Senate
15 April 1959

23rd Parliament · 1st Session

  1. Senate
  2. 23rd Parliament
  3. 1959

The PRESIDENT (Senator the Hon. Sir Alister McMulIin) took the chair at 3 p.m., and read prayers.

page 755

QUESTION

SOLAR ECLIPSES

Senator BRANSON:
WESTERN AUSTRALIA

– I preface a question to the Minister representing the Minister for Health by saying that the partial eclipse of the sun that was observed in certain States of Australia last week resulted in semi-permanent and, in some cases, permanent damage to the eyesight of a large number of unfortunate children. Would the Minister give consideration to producing a pamphlet for distribution to Australian schools showing in pictorial form, as well as by explanation, that permanent damage can be done to the eyes of a person who gazes directly at the sun?

Senator HENTY:
Minister for Customs and Excise · TASMANIA · LP

– The honorable senator raises a very interesting point indeed. It is one of great importance. I shall submit the question to the Minister for Health and find out whether the honorable senator’s suggestion can be carried out. I think it is most important that school children should recognize that permanent damage can be done to their eyes by looking at the sun, even in eclipse. If the honorable senator will put his question on the notice-paper, I will obtain an answer from the Minister for Health.

page 755

QUESTION

TELEVISION

Senator KENNELLY:
VICTORIA

– Will the Minister representing the Postmaster-General give an assurance that before any country television licences are granted, the Parliament will have an opportunity to discuss the Government’s proposals on the matter?

Senator Sir WALTER COOPER:

– I myself cannot give such an assurance to the honorable senator. If he will put the question on the notice-paper, I shall bring it before the Postmaster-General.

page 755

QUESTION

SALES TAX

Senator WADE:
VICTORIA

– I direct a question to the Minister representing the Treasurer, ls the Minister aware that people living in country towns and districts are penalized by being required to pay additional sales tax, owing to freight charges on goods being regarded as subject to the sales tax? As this must surely he regarded as an injustice and a deterrent to decentralization, will the Minister ask the Treasurer to consider including the abolition of this system in his Budget proposals for 1959?

Senator PALTRIDGE:
Minister for Civil Aviation · WESTERN AUSTRALIA · LP

– The question itself indicates that this subject is one for consideration when the Budget is being framed. I shall certainly be pleased to pass the request and the observations of the honorable senator on to the Treasurer. I will, however, go a little further than that. I can well remember Sir Arthur Fadden, the predecessor of the present Treasurer, issuing a lengthy statement in respect of this very matter. I shall endeavour to obtain a copy of the statement for the edification of the honorable senator.

page 755

QUESTION

NEW ZEALAND TRADE DELEGATION

Senator WRIGHT:
TASMANIA

– I direct a question to the Minister representing the Minister for Trade. It has reference to the delegation from New Zealand which is prosecuting a trade mission to Australia at the present time. I ask the Minister whether that mission was arranged between the two Governments. Has it any authority, and is it proposing to make any contact with the Australian Government for the purpose of arranging a trade agreement?

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– I know that before the delegation came here the New Zealand Minister for Trade was in Australia and at that time there were discussions on trade matters between him and my colleague, Mr. McEwen. As a matter of fact.T sat in at some of those discussions in an informal way. I am therefore in a position to say that this delegation from New Zealand had the complete approbation of the Australian Minister for Trade. I cannot say whether the arrangements were made on a government-to-government basis, but the indications I have before me are that they were made in that way.

page 755

QUESTION

TRANS-AUSTRALIAN RAILWAY

Senator VINCENT:
WESTERN AUSTRALIA

– My question, which is addressed to the Minister for Shipping and Transport, relates to the supply of foodstuffs and like commodities for the Trans-Australian Railway. I have been informed that, in the main, tenders for these supplies are offered only in Adelaide and the eastern States and that none is offered in Kalgoorlie or Western Australia. 1 ask the Minister whether that is so. If it is, will he consider giving Kalgoorlie tradesmen exactly the same right to tender as is given to tradesmen in the eastern States?

Senator PALTRIDGE:
LP

– The subjectmatter of the honorable senator’s question has been before me on a number of occasions, the last time being, as I recall it, at the instance of Mr. Hawke, the former Premier of Western Australia. On that occasion, I was able to indicate to Mr. Hawke, by referring to supplies in recent years, that the situation outlined in the question just asked did not exist and that Kalgoorlie traders did in fact enjoy the opportunity to cater for some sections of the business offered by the Trans-Australian Railway. I am well aware that some commodities come exclusively from Port Augusta, fish being one of them. That is because, as the honorable senator will appreciate, the fish is caught at Port Augusta and is therefore fresh. That is the most expedient way of providing fish for the journey both ways. If my memory is correct, the same applies to bread, which is baked at Kalgoorlie and supplied to the train for the journey both ways. But the supply of all other provisions is, to a large extent, shared by suppliers at the two terminals of the Trans-Australian Railway at Port Augusta and Kalgoorlie. I might, Sir, remind the honorable senator that years ago he and I joined forces in a battle against the former Minister for Shipping and Transport to secure for the trains on the transAustralia run a supply of first quality Western Australian wine.

page 756

QUESTION

SUPPLEMENTARY RENT PENSIONS

Senator TANGNEY:
WESTERN AUSTRALIA

– I direct a question to the Minister representing the Minister for Social Services. As the time is approaching when details of the Budget will be under discussion and revision, will the Minister for Social Services consider the extension of the additional rent allowance of 10s. a week to pensioners who are paying off their homes, particularly widows with children who are otherwise unable to obtain accommodation?

Senator HENTY:
LP

– Matters of policy come under the scrutiny of the Government when the Budget is being prepared. When that has been done, and if the time is considered opportune, no doubt an announcement will be made.

page 756

QUESTION

WOOL

Senator HENDRICKSON:
VICTORIA

– My question, which is addressed to the Minister representing the Minister for Primary Industry, relates to wool promotion. Recently, the Postmaster-General’s Department invited tenders for the supply of flags to be flown from government buildings and stipulated that the flags should contain a proportion of nylon. Advertisements are now appearing in Melbourne newspapers proclaiming that, with the approach of the football season, football jumpers for the first time will include nylon, using the pretext that nylon will prevent shrinkage and ensure that the colours will not run. The advertisements state that the jerseys have been approved by the Australian wool authorities. Since it is the opinion of scientific and medical authorities that no man-made fibres could ever replace wool fibres for warmth and other excellent qualities, such as resistance to shrinkage, will the Government ensure that Australian governmental instrumentalities do everything possible to protect the wool industry by issuing instructions that nylon is not to be substituted for wool? Furthermore, when the Australian Government contemplates in the future making a wedding present or other similar presentation to a foreign potentate, might it not be more appropriate to ordain that the present should be essentially typical of Australian primary industry.

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– I shall ask the Minister for Primary Industry to give a detailed reply to the points which the honorable senator has raised. I think I may say, in relation to the last point, that at the recent international conference held in Queensland the Australian Government, through the Minister for External Affairs, presented all the delegates from abroad with pullovers specially woven from the finest quality Australian wool, so that the delegates could take them back to their homelands as an example of the kind of garments that can be produced from wool, and let people see how useful wool is. In that, and in other ways, 1 think that the Government has shown that it is fully aware of the importance of promoting wool use. It may well be that, in some instances, a mixture of wool and other fibres will create a new use for wool, which, in itself, is good promotion practice.

page 757

QUESTION

LAND SETTLEMENT OF EX-SERVICEMEN

Senator LAUGHT:
SOUTH AUSTRALIA

asked the Minister representing the Minister for Primary Industry, upon notice -

  1. Is it a fact that a good deal of consternation exists in South Australia at the decision of the six State governments and the Commonwealth Government to terminate the operation of the war service land settlement scheme on 30th June next?
  2. Is it also a fact, as reported in the Adelaide “ Advertiser “ of 16th March to have been stated by Mr. B. G. Stephens, president of the Upper Murray Land Settlement Association, that there are still about 100 qualified ex-servicemen in South Australia awaiting rehabilitation?
  3. If the answers to 1 and 2 are in the affirmative, will the Minister, in view of the general stability of the scheme and the steady flow of capital repayments being made by those settled under it, examine the possibility of extending its operation for a sufficient period to enable the rehabilitation of the 100 men still awaiting consideration?
Senator GORTON:
LP

– The Minister for Primary Industry has supplied the following answers: -

  1. . Whilst some representations have been made for the continuance of the war service land settlement scheme, it has been conceded generally that the scheme cannot proceed indefinitely and that a dale of termination must be decided. A principle of the scheme is that the number of persons to be settled shall be determined primarily by opportunities for settlement, and not by the number of applicants. In the circumstances, it is inevitable that some applicants will not obtain farms as they desire, even though every effort has been made to fully satisfy the demand. This may give rise to some individual disappointment which can hardly, however, be classed as “ a good deal of consternation “.
  2. Many ex-servicemen to whom qualification certificates for war service land settlement were issued have been rehabilitated in other occupations. Efforts have been made by the State authorities to determine those still interested in land settlement, but an exact number cannot be given. However, the figure quoted from the Adelaide “ Advertiser “ is probably not unrealistic.
  3. The State authorities in South Australia, being aware for some time of the proposal to conclude the war service land settlement scheme, have made every effort to obtain land suitable for farms conforming with the principles of the scheme, but the results indicate that it is not available. Extension of the time is, therefore, not likely to achieve results within a reasonable period. After 30th June next, no further acquisition of land for war service land settlement will be undertaken, but all projects in hand at that time will be completed according to the approved developmental plans and the blocks allotted to waiting applicants.

page 757

QUESTION

NEWS AND INFORMATION BUREAU FILMS

Senator KENNELLY:

asked the Minister representing the Minister for the Interior, upon notice -

  1. Is it a fact that the Government is considering a report which recommends that the government News and Information Bureau film unit be reduced considerably and that in future government films be made mainly by private commercial interests?
  2. Is it a fact that a film for which commercial interests charge £4,000 could be made by the government film unit for £2,000, or roughly half?
  3. Will the Minister give an assurance that the Government will not reduce the News and Information Bureau film unit, and that it will continue the present practice of having the great majority of government films made by its own film unit?
Senator Sir WALTER COOPER:

– The

Minister for the Interior has furnished the following replies: -

  1. A report on the activities of the News and Information Bureau has been prepared but has not yet been considered by the Government.
  2. It is difficult to make valid cost comparisons. Any commercial charge would include at least reasonable profits. Government costing does not include that item.
  3. See answer to 1.

page 757

QUESTION

BEEF

Senator PEARSON:
SOUTH AUSTRALIA

asked the Minister representing the Minister for Primary Industry, upon notice -

  1. How many export licences have been granted for the export of boneless beef?
  2. What is the estimated value of such exports ‘
  3. What are the principal countries to which the beef is exported?
  4. Are any of the exports going to Communist China and, if so, what is their value?
Senator GORTON:
LP

– The Minister for Primary Industry has supplied the following answers: -

  1. There are 317 current export licences covering the export of all classes of meat. Export licences are not issued specifically for boneless beef. 2 and 3. Official Commonwealth statistics are not available for exports of boneless beef as such. However, it has been estimated by the Australian Meat Board that the quantities of boneless manufacturing beef shipped to overseas countries during the eight months ended 28th February, 1959, and their approximate f.o.b. values, were as follows: -
  1. There is no record of any direct exports of boneless beef to Communist China.

page 758

QUESTION

NEW PARLIAMENT HOUSE

Senator BUTTFIELD:
SOUTH AUSTRALIA

asked the Minister representing the Minister for the Interior, upon notice -

  1. Is it the intention of the Government to make a start on a permanent Parliament House in Canberra in the near future, or at least to push ahead with plans for it?
  2. Is it also intended to build this important national building on the hill which at present rises directly in front of the temporary Parliament House, or is it intended to remove the hill and build on a less commanding position at a lower level?
  3. If this latter suggestion is not correct, what are the reasons for the continuing intense earthmoving activities that are at present being carried out on the site and have been for some time past?
  4. Will the Minister endeavour to arrange with the Presiding Officers for the relief model of the proposed Canberra development scheme, now being exhibited in an inconspicuous place downstairs in the Australian War Memorial to be brought to King’s Hall, along with a map of the city, so that members of the Parliament may study the proposals in detail?
Senator SPOONER:
LP

– My colleague, the Minister for the Interior, has now supplied the following answer: -

The Prime Minister made a statement on 26th February, 1959, to the effect that there has been agreement in principle only on the siting of a new Parliament House, and that the stage has not been reached for the preparation of plans. The proposed site is in front of the temporary Parliament House and on the shore of the suggested lake.

The present earth-moving activity on Cork Hill, which is the small hill referred to by the honorable senator as the hill rising directly in front of the temporary Parliament House, relates to the extraction of shale for the Canberra brickworks.

Cork Hill is being utilized pending the development of further deposits elsewhere. The siting of a new Parliament House will not be prejudiced.

I am glad to note the honorable senator’s interest in the proposed development model, and will be glad to consider possible arrangements to display the model, together with appropriate maps, in Parliament House.

page 758

COMMONWEALTH BANKS BILL 1959

In committee: Consideration resumed from 9th April (vide page 699).

The CHAIRMAN (Senator the Hon. A. D. Reid). - Is it the wish of the committee that the bill be considered part by part?

Honorable Senators. - Yes.

Part I. agreed to.

Part II. - The Commonwealth Banking Corporation.

Senator McKENNA:
Leader of the Opposition · Tasmania

– Part II. deals with the establishment of the new body, the Commonwealth Banking Corporation. It provides for the importation of a large number of private individuals, who are to sit on a board to control the corporation. Here again, one finds the principle that I dealt with at length yesterday in speaking to the Reserve Bank Bill. The objections that we had to the Reserve Bank Board we repeat, with the addition that, whereas the governor and the deputy governor of the proposed Reserve Bank Board are to be the chairman and the deputy chairman respectively, that principle is here abandoned and there is, instead, a specific provision that the chairman and the deputy chairman shall be drawn, not from the executive officers of the bank, the managing director and his deputy, but from private individuals, who are to be imported, and who will constitute the great majority of those controlling the new corporation. Before leaving this first point, I ask the Minister to explain why the principle of executive officers in charge of the Reserve Bank Board, with a chairman and deputy chairman, is retained and why that principle is abandoned when it comes to the new Commonwealth Banking Corporation.

Under this part of the bill, there is to be an executive committee of the board for each of the constituent banks - the Trading Bank, the Savings Bank and the Development Bank. The personnel, on some of those committees at least, must necessarily be duplicated, and I should like to hear from the Minister the Government’s justification for importing into a bank that has been managed most successfully by executive officers these private interests, and why there is any necessity to have an executive committee of that board in charge of each of the banks. I put it to the committee that here we have a most cumbersome new organization. Whereas before there was complete success under the management of executive officers, there is now to be a board of eleven. That board, in turn, is to be divided into three executive committees. Under these committees again there will be a manager and a deputy manager of each of the banks, and over them all will be the managing director and the deputy director of the corporation. One has only to state that position to see that it is a most top-heavy superstructure. I can find no justification for it in reason, or practice, or any lapse on the part of the executive officers of the bank, and I would appreciate it if the Minister would address himself to justification of what the Government is doing in this matter in erecting what I claim to be a most top-heavy superstructure.

The only other comment I wish to make in relation to Part II. at this stage refers to sub-clause (2.) of clause 9, which sets out -

It is the duty of the Board, within the limits of its powers, to ensure that the policy of the Corporation, and the banking policy of the Trading Bank, of the Savings Bank and of the Development Bank, are directed to the greatest advantage of the people of Australia and have due regard to the stability and balanced development of the Australian economy.

That is quite worthy, as it appears in the bill as a statement of the duty imposed upon the corporation, a duty which, one mayexpect, will permeate down through the three constitutional banks; but I direct attention to the fact that the Reserve Bank Board, in addition to being obliged to address itself to those elements, is required to have due regard to the promotion of full employment. I notice that there is no reference to full employment in this sub-clause. One can well imagine that the efforts, even of a trading bank, may have a potent influence on that very important aspect of the Australian outlook and the Australian scene. Will the Minister explain to the committee why the duty of promoting policies to ensure full employment is imposed upon the Reserve Bank Board while such a duty has been omitted, apparently after deliberation, from the charter of the Commonwealth Banking Corporation.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– Senator McKenna has asked why the practice adopted of appointing the Governor and Deputy Governor of the Reserve Bank as Chairman and Deputy Chairman respectively of the Reserve Bank Board was not followed in the Commonwealth Banking Corporation, in which organization the managing director and the deputy managing director will not act as Chairman and Deputy Chairman respectively of the Commonwealth Banking Corporation Board. The answer lies in the fact that the Governor and the Deputy Governor of the Reserve Bank are highly skilled, technical specialists whose duties require a knowledge of, and continuous association with, central banking so that they may, in their positions, conduct central banking and, in their capacity as members of the board, bring to bear a specialized knowledge and. in a sense, a specialized guidance, as to technical matters.

The same considerations do not apply in the case of the Commonwealth Banking Corporation. While that institution is of first-class importance, it will not be necessary for either the chairman or the deputy chairman of the board to possess the intimate technical knowledge that is required of the Governor and Deputy Governor of the Reserve Bank. In setting up the Commonwealth Banking Corporation Board the Government has followed and adopted the practice which is universally employed and, to my knowledge, has always been employed, in the construction of commercial bank boards, that is, of heading the board by a chairman and a vice-chairman who have a general knowledge of commerce and business whilst the technical skill - the banking know-how - is provided by their chief executive officers. In this case, those officers are the managing director and the deputy managing director of the corporation. The two situations are- not comparable. The same degree of skill and intimate and continuing knowledge, so necessary in the Reserve Bank, do not apply in the Commonwealth Banking Corporation.

The Leader of the Opposition moved from that point to comment upon the construction of the board. He referred also to the existence of the executive committees and stated that, in his view, the proposed organization would be top heavy. 1 remind the honorable senator that the Commonwealth Banking Corporation will consist of three units, which together will comprise by far the largest banking business in Australia. The Trading Bank, for its part, has grown into a vast organization. The Savings Bank, for its part, is by far the biggest savings organization in Australia, and I do not doubt that the Development Bank will expand into an organization the duties of which will multiply as the years go by. The assertion that a board of eleven to look after that sort of organization is top heavy, displays, I would suggest, a lack of understanding of the magnitude of the work which the Commonwealth Banking Corporation will carry out.

As to the use of the executive committees, there again I would suggest that the structure planned is one which is eminently suitable. There will be eight members of the board other than the managing director, the deputy managing director and the Secretary to the Treasury. One of those members will be the chairman, who will be ineligible to sit as an executive committee member, although he may, of course, at his will, attend meetings of an executive committee. There will be three executive committees. On all of them the managing director will sit, and the deputy managing director may sit, and on the Savings Bank Committee there may sit, in addition, the Secretary to the Treasury. That will mean that for the non-official members of the board there will be a minimum of eight vacancies, three on the Trading Bank executive committee, two on the Savings Bank executive committee and three on the Development Bank executive committee. That makes a total of at least eight vacancies, for which seven members of the board are available. It may well be that only one non-official member will sit on two executive committees.

The idea of the executive committee was referred to at length in my second-reading speech. I no not propose to go into the matter in any detail now except to reiterate that it is thought desirable - and I think the Senate will agree with me - that those members of the board who will have a particular responsibility to one or other of these three organizations within the corporation should sit on the executive committee of that organization in order to familiarize themselves with the task which is being undertaken by the organization and be able to report back to the entire board1 - the committee of the whole, if I may refer to it as such - with a specialized knowledge of what is going on within that particular unit. I suggest that this use of the committee system is not strange, in either commercial or public administration. If one turns to public administration, one is immediately reminded of the committee system which operates, with vast success, in many municipal authorities throughout Australia.

The other question raised by the Leader of the Opposition referred to clause 9 (2.) and the duty imposed on the Commonwealth Banking Corporation under that provision. The Leader of the Opposition said that in this clause mention of the maintenance of full employment had been omitted. True, it has, but if the honorable senator refers to clause 10 (2.) of the Reserve Bank Bill - to which he did refer - he will find a provision there for the maintenance of full employment. I think that answers his question. Surely the maintenance of full employment is a central bank function, and it is most appropriate that that particular provision should be placed in the act covering the activities of the central bank, rather than in an act covering the activities of either the trading, savings or development banks.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I am obliged indeed to the Minister for his fairly full explanation, but he has not answered the first question which I posed to him. I asked him to justify the importation of private interests into the control of the Commonwealth Banking Corporation. Why is it necessary to have eight private individuals - presumably with no prior association with the . Commonwealth Bank - brought into an organization where, on all the records, the executive officers have been doing a perfectly good job? I am sure that that is a major question, which goes to the heart of this particular Part, and that the Minister merely overlooked the question in the course of his reply, which, as I have said, was very full.

Now 1 have to cross swords with the Minister on the matter of his arithmetic. As I understood him, he indicated that eight nan-official members would be available to sit on executive committees.

Senator Paltridge:

– There are eight nonofficial members, seven of whom are available. The chairman is not available.

Senator McKENNA:

– The chairman is not available. The Minister then divided the seven into lots of three, two and three.

Senator Paltridge:

– Yes.

Senator McKENNA:

– But that adds up to eight.

Senator Paltridge:

– That is right.

Senator McKENNA:

– You are reimporting into the Savings Bank committee the Secretary to the Treasury.

Senator Paltridge:

– No, that is after the re-importation of the Secretary to the Treasury.

Senator McKENNA:

– The Minister has available only seven non-official members. We are agreed upon that. If he divides those seven into lots of three, two and three, he is posing the proposition that one member may sit on two committees.

Senator Paltridge:

– That is what I said.

Senator McKENNA:

– 1 thought 1 heard the Minister say there would be eight nonofficial members. I must have misunderstood him, and I will not pursue the matter any further. However, I should like the Minister to deal with the other question I posed.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– The appointment of non-official members to this board represents, of course, a basic belief of this Government that the best purposes of this bank can be achieved by appointing to the board Australian people of wide and appropriate experience, who will act in the best interests of the bank and of the Australian people.

I would not contest the proposition put forward by the Leader of the Opposition that the executive members of the bank have done - and I have no doubt will continue to do - a fine job in the service of the bank, but a board of this nature - which again, I repeat, parallels, in part at least, the commercial practice of appointment to boards - has been found to be effective, and the Government believes, as a matter of policy, that it is designed to serve the best purposes of the bank.

Part II. agreed to.

Part III. - The Commonwealth Banking Corporation Board.

Senator McKENNA:
Leader of the Opposition · Tasmania

– On the question of the importation of private individuals, and the analogy which the Minister drew recently between private banking corporations and this body, I point out to him that in the case of private trading banks invariably the directors will be shareholders in the institutions. If he likes to carry the analogy right through, we reach the situation where those appointed ought to be depositors with the bank, because no one holds any shares in the Commonwealth Bank in the ordinary commercial sense of the term. If the Minister wants to carry the analogy right through, the Government should have given some acknowledgment to a proposition I advanced in relation to the Reserve Bank Board - namely, that those who seek appointment should be disqualified unless they are depositors with the Commonwealth Bank; secondly, that they should be disqualified if within a period of some years preceding their appointment they have acted as a director, manager or officer of a private banking company; and, thirdly, that no person so appointed should be indebted to a private trading bank.

How otherwise can you get an individual without fear of his being influenced in any direction? How do you keep him free of other interests? How is he able to give single-minded devotion to the interests of the bank? He may be under coercive pressure from a private bank. I know from sad experience that, whilst it is easy to move an account from one bank to another, it is not so easy to move an overdraft. Some of the persons who are appointed to this board may be heavily indebted to a private trading bank. I suggest that that is not a desirable thing.

Senator Henty:

– The honorable senator may have to try the Development Bank.

Senator McKENNA:

– 1 may well be reduced to that, but I would hope that the personal equation ranked reasonably high.

The disqualification set out in clause 16(f.) is that a person who is a director, officer or employee of a corporation the business of which is wholly or mainly that of banking is not capable of appointment as a member of the Commonwealth Banking Corporation Board. Does the Minister controvert the proposition that a manager or director of a private trading bank might resign to-day and on the next day take an appointment with the Commonwealth Banking Corporation? If that proposition is right, is it not reasonable that there should be some period during which his intimate association with the private trading bank has been severed before he is considered for appointment? It seems to me that the Government did not address its mind in any particular to what ought to be the safeguard, and that it has not carried the prohibitions far enough.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– I find it a little difficult, if I may say so, to follow the argument of the Leader of the Opposition that a non-official director of the bank should be a depositor with the bank, especially when in another context he points to the undesirability of some coercive action being taken because the appointee is a debtor to another bank. If we follow that argument through and try to establish a perfect world, we reach the situation where no one who has any banking business with another bank should be appointed to the Commonwealth Banking Corporation Board. That is a proposition which I cannot accept.

Senator Wright:

– But he should already have had some banking experience before he was appointed to the board.

Senator PALTRIDGE:

– That anticipates the answer I had proposed to offer to the third objection raised by Senator McKenna. The honorable senator said that invariably a director of a private bank is a shareholder in the bank. He knows as well as

I do that frequently people are made shareholders for the purpose of obtaining their advice as directors. 1 thought it might commend itself to the Leader of the Opposition if I were to point out to him, as I have frequently heard expressed from the Opposition benches, that every Australian is a shareholder in the Commonwealth Bank and as such is eligible for appointment to this board.

Senator KENNELLY:
Victoria

.- I should like the Minister to state the reason for the provision contained in clause 20 (4.), which reads -

The Secretary to the Department of the Treasury shall not be appointed as a member of the Executive Committee for the Trading Bank or of the Executive Committee for the Development Bank.

But that officer is eligible for appointment to the executive committee for the Savings Bank. What is the reason for the differentiation?

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– The Secretary to the Department of the Treasury will be eligible for membership of the Executive Committee of the Savings Bank only, the reason being that his responsibilities as Secretary to the Treasury are such that they would preclude him from taking on additional duties. The fact that he will be eligible for membership of the Executive Committee of the Savings Bank flows, I suggest, merely from’ the close relationship between the Treasury and the Savings Bank, particularly in regard to the latter’s activities as a subscriber to Commonwealth loans. That is why it is desirable to make the Secretary to the Treasury eligible for appointment to that particular committee.

Senator KENNELLY:
Victoria

– I know there are only 24 hours in a day, and no doubt on occasions the Secretary to the Treasury would find that they were insufficient for him. Would it not be possible to have another officer of the Treasury appointed to the executive committees of the Trading Bank and the Development Bank? Although it is true that the executive committee will, in the main, carry out the decisions of the board, I ask the Minister whether, in view of the fact that those decisions will have a great influence on affairs of this nation, he does not think it desirable to appoint an officer of the Treasury to the executive committees of both the Trading Bank and the Development Bank.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– The question is very largely one of the time and availability of the Secretary to the Treasury to do this type of duty. While the Government regards the eligibility of Treasury representation on the Savings Bank Executive Committee as of such importance that provision is made for the deputy secretary to represent the Secretary to the Treasury in his absence, it is not considered necessary, in view of all his other duties, that the Secretary to the Treasury should sit on the other executive committees.

Senator WRIGHT:
Tasmania

.- I wish to raise a question concerning the qualification provisions which are parallel to the provisions to which reference was made last night; that is to say, interest in contracts and the fact that the offices of managing director and deputy managing director are simply subject to the safeguard that those persons hold office subject to good behaviour, under clause 25 (1.).I offered the view last night that a provision of that kind did not create such a secure position as to warrant a sufficient safeguard in the case of either of those officers having an interest in a contract, or a resolution or decision of the board. I should like to know whether or not the Minister is yet in a position to add anything to what he was good enough to say yesterday.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– No, Mr. Chairman, I am not in a position to add anything further to whatI said last night in respect of the Reserve Bank.

Part III. agreed to.

Part IV. - The Commonwealth Trading Bank.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I invite the attention of the Minister to clauses 30 and 38. Clause 30 deals with the capital of the Trading Bank. It provides as follows: -

The capital of the Trading Bank shall be the aggregate of -

the amount of the capital of the Trading Bank immediately before the commencement of this Act;

the sum of two million pounds, which shall be paid by the Reserve Bank to the Trading Bank on the date of commencement of this Act; and

such other sums as are transferred from the Commonwealth Trading Bank Reserve Fund in pursuance of the next succeeding section.

A casual glance at that clause would give the impression that additional funds to the extent of £2,000,000 would be available for the trading activities of the Commonwealth Trading Bank. However, one remembers that, in the second-reading speech in relation to the Banking (Transitional Provisions) Bill, the Minister indicated that the costs of the transition under this bill would be in the nature of £2,000,000. I am prompted to ask him whether that is a true addition to capital that will be available for the ordinary trading purposes and for general purposes, or whether that figure represents the £2,000,000 which the transition from the present status of the various banks to the new one under the Commonwealth Banking Corporation will cost.

Then, perhaps I might read clause 38, which provides that -

The Trading Bank may, with the approval of the Treasurer, enter into an arrangement with any other bank for the transfer to the Trading Bank, upon such terms and conditions as are agreed upon between the Trading Bank and that other bank, of the whole or any part of the assets, liabilities and business of that other bank.

What would the Minister say to the possibility, pursuant to that clause, of the Trading Bank taking over the assets and business of either the Commonwealth Savings Bank of Australia or the Commonwealth Development Bank? As I interpret the matter, the Trading Bank is authorized by arrangement to take over the business of any other bank. Does the reference to “ any other bank “ there mean that the Trading Bank could take over the business of the Savings Bank or the Development Bank? If that is the case, is that an intended result of the clause, or was that possibility not envisaged?

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– Dealing first with the query as to capital, in relation to clause 30, the £2,000,000 which it is proposed to add to capital is certainly, to use the phrase used by the Leader of the Opposition (Senator McKenna), a true addition to capital. It is correct, of course, that certain costs in connexion with the transfer will very largely absorb this new capital, but that does not alter the fact that it will be a true addition to capital. I remind the committee that during my second-reading speechI specifically referred to the fact that the capital situation of the Trading Bank would be watched with a view to providing further capital if such capital were necessary, as it was not the intention of the Government that, in the matter of capital, the Commonwealth Bank should suffer in comparison with other trading banks.

As to the query arising from clause 38, the situation is that the banks referredto - the Savings Bank and the Trading Bank - are organizations which are set up by statute, in fact this statute. It would not be possible for action to be taken in respect of those banks under a clause as vague as that under discussion.

Senator McKenna:

– Why does the Minister argue in that way? They are banks, despite the fact that they are statutory corporations. There is no prohibition that I can see.

Senator PALTRIDGE:

– The statute provides, and the Parliament has stated, that there shall be a trading bank, which has been given certain functions, and that there shall be a development bank. If there is not to be a bank such as that set up by statute, we shall have to say so by statute. A vague provision like this could not be used to absorb the two banks referred to.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I do not want to pursue the matter further, but I should think that the clause is not vague at all. It is true, as the Minister says, that the Savings Bank is set up as a separate statutory body. Clause 38 undoubtedly authorizes the Trading Bank to take over any other bank. It is not at all inconsistent with the establishment of the Savings

Bank and the Development Bank that Parliament, in the same measure, also should authorize one of three banks to takeover one or both of the other two. I merely raise the matter as a thought that has occurred to me, and to find out whether the Government has considered it. I agree that the possibility of the Trading Bank taking over either of the other two banks under the Commonwealth Banking Corporation would be remote, and I am merely directing attention to what I put on no higher level than the legal possibility of that coming about.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

. -I shall try to answer the question in this way: It would only be possible for this bank to take over a bank which was itself capable of making a decision as to its transfer. The Savings Bank and the Trading Bank are by statute set up and continued. They cannot make such a decision, and, therefore, cannot be taken over except by statutory action. I put it to the Leader of the Opposition (Senator McKenna) that he would not argue that the Trading Bank could take over the Reserve Bank.

Senator McKenna:

– From the way the clause is drawn, I am not sure that it could not do so.

Part IV. agreed to.

Parts V. and VI. agreed to.

Part VII. - The Commonwealth Development Bank.

Senator WARDLAW:
Tasmania

.- I refer to clause 72, which provides that the functions of the Development Bank are -

  1. to provide finance for persons -

    1. for the purposes of primary production; or
    2. for the establishment or development of industrial undertakings, particularly small undertakings,-

And this is the point to which I want to direct attention particularly - in cases where, in the opinion of the Development Bank, the provision of the finance is desirable and the finance would not otherwise be available on reasonable and suitable terms and conditions; . . .

I ask the Minister for Shipping and Transport and the Minister for Civil Aviation (Senator Paltridge): Is this latter stipulation necessary? Does it not shut out many worthy borrowers from the benefits of the Development Bank and limit the resources of this new bank to, perhaps, the not so worthy borrower, who does not enjoy certain borrowing powers from the Mortgage Bank Department? Of course, the Mortgage Bank Department of the Commonwealth Bank will now become a part of the Development Bank. In some ways, the Development Bank will be a big improvement so far as the farmer is concerned, compared with what he could get from the Mortgage Bank Department of the Commonwealth Bank. 1 admit that. Whereas he was limited to an advance of £10,000 from the Mortgage Bank Department, and no advance could exceed 70 per cent, of the value - as determined by the Mortgage Bank Department itself - of the estate or interest in land on which the loan or loans are secured, those restrictions will not be applied by the new Development Bank.

However, in another respect it would appear that many farmers will be worse off under the new bank. The Mortgage Bank Department of the Commonwealth Bank has been of great assistance to very many farmers who could obtain loans through the Mortgage Bank Department against their farming properties at a very favorable rate of interest and on very liberal repayment terms. No doubt in many of those cases farmers could have obtained accommodation elsewhere on terms and conditions which might be deemed suitable and reasonable under normal lending conditions. Yet they were able to do better with the Mortgage Bank Department. Will that class of farmer now be ineligible to approach the Developmen Bank for a loan? If the clause is to be taken literally, it would seem that those men cannot go along to the Development Bank, where they might find the finance cheaper and the conditions easier, if somebody in the Development Bank is of the opinion that other finance would be available to them on reasonable and suitable terms and conditions. A neighbour might be in a much less sound position and could obtain his finance from the Development Bank. It could well be that the man who has to develop his farm or build his business and who is ineligible under the bill for Development Bank finance, because he can get it elsewhere, will find the struggle no less hard under those conditions.

It seems that the Development Bank will have an unnecessarily restricted class of borrower, which was not the case with the Mortgage Bank Department of the Commonwealth Bank. It certainly would not be desirable for the Development Bank’s funds to be used for furthering the profits of the wealthy land-owner, or big industrialist or the man who can readily obtain his requirements with the surety that his repayments and interest charges will cause him no strain or hardship. The man on the land, as we know, is subject to widely fluctuating seasonal and price conditions. If an intending borrower who must have capital to develop his farm could go quicker and further with Development Bank assistance, would it not be desirable for him to be able to put his proposition to that bank even though he has assets which would enable him to obtain other finance under terms and conditions which could be considered reasonable and suitable for normal lending? Surely, 1 take it, the clause does not mean that a man has to be a marginal farmer or have little or no business assets before he can obtain finance from the Development Bank. Surely, it is not envisaged that the Development Bank shall be a marginal lender that does not want to take undue risks and so will confine its activities to an upper class of borrower.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I also am interested in clause 72, which sets out the functions of the Development Bank. I paraphrase the clause by saying that the functions of the Development Bank are to provide finance for the purposes of primary production and industrial undertakings in cases where, in the opinion of the Development Bank, the provision of the finance is desirable and the finance would not otherwise be available on reasonable and suitable terms and conditions. I direct attention to the very narrow charter that is available to the Development Bank accordingly. It consists, as the part shows, of two divisions of the former Commonwealth Bank of Australia, namely, the

Mortgage Bank Department and the Industrial Finance Department. One was set up in 1943 and the other in 1945, by Labour governments.

Very broadly, the new bank, the Commonwealth Development Bank, is simply it fusion of those two divisions with increased and somewhat amplified powers. Apart from the fact that it gets amplified powers, there is the fact that the capital is increased by another £5,000,000, bringing the total capital to something like £20,000,000. The relative modesty of the additional capital provided - and provided, incidentally, from the reserves of the central banking division of the Commonwealth Bank - indicates that there is no really extensive activity anticipated in the setting-up of this organization. An extra £5,000,000 on top of the £15,000,000 already invested, which would be in the nature of a revolving fund, will not make for vast activity.

Senator Courtice:

– Borrowers will go to the Development Bank only when they cannot get finance elsewhere.

Senator McKENNA:

– Yes, but I point out that the Development Bank cannot attempt to look at any business at all until, in effect, it has been refused by other banks.

Senator Henty:

– Would there be many of those?

Senator McKENNA:

– Yes. The Development Bank, as I have said, cannot look at any business unless the borrower has been unable to get finance from other banks on reasonable terms and conditions. There would be many cases in that category. These two divisions will continue to perform a very real public service, as they have done in the past. At present, the Mortgage Bank Department is exempt from the provision requiring the lodging of statutory reserve deposits. lt is, in a limited way, entitled to receive deposits under clause 74, but all the powers - which look exceedingly wide - set out in that clause are subject to a very severe qualification. Sub-clause 1 of clause 74 states: -

For the purpose of carrying out its functions under this Act, and only for that purpose, obviously - the purpose of carrying out the very limited functions described in clause 72 - the Development Bank is empowered to carry on banking business.

Sub-clause 2 of clause 74 amplifies that, but all of the seemingly wide powers referred to are subject to the qualification, “ for the purpose of carrying out its functions under this Act “. Therefore, they are not unlimited powers. They are powers that may be exercised only within the ambit prescribed by clause 72.

Let us assume that Commonwealth Bank activity in a particular field - either primary production or industry - takes on some of the characteristics of a boom. The private trading banks might say, “ That is an activity which has now lost its risky character. We propose to enter it on terms and conditions that the Development Bank cannot describe as unreasonable.” I put it to the Minister that in that situation the Development Bank would be compelled to vacate the field. Under this legislation the Commonwealth Bank may pioneer an activity in primary production or industry - one that has hitherto been regarded as risky - and, having demonstrated that the risk is not so great as was at first thought, may find that the private trading banks regard it as a fresh and lucrative opening. Those banks may move into the field, offering reasonable terms and conditions, and the Development Bank would, under this clause, be obliged to get out of it.

Senator Courtice:

– If there is anything in it the Development Bank has to get out.

Senator McKENNA:

– That is the position. I repeat, if the Development Bank pioneers activity in what is thought to be a risky type of business, and is seen to be making a reasonable profit out of it, the private trading banks may decide to enter the field. The moment that they do the Development Bank will be obliged to vacate the field. That seems to me to put the Development Bank in a position that is strategically weak, and to contain its activities within a very narrow compass. Everything points to the truth of that assertion.

This is not an imaginative approach to the problems of the small man on the land, or in industry. It is a tentative approach, which apparently can be disturbed at any time. It is no answer to say that the whole function and jurisdiction of the Development Bank rests upon the opinion of the bank itself - as to whether finance is desirable, and as to whether it is not otherwise available on suitable terms and conditions. In the final analysis, the court must have reasons for its opinion, lt must be able to justify its opinion, and cannot airily express a particular view without showing that that view has foundation, Therefore, the bank cannot arbitarily decide that it is desirable to finance a particular activity - that reasonable terms and conditions are not available elsewhere. The facts must be established before its jurisdiction arises, and if the private trading banks see the Development Bank make a success of a particular venture and then say, “ You cannot be of the opinion that reasonable terms are not available; we offer these terms “, the Development Bank must vacate the field. So, first, the jurisdiction of the bank is limited. Its capital is not extensive, having regard to its possible needs. The bank’s high-sounding title gives the impression that there is to be huge development in Australia as a result of its estabment. In truth, the bank has a charter of which it is liable to be dispossessed the moment it becomes successful.

Clause 73 contains a very useful provision to the effect that the bank, in determining whether finance is to be made available shall have regard primarily to the prospective success of the operations of the person concerned. I think that it is a good thing to focus attention upon the personal equation. That is important in every loan transaction, but the virtue of this particular provision is that it puts the emphasis less upon security than upon the individual. It is such as to encourage an enterprising Australian to branch out with the backing of the proposed bank. It is not a new principle. It has already been laid down in the legislation, and my great regret is that the scope and potential of the bank are so very restricted; that by its charter it is liable to be dispossessed of a successful activity. After all is said and done, the proposed bank has not, under its present capital assignment, very great scope.

Senator WRIGHT:
Tasmania

.- My reaction to the honorable senator’s remarks is that we have listened to a somewhat arid and tedious exercise of a tautological nature, lt revealed a complete bankruptcy of viewpoint on the part of the Australian Labour Party in relation to an institution such as the proposed Development Bank. We have been told that, in the first place, the scope of the bank’s activity is to be really restricted. As he proceeded with his argument, Senator McKenna became conscious of the fact that the opinion which determines the scope is, in fact, the opinion of the Development Bank itself. That is one of these little jewels that Canberra draftsmen treasure. Thereby, the institution of their creation - in this case, the Development Bank - can say itself just what case merits the provision of finance. Under the legislation such cases are cases in which, in the opinion of the Development Bank, the provision of finance is desirable.

My learned friend - if I may make clear the character in which I address the Leader of the Opposition in this argument - then advanced the view that the court would step in and curtail the interest of the Development Bank in any particular transaction. That submission was surely made without the aid of clause 127, which gives complete immunity, from courts of law, to these institutions. I rather imagine that we are solicitous not even to court the idea of invalidating a transaction by reason of non-compliance with the provision in the measure which we are supposed to be enacting for the purpose of law. We are just moulding a political framework on which the Reserve Bank has the final say. The Development Bank comes along and says, of a particular transaction, “Yes, that is suitable to our function. We will undertake it.” If it is outside the function of that bank, clause 127 is designed to prevent a court stepping in for the purpose of creating a legal invalidity of the transaction.

Senator McKenna:

– But it does not prevent the court from issuing an injunction.

Senator WRIGHT:

– I submit that, clearly, it does - first, because the case is one to be determined by the opinion of the Development Bank, secondly, because it is immaterial from the point of view of the court’s purposes. Happily, in this country it is a court guided only by law, not by man. Therefore, if the validity of a transaction were not to depend upon compliance with any provision the court would not be satisfied that there was a breach of a legal right and therefore the basis of an injunction would not be laid down.

Senator Henty:

– The court could not order the bank to give an overdraft?

Senator WRIGHT:

– I do not think so. What is more to the point, the court could not order the Development Bank to abstain from financing me if, in fleeing from this place, I took refuge in 14,000 acres of bush and said, “ I want to clear this scrub “.

The third argument the Leader of the Opposition adopted was that, having shown some interest, and afforded some finance for a particular project and so turned what, on original examination, seemed not to be suitable for the ordinary terms of banking, into something on which even a trading bank would lend, the trading bank, simply by announcing the fact that it would take over the proposition and finance it, could elbow the Development Bank out of the proposition and say, “Thank you for your interest in it, but it has now become suitable for trading bank terms and so ceases to bc a function of the Development Bank “.

Senator Henty:

– That is a bit naive, is it not?

Senator WRIGHT:

– I should have thought that was one of those arid and extreme exploitations of legal interpretation that really do not do credit to jurisprudence. I think it is altogether so far fetched as to be not entertained. So much for the argument in opposition.

One point that did leave an impression on my mind was the comment by the Leader of the Opposition to the effect that the capital provided to the Development Bank seems of such modest proportions as not to indicate a very ambitious approach to the use of this bank for development. I expect that the purpose is to proceed cautiously, but we can live and hope to expect that, according to the success attending its operation, finance will be kept up to this bank. I only hope, though, that in an institution such as this, where the main aspect of a decision is to be prospects and not security, and knowing something of the irresponsibility that attends the management of public money, even where security is concerned, we wil! lake every care to see that the management ot this particular section of the Commonwealth Banking Corporation is of the acutest, most careful and conscientious character because upon the initial success of this bank for the first five years will depend its fate and whether or not it can grow for the benefit of agricultural interests into a bank comparable with the Commonwealth Trading Bank.

I did offer to the Minister the idea that if it did so develop with success, the real answer of the trading banks is, either cooperatively or as an adjunct to each individual institution, to have their own development banking section. As I understand it, the Minister did not seem to think there was much good sense in the proposition. Far be it from me, in all the tenseness of this environment, in which the art of monopoly in being referred to and riches and wealth are being mentioned-

Senator HENTY:
TASMANIA · LP

– You are on the wrong bill.

Senator WRIGHT:

– No, 1 am just catching an echo of other ideas. Riches and wealth to me, even when possessed, as in this instance, by other people, are not nostalgic if they are impressed for the purpose of development, and I think some of these trading banks might have the business sagacity to see that the future development of their institution on a permanent basis would be much better balanced if, as well as going into the hire-purchase field for the purpose of expanding retail trade in consumer goods, they were to say, “ We can, from these profits, offset the discount that might occur from profits in a development bank, properly run “-

Senator Courtice:

– That will be the day.

Senator WRIGHT:

– It could be the day. In our own lifetime, we have seen such an institution as the Australian Mutual Provident Society, with much greater care, I hope, for the conservation of its assets, considering that it manages a mutual life society for policy holders, devoting oceans of capital for the purpose of development not for profit on a short term, but almost guaranteeing profits within twenty years.

Senator PALTRIDGE (Western Australia - Minister for Shipping and Trans - I think my second-reading speech largely answers the interesting points raised by Senator Wardlaw. I do not want to repeat that speech at length, but I did point out that the mortgage bank business will be taken over on transfer day by the Development Bank, so that his fear, which I think I detected, that these clients might suffer some disadvantage is not in fact a real fear. If the honorable senator will be so good as to look at my second-reading speech, he will see there a very full account of the way in which the transfer will operate. I am sure much of his criticism will then be answered. If there are any further points outstanding, I shall be only too pleased to give him a detailed answer at a later stage in the debate, but I am sure he will be the first to agree that his remarks had reference more to the basic concept of the Development Bank, and to reply in detail to all the points he raised would require longer than one session at the committee stage.

I turn now to what Senator McKenna said with relation to the Development Bank. He said that this bank’s field was narrow, that it would start with between £20,000,000 and £21,000,000, made up of £16,000,000 now held by the two organizations which it will take over, and £5,000,000 of fresh capital. I am indebted to Senator Wright for his suggestion that a bank of this nature will take some little time to find its feet. To Senator Wright’s statement, I add the reference I made during my second-reading speech to the fact that the Government is aware of the possible necessity for the issuance of fresh capital and will provide it as the need arises. It is not the Government’s intention to set up this bank and then restrict its legitimate business through shortage of capital. I was intrigued by the comments of the Leader of the Opposition, who described the situation that might arise in these days of prosperity - he referred to them as boom times - in which the private trading banks, because of those conditions of buoyancy, would feel competent to take over the type of business which previously was considered to be developmental business.

Senator Courtice:

– Would the Government stop the private banks doing that?

Senator PALTRIDGE:

– Not at all. That is the very concept of this proposed bank. Mr. Chairman, if the Development Bank can start a series of businesses, primary or secondary industries, and assist them to the stage at which they will become commercial risks and sufficient security for advances by private trading banks -

Senator Hannaford:

– Or by the Commonwealth Trading Bank.

Senator PALTRIDGE:

– Or by the Commonwealth Trading Bank, then the Development Bank will have done a splendid job and will be able to divert its resources and returns from those businesses which it has financed to other businesses, and thus carry on the chain of development. I express the very earnest hope that the situation envisaged by the Leader of the Opposition materializes because, in those circumstances, we would have a Development Bank at the base of Australia’s development, fulfilling the very function for which it has been designed. Nothing could suit the Government better than that.

Reference has been made to clause 72. and perhaps I should put on record an opinion which has been furnished by the Attorney-General (Sir Garfield Barwick) in relation to clause 72 (a), which is in these terms -

  1. The functions of the Development Bank are -

    1. to provide finance for persons -
    1. for the purpose of primary production; or
    2. for the establishment or development of industrial undertakings, particularly small undertakings, in cases where, in the opinion of the Development Bank, the provision of the finance is desirable and the finance would not otherwise be available on reasonable and suitable terms and conditions.

The Attorney-General has advised as follows: -

In my view, the opinion that the Development Bank is required to form must be an honest and genuine opinion and not fanciful or capricious. The opinion must, of course, be formed having regard to the circumstances of the particular case.

In general, it is the duty of the AttorneyGeneral to see that a statutory corporation does not exceed its powers. If it could be shown in a particular case that the opinion of the

Development Bank was not genuine, an injunction might be obtained against the Development Bank by the Attorney-General to restrain it from making the proposed finance available.

Where the ultra vires act of a statutory corporation especially affects a particular individual, he may also sue for an injunction. Although the law is to some extent obscure as to the circumstances in which a private person may obtain an injunction, it cannot be said that there are no circumstances in which an injunction could be obtained by a private individual against the Development Bank. For example, where a bank could show that it would have been prepared to make the finance available to a customer, it might be held to be entitled to an injunction.

Nevertheless, in proceedings for an injunction, whether by the Attorney-General or otherwise, it would not be sufficient merely to prove that finance would have been available elsewhere if it could be shown the Development Bank was justified in forming the opinion to the contrary.

In the case of an action for an injunction to restrain a particular loan that has not yet been made, it is possible for both the AttorneyGeneral and a competent private plaintiff to obtain an interlocutory or interim injunction to preserve the status quo until the action can be tried.

Where the Development Bank has already granted a particular loan, proceedings by a private person to restrain the making of the loan would be useless. Nevertheless, if the Attorney-General could prove a breach, coupled with the likelihood of further breaches, it would probably be possible for him to obtain an injunction to restrain further breaches.

Senator Wright:

– Has the AttorneyGeneral made any reference to clause 127?

Senator PALTRIDGE:

– No, but in view of the terms of that clause the opinion which I have just read was supplied by the Attorney-General. Dealing briefly with the very interesting suggestion made by Senator Wright as to the possibility of the private trading banks establishing development banks of their own, either in a cooperation of some kind or in their own right, I trust that the honorable senator does not believe that any suggestion he has ever offered to me has not been thought to be well worthy of consideration. But when I say that I regard the development of that kind of bank by the private banks as unlikely in the extreme, I am supported surely by the whole history of commercial banking. Mr. Chairman, I can well remember as a youth the banking business done by country bank managers from the back of horse-drawn traps and the like. Development in that sense rather warms my heart. Business conducted in those circumstances is in direct contrast to the surroundings in which much banking business is carried out to-day. When I walk into a bank nowadays I am often reminded of the foyer of a theatre. While banking carried out in those surroundings no doubt is good banking, it is not developmental banking. With the best intentions in the world, no private trading bank could undertake the kind of developmental banking envisaged in this legislation, for the simple reason that it has not been found possible in the past for a bank to pledge its funds on long-term conditions, such as have been applied by the Mortgage Bank Department in the past, and will be applied by the Commonwealth Development Bank in the future. I make that statement with the best intentions in the world and with no desire at all to be critical.

A commercial bank, like all other businesses of the kind, thrives on the return of money lent, if I may so describe it. A private trading bank cannot thrive if it ties up its deposits and resources in such a way that they can be used only once in a period of twenty years. I am taking the time of the committee to explain to Senator Wright the reasons that have led me to the conclusion that his proposal is interesting but unacceptable, lest some casual remark I have made may have caused him offence.

Senator COURTICE (Queensland) [4.44J. - One thing about the Minister that I admire is his frankness. He always makes very clear the fundamental difference between the Liberal and Labour outlook on all matters before us. The Minister has said that it is physically impossible for the private banks to do the pioneering work in Australia that is screaming for attention. We must have public investment. None of us can object to this bank. For a long time I have advocated legislation of this kind, but I never thought that any government which saw the necessity for a bank of this kind would immediately place a straitjacket on it. The Minister says that he hopes that the bank will be a great success. It may be able to secure large funds and become a power in the land, assisting materially in the development of the resources of the nation; but, if that is so, immediately it is in a position to do business which is attractive to the private banks, that kind of business will, of course. gravitate to the private banks, and the further development of the nation will be subordinated to the interests of profitmaking by people associated with private banks.

The difference between the Labour Party and the parties opposite is that the Labour Party believes in the maximum of public investment in this country, whereas the Government parties believe in just the opposite. Immediately a public undertaking becomes a success - I give the Australian Whaling Commission as an example - the Government sells it to private enterprise. The Government believes in private enterprise and does not believe in public investment, but in this instance the Minister has to admit that the investment of the small people of this country in Government loans will finance the Development Bank, lt will be financed by people who are prepared to lend their money to the Government at a very low rate of interest.

The Minister, who is very fair and has a clear and shrewd understanding, knows, and has always known, that you cannot expect private individuals to invest their money in a concern which offers no likelihood of a high rate of interest or large dividends. I know that if I had any money to invest, I would not invest it in an irrigagation scheme, knowing that during the twenty years it took to develop the project no dividends would be paid. The financing of this bank is work for public enterprise. That is the policy of the Labour Party. All great works in a young country like Australia must be developed by public enterprise.

It is ridiculous that at this stage of our history we are not attempting to develop the nation to a much greater extent. How can we hope, without greater public investment, to absorb into industry the immigrants coming to this country? We should be bringing in more immigrants. In my opinion it is later than we think. There must be more immigration and we must make sure that we shall be able to place the newcomers in industry. We have no possible chance of doing that other than by an increase of public investment, but at present much of the money of private individuals is gravitating to hire-purchase organizations, although the country is screaming for more sewerage and water schemes and other amenities. Wealthy

F.2622/59. - S. - PO]

people are to-day grasping everything they can get. They are actuated by the idea of getting all they can, not by the idea of doing what they can for this country. That attitude is dominating Australia at the present time.

The Government is always complaining that trade unions ask for too much, but my contention is that the people in a large section of the population are day after day and week after week thinking how they can get a little more from their investments, not about how they could help to develop the country. In some respects, their money may be used for development - I realize that - but I say that the wealthy people in Australia to-day are more interested in what they can make than in what they could do to assist national development. If we are to develop this country, there must be greater public investment.

The proposal to institute this Development Bank is a sop to the Country Party, because the Liberal Party never had any ideas about a Development Bank. During the years that I have been in politics I never heard a word from Liberal Party members about a development bank until recently. The Liberal Party is not concerned about it how. The Development Bank is proposed only in order to get the Country Party to accept this banking legislation. I know that the Country Party has accepted all of this banking legislation only because of the proposal to set up a Development Bank. The Labour Party would have introduced a better bill than this if it had been in power.

The Liberal Party gives no encouragement to public investment. I say more in sorrow than in anger that the old pioneering spirit is vanishing. I can recall occasions in my own district when a person accepted a lower price for his land rather than have certain people enter the district. That type of person had some concern for the welfare of the country. We have drifted a long way since then.

Criticism has been directed at the work. ing class of this country, but in the final analysis it will be the working people and their savings that will be the force behind the development of this nation. I do not want to get off the subject of the bill, and it is perhaps not irrelevant to remind honorable senators that there is a certain railway construction scheme in Queensland awaiting development. It would be of enormous value to Queensland and the nation generally, but we cannot get the money that is necessary. Hire-purchase companies can raise £300,000,000, but we cannot raise £20,000,000 for a railway from the Mount Isa mines to the coast. Mount Isa Mines Limited has proved itself to be a great company and has done great work, but the wealthy people of Australia are not prepared to give it the assistance it needs. To get finance for this railway, Australia has to go to the World Bank, which was created in order to assist backward countries. Australia has tried to draw more heavily from the World Bank than any other country, so it must be a backward country. If this Government were worth its salt, it would say to the Mount lsa company, ““If you cannot get the money you want, we, realizing that the proper development of the mines will be in the best interests of the nation, will get the money for you “.

Nobody in this chamber understands the situation better than the Minister, and there is nobody more candid than the Minister. He is satisfied that, so far as public investment is concerned, it is the wood and water joeys of this country who will supply the money for development. Private investment will not be behind anysuch development, because there is no profit in it. I should like to feel, like Senator Wright, that the Development Bank will be a success and that it will gradually become a power in the development of this country, but 1 do not think anything of the kind will transpire. I think that the same influence that has clamped down on the Commonwealth Bank will be brought to bear on this bank.

Senator McKENNA:
Leader of the Opposition · Tasmania

– When the Minister replied, he gave me two surprises. In the first place, I did not expect his ready acquiescence in the proposition that I put, namely, that when the Development Bank had pioneered the field and the private hanks had decided to enter that field, the Development Bank should vacate it. That is a situation which he expressly said he would welcome.

Senator Wright:

– I do not think he said that the Development Bank would have to get out. I think he said it was a situation in which it would be natural for the Development Bank to say, “ This ceases to be my province; you take over “.

Senator McKENNA:

– I am quite content to rest upon the answer the Minister has given to me. Senator Wright raised a doubt as to whether an injunction would lie against the Development Bank on this matter. My second surprise was in relation to that. I certainly did not expect to find the Attorney-General of the Commonwealth coming to my rescue, through the mouth of the Minister, in such very clear and definite terms. May I say that the opinion comes from a source that I know Senator Wright respects to a very high degree. May I now propose to you, Mr. Temporary Chairman, that on that particular issue I should enter judgment and suggest that the honorable senator, in a burst of generosity, may even consider paying my costs?

Leaving the lighter side and coming back to a consideration of clause 127, I feel that that clause, wide as it is, has been inserted to pick up an act or transaction which through inadvertence is put through by the Development Bank. If the honorable senator looks at the clause again, he will find that it relates to transactions which are past and accomplished. There must be an act or transaction, and it seems reasonably obvious that an injunction might well lie in respect of future acts. Apparently that is the view which is firmly taken by the Attorney-General. It is not often that I get such a pleasant surprise. If the Minister has any more of that kind in store, I shall be glad to have them. I join with Senator Courtice in saying that the Minister is very frank, and I think he was particularly frank in producing that rabbit out of the hat.

Now I refer to clause 83, and again to clause 85. Clause 83 reads -

In the exercise of its powers and the performance of its functions, the Development Bank.-

may arrange with a person to act as agent of the Development Bank in any place, whether within or beyond Australia, and shall, on request by a bank specified in Part I. of the First Schedule to the Banking Act 1939, appoint that bank to be an agent of the Development Bank for the receipt and transmission of applications for the provision of finance by the Development Bank; 1 should imagine that banks which were not interested in risky business would automatically refer their clients to the Development Bank, or to some other source, that that would be done as a matter of course, and that there would be no need to impose the obligation on the Development Bank to appoint that private trading bank to be its agent. 1 ask, first, whether any agency benefits are to be derived by the private trading banks for the reference of clients. Is any kind of procuration fee or commission on the transaction to be paid, or will the private trading bank merely do it as a matter of ordinary exchange between banks? lt seems to me to be rather extraordinary that it should be made mandatory upon the Development Bank so to appoint a private bank as its agent. If the Development Bank had some reason to object to the behaviour of a private trading bank, why should not it be free to terminate the agency? Why should this be made mandatory?

The other comment I make relates to clause 85. The Treasurer was not forbidden by the bill that was before us in March last year to deposit moneys with the Development Bank. The clause presented to us now provides that the Treasurer shall not be free to deposit moneys with the Development Bank except with the authority of the Parliament. Is not that rather a restriction upon the activities of the bank? Will the Minister indicate why it is necessary to tie the bank down to an appropriation by the Parliament? Why should not the Treasurer be free to make whatever deposits to trust funds with the Development Bank that he wants to?

Senator O’FLAHERTY:
South Australia

– The Minister has made an extraordinary statement which, to my mind, explains a lot of things in the bill. The essence of his statement was that, when the Development Bank had set businesses on their feet or had otherwise pioneered developmental work, its task was finished and the private banks should then be allowed to come in and take over. That explains the presence of clause 83 (b) in the bill. That provision will enable the private banking institutions to request that they be made the agents of the Development Bank, and the Development Bank will not have the right to refuse. From that point on, the private banks will be the agents of the Development Bank and that bank will not be able to establish a branch where it has an agent. This provision, which has been deliberately included in the bill, will enable the private banks to choke the business of the Development Bank, or to throw certain business onto the Development Bank until it becomes profitable and then take it over.

That is what the Minister has said, in effect. That is a dreadful thing to say. It is in line with statements that have been made in the Parliament from time to time to the effect that it is not the business of the Government to engage in private enterprise. Under this provision, the Government, through the Development Bank, will take all the risks until various enterprises become payable concerns, and then the private banks will take. over.

Senator Paltridge:

– Or the Commonwealth Trading Bank.

Senator O’FLAHERTY:

– But in this instance we are not dealing with the Commonwealth Trading Bank. The Commonwealth Trading Bank is not mentioned in the First Schedule to the Banking Bill, to which reference is made in clause 83 (b) of the measure now before us. The banks referred to in that schedule are as follows: - Australia and New Zealand Bank Limited, the Ballarat Banking Company Limited, the Bank of Adelaide, the Bank of China, the Bank of New South Wales, the Bank of New Zealand, the Brisbane Permanent Building and Banking Company Limited, the Commercial Bank of Australia Limited, the Commercial Banking Company of Sydney Limited, the Comptoir National d’Escompte de Paris, the English, Scottish and Australian Bank Limited, the National Bank of Australasia Limited and the Queensland National Bank Limited.

Senator Paltridge:

– The clause provides that the Development Bank may arrange with a person to act as its agent, and1 I suggest that one of the first agents it would appoint would be the Commonwealth Trading Bank.

Senator O’FLAHERTY:

– But that is not what the clause provides.

Senator Paltridge:

– Yes, it is.

Senator O’FLAHERTY:

– Let us have another look at clause 83 (b). It states that, in the exercise of its powers and the performance of its functions, the Development Bank may arrange with a person to act as agent of the Development Bank in any place, whether within or beyond Australia, and shall, on request by a bank specified in Part I. of the First Schedule to the Banking Bill, to which I have just referred and which does not mention the Commonwealth Bank, appoint that bank to be an agent of the Development Bank.

The first statement of the Minister explains his second statement. It seems that the Government is deliberately setting out with the purpose of allowing the private banks to dictate just how much business the Development Bank may do. The moment that a project becomes a paying proposition, the private banks will take over and leave the Government’s bank in the mud. It will have to start afresh. That is as I read the bill and as it has been explained by the Minister.

Perhaps the Minister would agree to adopt the suggestion that instead of the word “ shall “ in clause 83 (b), where it is stated that the Development Bank shall appoint as an agent a bank specified in Part I. of the First Schedule to the Banking Bill, the word “ may “ be substituted. I hope that the Development Bank will be handling business in country areas, and I do not think that the private banks should be able to dictate the type of business that the bank will do. As I have suggested, no doubt if the business is of a risky nature, the private banks will be content to let the Development Bank have it, but if it is not risky they will try to seduce, if I may use that expression, the business away from the bank.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– I wish to speak briefly in order to remove, if I can, the misconception that Senator O’Flaherty is under. He apparently thinks that the Commonwealth Development Bank is prevented from appointing as agent the Commonwealth Trading Bank or, for that matter, the Commonwealth Savings Bank, because those two banks do not appear in the schedule to the bill to which he referred. That is not so. The provision is made in the clause that the Development Bank may arrange with a person to act as agent for the bank in any place, and that will include, I suggest, the Commonwealth Trading Bank and the Commonwealth Savings Bank. As to the requirement regarding appointment of the trading banks as agents, they will be appointed as agents not for the conduct or negotiation of business, but merely for the receipt and transmission of applications.

My friend Senator O’Flaherty poses a question to me. He asks: What about the position which arises when a trading bank decides that the business is good enough to take on as a commercial risk. What of it? That would be the best thing that could happen. There would be more money available for real developmental purposes in the Development Bank. The purpose of the Development Bank is to undertake business of a type which would not be undertaken by any trading bank on the terms under which trading banks operate.

Senator WRIGHT:
Tasmania

.- I ask the Minister whether he concedes the contention that, when a security that has been fertilized by the Development Bank reaches the stage where it commands finance from the trading banks, simply on the request of a trading bank the Development Bank should cease to be competent to continue that finance. That is the contention that Senator McKenna put forward, and I want to know explicitly whether the Minister concedes that that should be so.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– No, Mr. Temporary Chairman. The point is that the Development Bank has the power to make a developmental loan, and that, I think, is the short and the long answer to the question.

Part VII. agreed to.

Part VIII. - The Commonwealth Banking Corporation Service.

Senator BUTTFIELD:
South Australia

– I rise to register a protest about two clauses in this part I refer to clauses 91 and 104 which, in my opinion, amount to blatant discrimination in a democracy which pretends to protect the rights of the individual in his choice of how, when, where and why he works. Clause 91 provides that -

A person shall not be admitted to a prescribed entrance examination unless that person is of the required sex and age . . .

I wish to know from the Minister why it has been necessary to insert the word “ sex “ and whether there is any reason why examinations should not be open to all who have the qualifications to sit for them.

Senator Hannaford:

– There is no discrimination there.

Senator BUTTFIELD:

– There is discrimination if a clause states that only persons of a certain sex shall be eligible to sit for an examination. There should be equal opportunity for all. In my opinion, that is an absurd clause.

In clause 104, there is not only discrimination against one sex, but there is also discrimination against permanent or temporary employees. The clause reads - (1.) A married woman shall not be appointed to the Service except in special circumstances. (2). A female officer shall cease to be an officer on her marriage . . .

That, of course, means that a permanent officer has to resign on marriage, but a temporary employee is not forced to do so. There is discrimination against a person who has ability and in favour of some one who, perhaps, is in an unskilled position.

I submit to the Minister, and I should like to hear his answer, that it was unnecessary to insert such a clause as clause 104 in this bill, since there is no similar provision in the Reserve Bank Bill. I heard the Minister last night, in answer to Senator Kennelly, say that the Reserve Bank would be a specialist bank and that therefore it was not possible to apply to it the rigid rules that operated in the Public Service. I suggest that if it is not necessary to apply the rules in respect of one bank, it is not necessary to insert in this legislation such an antiquated type of clause as clause 104.

To do so completely ignores the advantages and disadvantages of the employment of married women.

I have heard people give various reasons why they would not want to employ married women. For instance, it is said that a married woman is unreliable in her employment because, through the sickness of her husband, she may have to go home to look after him. If the boot were on the other foot and the married woman were ill, would not her husband have an obligation to look after her? I have also heard it said that the employment of married women postpones the procreation of children. That contention could possibly work in another way, too. By stipulating that married women were not to be employed, the authority concerned might easily postpone the marriage of female employees while they waited and saved for what they considered a sufficient amount on which to bring up a family.

Another objection that I have heard concerns the termination of service of married women. It has been suggested that if a married woman were proving somewhat unreliable in her employment, it would be difficult to terminate her services. I think that it would be quite a simple matter to provide that women would be employed under the same conditions as any one else. If a woman employee could not comply with the prescribed conditions, she could be re-engaged as a temporary officer on one week’s notice. In addition, this provision places all types of married women in one class. It does not take into consideration the fact that there are four classifications of married women. For instance, there is the young married woman employed by a bank who reaches a certain stage of efficiency and is then told that she must resign. She has to set up home, unless, of course, private industry can re-engage her, and she becomes frustrated and bored. If, by any chance, she is unable to have children she suffers in two ways - through losing her employment and her inability to have a family.

Then there is the married woman with a young family. I think that in most cases such women resign to look after their children, but I see no reason why, in this era, people should be told whether they can or cannot make arrangements as to how their children shall be cared for. If they wish to continue in service, that is their own choice. Some people will say that this is the cause of child delinquency, lt has been established through research by the Lady Gowrie Child Centre that delinquency has not been caused by young married women who go to work but who leave their children in places such as kindergartens to be looked after.

There is a third category - married women who have grown families. In my own case, I found that with my family grown up I had something to offer to the community, and also something to offer to my family by going into some form of useful employment outside my home. I consider that I am a good deal more interesting to my family because I have directed my mind to something outside domestic matters as well as continuing to run my home. I submit that the reason for many a man straying is that he considers his wife boring because she stays at home. I submit, also, that in many instances women who go out to work are more interesting to their husbands when they come home. I feel that this particular category of married women have a right, if they so desire, to some form of economic independence. They have a right to prove themselves to themselves by engaging in some other useful activity outside the home. I always say that women in this category also have a right to go out to work, if they wish to do so, to add to the comfort of the home. In addition, these women may have the very laudable ambition to travel. There is no reason on earth that I am aware of why this category of married women should not be allowed to benefit from employment.

The fourth category comprises divorcees and widows, who may be bread-winners. They need and must have employment in order to bring up their families. Yet all these categories are not allowed to be employed by the State, or in this case by the bank. This provision ignores the fact that there are many advantages in employing these more experienced and more mature women, who have gained their experience during years of work and who are perhaps more purposeful in their attitude towards work, who are settled in their attitude and who have a sense of responsibility towards work because they want to improve their home. I submit that Australia cannot afford to waste any talent whatsoever. We did not waste talent in an emergency during the war. We were very pleased to employ all the married women. Was it a fair thing, when the emergency was over, simply to say to these women, “ Thank you very much for your services; we do not want you any more “. It seems to me an extraordinary thing that we in Australia who have been parties to the Declaration of Human Rights are ignoring that declaration in this legislation. As honorable senators know, the Declaration of Human Rights provides that all humans are born equal in dignity and rights without discrimination of any kind. Yet in this legislation we are discriminating against married women. Furthermore, Article 23 of the United Nations Charter provides that every one has a right to work, to a free choice of employment, to just and favorable conditions of work, and to protection against unemployment. There is no restrictive qualification, such as “ Unless they are married women “.

Senator Benn:

– Tt is a husband’s lawful obligation to support his wife.

Senator BUTTFIELD:

– He can support her, but she should still have the right to accept employment if she wishes. It is significant that of the 44 countries which are members of the United Nations Economic and Social Council, Australia is one of five of them which do not give to women equal rights of employment with men. The United Kingdom removed the marriage bar from its legislation as far back as 1946. I have had a look at the statistics to see how many married women are employed in Australia. At June, 1957, there were 764,400 women employed in Australia, of whom 300,000 were married. Again, 45,600 were employed by the Commonwealth Government and every one of those can expect to be married. Yet the Government has to say to them, “ When you get married you will have to go. You will have to see whether private enterprise can employ you. If it cannot do so, that is too bad. You will not have any employment.” The Government is ignoring its own practice. It employs women when it wants them and it cannot find others to do the work. Already the

Government employs 10,000 women under exemption. Yet it continues to legislate in this way. Here in Canberra one in five of all married women are working, possibly for the Government. Is this provision of the legislation fair and logical, and does it have to continue?

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– I can only give to Senator Buttfield the same answer that the Treasurer (Mr. Harold Holt) supplied in another place, which was to the effect that the whole question of the recruitment of women in the Public Service has been raised in the report submitted recently in connexion with the Public Service, and that a government decision will be taken consequent to the examination of this report.

Senator Wedgwood:

– We hope that the Government will accept the recommendations of the committee.

Senator PALTRIDGE:

– This chamber and our party room would be particularly uncomfortable places if it did not.

Senator Buttfield:

– They surely will.

Senator ROBERTSON:
Western Australia

– I should like to support what my colleague, Senator Buttfield, has said about this matter. I feel that it is a very retrograde step for a country which is looked upon as being an advanced country to keep such an antiquated provision in its banking legislation. The United States of America, which is an advanced country, has a woman as Treasurer. The question of the employment of married women has been a very bitter one in all the education departments of Australia. In most of the States, there has been talk about the dismissal of married women from those departments. Now, the regulations are being altered in some States so that the bar against the employment of married women will pass into oblivion. 1 hope that the Minister for Shipping and Transport and the Minister for Civil Aviation (Senator Paltridge) will be able to tell me in his reply the circumstances that are envisaged by the phrase “ special circumstances “ in this legislation. It is difficult to see into a man’s mind. When women make a place for themselves in politics, men think that they have paid them a tremendous compliment. They say to us, “ You are very wonderful; you have a man’s mind “. My “ man’s mind “, if I have one, cannot understand what such special circumstances might be. I should like the Minister to tell me the nature of the special circumstances that would justify retaining married women in the employ of the bank.

Senator MCCALLUM:
New South Wales

– I am completely opposed to these clauses; I have been opposed to them ever since they first came to my notice. I may say that in the past in the New South Wales Education Department I strongly opposed a measure that was enacted in the ‘30’s which provided for the dismissal of married women. I might say that whether or not special circumstances apply in this respect in the bank, I took the attitude - I do not know whether this will make me particularly popular in the chamber - that as far as teaching was concerned a woman did not become a worse teacher by being married; she became a better teacher. I know that in the teaching service some of the most valuable teachers are married women. This provision belongs to an age that is dead and gone, however much some people may look back with nostalgia to the nineteenth century - or perhaps the fifteenth century - because some of the ideas expressed are really more appropriate to that period. Under our Constitution men and women are equal and, while no doubt every one believes that for a woman to marry and devote the whole of her time to a home is the best lot that can befall her, it is a fact that there are women who may, during some part of their married life, be profitably employed. There are also widows, and there are women who do not wish to marry - who wish to pursue some other career. To say that a woman may be a professor, the head of a college, a senator, a Minister of State or even higher, but cannot possibly rise to the dizzy height of branch manager of a bank is the sheerest nonsense.

I do not regard this as a humorous matter, or merely as a matter between men and women. I regard it as a fundamental principle of the modern state in which we live that women should be, as far as the law is concerned, and as far as opportunities are concerned, on an equal footing with men. I shall qualify that by saying that under the law a woman should not be on a basis of absolute equality with men because she should enjoy special protections. Apart from that aspect, she should have complete equality, and I support this measure only because of the Minister’s assurance that this antiquated system will be swept away by a more comprehensive system.

Part VIII. agreed to.

Part IX. - Miscellaneous.

Senator McKENNA:
Leader of the Opposition · Tasmania

– Clause 126 relates to the investment of trust moneys and reads -

A trustee, executor or administrator may invest any trust moneys in his hands on deposit with the Trading Bank, the Savings Bank or the Development Bank.

It is perhaps hardly fair to expect the Minister to answer personally the point that I propose to raise, but it seems to me that the collection of trust moneys and investment moneys is a matter for State governments. I have not examined the Constitution closely in recent times, but I can recall no placitum or head of power that would enable the Commonwealth to legislate in that field. After all is said and done, we are dealing with banking; we are regulating banking. This clause purports to authorize a trustee, executor or administrator to invest his trust moneys in a particular bank. I merely question whether that is a law in relation to banking or in relation to the investment of trust funds - a matter that I would have thought, at first glance, to reside in the States, and not in the Commonwealth.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– I do not know whether the provision is in any other Commonwealth statute, but it was carried through from the previous act and, indeed, was inserted in the 1945 legislation.

Senator McKenna:

– I realize that, but I should be interested to learn of the head of power under which the provision is drawn.

Senator WRIGHT:
Tasmania

– I should like to refer briefly to clause 129, which empowers the making of regulations for the depositing of money with, or the withdrawal of money from, the Savings Bank. I should like to know whether, in the existing regulations, there is a limitation upon the amount that may be withdrawn at any one time from a deposit in the Savings Bank. If the information cannot be readily obtained the Minister need not trouble to obtain it.

Senator Paltridge:

– I have not the information at hand, but I shall give it to the honorable senator later.

Part IX. agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 778

BANKING BILL 1959

In committee: Consideration resumed from 9th April (vide page 700).

The CHAIRMAN (Senator the Hon. A. D. Reid). - Is it the wish of the committee that the bill be considered part by part?

Honorable Senators. - Yes.

Part I. agreed to.

Part II. - Provisions relating to the carrying on of Banking Business.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I merely rise to say that this is very largely a repetition of the 1945 banking legislation of the Chifley Administration which, at the time, was roundly condemned by the parties which then constituted the Opposition. It is very interesting to see how, almost word for word, that legislation, with its controls upon advances, and its control of interest rates and the rest, is now not only adopted and exercised by the Government, but consolidated and presented in this form.

Senator Kendall:

– By the law of averages, you and your colleagues must have done something right!

Senator McKENNA:

– It is nice to know that occasionally the Government acknowledges that fact. There are, of course, important changes. The basis upon which the banks were obliged to place a portion of their deposits with the central banking division has been revised. In the legislation before us that particular provision falls within Division 3 of this part. Before I deal with it, I should like to ask the Minister a question about clause 11. Sub-clause (1.) of that clause provides -

Where a person desires to carry on any banking business in Australia but does not desire to carry on the general business of banking, the Treasurer may, by order published in the Gazette, exempt that person from compliance with such of the provisions of this Act as are specified in the order and, so long as the order continues in force, that person shall be exempt from compliance with the provisions so specified.

Is the Minister in a position to give any information at short notice as to the types of applications for exemption that have been received, and as to the types where exemption has been granted? If he could do that, I should be grateful.

Clause 15 relates to indemnity, and reads -

The Reserve Bank, the Governor and Deputy Governor of the Reserve Bank, and any officer of the Reserve Bank Service, are not subject to any action, claim or demand by, or any liability to, any person in respect of anything done or omitted to be done in good faith and without negligence-

I underline the words “ without negligence “ - in the exercise, or in connexion with the exercise, of the powers conferred on the Reserve Bank under this Division.

I merely commend to the Minister the contrast there where the Government affirms the liability of the Commonwealth Bank for negligence, a principle that was discarded and resisted by the Government quite recently in relation to the airline companies of Australia. I draw the Minister’s attention to that and invite him to comment on that rather contradictory position which the Government takes up.

I am interested in sub-clause (1.) of clause 16, which reads -

In the event of a bank becoming unable to meet its obligations or suspending payment, the assets of the bank in Australia shall be available to meet the bank’s deposit liabilities in Australia in priority to all other liabilities of the bank.

That may or may not have appeared in the 1945 legislation, but I am asking the Minister whether it has the effect of preferring depositors to secured creditors of the bank. In other words, does it provide that the assets of the bank in Australia shall be available to meet that bank’s deposit lia bilities in Australia in priority to all other liabilities of the bank? The answer may well be that, in a case where the bank has a mortgage owing on its asset, the asset has an equity of redemption and the secured creditor is protected. Do I read that aright?

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– Senator McKenna’s first question relates to clause 11, which deals with exemptions. That clause repeats the existing section 10, and reads -

Where a person desires to carry on any banking business in Australia but does not desire to carry on the general business of banking, the Treasurer may, by order published in the Gazette, exempt that person from compliance with such of the provisions of this Act as are specified in the order .

The types of businesses are building societies, stock and station firms, pastoral firms, travel agencies, insurance companies and so on.

I shall reply later to the honorable senator’s question relating to sub-clause (1.) of clause 16.

Senator McMANUS:
Victoria

.- I refer to clause 20, which reads -

A trading bank shall, on each day on which a determination that applies to the bank is in force, have on deposit in the bank’s Statutory Reserve Deposit Account an amount not less than the amount which, when expressed as a percentage of the bank’s current level of Australian deposits on that day, is the same as the statutory reserve deposit ratio specified in the determination.

Does that mean, in effect, that 100 per cent, of the bank’s current level of Australian deposits could be called up?

Senator Paltridge:

– Yes, subject to clause 22 and the rest of Division 3.

Senator McMANUS:

– I do not think that clause 22 affects the plain fact that under this legislation it is possible to call up 100 per cent, of the bank’s current level of Australian deposits, even in the circumstances set out there. I merely raise the point to make it clear that I cannot understand how legislation which allows 100 per cent, of the bank’s deposits to be called up can be regarded as legislation which is going to prevent nationalization.

Senator WRIGHT:
Tasmania

.- I wish to raise one or two questions in connexion with clauses 8, 9 and 11. Senator

McKenna has paid the Minister the compliment of saying that the bill has adopted some very basic provisions of the 1945 legislation, and, if it is any compliment, I should like to add, “ Despite the constitutional development that has taken place in that time “. I hope the committee will subject these three clauses to the closest of scrutiny, because I submit that neither side of the Senate can be in the slightest degree comforted by this sort of banking structure. I think there are many fundamental objections to it.

Clause 7 reads -

Subject to this Act, a person other than a body corporate shall not carry on any banking business in Australia.

That is to say, nobody other than a company shall do it. For instance, a Rothschild or a John Wren may not carry on banking business unless he has the company legislation behind him.

Clause 8 reads -

Subject to this Act, a body corporate shall not carry on any banking business in Australia unless the body corporate is in possession of an authority under the next succeeding section to carry on banking business.

Penalty: Five thousand pounds for each day during which the contravention continues.

Pausing there, when I first heard those lines recited in Australian legislation, my blood started to curdle, but, mixed in this Canberran atmosphere, apparently these things become palatable.

Sub-clause (1.) of clause 9 reads -

The authorities under section eight of the Banking Act 1945-1953 as in force immediately before the commencement of this Part (being the authorities granted to the bodies corporate specified in the First Schedule) shall, notwithstanding the repeal effected by section four of this Act, continue in force and shall be deemed for all purposes to be authorities under this section.

That goes back to the 1945 act, which entitles recognized trading banks to have one of these discretionary authorities. This clause continues that right. . Sub-clause (2.) reads -

A body corporate (not being a body corporate specified in the First Schedule)-

That is, the recognized trading banks - which desires authority to carry on banking business in Australia may apply m writing to the Treasurer for authority accordingly.

Sitting suspended from 5.45 to 8 p.m.

Senator WRIGHT:

– Before the suspension of the sitting I had been developing a discussion on what I consider are the fundamental clauses in this bill, namely, clauses 8, 9 and 11, and I had referred to clause 8 and sub-clauses (1.) and (2.) of clause 9. 1 shall now deal with sub-clauses (3.), (4.) and (5.) of clause 9 which are in these terms - (3.) Where such an application is made,, the Governor-General may grant to that body corporate an authority, in writing, to carry on banking business in Australia. (4.) An authority under this section may be granted subject to such conditions as are specified in the authority. (5.) Where an authority under this section is subject to conditions, the Governor-General may, from time to lime, vary or revoke any of those conditions or impose additional conditions.

Clause 11, which I should have thought would be a monstrosity in the eye of any liberal person, is in these terms -

  1. – (1.) Where a person desires to carry on any banking business in Australia but does not desire to carry on the general business of banking, the Treasurer may, by order published in the Gazette, exempt that person from compliance with such of the provisions of this Act as are specified in the order . . .

Senator McKenna directed to us a pseudo compliment - in fact it was the very reverse of a compliment - to the effect that we had lifted these sections out of the notorious act of 1945 without bothering to change them in any material respect. Banking institutions currently carrying on business are entitled to an authority to engage in business but are subject, in terms of the provisions that I have read, to variation of the conditions of their authority at any time at the instance of the GovernorGeneral and, at the same time, may be subject to the addition of further conditions on their authority. Of course, when I speak of the Governor-General, I attribute all responsibility for his actions to his advisers. When one realizes that the government of the day will have the right, by variation of conditions and the imposition of new conditions, to prevent a person from carrying on the business of banking, one’s nostrils expand and exude resentment. I should have thought that in an “ Australia Unlimited “ the prospects of our economy in 50 years’ time were such that we could well utilize double the present number of trading banks. However, all new enterprises in the field of banking must approach the Government on bended knee and seek permission to carry on business.

Those who invalidated the nationalization of banking legislation in 1947 did so because of the provision in that act to the effect that no person or body, other than the Commonwealth Bank, shall carry on the business of banking. That was a statute of the Federal Parliament. The legislation now before us will give to the Executive the right to do exactly the same thing as was proposed in 1947, with the qualification that if the Executive is pleased to give authority to a bank to carry on banking business on conditions to which the bank will conform, that body may engage in thai business. Despite the efforts of the present Government, the Privy Council established that the freedom contained in section 92 of the Constitution denies to any government in Australia the right to say to an interstate trader - of which a bank is an instance - “ You shall carry on your interstate trade only with our permission “. That is the very kernel of the cases dealing with interstate transport - Hughes and Vale and Collier-Garland Limited. We are seeking to erect this banking structure as the citadel of free enterprise banking upon a base which, I should have thought, fairly obviously was open to attack at its foundations for contravention of section 92 of the Constitution.

Who among us calls himself a liberal who gives to the Executive the power of dispensation? Blood was spilled in the fight for freedom, and those who bury freedom now are unworthy of their inheritance. When I hear it stated that clause 11 is designed to apply to housing institutions, building societies, pastoral companies and the like, one vice immediately becomes apparent. That vice lies in the power to control. No person could be satisfied, on a robust interpretation of the term “ banking “, that such organizations really do carry on the business of banking. They do not. However, having claimed that they do so. the Government then says to them, “ Take your exemption, please, from such of the sections in this act as we specify in the instrument “. Such matters, Mr. Chairman, should provoke a heartsearching and a thorough re-examintion of these provisions which lie at the very base of a sound banking structure for the Commonwealth.

Senator Sir NEIL O’SULLIVAN (Queensland) [8.8]. - All of us detest as vehemently as does Senator Wright any undue exercise by the Executive of a power that should more properly be exercised by the Parliament. But there is no novelty in the proposal now before us. For instance, the suburban plumber, the bottle-on and the commission agent must obtain a licence before they can carry on their business. Does the honorable senator suggest that it is more important that a licence be issued for such undertakings than for the business of banking, a business which could be of the utmost economic importance to the nation? All honorable senators know that during the depression of the ‘thirties hundreds of banks in other countries crashed because they were loosely supervised and loosely authorized to carry on their business. The result was a devastating effect on the economies of the countries in which that occurred. Simply because a person says, “ There is good money to be made in banking. I think 1 shall start a bank “, is not sufficient to enable that person to set himself up in the business of banking. Ned Kelly had something of the same idea, but he was not fussy about the bank in which he commenced operations.

The contention that a part of our economy which is so vital to the welfare, not only of the big people, but also of the small people of Australia, should be completely unfettered and that anybody should be allowed to operate in this particular line of business, is completely incomprehensible to me. If the Executive did not have the authority to grant these licences, who should have it? Should Parliament have the authority? Would that mean that every time somebody applied for a commission agent’s licence or a plumber’s licence, Parliament would have to consider the application? How absurd we can get! I sincerely trust the Government will insist on the retention of this provision. I think it is vital, not in the interests of big business, not in the interests of those who want to maraud the country under the guise of being bankers, but in the interests of the little people, and in the interests of the economic solidity and soundness of the country.

Senator McCALLUM:
New South Wales

.- Senator Sir Neil O’Sullivan’s answer does not quite satisfy me. It does not allay the disquiet that Senator Wright’s criticism has raised. I should like the Minister to answer this question. Why the clear differentiation between banking and other businesses? I can see that there must be some safeguards for the public, but why not have a series of general provisions that any company seeking to enter banking must fulfil?

Secondly, why in clause 7 is there an absolute prohibition on a single person entering banking? There have been successful private banks in the past. I am not sufficiently acquainted with banking to know the answers to these questions, and I want a very full reply from the Minister. I feel that every one of these clauses requires the fullest thought and consideration. To me, some of them are quite new. I do not believe that everything that is done should be licensed. In fact, I go to the other extreme and say that unless a special reason exists why a licence should be demanded, a person should be free to do anything without a licence. If the Minister will answer my questions clearly, I will be much happier than I am at the moment.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– I find myself in a position of some incongruity inasmuch as Senator Wright puts me virtually on challenge to defend an act sponsored by the Labour Government in 1945. I do not know whether that is quite a fair challenge. I do not know whether the particular sections of the 1945 act should be adjudged good or ill just because they happened to be drafted by a Labour government.

Senator Wright:

– Certainly not. I do not base my argument on that.

Senator PALTRIDGE:

– I say to the Senate, and to Senator Wright particularly, that the need to regulate banking in a modern community is a need which is accepted.

Senator Wright:

– That is conceded, too.

Senator PALTRIDGE:

– It is a need which is accepted by all people and all communities that have given any thought at all to this problem. That need was clearly stated, as my friend will no doubt remem ber, by the royal commission of 1936 which inquired into the scope of banking in this country.

Senator Sir Neil O’sullivan posed the very pertinent question: What might happen in the absence of some regulatory or licensing system? I, for my part, regard with a good deal of horror some of the things that could happen, and indeed have happened, in the absence of an effective system for the licensing of banks, not only in this country but also in other countries. There is an important dual purpose behind all this. That purpose is the protection of the country’s monetary system and the protection of depositors. Frankly, I cannot understand how any serious doubt can be raised about the necessity to regulate and to control in such a way as is laid down in this bill.

Senator Wright has said that continuing banks, if I may use the term, will be brought into the scope of this measure and that their authorities, the conditions under which they operate, may subsequently be varied or altered. I say, with respect, that the honorable senator has misunderstood the clause. Clause 9 (1.) provides -

The authorities under section eight of the Banking Act 1945-1953 as in force immediately before the commencement of this Part (being the authorities granted to the bodies corporate specified in the First Schedule) shall . continue in force-

They will continue in force as unconditional authorities, subject only to the act.

Senator Wright:

– Unconditional?

Senator PALTRIDGE:

– Subject only to this act of Parliament. They are unconditional authorities, which will be continued. It says so.

Senator Wright:

– Where does it say so?

Senator PALTRIDGE:

– In clause 9 (1.).

Senator Wright:

– Where does it say they are unconditional?

Senator PALTRIDGE:

– They are.

Senator Wright:

– That is all right. I take your word for it. But when somebody says a thing is written in a clause, 1 ask him to read it. Where does it say they are unconditional?

Senator PALTRIDGE:

– I am saying that they are unconditional licences and that they shall continue in force. The variations in the terms of an authority which might be made apply to a licence which is issued as an authority to other than the corporations mentioned in clause 9 (1.). I suggest that such a provision is a very desirable one. It is not only a question of some one coming along and bending the knee to the Executive to get a licence. If the provision does require bending the knee, it also imposes an obligation on the Executive to make doubly sure that the licence so granted is granted to a corporation which can in every way fulfil the obligations which are placed on it, and that the granting of the licence will not endanger the monetary system or place in jeopardy the interest of the depositors.

Having in mind the very nature of banking, I put it to the committee that any new application for an authority should be subject to some obligation, some condition, by which the applicant can demonstrate his ability to discharge the obligations to which I have referred. In the sorry event of an applicant not being able to fulfil all those obligations, there should be some power whereby the authority issued can be altered. These are not questions that have no far-reaching consequences. When one deals with a bank, one deals with an organization the operation or the failure of which may have far-reaching effects. So it is extremely necessary that these clauses which were embodied in the 1945 legislation be retained. The present Government retains them, I imagine, for the same reasons that motivated the government of 1945 in writing them into the act.

Senator McCallum referred, as did Senator Wright, to clause 11 - the exemption clause. The honorable senator asked why there could not be written into the legislation a set of general provisions to cover the exemptions which no doubt will be granted under this clause. I have outlined to the Leader of the Opposition the kinds of organization that apply for exemption. There is quite a wide variety of such bodies and activities, and even within one kind of activity there could be a wide variation in the type of banking business undertaken. While I might agree with Senator McCallum’s suggestion that it would be preferable to have something down in black and white, the kinds of organization which claim exemption vary so much that I suggest it would be quite impossible to write down a general list of provisions. Even if that were done we would find ourselves in the position of having to write into the act a power to make some exemptions to meet particular circumstances.

Senator Hannaford:

– To cover the differentiation between banking and general business?

Senator PALTRIDGE:

– As my friend knows, stock firms constitute one kind of activity. The list runs from stock firms to building societies, insurance companies, and even tourist companies. I suggest that it is not possible to delineate and write into the act all these things that might be covered.

The last point raised by Senator McCallum related to clause 7, which reads-

Subject to this Act, a person other than a body corporate shall not carry on any banking business in Australia.

I suppose we all can think of some very Wealthy men of the past who, as individuals, may have been able to conduct, and as far as I know may have conducted, successful banking businesses. But I can think of other individuals who were very wealthy one day, and who had assets and resources that would have enabled them to carry on the business of banking, but who on the following day or the day after were flat broke. The purpose of providing that only a body corporate shall be licensed is purely and simply to extend the protection which is afforded by licensing a body which has a stated capital and resources that are of a continuing nature, and which can meet the conditions of banking.

Senator WRIGHT:
Tasmania

.- It is an artifice of advocacy in less important jurisdictions, when meeting an argument, to put up a cock-shy which is not the real argument and then knock it down. I am sure my good friend, the Minister for Shipping and Transport, was not aware that that was precisely what he did in answering my submissions. I have not controverted the proposition that the responsibilities of banking as a business are such as to require quite a close degree of legislation. I speak with a full heart, Mr. Chairman, when I say that I am dismayed beyond expression to hear the Minister in charge of this bill express himself to be unable to understand how this system of regulation contravenes the very essence of the theme whereby liberals live - the right to live, by no man’s leave, under the law. If the law prescribes the conditions by which it is desired to regulate the business of banking, that is good enough for me. It can be done with insurance business and with general joint stock business, and vigilant parliaments find themselves with the capacity to reform their legislation from time to time as the complexity of commerce shows weaknesses. But it is a matter for tears to hear it stated that because we need regulation of business in order to make business accept its responsibilities and preserve a standard of integrity acceptable to us, ergo, government license!

Ye gods, Moscow spoke in precisely the same way! Sir Stafford Cripps demonstrated, in 1931, how, under the English Constitution, by one sweeping act authorizing the executive to create a decree and order system in relation to every type of business, the Communist revolution could be achieved overnight. But that is not so in Australia, where we have the written Constitution, especially section 92. I say these things because it profits little when we espouse the cause for the destruction of the authoritarian order and apply it to a matter which is so vital in our conception that throughout the last ten or fifteen years we have called it the citadel of the freeenterprise system. It little profits me to find that, after argument, those who have responsibility and who have carried responsibility should be unconscious of the iniquity of the system of regulation, not by law, but by executive decree and order.

The second thing that I want to say is that it is possible that the Minister’s construction of clause 9 is valid, and it may be that by a very thin whisker the existing trading banks would escape from that Executive decree control; but it is so near the line that if I had the responsibility to mould legislation which would withstand a determined and earnest assault by people who may be the equal in vigour, in their socialist objective, of their predecessors in 1947, I would at least re-read the clause and consider, if I may go to old Churchill for my idea, how near the rim of hell this legislation brings the trading banks, to whose protection against nationalization I thought we were so jealously devoted.

Let us have a look at clause 9. It provides - (1.) The authorities under section eight of the Banking Act 1945-1953 . . . shall, notwithstanding thu repeal . . . continue in force and shall be deemed for all purposes to be authorities under this section.

The authorities are continued in force by virtue of this legislation. They originated in 1945, but they are authorities, under this provision, for all purposes. Sub-clause (2.) refers to future applicants. Sub-clause (3.) states that where an application is made, the Governor-General may grant an authority. Sub-clause (4.) says that an authority under the section may be granted. Note that the clause states that an authority may be granted. It is only by virtue of the words “ grant “ or “ granted “ that the trading banks will continue to have their authorities guaranteed free from conditions. Sub-clause (3.) states that the GovernorGeneral may grant to the body corporate an authority, in writing, to carry on banking business in Australia, and sub-clause (4.) states that an authority under the section may be granted subject to such conditions as are specified. On the same theme, depending upon the distinction between continuance of an authority and the granting of an authority under this clause, there is a provision in sub-clause (5.) that the Governor-General may from time to time vary or revoke any of those conditions or impose additional conditions. That is the protection. It is on that thin line that the continued security of the banks depends. Let me pass from that somewhat troublesome aspect of those two matters and go right to the opposite point of the compass. Let me assume that all of this apparatus is completely valid and, as expressed, guarantees security to the trading banks, and that executive discretion gives a proper opportunity to future trading banks. Do we dismiss altogether the argument that the High Court decisions in the transport cases spell complete constitutional invalidity for this clause?

Senator Paltridge:

– Yes.

Senator WRIGHT:

– Very well. My responsibility is discharged. I remember appealing in vain for the Government to hearken to this interpretation on the road transport cases. The Government went and argued the proposition to the contrary be- fore the Privy Council, and the Privy Council decided as it did; that is to say, that it is the very negation of freedom to say that you are free to carry on a business only if you get an executive licence.

I should have thought that, aided by that interpretation, and having regard to the fact that this clause is so analogous to section 22 of the 1947 act, upon which nationalization of banking relied, one would have been most nervous as to the security of a banking structure, the constitutional validity of which depends upon this concept. But, of course, I realize that this is not the appropriate place to argue those matters. My duty as an ordinary member of the Government parties in the Senate is discharged if I bring them to the notice of those who are surrounded by advice, with the knowledge that they take responsibility for saying that advice to the contrary is valid. I just say that, in the road transport cases and in the Boilermakers case, I was met with the same attitude. The Government found that its views were rejected by the High Court and the Privy Council.

Senator McCALLUM:
New South Wales

– I have a question to ask about clause 25. Certain banks are referred to in that clause as “ prescribed banks “, and that clause and others provide for differential treatment. 1 can see the reason for such treatment in regard to some of the banks, in that some of them have their headquarters abroad. Of the Brisbane Permanent Building and Banking Company Limited I know nothing whatever. I should like the Minister to inform me of the reason for the distinction.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

.- The business of the four banks that are named is, to a large extent, of a specialized character, and I think that Senator McCallum will acknowledge that that is so. The three overseas banks operate mainly to facilitate trade with their countries and for the convenience of their nationals. The banking business of the Brisbane Permanent Building and Banking Company Limited is very closely related to home financing activities.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I must confess that I rejoiced, a while ago, to hear the Minister’s defence of some of the provisions of the act. I rise now to refer only to one aspect, that relating to statutory reserve deposits. The committee may recall that in March, 1958, I directed particular attention to the fact that the Government was taking power to the Reserve Bank to call up, after 45 days’ notice, the whole of the deposits of a private trading bank. I criticized that decision on two grounds. The first was that in an emergency a delay of 45 days might be dangerous, and the second, that the whole proceeding might well be deemed unconstitutional.

It appears that, to date, the central bank has never called up an amount, under the formula functioning at the moment, equivalent to more than 25 per cent, of the total deposits of a bank. One can appreciate, as Senator McManus indicated to-day, that if the whole of the deposits of a bank were called up by the Reserve Bank there would be complete chaos in the community. The bank would be unable to lend and would be obliged to call in all overdrafts and realize assets, in the course of which there would be wholesale unemployment and general business disruption in the community. And if the Reserve Bank were to go to the extreme of calling up the whole of the deposits of the private trading banks they would be immobilized. They could be kept immobilized, by this legislation, by the renewal of the notice calling up the deposits on 45 days’ notice each time, and in effect, so immobilized that they would not be able to trade. I think that it is a fantastic concept to think that any responsible body of men would ever attempt that. But I merely picture the extreme, to point out that the provision may be open to constitutional challenge. The thing that staggered me was that the private trading banks were prepared to accept without question and without opposition a provision of that nature coupled with the possible doubt about the constitutional base for central banking; and the thought that this is certainly challengeable on quite a number of grounds leads one to the conclusion that the private trading banks might have allowed it to pass without question or complaint, relying on the fact that they have 45 days in which to challenge the whole provision. I merely rise to draw attention to that position, as I did about this time last year.

For the rest, I indicate to the Miinster that I have no other matters to put to him in connexion with this bill - this is the last matter - but I remind him that he did not complete his answer to me regarding clause 16. 1 would be prepared to exempt him from complying with my request in relation to clause 15, unless he is ready to deal with it, but I should like to have his answer to the question I asked on clause 16.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– The answer to Senator McKenna’s question in relation to clause 16 is: Yes, the depositors do have priority.

Senator McKenna:

– Over the secured creditors?

Senator PALTRIDGE:

– Yes. You suggested that difficulties could arise in determining whether their particular property constituted assets of the bank if the property had been mortgaged in such a way that the title to the property had vested in the mortgagee and the bank’s interest consisted only of an equity of redemption.

On the other question, as to the operations of the special reserve deposits and the power of the bank to call up 100 per cent, of deposits the answer, of course, lies in the statement that it is a central reserve bank power so to do. It is beyond the wit of any of us to imagine that the ghastly economic and national situation which would render such action necessary will arise; nonetheless it is accepted as a central bank power to call up 100 per cent, of deposits not only in this country but also in a number of other countries. The fact of the 45 days’ notice in relation to a call-up in excess of the stipulated percentage of 25 per cent, affords to the bank the very necessary time in which to so order its affairs as to cause its own clients - its own customers - a minimum of inconvenience, and, at the same time, to make provision within its own resources so that it will be able to lodge with the Reserve Bank the necessary amount called up.

Senator WRIGHT:
Tasmania

– I just want to call attention to clause 14, subclause (6.). I hope that the validity of the clause has been studiously considered; I have the utmost doubt as to it.

I wish to refer to clause 25, sub-clause (1.), paragraph (e); and to introduce it I shall refer to the preceding works. They are -

For the purposes of this section, “ prescribed bank “ means-

And the four banks are named. Paragraph (e) reads - a body corporate to which an authority to carry on banking business is granted under subsection (3.) of section nine of this Act and which is declared by the regulations to be a prescribed bank for the purposes of this section.

That is to say, a new bank may come into existence and, by regulation, be exempted from the provisions of control stemming from the Reserve Bank by way of statutory reserve deposits. I should like to know whether there is any practical situation that is in mind on the part of those who drafted the provision in these terms. It seems to me to be an exemption power, the wisdom of which is doubtful.

Senator Paltridge:

– It would have application to a number of banks of a special type, such as the banks which are detailed in clause 25 (1.). That is the purpose of it.

Senator WRIGHT:

– I refer now to subclause (2.) of clause 25, which reads -

The Reserve Bank shall exercise its powers under this Division in such a manner -

that, on a day on which a statutory reserve deposit ratio applies to a trading bank other than a prescribed bank -

a statutory reserve deposit ratio equal to that first-mentioned statutory reserve deposit ratio also applies to each other trading bank other than a prescribed bank; and

a statutory reserve deposit ratio greater than that firstmentioned statutory reserve deposit ratio does not apply to a prescribed bank; and

that, on a day on which a statutory reserve deposit ratio does not apply to a trading bank other than a prescribed bank, a statutory reserve deposit ratio does not apply to a prescribed bank.

It can be seen from these provisions the importance that is given to reserving a power to discriminate between trading banks and prescribed banks. That is to say future banks may be exempted from the statutory reserve deposit apparatus, the application of which we regarded as a cardinal principle of this legislation. I should like the Minister to reveal to the committee the full content of what is anticipated under subclause (2.).

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– Possibly I can illustrate the point by referring to the operation of the special accounts provisions as they relate to the prescribed banks at present listed. The average Australian deposits of the Bank of China amount to £44,000; its special account balance is nil, and its special account deposit ratio is nil. Another example is provided by Brisbane Permanent. Its Australian deposits were £2,785,000, its special account balance £100,000, and the ratio was 3.6 per cent. For the Comptoir National, the figures were - Australian deposits £2,138,000, special account balance £110,000, and deposit ratio 5.1 per cent. - as against the special account deposit ratio of the major trading banks, which, at that time, was 16.3 per cent. I cite those figures to illustrate the manner in which special accounts deposits have been applied to these prescribed banks. They vary in accordance with the determination of the central bank, and for the reason which I stated earlier - that they are banks carrying on a restricted type of business of a specialized character. They are not affected by the rises in deposits which occur in the ordinary banking system and to which, as a result, the trading banks become subject, thus affecting their special account deposits or their special reserve deposits. For these reasons, certain banks are prescribed, and treated differently.

Part II. agreed to.

Part III. - Foreign Exchange.

Senator WRIGHT:
Tasmania

.- I wish to refer to the provisions of clause 39, the first part of which provides for the making of regulations in ordinary form and in relation to the control of foreign exchange. Under the clause, such regulations may be made, in particular, but without limiting the generality of the foregoing, for or in relation to various provisions set out in paragraphs (a) to (i). I wish to direct my remarks to paragraphs (f) and (g), which read -

  1. the prohibition of the importation or exportation of goods unless a licence under the regulations to import or export the goods is in force;
  2. the terms and conditions to which such licences may be subject;

It can be seen that they give the GovernorGeneral the right to make regulations for the prohibition of ‘ the importation or exportation of goods except under licence, and also as to the terms and conditions to which such licences may be subject. Moreover, the provisions apply in respect of the importation and exportation of goods generally, without limit or qualification.

The power set out in paragraph (f) and paragraph (g) amounts to an authority to erect the whole gamut of the executive apparatus necessary to control the inwards and outwards trade of Australia. It is quite idle to pretend to any effort to preserve free enterprise in such a transaction if, in all cases, it can be made subject - by virtue of regulations, issued by the executive of the day - to prohibition, unless a licence in terms approved by the regulation is held.

At present, under the Customs Act, the Government has a large measure of power to prohibit exports. One has only to look to the regulations to see a whole series prohibiting the export of stated articles. These include - if we take primary produce as an example - barley, grain, oats in the form of grain, wheat, potatoes and such things. When one looks at the regulations one sees that there is a prohibition upon the exportation of goods specified in a certain schedule, wherein are listed the goods that concern the particular department. The prohibition operates unless an approval in writing for exportation has been issued by the particular department and can be produced to the Collector. By virtue of Act No. 108 of 1952 special legislation was provided to meet doubts that then existed as to the validity of import licensing. The Governor-General was given power to prohibit, by regulation, the importation of goods, and also to prohibit absolutely the importation of goods from a specified place, or to permit importation subject to specified conditions and restrictions. I refer to those provisions because they are fairly absolute, and create a system which I thought was regarded as transitory. I may add that it is a system which honorable senators do not need to be convinced is obnoxious to the ordinary concept of free enterprise in import and export trade which we cherish.

In the legislation before us, the Governor-General is to have power in relation to foreign exchange to make regulations prohibiting the importation and exportation of goods in the absence of a licence which, in turn, may be subject to any conditions that he may care to impose. I should like to understand more of the rigidity that has been developed in trade to maintain control of the foreign exchange of the country, but I think that this is an opportunity for the committee to understand clearly - if it be a fact - that this rigid, executive control of inwards and outwards trade is an essential accompaniment of the control of foreign exchange. If that is the view of the Government, I for one, as a member of the committee, would feel obliged to seek an explanation as to why, for the purpose of foreign exchange control in this bill, we must include such absolute provisions, which are additional to those already to be found in the Customs Act.

Senator PALTRIDGE:
Minister for Shipping and Transport and Minister for Civil Aviation · Western Australia · LP

– The inclusion in this legislation of a clause which has to do with foreign exchange is especially appropriate. Under clause 39, where the Governor-General is satisfied that it is expedient for the protection of the currency or 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 as set out in paragraphs (e) and (0, which were referred to by Senator Wright. Paragraph (f) relates to the prohibition of the importation or exportation of goods, unless a licence under the regulations to import or export the goods is in force. I repeat that this is a banking bill, and this clause deals with the protection of foreign exchange on Australia’s public credit. I recall the position many years ago when I was a bank clerk. I refer to the time prior to the establishment of the mobilization of foreign exchange agreement in 1932, under which the private trading banks exercised the form of protection against their own overseas resources as is envisaged will apply to all the banks of Australia under this bill. The need for that protection is just as strong now as it was then. Just as there was need, before the mobilization of foreign exchange agreement, for all banks to conserve, for best use, their own resources of foreign exchange, so now, at the national level since 1932, during which time we have had the agreement to which I have referred, and when we have had the increased and extended powers of the Reserve Bank, it is necessary and appropriate that this safeguard should be in the bill.

It is also true that no regulation has been promulgated under the Banking Act with respect to imports. This is because it has proved expedient to use the established machinery of the Customs Department, under the Customs Act, for the supervision of the importation of goods into Australia. The Customs Department has long supervised the importation of goods which have been subject to control for other than balance of payments reasons. I refer to such goods as dangerous drugs, firearms, &c, the importation of which is controlled under the Customs (Prohibited Imports) Regulations; and it was better able to supervise the importation of goods when import licensing controls, as distinct from prohibited import regulations, were introduced some years ago for balance of payments purposes.

The customs import licensing regulations were therefore made under the Customs Act in the early years of the war, and have been administered by that department ever since. Exchange control requirements in relation to import licensing have been met to date without making, under the Banking Act, regulations complementary to the regulations under the Customs Act. Each licence issued under the customs regulations - and here is the existing link - contains a statement setting out the approved means of payment for the goods in question, and a copy of each licence is sent to the importer’s bank. By arrangement with the central bank, the importer’s bank supervises the making of payment to the overseas supplier of goods in accordance with approved exchange control procedure. The trading banks see that no remittances are made from

Australia in payment for imported goods unless the goods are either covered by valid licence or exempt from import licences. In the latter case, the banks see that payment is made for the goods in accordance with approved foreign exchange procedures.

It is hoped that it will be possible some day to abolish import licensing in the sense of restriction of imports for balance of payments reasons. When that day comes, the Customs (Import Licensing) Regulations will no doubt be repealed; and it is perhaps possible that the provisions in the Customs Act authorizing the making of import regulations will also be repealed. However, it does not necessarily follow that if and when import licensing as at present understood is abolished, there will be no need for the supervision of payments for imports. Indeed, when that happens we will revert to the old position we were in when we had real and very necessary need to watch the control of foreign exchange. It is quite conceivable that, despite the absence of quantitative controls of imports, it will be necessary or desirable to ensure that imported goods are not paid for in ways that could be detrimental to the national interest. For instance, it could so happen that Australia’s holdings of a particular foreign currency might be at a relatively low level. If so, it could well be desirable to ensure that payments in that currency were made only in respect of imports from the country concerned and not in respect of imports from other countries.

I might explain that by saying that if, tor instance, goods were imported from Spain and the importer desired to pay for those Spanish goods in dollars, the bank, for the protection of the nation’s dollar resources, might be in a position to say, “ No, not with dollars; they must be paid for in some other currency “. If it were found necessary or desirable to supervise the payments arrangements, the appropriate course would be to use the power contained in paragraph (f) of sub-clause (1.) of clause 39 of the Banking Bill - that is the exchange control power - for the making of appropriate regulations.

The position in relation to payment lor imports would then be on all fours with the present position in relation to the control of export proceeds. Export licensing. as distinct from the control of exports for other than balance of payments reasons under the Customs (Prohibited Exports) Regulations, is at present administered under regulations promulgated under the Banking Act. The purpose of these latter regulations is to ensure that the proceeds of exports are accounted for to the Australian banking system in appropriate currencies, and not, of course, to place physical controls on the export of the goods themselves. In other words, under existing conditions, the export aspect is looked after by the banking system under regulations made under the Banking Act which ensure that proceeds from the sale overseas of Australian produce and goods are accounted for to the Australian banking system and that Australia does not lose the proceeds of the sale.

Part III. agreed to.

Parts IV. to VII. agreed to.

First and Second Schedules agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 789

BANKING (TRANSITIONAL PROVISIONS) BILL 1959

In committee: Consideration resumed from 9th April (vide page 700).

The bill.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I wish to refer briefly to two aspects of this legislation. The first deals with the very extensive nature of the provisions contained in this bill. One of the greatest tragedies resulting from the segregation of the staff of the proposed Reserve Bank from the former Commonwealth Bank Service is the division of a staff that was completely integrated, a staff that was interchangeable and a staff that enjoyed assured conditions. One has only to scan the various clauses of the bill to see that the Government’s plan is most complicated. Reference to clause 12 will indicate that the Commonwealth Bank will bear the whole of the expense involved in bringing into effect the Banking (Transitional Provisions) Bill, which is of the order of £2.000,000. The severe disruption of the banking service which will follow the passage of this legislation should be apparent to all honorable senators.

The second aspect to which I refer relates to the length of time that will elapse before the act is proclaimed. I understand that, owing to the complexity and difficulty associated with the transitional arrangements, the act will not be proclaimed until the end of this year. That fact also will add to the great disservice that this Government is rendering to the family of Commonwealth Banks.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 790

BILLS RELATED TO BANKING

Audit Bill 1959.

Christmas Island Bill 1959.

Commonwealth Employees’ Furlough Bill 1959.

Crimes Bill 1959.

Income Tax and Social Services Contribution Assessment Bill 1959.

National Debt Sinking Fund Bill 1959.

Northern Territory (Lessees’ Loans Guarantee) Bill 1959.

Officers’ Rights Declaration Bill 1959.

Re-establishment and Employment Bill 1959.

Sales Tax (Exemptions and Classifications) Bill 1959.

Suspension of Standing Orders.

Motion (by Senator Paltridge) put -

That so much of the Standing Orders be suspended as would prevent the questions with regard to the remaining stages for the passage through the Senate of the following bills, viz., Audit Bill 1959, Christmas Island Bill 1959, Commonwealth Employees’ Furlough Bill 1959, Crimes Bill 1959, Income Tax and Social Services Contribution Assessment Bill 1959, National Debt Sinking Fund Bill 1959, Northern Territory (Lessees’ Loans Guarantee) Bill 1959, Officers’ Rights Declaration Bill 1959, Re-establishment and Employment Bill 1959, and Sales Tax (Exemptions and Classifications) Bill 1959, being put in one motion, at each stage, and the consideration of all such bills together in Committee of the Whole.

The PRESIDENT (Senator the Hon. Sir Alister McMullin). - There being present an absolute majority of the whole number of senators, and no dissentient voice, I declare the question resolved in the affirmative.

Motion (by Senator Paltridge) put -

That the bills be now read a second time.

The Senate divided. (The President - Senator the Hon. Sir Alister McMullin.)

AYES: 30

NOES: 20

Majority . . . . 10

AYES

NOES

Question so resolved in the affirmative.

Bills read a second time, and passed through their remaining stages without amendment or debate.

page 790

ADJOURNMENT

Australian National Fitness Council

Motion (by Senator Spooner) proposed -

That the Senate do now adjourn.

Senator ANDERSON:
New South Wales

– I want to raise a matter which I think it is appropriate to raise on the motion for the adjournment. It relates, Sir, to the Australian National Fitness Council.I remind the Senate that on 24th May, 1956, I asked a question relating to the council and received a reply which gave the names of the members of the council and indicated that the annual Commonwealth grant was £72,500. The answer also stated -

There have been no meetings of the council during the last twelve months - the council last met in September, 1954.

As I have said, the names of the members of the council were given. I mention them because Senator Arnold is a member. They were -

Dr. A. J. Metcalfe, DirectorGeneral of Health; Miss K. M. Gordon, representing the Commonwealth Department of Health; Senator J. J. Arnold, together with the following six persons representing the States indicated: - His Honour Adrian Curlewis (NSW), Mr. J. S. McCreery (Vic), Mr. J. Townsley (Qld), Dr. H. K. Fry (S A), Mr. R. E. Halliday (W A), Mr. M. L. Moore (Tas).

This year, on 10th March, in response to a question about the council I had asked several days earlier, the Minister for Health furnished a reply. I had asked -

  1. Is it a fact that in the last Budget the Commonwealth made an annual grant to the National Fitness Council of ?72,500?
  2. How many meetings of the National Fitness Council have been held since September, 1954?

Honorable senators will recall that I had received a previous answer to the effect that the council had held a meeting in September, 1954. I received this reply on 10th March of this year -

  1. Yes.
  2. None.

The Council had still not held a meeting since September 1954. Looking at the matter against that rather odd background, we find that on 26th February of this year the Minister tabled a report of the Australian National Fitness Council for the year 1957. It was a report, of which we all received a copy, of the activities carried out under the National Fitness Council Act of 1941. 1 shall have something more to say about this report in a little while, but first I think we should examine how it comes about that, the council not having held a meeting for five years, this Parliament has appropriated each year ?72,500 for the council, and how it is that such a report has been issued.

To get the explanation of this rather odd circumstance - I am not suggesting there is anything sinister; it is just an odd circumstance - we have to go to the act itself. The act was passed in 1941, the date of commencement being 1st August, 1941. It is a very short act. I wish to refer the Senate first of all to section 3, an important section that has a bearing on what I want to say. Section 3 reads - (1.) The Governor-General may appoint a Commonwealth Council for National Fitness consisting of such number of members (not exceeding nine) as the Governor-General thinks fit. (2.) The Council shall advise the Minister with respect to the promotion of national fitness, and in particular in relation to-

I ask the Senate to note this -

  1. the measures to be adopted to develop appreciation of the need for physical fitness;
  2. the provision of facilities for instruction in the principles of physical education;
  3. the organization of movements, and the provision of facilities, for attaining or maintaining personal physical fitness; and
  4. the training of teachers of classes, and of leaders of movements or groups, formed for the purpose of promoting physical fitness. (3.) The Council may make inquiries into the causes of physical unfitness in the community, and may for that purpose co-operate with the National Health and Medical Research Council.

Honorable senators will see that there is a continuing task for the council. I want also to refer to section 5 to illustrate the difference that exists between the responsibilities of the Minister and the Commonwealth Council for National Fitness.

Section 5 (1.) reads -

Subject to the next succeeding sub-section-

We can forget about that for the moment - the Minister may apply the moneys standing to the credit of the Fund for the purpose of providing assistance -

And then various purposes are set out. So it will be seen that, whilst a Commonwealth Council for National Fitness has been appointed and whilst quite clearly under the act it has a continuing task, the control of the fund and the purposes for which it is used are in the hands of the Minister for Health. I shall again read section 5 (1.) to indicate to the Senate purposes for which the fund may be applied. It reads -

  1. . the Minister may apply the moneys standing to the credit of the Fund for the purpose of providing assistance -

    1. to encourage the development of national fitness in each State under the direction of a National Fitness Council appointed by the Government of the State;
    2. for such other purposes in relation to the matters specified in sub-sections (2.) and (3.) of section three of this Act as the Minister determines.

The matters referred to in sub-sections (2.) and (3.) of section three are those to which I referred earlier as being the responsibility of the Commonwealth Council for National Fitness. So it is quite clear that under the act the Minister, in addition to having the responsibility of spending the money and doing certain other things, has the responsibility of acting on recommendations made to him from time to time by the Commonwealth Council for National Fitness.

I repeat that it will be noted that the Minister, and not the Commonwealth National Fitness Council as such, has the responsibility for applying the funds. But it is to be appreciated that the Minister can allot funds for purposes that are the particular responsibility of the council. I think I have made it fairly clear that the nine people whose names I have read out and who comprise the Commonwealth Council for National Fitness have a certain obligation and responsibility under the act. That council has a continuing task, but it has failed to perform that task. In fact, it has not had a meeting for five years.

Senator Cooke:

– Is there any provision in the act for remuneration?

Senator ANDERSON:

– No, there is no suggestion of a remuneration.

Senator Hendrickson:

– Who gets the £72,500?

Senator ANDERSON:

– I shall come to that as I develop the matter. I said that I would comment upon the report on activities carried out in 1957 under the Commonwealth National Fitness Act 1941. Section 6 of the act, which makes it obligatory for the Minister to produce a report each year, reads -

The Minister shall, each year, cause a general report containing a summary of the work done under this Act during the preceding year to be prepared and laid before both Houses of the Parliament.

The report that I have before me, which was for the year 1957, was tabled in this place on 26th February of this year. But in fairness, I point out that if one reads the document, which appears above the signature “A. J. Metcalfe, DirectorGeneral of Health “, one ascertains that it obviously was handed to the Minister in December, 1958. Quite clearly, as the Senate was not then in session, the report could not be tabled within a period of one year. But I point out that the DirectorGeneral of Health was cutting it fairly fine, because he did not produce the document until December, 1958. Apparently that is not unusual. I went to the trouble of finding out what happened to the report for 1956, and I discovered that it was tabled in the Senate in March, 1958.

The report for 1957 is really a classic. It purports to be a report of national fitness activities for that year. It is a document of 27 pages, and the first 25 pages, as far as I can see, deal exclusively with the activities of the national fitness agencies in the various States. I read the document fairly carefully, but the only reference that I could find in the first 25 pages to the Commonwealth Council for National Fitness was a reference to his Honour, Judge Curlewis, having attended the Australian National Citizenship Convention in Canberra.

Senator Kendall:

– As a representative of the Commonwealth Council for National Fitness?

Senator ANDERSON:

– He represented the Council at the Citizenship Convention. I repeat that that is the only reference that I could find in the first 25 pages to the activities of the Commonwealth Council for National Fitness. Indeed, it could not be otherwise, because the Minister has assured us that the council has not met for five years.

The remaining two pages of the report set out, in the form of appendixes, the financial position. They reveal, for instance, that, of the allocation of £72,500, the State national fitness councils received £36,954, the State education departments received £17,000, universities received £12,400, that central administration cost £3,396, and that £2,750 was allocated to the Australian Capital Territory. The whole of the 27 pages deal with the story - it is a very well written story - of the activities in the various States.

I feel that I should direct the attention of the Senate to the expenditure of £3,396 for central administration. The break-up of that expenditure contains the item, “ Expenses for Commonwealth National Fitness Council meeting - £250”. The plain fact is that the council did not meet, and it has not met for five years. Although the appendix to the report is not a balancesheet or a statement of income and expenditure, a person who did not have the background that I have, and which has been afforded by the two replies that I have received in this chamber, could be excused for assuming that there had been a meeting in 1957 and that it had cost £250.

There is a job to be done by the Commonwealth Council for National Fitness. 1 do not suggest, and I do not think anyone in this chamber would suggest, that Australia, as a young country, can afford to be indifferent to the problem of national fitness. I assert, without suggesting where the fault lies, that the council has failed in its job. As to the need for something to be done in regard to national fitness, let me remind the Senate of an answer that I received from the late Senator George McLeay, of fond memory, when he represented the Minister for the Army in this chamber. Away back in 1954 I asked a question relating to national fitness and young men who had been called up for national service. Senator McLeay, in his reply, which is reported in “ Hansard “, said that of 133,849 young men medically examined for national service up to 21st July, 1954, 86.4 per cent, were classified as fit for all duties. If my mathematics are correct, those figures indicate that approximately 13.6 per cent, of those called up were unfit in either a great or a less degree.

I give those figures to point out that this question of national fitness is not one that we may brush off by referring to Australia’s magnificent record in the Olympic Games, or to the names of the splendid athletes whom we have produced in the last decade. The plain fact is that this is a continuing problem in every country of the world. When the act was passed in 1941, the government of the day recognized this problem and established a council to do a specialized job, having regard to the nature of the problem, through the Department of Health.

I think that we have to ask ourselves: “Who is the convenor of this National Fitness Council? Is it the DirectorGeneral of Health? Is he at fault because the council has never met? “ We have a duty as senators to find the answers to those questions. There must be some explanation of the council’s failure to meet.

Senator McManus:

– Has the council a secretary or an administrative officer?

Senator ANDERSON:

– I asked whether there was an administrative secretary and whether a pattern was laid down for the convening of meetings. The final thing that I want to say, Mr. President, is that if the fault is in the Department of Health, let the act be amended in order to give those people who were appointed to the council the chance to do the job that the act required them to do in the first place. If the fault is not with the Department of Health, then I suggest to the Minister representing the Minister for Health that he should terminate the services of the members of the council and appoint to it people who are willing to do, and capable of doing, the job that is required of them. But whatever else we do, let us not continue this indifference, or the utter folly of asking this Parliament to appropriate each year a sum of money, under an act which requires of certain people activities that they do not perform, in circumstances in which each year a report is brought down which could quite easily give the false impression that everything was going along in accordance with the original intention of the Parliament.

Senator Kendall:

– Who signs the reports?

Senator ANDERSON:

– They are signed by the Director-General of Health, Dr. Metcalfe. There is quite a distinct difference in function between the council and the department.

My only purpose in bringing this matter forward is to ensure that the question of national fitness is not lost sight of, because whilst Australia has a great future, and although there are many wonderfully healthy young Australians, our responsibility is also to those who, through circumstances over which they have no control, are not fit. We have an obligation to give every boy and girl, and every young man and woman, the chance to become fit, because if one has health, nothing is impossible in this world of ours.

Senator ARNOLD:
New South Wales

– I am very pleased that Senator Anderson has brought this problem to the notice of the Senate, because I have had some interest in the Commonwealth Council for National Fitness for a long time. It is true that there have been no meetings of the council for a number of years. The history of the council is that in the early war years, when our young men were being called up into the armed services, so many of them were physically unfit that the government of the day considered there was evidence of a national problem and that it ought to do something to ensure that the young people of Australia were fit. This council, accordingly, was established. It was placed under the jurisdiction of the Minister for Health, and the Minister, by means of annual appropriations, supplied it with whatever moneys were required for it to carry out its work. The council was able to extend its activities to all States, and in the war years there was considerable enthusiasm for the work that it sought to do.

After the war, the Prime Minister of the day - I think it was Mr. Chifley - granted the council approximately £72,000 a year for five years in the belief that, in that time, it would be able to extend its activities and place the national fitness movement on a firm basis. After the Labour Government went out of office, the present Government allowed me to remain on the council as its representative. Of course, that was rather a difficult task, because I had to approach the Minister for Health to seek additional funds for the carrying on of the work of the council. My instructions from the Minister were to the effect that no additional funds would be available. I felt that, as the representative of the Minister, it was my duty to convey that information to the council.

Due to inflation and rising costs, the council found that the annual grant of £72,000 was not sufficient to extend its work further, and we got to the position where, in order to help the States to keep the movement alive, we had to make annual appropriations that took the whole, or nearly the whole, of the £72,000 that was allocated to us. This Government, since 1949 or early 1950, has taken the view that it is not advisable to expend on the national fitness movement from Commonwealth funds, more than £72,000 a year So, the work of the council in recent years has reached the stage where there is little more to be done, because the funds that have been allocated have been just sufficient to keep the movement alive.

There is now little Commonwealth activity directed towards ensuring national fitness.

I have raised this subject in the Senate time after time during Budget debates; yet, the appropriation has been set down at exactly the same figure year after year. Honorable senators may remember that on many occasions I have raised the matter and asked for additional funds to be allocated, but the Government, in its wisdom, has considered that that was not desirable. To be frank, Sir, I was reminded only to-night that I am still a member of the council. I did not know whether I had been dropped from the council after the previous Parliament ended, or again nominated for membership. I have not had any word to tell me that I have been re-nominated. There has been no meeting of which I have had notice. I can only regret that this work, which was commenced with such excellent intentions and is directed by an organization with ramifications throughout Australia, should be in its present condition. I believe that it has done tremendous work for the young people of our nation. Some of our council meetings were very enlightening. We found that there are far too many children who are unable to obtain playing space around our cities, because there just is not playing space available. The State Governments did not have the finance to resume land in order to make playing fields available, and the local councils, of course, were in a hopeless position; they just could not do anything about the problem. Suggestions were made to the Government to assist in this particular matter, but unfortunately the idealism that existed when the Commonwealth Council for National Fitness started about fifteen years ago has not gone out, and I think that feeling of the members of the Parliament in this particular work is languishing. It will probably die unless it is rejuvenated in some way.

I appreciate what the honorable senator has brought before the Senate. I think it is a pity that the work is not going on. I do not know how the £250 for expenses of meetings could have been used. I did not know that there was a meeting. I feel pretty certain that there was not one. If the honorable senator’s remarks do no more than steer the mind of the Government back to the problem of the fitness of our children, and the great work that could be done with additional finance, he has done very fine work in bringing the matter to the attention of the Senate. I assure him that there is still a place for the national fitness movement in Australia.

Senator COOKE:
Western Australia

– I am glad that Senator Arnold has put the case to the Senate as he sees it. On many occasions, particularly during Budget debates, I have pleaded with the Government to provide assistance for amateur sport in Australia. I have pointed out that the sales tax imposed on sporting goods, including rowing skiffs and other gear, is absolutely crippling amateur sport. As we know, amateur athletics are an important factor in the maintenance of national fitness. I suggest that we should consider this matter in much wider perspective than the very poor report that has been made by Senator Anderson. I endorse what Senator Arnold has said in this connexion. In Western Australia racing skiffs cost £600 plus sales tax.

Senator O’Byrne:

– The sales tax amounts to about £100.

Senator COOKE:

– I am referring to amateur rowing.

Senator Gorton:

– The racing eights?

Senator COOKE:

– Yes. It is an excellent sport. These days, in Australia, children take part in rowing events. In years gone by in England, this privilege was available only to the 61ite. As I have said, in Australia we encourage young people to participate in sport; but the sales tax on sporting gear is crippling the amateur clubs. It is very difficult for young people to equip themselves with sporting gear, because there is no gate collection for amateur events. Senator Hendrickson is interjecting. I do not know whether the position is any different at Albert Park from what it is in Western Australia.

I think we should approach a consideration of national fitness first from a medical point of view. We must realize that young people suffering from physical disabilities need medical treatment in order to make them physically fit to participate in sport. On the other hand, financial assistance should be provided to enable young people who are blessed with normal physical attributes to engage in amateur sport, the cleanest of activities. I know that in Western Australia life-saving clubs are struggling to exist because of lack of money. Honorable senators have probably heard of the plight of a life-saving team which, after winning an Australian championship, is unable to raise sufficient money to pay its members’ fares back to their home State. The clubs are hard pressed to raise sufficient money to pay for the materials they need. Only very small subsidies are paid by the Government.

I mention particularly the case of volunteer firemen throughout the country, who do excellent national work whenever they are called upon. In most cases they engage in amateur athletics. Despite the valuable work they perform, on a voluntary basis, in fighting fires they are refused even minor concessions by people whose property they protect.

When financial provision in this field was first made by a Labour government, it was envisaged that amateur sporting facilities would be made available for all young people in the community, not only those at universities; they were already being reasonably well catered for. This has not materialized. I sincerely support Senator Anderson’s plea to the Government to examine the situation, which is pretty horrid. I urge the Government to abolish, or at least to reduce, the sales tax on sporting goods purchased by amateur sporting associations and clubs. This would provide a wider scope for the development of amateur sport by relieving the hardship that is at present suffered by the amateur sporting bodies of Australia.

Senator ROBERTSON:
Western Australia

– I shall not detain the Senate for very long, but I feel that I cannot let this opportunity pass to pay tribute to Mr. Halliday, of Western Australia, for the valuable work he is performing in the interests of national fitness. I am completely mystified by the report that Senator Anderson has given about the lack of meeting of the Commonwealth Council for National Fitness. I was under the impression when I met Mr. Halliday in February last that he Was then returning from a meeting. When referring to the activities of the council in Western Australia, he said to me “ If only you people in Canberra would give us more money we could do a great deal more work “. I said, “ That is everybody’s cry - they want more money from Canberra”.

I assure the Senate that the grants that are given to Western Australia are fully applied. As honorable senators know, that State comprises in area about one-third of Australia. Mr. Halliday travels many miles in his journeys between the north and the south of that State. I recently received a letter from him in which he thanked me for something I had done for the council, and he again stressed the need for more money to be made available. I think that the position in relation to the disposition of the money and the alleged lack of meetings should be clarified. There would appear to be a lack of cohesion in national fitness training for the youth of Australia. I am glad to have had this opportunity publicly to pay a tribute to Mr. Halliday’s excellent work.

Senator O’BYRNE:
Tasmania

.- The Senate is indebted to Senator Anderson for bringing this matter forward. I regret very much indeed that the activities of the Commonwealth Council for National Fitness have been curtailed to the extent mentioned by him. I support Senator Cooke’s appeal for greater attention to be given to the activities of amateur sporting bodies in Australia, particularly those engaged in aquatic sports. 1 refer especially to rowing. It has been my privilege over the last few months to assist in the raising of money to enable the Tasmanian rowing crew to participate in the championships to be held in Western Australia next week-end. When I have approached people on this matter and given them an idea of the cost of a racing eight skiff, they have loudly criticized the fact that the Government imposes sales tax at the rate of 161 per cent, on amateur sporting gear. The Commonwealth Council for National Fitness should sponsor sports which have not the benefit of a gate. Rowing has always been a noble sport in Australia. Down through the years it has produced some of our greatest internationals. I have in mind Wood, Pearce and some of the great crews that we have sent abroad. These rowers have gone to England and to the Olympic Games, and have brought great credit to Australia, but the sport is languishing because of the very high cost of equipment, and for other reasons. This decline could be countered by such a body as the Commonwealth Council for National Fitness.

I should very much like to see a revival of the council, and of the spirit in which it was set up. It should have the task of encouraging sports such as rowing, which really needs sponsorship. If it adopted rowing I have no doubt that it could obtain remissions of sales tax for rowing equipment, just as they are obtained by schools buying racing eights. For too long rowing has been placed in the same category as such sports as football, which derive benefit from large gates. One has only to see the crowds of people who pay to see such sports to realize what the revenue of some clubs must be. After all, the construction of the sports grounds that they use has been subsidized to a great extent by the Commonwealth and State Governments. I remind honorable senators of all the work that was carried out on the Melbourne cricket ground in preparation for the Olympic Games, and of the other ways in which such sports as football have been helped. Rowing has been in quite another category. It is, of course, very difficult to collect money from people who watch rowing. They usually take up strategic positions along the course, and policing such matters is virtually impossible.

I should like to point to the need for coordination of the various Police Boys’ Clubs that are being set up, often in a very small way with very little money to spend. Wonderful possibilities exist for the coordination of the Police Boys’ Clubs of Australia through an institution such as the Commonwealth Council for National Fitness. Juvenile delinquency, one of the great problems of the present day, can be tackled in this way. Young men who are leaving school, and who really need guidance, can be given it by men of strong character and healthy minds, such as are to be found in these boys’ clubs. The clubs in my State are living from hand to mouth, and virtually subsisting on charity. The Commonwealth Council for National Fitness could play a most important part in co-ordinating these clubs, which may be one of the keys to overcoming juvenile delinquency, which is becoming so prevalent throughout Australia to-day.

Senator HENTY:
Minister for Customs and Excise · Tasmania · LP

– We are indebted to Senator Anderson for directing the attention of the Senate to this matter of the Commonwealth Council for National Fitness. I must assure Senator O’Byrne and Senator Cooke that even if the council were called together every year it would not mean the lifting of sales tax on rowing eights. That is a matter for the Treasurer (Mr. Harold Holt) to decide. I appreciate the honorable senator’s sincerity, but what he had to say had nothing to do with the matter raised by Senator Anderson. If I understood Senator Anderson, he said that the legislation provided that the council should meet, and should advise the Minister for Health, but that the Minister also had full authority to spend the money.

Senator Anderson:

– That is so.

Senator HENTY:

– It is obvious that the Minister has been allocating the money to the national fitness organizations which are set up in each State. Apparently, he has not felt the need to obtain advice from the Commonwealth Council for National Fitness. Last year, he had only £72,500 to spend throughout the Commonwealth, and if he has not called the national body together for five years he has saved at least £1,250. Apparently, that is what it costs to bring these people together.

Senator Anderson:

– But under the act the national body has a continuing responsibility to make inquiries.

Senator HENTY:

– The national body has a continuing responsibility to advise the Minister. I shall bring that aspect of the honorable senator’s remarks to the notice of the Minister. However, doubtless that gentleman finds it unnecessary to call the national body together. The reports that the honorable senator quoted emanated, I am sure, not from the council but from the Department of Health. I am fortified in my belief by the fact that Dr. Metcalfe is mentioned as having signed the report. Probably that is the way the matter is being dealt with. Probably it is being done efficiently by the Minister for Health without the guidance of the national body. Limited funds are available and there may be a very good reason why the council has not been called together.

The honorable senator has raised a very interesting point and I will bring to the notice of the Minister his remarks, and those of other honorable senators who have discussed this matter. The Minister could reply directly to Senator Anderson, or reply to me. I could then make a statement upon it in the Senate.

Senator Arnold:

– I should prefer that you made a statement here.

Senator HENTY:

– I will do that.

Question resolved in the affirmative.

Senate adjourned at 10.7 p.m.

Cite as: Australia, Senate, Debates, 15 April 1959, viewed 22 October 2017, <http://historichansard.net/senate/1959/19590415_senate_23_s14/>.

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