who is receiving superannuation at the rate of £2 a week, finds himself compelled to apply for the old-age pension ; and his case is dealt with as follows: - The maximum rate of old-age pension is £84 10s. per annum. His superannuation pension amounts to £104, half of which, namely, £52, is allowed in respect of his wife. Allowable income under the Invalid and Old-age Pension Act is £32 10s., leaving a balance of £19 10s. to be taken into account in calculating the old-age pension, which works out at £65 each for husband and wife. The weekly income of husband and wife in this case would be: Husband’s pension £1 5s., wife’s pension £1 5s., and superannuation £2, making a total of £4 10s. a week. In the case of an applicant for oldage pension who does not receive superannuation, the total weekly income of husband and wife would be: Husband’s pension fi 12s. 6d., wife’s pension £1 12s. 6d., making a total income of £3 5s. a week. One couple would, therefore, receive £4 10s. a. week towards which contributions had been made for many years; whilst the other couple would receive £3 5s. a .week towards which no contributions had been made. I am certain that any steps taken to remedy this position would be strongly supported by honorable senators. The dignity of the Service as well as the interests and comfort of the individual should be considered. Something should be done to ease a position which, otherwise, must rapidly become worse, because the fund as now established and supported will not stand further imposts upon its income. A possible and welcome remedy would be the establishment of an appropriate scheme of general superannuation in which a means test would not find a place. Opposition is rapidly growing in all quarters against the retention of the means test. As I have indicated, the faults of the bill are due to the omissions I have dealt with. However I shall not oppose the measure.
.- The bill makes no provision for relief to the lower salaried superannuated Commonwealth public servants. On two occasions in this chamber, I have made a plea for an increase of such pensions, in order to offset the rising cost of living. A considerable percentage of the people affected could not afford to take up more than the obligatory minimum of four units under the Commonwealth Superannuation Act of 1922. That minimum ensured a pension of £2 a week on retirement, half of which represents their contribution to the Superannuation Fund. To make this contribution, hundreds of the lower-salaried officers had to surrender life assurance policies, as they could not contribute to both. These aged former officials, both male and female, have given long and faithful service to the ‘Crown. By thrift, they have kept up their contributions. The least the Government could have done was to have included in this bill an amendment to the act which would have increased the pension to at least £3 a week.
The superannuation value of four units was based on the cost of living when the act was passed 23 years ago. In that year, the old-age pension was 15s. a week, based on the cost of living. It is now £1 12s. 6d. a week, also being based on the cost of living. This rate may be less as the cost of living decreases in normal peace-time, but it will never fall to the level of 1922. I do not suggest that superannuation should have any relation to the rise and fall of the cost of living, such as determines the basic wage. ‘ That would result in actuarial complications and be difficult to administer. I do suggest however, that something should be done for the present and future aged public servants as was done in the case of war pensioners in 1943 whose original pension was determined by the cost of living in 1920 and remained static for 23 years. War pensions were then increased by 20 per cent. The all-party parliamentary committee considered that a further increase might be justified if, in the future, the economic situation warranted. The superannuated public servant and the war pensioner are in much the same category. If it is considered right and just to increase a war pension, and almost treble the old-age pension, then the retired pu’blic servant is entitled to some consideration. An increase in the case of those who took up four, six or eight superannuation units would give some relief to many people in the eventide of their lives. These men and women, unlike old-age pensioners^ contributed over their years of service towards superannuation. As a retired permanent army officer, I am a superannuated public servant. I was in the fortunate position of being able to take up the maximum number of units. I know how I had to screw and save to keep up my contributions, in addition to rearing and educating a family. Haw much more so did those on the obligatory minimum of units have to deny themselves of comforts and pleasure?
It is useless for a Minister to repeat parrot-like what some Treasury official or member of the Superannuation Board tells him. The official reply is that the men and women, whose cause I am pleading, can apply for the old-age pension.
My answer is that for every one who is eligible for that pension, twenty just fail to comply with the qualifications. An increase of £1 per week would cost the country less than the old-age pension rate of £1 12s. 6d. per week. This rate is never likely to fall back to £1 per week. When Parliament passed the Superannuation Bill in 1922, it obviously intended that public servants on retirement would have something more than the oldage pension to live on. Hence the compulsory fortnightly contributions to the Superannuation Fund. By denying these lower salaried public servants any increase, the Government will not ensure the better type of person entering or remaining in Government employ. There will be no incentive to continue to give loyal and faithful service. I hope that the Minister in charge of the bill will induce the Treasurer to’ by-pass officialdom and grant some relief on the same lines as has been accorded war pensioners, or a straight out increase of £1 a week.
– This bill seeks to rectify certain anomalies in the principal act. On that ground it is more than justified. Senator Collett and Senator Brand have raised * matter which is not dealt with in the measure, and so far as I am aware, has not been raised with honorable senators on this side of the chamber by the representative of any organization of Commonwealth public servants. One would think that if members of such organizations desired the principal act to be altered they would at least consult honorable senators on this side in view of our experience in respect of superannuation matters. It has been my lot since - the establishment of superannuation in Victoria to take a part in many discussions on the incidence of the contributions made to the fund by the members and the Government and the fund’s earning capacity. No member of the Commonwealth Public Service and no official of a Commonwealth Public Service organization has ever suggested to me that the act should be amended or the system altered.
– Does the honorablesenator not read the reports of the Superannuation Board?
– I am a member of the Victorian branch of the Australian Railways Union, and I assure the honorable gentleman that whenever the Victorian Parliament is legislating on matters affecting the members of that union, its officers submit all available information on the subject to the members on both sides of that legislature.
– This matter has been before me for two years.
– Then it has been in cold storage. I do not deny that the members of superannuation funds have a legitimate case for greater superannuation payments, but I must point out that the conditions of superannuation are not so one-sided as Senator Collett and Senator Brand would lead the Senate to believe them to be.
– What does the honorable senator mean?
– I mean that immediately a Commonwealth public servant becomes a contributor to the superannuation fund, he is entitled to all the benefits. His entitlement to superannuation at 60 or 65 years of age, whichever he elects, does not end the benefits he is entitled to. The act provides, amongst other things, that a contributor who becomes incapacitated, immediately is entitled to the full pension appropriate to the number of units of superannuation he has contributed for. If he has contributed for four units, which means £2 a week, even though he be only 19, 20 or 21 years of age, he becomes entitled to that payment immediately he is incapacitated.
– That, of course, is not disputed.
– The widow of a contributor is entitled to one-half of the pension her husband would have been entitled to had he lived and £13 a year for each child under sixteen years of age. Several phases of social service are wrapped up in superannuation, such as widows’ pensions, child endowment, invalid’ pensions, and retiring age pensions. Superannuation is far in advance of any life insurance scheme, because life insurance is a liability instead of an asset to a man incapacitated for work. Superannuation must be actuarially equated. The actuary ascertains the amount that the fund must receive to be solvent. In the scheme of things, the fund expires and is renewed periodically as men retire and new contributors enter the fund. At the inception of Commonwealth superannuation, many Commonwealth public servants were well up in years and would not have been able to make the contributions necessary to meet the actuarial requirements to qualify them for a certain rate of payment upon retirement and to cover the possibility of their leaving widows or children. I believe the Commonwealth Government has subsidized the fund by a considerable amount and, without going into details, [ suggest that at the moment the Commonwealth Government has met from ConsolidatedRevenue 60 or 70 per cent. of the payments and that it will be many years before the fund reaches the position in which both the Government and the contributors will be making equal contributions.
The whole field of social services comes under review when the complaints put forward are considered. A married couple in receipt of superannuation can receive additional assistance from the old-age pension to bring their total weekly income to £4 10s. a week. The basic wage is about £4 19s. a week. An adjustment was made last quarter. The young man receiving the basic wage has to meet all the expenses of rearing and educating his children and maintaining his household. I tell Senator Brand, whose charge against the Government is baseless, that the social services of this country are not at all bad when, after reaching 60 or 65 years of age, a couple can own their own home, have money in the bank, and receive £4 10s. a week, as against the basic wage worker’s £4 19s.
– The basic wage is only £4 14s. in South Australia.
– Yes. The basic wage worker has to raise a family on that. I know that many people do not like to apply for the old-age pension, because they regard it as a charity. I referred to that in my second-reading speech on the Invalid and Old-age Pensions Bill. As I said then, I do not like the term “ old-age pension “, because of the stigma attached to it when it was introduced. Many people to-day still have an aversion to going to the post office to receive the pension. This is not an appropriate bill on which to debate social services,but we have to make up our minds whether we, as a nation, are prepared to adopt a contributory scheme of superannuation, in which all Australians will participate, and to which all will make some contribution. That question is coming right to the fore. We, on this side, have generally favoured social services financed from Consolidated. Revenue, but the contributor to a government superannuation fund is naturally resentful when he sees an old-age pension paid, as he believes, without the recipient having contributed towards it. But the old-age pension is not charity, because, in their working years, the old-age pensioners have contributed to the Consolidated Revenue. A good deal of debate could take place on that point. We have had discussions on it amongst ourselves. I have every sympathy for the superannuated public servants, both Commonwealth and State, in the problem confronting them of rising costs and a stationary superannuation, though the problem is not new. I well remember that seven years ago, when I entered this Parliament, Senator Cameron and I led deputations from pensioners on that matter. The Treasurer of the day, who was not a Labour man, refused to consider the suggestions we made in an attempt to help superannuated persons to overcome rising costs. The present Government has not turned a deaf ear to the requests of superannuated Commonwealth employees. The problem will have to be faced sooner or later by this or some other government.
I rose to direct attention to the fact that the benefit of superannuation is not one-sided. Superannuation protects the contributor for his whole industrial life. As an officer of the Australian Railways Union, I met many men, incapacitated by accidents or otherwise, who received early in what they expected to be their working life the full superannuation they would have been entitled to at the end of it. An important provision of this legislation enables the
Public Service Commissioner to re-admit to the Service men superannuated because of incapacity, should they recover and desire to return. That is a wise provision. There is nothing to stop a superannuated employee from seeking employment outside the Public Service if he cannot comply with the requirements necessary for re-admission to theService. This is a most involved provision. There is no means test for this benefit. I suggest that honorable senators opposite who chide the Government with being parsimonious should study the ramifications of the Commonwealth superannuation scheme and acquaint themselves with the benefits to which contributors are entitled.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 6 agreed to.
Clause 7 -
Section forty-one of the Principal Act is repealed and the following section inserted in its stead: - “41. - (1.) Where a pensioner deserts his wife, the wife may, from time to time, apply to a court of summary jurisdiction constituted by a Police, Stipendiary or Special Magistrate, and, on proof of the desertion, the court may order the payment, during such period as it thinks desirable, of pension in accordance with section thirty-two of this Act as if the pensioner were dead. “ (2.) Where a pensioner whose wife is dead or divorced deserts any of his children who are dependent on him, the guardian of the children, or the Board, may, from time to time, apply to a court of summary jurisdiction constituted by a Police, Stipendiary or Special Magistrate, and, on proof of the desertion, the court may order the payment, during such period as it thinks desirable, of pension in accordance with section thirty-three of this Act as if the pensioner were dead.
– I move-
That, in proposed new sub-section . (1.) of section 41 after the word “wife”, first occurring, the following words be inserted: - “or leaves her without means of support.”
The object of this amendment and of three subsequent amendments is to extend the benefits of section 41 of the Superannuation Act to a wife who has been left without means of support.
Amendment agreed to.
Amendments (bySenator Ashley) agreed to -
That, in proposed new sub-section (1.), the words “ of the desertion “, be left out with a view to insert in lieu thereof the following words : - “ that the wife has been deserted or left without means of support.”.
That, in proposed new sub-section (2.), after the word “ deserts “, the following words be inserted: - “ , or leaves without means of support,”.
That, in proposed new sub-section (2.), the words “ of the desertion “ be left out witha view to insert in lieu thereof the following words: - “that any child of the pensioner who is dependent on him has been deserted or left without means of support.”.
Clause, as amended, agreed to.
Clauses 8 to 12agreed to.
Title agreed to.
Bill reported with amendments.
Standing and Sessional Orders suspended; report adopted.
Motion (by Senator Ashley) proposed -
That the bill be now read a third time.
.-I wish to refer to certain remarks made by Senator Sheehan in his second-reading speech on this measure. If the honorable senator will refer to Hansard of 1935 and 1938, he will find that when an anti-Labour government was in office, I made remarks similar to those which I made on this measure to-night. Therefore, my remarks applied not only to this Government. On the 11th July, at the Federal Members’ Rooms, Melbourne, a deputation of four men and two women, all members of the Superannuated Public Servants Association, made representations to me. During the last three or four years almost every member of Parliament - Victorian members at least - have received letters from the president of that association. I mention this matter, because Senator Sheehan’s remarks would lead one to believe that the grievances of which I spoke were imaginary. I can give to the honorable senator the address of the president of the association. I understand that the New South Wales branch sent a deputation to wait upon a Government supporter in this chamber - I do not know who he was - with a view to having something done on the lines which I have indicated.
Question resolved in the affirmative.
Bill read a third time.
Senator COLLINGS (Queensland-
Vice-President of the Executive Council) [8.57]. - I move-
That the bill be now read a second time.
Earlier in the year it was announced that the Government, after consultation with the Commander-in-Chief of the Australian Military Forces, General Sir Thomas Blarney, had decided to restore civil administration to the Territory of Papua and that portion of the Territory of New Guinea south of the Markham River. The purpose of this bill is to give effect to that decision. At the time of the invasion of the Territories of Papua and New Guinea by the Japanese early in 1942 there were separate administrations for the areas, each with an Administrator, and Executive and Legislative Councils, a Judiciary, and a Public Service. Following the Japanese invasion, all persons employed by both Administrations who were not in the forces were suspended from office by National Security (External Territories) Regulations, and such functions of civil administration as were necessary to be performed in those portions of Papua and New Guinea not then in enemy occupation were vested by National Security (Emergency Control) Regulations in the officer commanding the Australian Military Forces operating in the area. The Australian New Guinea Administration Unit was formed as a part of the Australian Military Forces and commenced operations in Papua, and progressively extended its activities to the Territory of New Guinea. For convenience, the Territories have been regarded as one administrative area whilst under military control. Although the Government does not propose, at this stage, to consider the question of the amalgamation of the two Territories, it considers that it would not be desirable immediately to re-establish two entirely separate Public Services. It proposes, therefore, as a temporary measure, to create a single Provisional Administration to administer Papua and such portions of the Mandated Territory of New Guinea as are now available to be transferred to civil control. Other parts of the Mandated Territory which have been recovered from the enemy will continue to be administered by the Australian New Guinea Administration Unit until the operational position in those areas is such as to allow control to be transferred to civil authorities.
The Administration of Papua was constituted under the Papua Act 1905, and that of the Mandated Territory of New Guinea under the New Guinea Act 1920. Although officers of the Administrations of the Territories were suspended in 1942, all laws of the Territories have continued in force, and such legislation as has been necessary during military control has been effected under National ‘Security Regulations. It is proposed that the Papua Act and the New Guinea Act should continue in force so far as their provisions relate to the definition of the boundaries of the Territories and the powers of the Commonwealth in relation to the Territories. It is proposed, however, to suspend the provisions of those acts which relate to the Administrator, the Legislative Councils, the Judiciary and the Public Service. The bill contains provisions similar to those in the separate acts in relation to these matters, excepting that the power to make ordinances will be vested in the Governor-General instead of in the Legislative Councils. This course is necessary by reason of the temporary nature of the Provisional Administration and of the absence of normal conditions and a settled population. The position will, however, be kept under constant review by the Government and as soon as it becomes practicable to do so legislative powers will be restored to the Territories. The area covered by the Provisional Administration will be known as the Territory of Papua-New Guinea, and there will be one Administrator, one Supreme Court, and one Public Service for the Territory.
The bill provides that the suspension of the provisions of the Papua Act and the New Guinea Act relating to the making of ordinances shall not affect the operation of any law made pursuant to those acts, but any ordinance made under the acts may be amended or repealed by ordinance under the proposed act. The proposed Papua-New Guinea Provisional Administration Act will continue in operation until a date to be fixed by proclamation and no longer, but, in any event, not longer than six months after Sis Majesty ceases to be engaged in war. When the act comes into force the operation of National Security (Emergency Control) Regulations will be terminated so far as the Territory of Papua and the portion of the Territory of New Guinea that is being transferred to civil control are concerned, and certain sections of National Security (External Territories) Regulations will be repealed. The separate Public Services of Papua and New Guinea will be replaced temporarily by a Provisional Public Service under the proposed act. Officers of the former services will continue to be regarded as suspended from office under National Security (External Territories) Regulations, but they will be entitled to appointment in the provisional service under conditions of service and at salary not less favorable than those applicable to them as officers of their respective Public Services. The rights of such officers under the terms of their appointments in separate services will be preserved to them, and such rights will be safeguarded during the period of the Provisional Administration. The classification for the provisional service has been prepared on the basis of the salary scales for corresponding positions in the Public Services of Papua and New Guinea, adopting as a general rule whichever rate is the higher for analogous positions. Any disparity in salaries paid for positions with similar duties and responsibilities as between the two services will thus be removed.
The occupation by the enemy of most of the Territory of New Guinea, and a large portion of the Territory of Papua, caused disruption to the native inhabitants and destruction of property that will require considerable sums of money to repair. Some of this money will be forthcoming from the Commonwealth
War Damage scheme, which applies to the Territories, but appropriations, will also be necessary from the revenue of the Commonwealth to assist in the reconstruction and rehabilitation of the Territories. The Government is not satisfied that sufficient interest had been taken in the Territories prior to the Japanese invasion, or that adequate funds had been provided for their development and the advancement of the native inhabitants. Apart from the debt of gratitude that the people of Australia owe to the natives of the Territory, the Government regards it as its bounden’ duty to further to the utmost the advancement of the natives and considers that that can be achieved only by providing facilities for better health, better education, and for a greater participation by the natives in the wealth of their country, and eventually in its government. A comprehensive programme is to be followed for the rehabilitation and development of the Territories, having regard to the moral and material welfare of the native inhabitants and the strategic importance of the area to Australia. The Government has already made decisions on a number of matters, the most important of which is that relating to native labour. In the past, native labour has been employed under the indenture system. It has already been announced that it is the intention of the Government to abolish this system as soon as practicable, and the decisions that have been made and which are now outlined are designed to remove the indenture system from Papua and New Guinea within a period of five years, or at an earlier date, as may be determined by the Government. As soon as the civil administration is restored, a new native labour ordinance for the combined Territory will be enacted. The major alterations to be made under this ordinance will be -
It will be an offence for any person to give, offer or accept recruiting fees, bonuses, commissions, or any consideration other than salary, in connexion with the engagement of natives for employment.
Pending the receipt of such report by the Government, it is proposed to fix a tentative minimum rate of 15s. a month plus rations, issues, housing and medical care, &c. Formerly, the minimum wage in New Guinea was 5s. a month, and in Papua 10s. a month. If the report of the investigation is not in the hands of the Government prior to the promulgation of the new native labour ordinance any new rate will be retrospective to that date.
The period of employment will he limited to a maximum of twelve months, and re-engagement will not be permitted until the native has been returned to his home village for a period of three months. Formerly, a native could be away from his home village up to four years in Papua, and seven years in New Guinea. (ix)Repatriation of native employees to their home villages will be at the expense of the employers and under the supervision of the administration.
Making a contract with an employer while under contract to another employer.
Ill-treatment of a worker.
Formerly, in New Guinea, when the minimum rate of wages was 5s. a month, prescribed penalties were disproportionate to the capacity of the native to pay them. For example, a labourer who was absent without leave could be fined £1 ; one who used insulting words to his employer could be fined £5; whilst the labourer who deserted was liable to imprisonment for three months without the option of a fine.
Contraventions of the labour laws will be dealt with by a Court of Labour and Arbitration instead of by the courts exercising criminal jurisdiction.
Although native labour is a very important item, it can be regarded only as a small part of any plan that is made for the benefit of the natives as a whole. The native population of the Territories is estimated to be about 1,000,000, and the greatest number of natives in employment at any one time has not exceeded 60,000.
For the general benefit of the natives, much more must be done to improve conditions of living in the villages and plans for that purpose are being formulated. The immediate need is to repair the damage caused by war, to both native life and property. Some time ago a committee was set up to investigate and recommend a just and practicable plan for compensating natives in Papua and New Guinea for loss of, or damage to, land and property, and death or injury arising from military operations, or arising out of causes attributable to the existence of a state of war in the Territories. This committee has completed its investigations, and it is expected that its report will be available at an early date. Thereafter, it will be the aim to improve the health of natives generally, and by education to improve their conditions and the standard of living. In the past, much of the education of the natives has been in the hands of the missionaries. Our plans provide for a vigorous programme of education in its broadest sense, controlled and directed by the administration. This does not mean that the missions will he excluded from that field. They have performed very valuable services in the past, and can continue to do so within the framework of the educational programme that is being developed.
Formerly, the economic development of the Territory and the extent to which industry might be expanded were limited only by the markets available and the supply of native labour that could be obtained. There had been some development by natives on their own account. In future, the basis for the economy of the Territory will be native and European industry with the limit of non-native expansion determined by the welfare of the natives generally. Trading activities particularly, so far as they affect the natives, willi be under much closer scrutiny and control than in the past, but the policy of the Government in this regard has not yet been determined. Transport between Australia and the Territories and within the Territories is a major factor in the development of the areas and the future of shipping and aviation activities is now being considered by the Government. The magnitude and complexity of the. task can be seen when I mention that practically all settlements in New Guinea and many of those in Papua will require to be rebuilt. Opportunity will be taken to bring to our assistance all technical aid that will be necessary to provide suitable and attractive areas of settlement 1by town planning and construction of buildings that are appropriate to the climate and equipped with modern facilities.
In order to carry out the plans of the Government, an efficient and energetic administration will be required. Although many of the experienced officers of the former administrations who have performed such splendid services in the past will be available, other officers will be required to fill vacancies that have been caused by war casualties and retirements from the services. The most important post to be filled is, of course, that of Administrator, and it has been decided to pay a salary of f 2,000 and an entertainment allowance of £500 per annum to the occupant of that post. In order to have the widest possible field of selection, it has been decided to invite applications for the appointment and this action will be taken forthwith. Other important post3 of the services for which application will be invited include those of Director of Public Health, salary, £1,100- £1,200; Director of Agriculture, salary, £1,000-£1,100 ; and. Director of Education, salary £900-£l,000. The foregoing rates of salary have been fixed having regard to the fact that residents of the Territories are not subject to income tax in respect, of salary earned by them in the Territories.
Plans for the return of civil administration have so far progressed as to make it possible to anticipate that the transfer of the control of the administration of Papua and portion of the Territory of New Guinea south of he Markham River can be effected about the beginning of October next. It will be some time, however, before normal conditions can be re-established, even in those areas, especially in relation to the supply of stores and the provision of transport between Australia and the Territories and within the Territories. It will therefore be necessary even after civil administration has been re-established to retain certain restrictions upon the entry of persons to the Territories and upon activities generally.
Much reconstruction and rebuilding of public and private utilities and living accommodation will be necessary, especially in the Territory of New Guinea before any large number of civilians can be accommodated in the town areas. So far as is possible, authority will be given for the return of persons to plantations and essential industries, but such persons will for the present be subject to control of the Australian New Guinea Production Control Board under National Security (External Territories - Control of Industries) Regulations. Former residents of the Territories and their families will be permitted to return to the Territories so soon as it is practicable to do so, having regard to the circumstances of each individual case. It is the aim of the Government, as the proposer at the San Francisco Conference of the establishment of the principle of trusteeships respecting dependent peoples, to set an example by the way in which Australia carries out its responsibilities in the Territories under its control. Naturally, many of the plans of the Government affecting native education, health, &c, are in the formative stage, and from time to time statements will be made to the Parliament of decisions taken in various subjects.
Debate (on motion by Senator Sampson) adjourned.
Debate resumed from the 20th July (vide page 4329), on motion by Senator Ashley -
That the bill be now read a second time.
.- The Minister for Supply and Shipping (Senator Ashley), in his secondreading speech, outlined the main purposes of the bill. The Opposition will not delay the passage of this measure. Personally, I have no criticism to offer of it. However, I should like to traverse the ground covered by the Minister in his second-reading speech in order to bring into greater prominence the major features of the proposed gratuity plan. It has been truly said - and it is well to repeat, and mean it - that we owe a deep debt of gratitude to members of the fighting services. We shall always honour them for their deeds in our defence in this war which veritably has threatened our existence as a nation. Perhaps, future historians like those of ancient Greece, in which country Australians have fought in this struggle, will set out the achievements of our people in their correct perspective. If that is done, our children’s children, too, may well erect temples to the fame of our fighting services and say with pride, in imitation of the Roman, “I am an Australian citizen, and because my forefathers secured to me a great heritage of freedom and prosperity, I now enjoy my nation’s liberty and riches”. But in view of our limited material resources, it is far from easy to provide rewards adequate to the great services rendered unselfishly by members of our fighting forces. Therefore, governments have endeavoured to adjust rates of pay on satisfactory bases, make due allowance for dependants, provide treatment for the wounded and sick, introduce a system of deferred pay, grant tax concessions and moratoriums, approve the principle of liberal recreation leave, and devise means for the satisfactory re-absorption after discharge into a disrupted national economy of men and women who left their work to serve on the battle-field. Some of these schemes have not yet matured, whilst others, unfortunately, are the focus of disputes which I sincerely hope will be adjusted before long. This bill seeks to make further monetary rewards, albeit modest, to those who have rendered honorable service in the defence of this country. It is proposed to make the gratuity a straight-out gift free from tax; and the gratuity will not be regarded as income or property for the purposes of the Invalid and Old-age Pensions Act or the Australian Soldiers’ Repatriation Act, and it may, not be alienated by any process in law. The provisions of the bill are based on the recommendations of a joint parliamentary committee, the majority of the members of which were returned soldiers, and of which the chairman was the Treasurer (Mr. Chifley). I was privileged to be a member of the committee together with Senator Cooper and Senator Finlay. The factors considered by the committee in arriving at its decisions were many and varied, and, whilst differences of opinion may have arisen between members of the committee, honorable senators will note that itsreport was unanimous. The Treasurer has said -
It would be an impossible task to devise a scheme which would select for special recognition periods of time spent in actual battle, and no attempt is made in the bill to do this.
The field of war is vast, and whilst one man may in has time play many parts, no man can cover all the stage. In this war, on account of the higher degree of mechanization, and’, consequently, a bigger supply problem, the proportion of personnel serving behind the firingline is probably greater than in any previous war. I should say that for every man actually in combat at least nine or ten were required to supply him.
When these factors are considered, the proposed distribution of the gratuity, by and large, is equitable.
Primarily, two gratuities are proposed. One is payable at the rate of £3 15s. a month of 30 days for every month served overseas; and the second is at the rate of 15s. a month for those members of the forces who did not proceed beyond Australia proper, or did not serve in a sea-going ship as a member of a body, contingent, or detachment of the defence force, or did not serve as a member of an air crew of a squadron of the Air Force whose role was operational and involved flights outside Australia. .Service in Papua and New Guinea on and after the 7th December, 1941, is included as service overseas. The gratuity is payable alike to men and women of the forces, and at the rates prescribed, regardless of the rank of a member. That means that a general will receive the same gratuity as a private with equal qualifications, and a member of the Australian Women’s Army Service will receive the same gratuity as a soldier or sailor with equal qualifications. Gratuity at the higher rate will be payable to those who served in Egypt, Libya, Syria, Greece, Crete, Malaya, New Guinea, Papua, Borneo, and whatever other theatre of active operations our expeditionary f orces may have been engaged in. Gratuity at the lower rate may be credited to those engaged in defence of the mainland of Australia, and this will also cover members of the permanent forces, garrison battalions, and members of the Volunteer Defence Corps called up for continuous service.
There are two classes of qualifications, one for the gratuity in respect of overseas service, and the second in respect of home service. With respect to the gratuity for overseas service, entitlement commences at the date of embarkation and continues at the overseas rate -
A member returned to Australia fit continues to qualify for the 2s. 6d. a day for 90 days and then is credited with the lower rate of gratuity, that is, 6d. a day. Where a member is killed in action, or dies of wounds or sickness, incurred abroad, the period between the date of death to the notification of death to the Repatriation Commission plus seven months is allowed for at the oversea? rate. * Once entitlement is gained the minimum period for which gratuity will be payable, subject to certain possible deductions, will he twelve months.
For home service, that is, in Australia, including the Northern Territory, entitlement is conceded to those who (i) on the 7th December, 1941, had served for six months immediately preceding that date, and (ii) on or after the 7th December, 1941, served continuously for * period of six months. Where a member dies, and death is attributable to his war service, a period of seven months is added to his entitlement. Where the death of a member on home service is due to thai service, and it is proved that certain persons were totally dependent on the member, an amount equal to three years’ qualifying service at the overseas rate may be paid. If the member had no qualifying service at the date of his death, and total dependency of some person is proved, a proportionate amount of s gratuity may be granted by the prescribed authority.
The gratuity is to be, as I have already stated, a free gift in return for honorable service. Insofar as a member, by his acts, breaks away from the high standard of discipline necessary for the maintenance of a cohesive and efficient fighting unit, he forfeits the regard of his countrymen. In such circumstances, he loses his right to the whole or a part of the gratuity that otherwise he might become entitled to. The acts committed or omitted, that may bring about such disqualification are set out in the schedule of the bill. It is, of course, conceivable that such acts may be atoned for by subsequent specially meritorious service, or, on the whole, balanced by an overall distinguished record of endeavour and valour. In any such case, it is left to the prescribed authority to exercise, under regulation, its judgment whether the entitlement to the whole or a part of the gratuity shall be restored. In general terms, a member forfeits his right to a gratuity in respect of any day of his service for which he was not entitled to the full pay of his rank.
With a possible entitlement of nearly a million people, the payment of the gratuity presents many problems. The parliamentary committee had in mind the scandals associated with traffic in bonds issued after the last war. To prevent any recurrence of such unpleasantness the bill provides that no documents shall be issued until actual payment in cash is about to be made to the individual entitled to the gratuity. The period of five and a half years after the cessation of hostilities that must elapse before payment is made may be questioned by honorable senators. In recommending this course, the committee felt bound to haveregard to several factors, but, in the main, was influenced by the needs of the Treasury and the position that will arise when demobilization takes place. About £60,000,000 deferred pay will then be due. The note issue to-day is about £200,000,000. To load the money market with another £60,000,000 or £70,000,000 at the same time, and in cash, would be calamitous for all concerned. With little or nothing in the way of necessary commodities to buy, black-marketing would rage and money would lose its value. But cash payments, in whole or m part, may be made six months or later after the cessation of hostilities: (i) where the amount due is less than £10; (ii) to the widow of a member ; (iii) to the widowed mother of an unmarried deceased soldier; (iv) to a blinded or totally incapacitated soldier; (v) to the mother of a deceased member, or an older sister who has stood to him in the place of a parent, if she was totally dependent upon or is in necessitous circumstances; and (yi) for the purposes of a deposit on, or payment for, a home secured through the War Service Homes Commission or any other approved authority.
It is as well to note that the words “cessation of hostilities” have a special meaning. They signify the date proclaimed by the Governor-General as the date cn and from which we cease to be at war. As a matter of interest, I point to the provision for the recognition of services rendered in the defence of this country by natives of the Torres Straits Islands and ‘by aboriginal natives of Australia: They will receive a gratuity at the rate of 10s. a month, but a full gratuity will be credited to any aborigine who draws for his Tank the same rate of pay as his white comrade. Some recognition is also to be made of the services rendered by the “ Fuzzies “ or natives of New Guinea or Papua. It may take the form of a monetary payment at special rates or be made in some other form.
Clause 32 of the bill provides that the Governor-General may make regulations for, inter alia, “ The appointment and tenure of office of prescribed authorities “. In practice it may turn out that one or more of these authorities is necessary, one to adjudicate on entitlement and another on payment or allotment. Each authority may be composed of one or more persons. In human affairs there are, as the Frenchman said, many “ confusionings “. There will be arguable points as to entitlement. There will be doubts as to next of kin. There will be degrees of dependency to be investigated. There will be claims arising out of unfortunate domestic conditions, and there will be the ex-soldier himself to protect in cases where his health is such that he is unable to fend for himself and the appointment of a trustee, or trustees, is deemed necessary. Where orphans of a tender age are concerned, the gratuity credited to the deceased person may, if the regulations so provide, be paid to them or invested on their behalf in such amounts and under such conditions as the “ prescribed authority “ thinks fit. After the last war, I witnessed this method of administration in operation and I can assure honorable senators that it was satisfactory. Many adult persons to-day have received the fullest advantages in education, and in other ways, as a result of the wisdom displayed by those who administered the War Gratuity Act of 1920. The regulations that will follow the coming into force, as law, of this bill may stipulate that there shall be a “prescribed authority “ in each State, with a controlling central authority at Canberra. This central authority may also be the recipient of appeals against decisions of any State authority.
The bill proposes to give the Treasurer authority to borrow money in order to finance the gratuity and/or expend money from Consolidated Revenue. The gratuity paid after the last war totalled approximately £27,000,000 ; this is estimated to involve a commitment of £63,000,000 up to the 30th June last and an additional £7,000,000 for each six months that the war -is prolonged beyond that date. Five-sixths of the amount is due in respect to service overseas. It will be seen that the country is assuming an additional heavy war burden, but I consider the expenditure fully justified and express the hope that the administration of the act will be placed in capable hands and carried out with the minimum of cause for complaint.
– I should like first to express my appreciation of the manner in which the all-party committee set up to deal with this matter applied itself to the task of seeking a fair and equitable formula for the payment of a gratuity to members of our fighting forces. This is the second war in our life-time in which a war gratuity has been paid, and the committee had to bear in mind the necessity to avoid the pitfalls encountered after the last war. After many days of sitting, the committee was able to present to the Government a unanimous report, and I am pleased to find that, without exception, the terms of the report have been the basis for this legislation. A war gratuity is not given to a soldier as a right; it is a payment made to him by his country in gratitude for the services which he has rendered as a member of the fighting forces, either at home or abroad. It was the task of the committee to determine first a scale of gratuity covering soldiers who served overseas, and, secondly, a scale for others who, in most cases against their wishes, were kept within our shores. In the war of 1914-18, all war service was of a voluntary character, but under the conditions of total war which have existed during this conflict, the service of every member of the community has been requisitioned. Thousands of men and women who would have liked to serve with our fighting, forces overseas were compelled to remain at. home and so varied were the duties of those who remained in Australia, tha’ it was most difficult to determine what variations, if any, there should be in the gratuity payable to them. The only service within this country that has been recognized as actual overseas service, i? that of members of the Royal Australian Air Force who flew from Australia’? shores on operational missions. Quite a controversy was created amongst the general public of this country in regard to the position of these men, and the opinion has been expressed that they have not been provided for on the basis of overseas service. That is not so. The bill is most definite in that regard. Clause 2 states - “Service abroad” means service by a mem-, ber -
Having determined the overseas gratuity and the home gratuity the committee then had to consider what safeguards should be placed upon the payment of gratuities in the interests of the servicemen themselves. Returned soldier members of the committee had vivid recollections of what happened after the last war when the gratuity was paid in negotiable bonds. The greatly increased purchasing power in the community caused by the availability of these bonds, valued at many millions of pounds, caused an inflation of prices, and, in many instances, bonds were sacrificed at half their true value. To overcome the possibility of a repetition of these conditions, the committee decided that except for certain reasons, the war gratuity on this occasion should not be payable until a prescribed period after the cessation of hostilities. Clause 19 states -
The next clause provides that except in certain circumstances, payment of war gratuity shall be made at the expiration of five years and six months after the cessation of hostilities. Before payment at an earlier date will be made, either to the soldier himself or to his dependants in the event of his death, an adequate cage in accordance with the conditions specified in the bill, will have to be presented. One reason for delaying the payment of war gratuity for some years after the end of the war is that every soldier, upon demobilization, will be able to collect has accumulated’ deferred pay, which in . many instances will amount to some hundreds of pounds. In the aggregate, deferred pay will amount to many millions of pounds. The release of this money in a short space of time, together with the payment of war gratuities immediately upon the cessation of hostilities would tend to cause inflation. The committee believes that the interests of the servicemen themselves can be best served by withholding payment of war gratuities until the peace-time economy of the country has been restored. The bill provides that hostilities shall be regarded as having ceased on “ a date to be proclaimed by the Governor-General “. This measure should commend itself to every fair-minded member of the community. “With the exception perhaps of New Zealand, the war gratuity payable in this country is second to none in the world. In New Zealand I understand the payment for a soldier who served only within the Dominion, is 8d. a day compared with 6d. a day in this bill. This measure has been designed, not only in the best interests of the servicemen themselves, but also in the interests of the nation. The bill speaks for itself, and it is a measure of which we can all be proud.
– I am sure that all members of the Senate are in full agreement with the provisions of this measure. I think it only fair that the many thousands of service men and women who will be affected by the bill should have some knowledge ofthe type of men who constituted the all-party committee which was appointed by the Government to make recommendations in regard to the payment of a war gratuity. With the exception of the Treasurer (Mr. Chifley) who was chairman, and the Minister for Repatriation (Mr. Frost) every member of the committee had seen active service in the war 1914-18. The committee included Senator Collett, who. was associated with the 28th Infantry Battalion in the last war, Senator Finlay who, I understand, was a member of the 10th Infantry Battalion, the honorable member for Barker (Mr. Archie Cameron), 27 th Battalion, Senator MacDonald, 14th Battalion, the honorable member for Ballarat (Mr. Pollard), 6th Battalion, and myself. I was associated with the 15th Battalion, and also the 4th Squadron of the Australian Flying Corps. Therefore, it can be assumed that the members of the committee had some knowledge of the subject which they had to tackle. It was a difficult problem to solve because of the exceptional circumstances in which the Navy, the Army and the Air Force have been obliged to serve. The situationwhich confronted the committee was entirely different from that which had to be faced after the war of 1914-18. On that occasion all members of the forces enlisted to fight overseas. The gratuity was paid from the time that they embarked for overseas until they returned to Australia. The problem as it affected service in Australia on that occasion also was simple. But the entry of Japan into the present war made the problem most complex; an entirely different set of circumstances was created. For instance, the Government had to call up tens of thousands of men for the defence of this country under the section of the Defence Act 1902 which provides that every able-bodied man in the Commonwealth between the ages of 18 and 60 years shall be liable for war service in defence of Australia. The committee had to give consideration to the claims of men who were engaged on home service in Australia, as well as the claims of those who fought overseas. A great deal of. time was devoted by the members of the committee to the hearing of witnesses and the preparation of the report. The matters referred to it were considered from every angle.
– The committee did a good job.
– I believe that it did. It was able to present a unanimous report which has been well received not only by the Parliament hut also by the people of Australia generally.I am confident, too, that the work of the committee will he appreciated by the hundreds of thousands of men and women in the services for whose benefit this bill, which is based on the committee’s report, has been introduced.
– in reply - I am indebted to Senators Collett and Cooper of the Opposition parties, as well as to my colleague, Senator Finlay, for their contributions to this debate, and I wish also to express on behalf of the Government its thanks to the committee for its report. As that report was unanimous, I shall not delay the passage of thebill by referring to it in detail, except to say that the spirit of the report is embodied in the measure before us. I believe that this measure gives expression to the nation’s appreciation of the services rendered to it by the members of the fighting services, and I commend it to the Senate.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 15 agreed to.
The. following papers were pre sented : -
Lands Acquisition Act - Land acquired forCommonwealth purposes - Rocklea, Queensland.
Postal purposes - Sydney, New South Wales.
National Security Act -
National Security (General) Regulations - Orders -
Taking possession of land, &c. (8). Use of land.
National Security (War-time Banking Control) Regulations - Order - Exemption.
Senate adjourned at 10.12 p.m.
Cite as: Australia, Senate, Debates, 25 July 1945, viewed 22 October 2017, <http://historichansard.net/senate/1945/19450725_senate_17_184/>.