16th Parliament · 1st Session
Mr. Speaker (Hon. W. M. Nairn) took the chair at 2.30 p.m., and read prayers.
HOUR OF MEETING.
Motion (by Mr. Curtin) agreed to - That the House, at its rising, adjourn to to-morrow, at 10.30 a.m.
Mr. SPOONER.- Has the Treasurer read in to-day’s Sydney press the report that the Government has accepted legal opinion to the effect that the income tax instalments paid during, let us say, 1042-43 - or, for that matter, any other year - discharge the tax liability for that year? If the report is correct, will the honorable gentleman officially confirm it? Will he also say whether the way has now been made more clear for the adoption of the system of “ pay as you go on the basis of incomes derived in 1943-44, instead of using the financial year 1942-43 as the year of notional income S
Mr. CHIFLEY.- The Government has not made any announcement on the subject. Full opportunity will be afforded to the honorable member during the debate on the Income Tax Assessment Bill to discuss the , matter of tax lag. Li reply to his statement that the position has become more clear, I can only say that according to some newspaper statements it would appear to have become more confused in the minds of certain persons.
Mr. ANTHONY. - Has the Treasurer seen the statement in the Sydney Sun of yesterday that the Commonwealth Crown Solicitor has advised the Commonwealth Government that income tax is based on income for the current year and that the income for the previous year is only the basis for the assessment? Did the Crown Solicitor tender such advice? If so, does the Treasurer agree that there is actually no lag of one year in the payment of income tas?
Mr. CHIFLEY.- I do not propose to debate whether there is a lag in the payment of income tax. I think that the position is perfectly clear to most honorable members. All governments have held that no particular action was needed in relation to this matter.
STRIKE OF SLAUGHTERMEN.
Mr. ABBOTT.- Has the Prime Minister read in the Sydney press to-day the report regarding the strike of slaughtermen in the mutton and beef sections at Homebush abattoirs? Has the honorable gentleman seen the statement by P. H. Herbert, secretary of the Master Butchers Association, that at the abattoirs awaiting slaughter there are 2,400 head of cattle, 1-5,000 head of sheep, 700 pigs, and 500 calves, and that, if the strike be not settled, there will be an immediate shortage of meat in Sydney, and no supplies next week-end? Is the right honorable gentleman aware that Homebush abattoirs, during January, killed 60,000 sheep short of what would have been killed had the slaughtermen worked the tally fixed in the award?
Mr. SPEAKER-Order ! Does the honorable gentleman vouch for the accuracy of those statements?
Mr. ABBOTT.- I aim not making, but merely citing the statements.
Mr. SPEAKER-The citation is too lengthy.
Mr. ABBOTT. - In view of the complete inability of the Minister for Labour and National Service-
Mr. SPEAKER. - Order ! The honorable member must ask a question.
Mr. ABBOTT. - In view of the conditions that exist at the Homebush abattoirs, and the apparent inability of the Minister for Labour and National Service to effect a remedy, will the Prime Minister take steps to get rid of that honorable gentleman?
Mr. CURTIN- I do not propose to take any steps to get rid of the Minister for Labour and National Service, but, on the contrary, intend to take every step open to me to keep hold of him. I regard him as a most valuable member of the Government, and shall keep as tight a hold of him as of every other member of the Government. I am rather surprised that the honorable member for New
England should have raised this matter, because this morning he sent to me a request that I receive the authoritative evidence which could be supplied by a deputation that he proposed to introduce to me. I imagine that he must by now have received my acquiescence.
Mr. Abbott. - That is in regard to an entirely different matter, not this particular strike.
Mr. CURTIN. - I am not so sure that it is unconnected with the strike. I believe that there is a connexion, and shall be surprised if there is not.
Mr. Abbott. - There may be; but this is a service which affects the (fighting forces and the people of Sydney.
Mr. Lazzarini. - It does not; meat for the troops is being slaughtered, and the honorable member knows it.
Mr. CURTIN. - I regard any stoppage of an essential service as distinctly detrimental to the nation, and an impairment of the war effort. I know, however, that there is some reason, either good or bad, for any stoppage that may take place. Those responsible for the cessation of workbelieve that they have no alternative. In my judgment, that is a mistaken belief. Nevertheless, it is impossible, in a democracy, to fail to give consideration to the views of any section of the community. It would also be wrong to arrive at a judgment upon what has been done without being in possession of all the facts. It was because I was most anxious to obtain ail the facts as quickly as possible that I readily agreed to hear the views of those who say that they are able to place authoritative evidence before me. I shall endeavour to learn something of the men’s side of the dispute as soon as possible. Broadly speaking, I do not believe that any section of the community is justified in withholding its services at this time merely because it cannot get its own way. Facilities exist to enable all persons with grievances to have them remedied without inflicting costly losses on the nation, and I ask that those facilities be used. I am not going to judge any issue with which I am confronted without hearing all the facts. I regret very much, as I am sure the honorable member himself will, that in putting his question he sought to set me at odds with my Min ister. I have never been at odds with him, and he has never been at odds with me.
Mr. Abbott. - We all thought differently.
Mr. CURTIN.- He is a strongminded man; so am I, and he and I get along very much more amicably than our critics get on with one another.
– Last week, I asked a question regarding the increased cost of fire-wood in the city of Launceston, and I was advised that the increase, amounting to over 75 per cent., was due to higher wages for wood-cutters, and higher costs of transport. Since then I have been advised that music teachers are forbidden to increase their charges by more than 25 per cent., corresponding to the higher cost of living. How does the Minister representing the Minister for Customs reconcile the increase of over 75 per cent. in the price of cut firewood with the increase of only 25 per cent. in the fees of music teachers?
– Fortunately, I am not called upon to reconcile the two rulings, but I shallbring the honorable member’s question before the Minister for Trade and Customs.
– Has the AttorneyGeneral seen the press reports of a speech made in the Legislative Assembly of Victoria yesterday by Mr. Mullens, in which, among other things, he said that the funds of some of the strongest and wealthiest trade unions were being used to subsidize Communist propaganda? He is also reported to have said that a college for revolutionaries had been opened in Victoria, and another for the training of commissars. ‘ Has the AttorneyGeneral received any information that confirms those assertions? Does he think i’t advisable that the officers of his department should make inquiries with a view to establishing the truth or otherwise of the allegations.
– I have not read the full report of the speech referred to, but I have seen some reference to it in the newspapers. I shall have inquiries made.
– Is the AttorneyGeneral aware that the beneficial effects of Statutory Rules 1942, No. 65 (Contracts Adjustment) are being lost in many instances because those who desire to seek relief under it are unable to employ counsel? Will the Minister have” the regulations under this statutory rule amended so as to forbid the employment of counsel by either party to a dispute ?
– Cases heard under Statutory Rule No. 65 often involve large suras of money, and the hearings are not confined to the inferior courts. My own opinion is that, as a general rule; - though there may be exceptions - the presence of counsel at such hearings assists in the determination of the issue, and does not lead to injustice.
– But what help is there for the poor litigant who cannot employ counsel?
– The problem of the poor litigant is not confined to cases heard under this statutory rule. If the honorable member can cite instances in which persons, because of their poor circumstances, have been unable to take advantage of these provisions, I shall take steps to deal with the situation, but my o’pinion is that the remedy does not lie in abolishing the right of litigants, whether rich or poor, to employ counsel.
Appointment of Cadets
– (Barton - Minister for Externa.1 Affairs). - by leave - Yesterday, the honorable member for Warringah (Mr. Spender) asked a question regarding the proposal to appoint cadets 1>o the Department of External Affairs. Because of the necessity for equipping the Department of External Affairs with adequately trained staff to enable it to carry out its expanding responsibilities, it was recently decided that a scheme for the recruitment and training of such staff should be inaugurated. To this end applications were, with the approval of the Public Service Commissioner and the man-power authorities, invited from British subjects, both male and female, of not less than seventeen years of age who had at least the Leaving Certificate or complied with matriculation requirements, for appointment as Diplomatic Staff Cadets. Successful applicants will be required to undergo a special university course covering diplomatic practice and procedure and other topics of special bearing upon foreign affairs. At the end of the course applicants will be further examined and on a satisfactory # certificate will receive a temporary post in the Department. The question of permanent appointment to the Commonwealth Public Service will be considered at a later date.
Already over 1,000 applications have been received, and arrangements are now being made for examination and selection. A very large number of applications has been received from members of the fighting services, and such applications are being accepted after the stated closing date if they are lodged within a reasonable time. As already stated, first, preference will be given to those who have had active combatant service in the present war. I should add that special arrangements were made to have the announcement and details of the scheme brought to the notice of the members of the fighting services. Honorable members will appreciate the rapid growth of Australia’s foreign interests and relations, particularly in the Pacific area. The present system will enable selected candidates to enter upon a course of intensive study with a view to their permanent appointment to the Australian Diplomatic Service.
– As the Minister for External Affairs stated that preference in recruiting members of the diplomatic corps will be given to persons who have had active combatant service, will the Prime Minister inform me whether it is the policy of the Government to overlook men who, being engaged on essential services, are not permitted to enlist for active service?
– The Government does not intend to overlook anybody, but as a particular principle, believes that preference to returned soldiers in this war should be integral to the general administration. I am aware that some men have been refused permission to enlist because of their qualifications for work in other spheres of the total war effort, and I am sure that they will not suffer any disability because of that.
– Has the Prime Minister received from Mr. Telford’ Simpson a telegram concerning the action of Mr. W. Orr, secretary of a group of miners in the north, in calling a general strike in all collieries controlled by Northern Collieries Limited? Is the Prime Minister aware that the reason given by Orr for his action is to protest against decisions given by the Northern Reference Board in respect of only two collieries, Stockton-Borehole and Maitland Main? Has the Prime Minister seen Orr’s statement, reported in the press to-day, that direct action was the only way to have these two cases reopened? In view of this threat to constituted authority, will the Prime Minister institute legal proceedings against those responsible for advising the strike?
– I have received a telegram from Mr. Simpson. I got it yesterday.
– The miners resumed work to-day.
– Yes. I understand that the mines were worked to-day. The matter of legal proceedings entirely depends on the merits of the situation. I have taken the requisite steps to ascertain for myself what the merits are.
Production Committees and Amenities
– Is the Minister for Labour and National Service in a position to make any progress report on his plans for the establishment of production committees in war industries?” Is the Minister aware that there have been undue delays in the provision of canteens, washing facilities, adequate ventilation and other amenities by private concerns engaged in war industries and that this delay is causing restiveness amongst the workers and is tending to bring about industrial trouble? What power has the Minister to compel the provision of these amenities in order that these private companies shall fall into line with the policy which the Minister has announced will be applied in establishments conducted by the Government ?
– The matter of the establishment of production committees has been referred to a sub-committee of Cabinet. That sub-committee will soon meet and an announcement will be made as early thereafter as possible.
– Will the Minister for the Army state when the Canteens Board of Inquiry is likely to resume its sittings? If he is not in a position to make a statement now, will he ascertain the present position in regard to. the matter, and also whether certain military officers are attempting to frustrate a reopening of the inquiry, following certain additional information furnished to the Minister in this House about six months ago by the honorable member for Melbourne ?
– I am not aware that there is a necessity for the Canteens Board of Inquiry to resume. I shall make inquiries, but I do not know that any military officers are attempting to frustrate a re-opening of the investigation.
Having been supplied by the Minister for Trade and Customs with figures which show that the clearance of alcoholic beer in New South Wales in the first threequarters of last year was almost 2,500;000 gallons greater than in the corresponding period of 1941, I ask the Prime Minister whether we are to assume that the Government, has jettisoned its proposal to reduce the production of beer by331/3 per cent. ?
– The policy of fixing a quota for beer consumption took effect on the 1st March, 1942. The honorable member says that the production in the first three quarters of last year was greater than in the corresponding period of the previous year. That is admitted. As I understand the position, the civilian consumption of beer is pegged at 7,200.000 gallons a month.
– That is for Australia, hut I am speaking of New South Wales.
– Movements of population and ether factors have to be taken into account. I am speaking of Australia as a whole. The production fixed for Australia as a whole has been maintained. I know very well that the quantity of beer consumed in some months was less than 7,200,000 gallons. The purpose was to lay in supplies in order that there might be some extra ration for the months of December and January, when conditions would probably make it necessary that more beer should be available than in, say, July and August. The policy of the Government, in respect of the beer quota has not been jettisoned.
Labour Corps - Use or Service Personnel
– About a fortnight ago I asked the Minister for the Army what was to be done with the money which represented the difference between the pay given to the soldiers in the Army Labour Corps and the amount prescribed by the award for similar work done by civilians. Is the Minister yet in a position to say what is to be done with the difference between the amount of money paid to the soldiers and the money which the Government would be liable to pay if the work performed by those soldiers had to be paid for at award rates ?
– I have not yet received the report from the Treasury and Army officials who were appointed to consider this matter. The last I heard of the matter was that they had come to the conclusion that there was no credit, when the allowances paid to soldiers and pension rights were taken into consideration. I shall endeavour to obtain a copy of their report this afternoon and make it available to the honorahle member.
– Will the Minister for the Army inform the House how many former Militia men, who have been accepted for the Australian Imperial Force, are performing duties of the kind naturally associated with the designation of Australian Imperial Force? If about 27 per cent. of the
Militia are unfit for service overseas, how is it that the single men in their twenties who have been transferred to the Australian Imperial Force and passed as fit for combatant service are spending their days in offices and their nights at home?
– I shall have the question examined, and supply the honorable member with an answer as soon as possible.
– Has the Prime Minister seen the report in the Sydney Morning Herald of yesterday that the Australian Agricultural Council decided to recommend to the Government that there should be no further call-up of rural labour? In view of the suggestion made recently in the press that it may be necessary to call up more of the men engaged in rural industries, I desire to know whether the blanket deferment of rural lahour from military service which has existed since last May will stand? Will the Prime Minister indicate his attitude regarding rural labour, the supply of which has already been seriously depleted ?
M’r. CURTIN.- The problem of manpower has to be looked at as a whole. It includes the requirements of men for the armed services, and also the requirements of men for the maintenance of essential services including the production of food and other things that are desirable as a part of the total economy of the country. I think honorahle gentlemen are aware that we have set up a War Commitments Committee consisting of the chiefs of the fighting services, the Director-General of Man Power, the Director-General of War Organization of Industry, the Director-General of the Allied Works Council, the Director-General of Munitions and Aircraft Production, and the chairman of the Standing Committee of the Allied Supply Council. It is a technical committee whose business is to survey the total requirements of the nation.
– Who is the chairman?
– The chairman is the Director-General of Man Power, Mr. Wurth, and the committee meets as or when I direct to consider major problems which arise from time to time. The function of the committee is to examine such matters in toto, and to make recommendations to the Government for the direction of categories of man-power. The direction of individuals is the responsibility of the Director-General of Man Power, but a decision as to whether 20,000 men shall bts used on a certain project is made as the result of the recommendations of the War Commitments Committee.
– Will the Minister for
Commerce and Agriculture inform me whether the Australian Agricultural Council has been informed that next year barley production may fall short of requirements by 3,000,000 bushels? If so, will the Minister make an early announcement that a guaranteed profitable price will be paid to barley-growers for next season’s production, for the purpose of inducing them to make up the expected shortage by sowing additional acreage ?
– I think that the honorable member has been misinformed. No shortage of barley is expected, but developments may possibly arise that will lead to a shortage. Therefore, I have arranged for the Director-General of Agriculture to confer with representatives of the Victorian Minister for Agriculture (Mr. Hogan), the South Australian Minister for Agriculture (Mr. Blesing) and the barley interests in Melbourne next week, and to submit a report to me for consideration.
– Did the Prime
Minister read in to-day’s Sydney Morning Herald a statement by Mr. G. M. Dawson, . vice-president of the Brishane Trades and Labour Council, that the strike of 1,000 members of the Civil Constructional Corps in Queensland, in sympathy with members of the personnel division of the Allied Works Council, will seriously disrupt important national work unless positive action be taken by the Commonwealth Government to reform the higher direction of the corps? Will the Prime Minister inform the House of the circumstances surrounding the supersession of Mr. C Barrett, Deputy Assistant Personnel Officer for Queensland, and take such action as will bring about the immediate return to work of those now on strike?
– The honorable member referred to the “ supersession “ of Mr. Barrett. I am sure that the word is entirely unwarranted.
– Is everything all right, then ?
– Everything is not all right. The Director-General of the Allied Works Council, Mr. Theodore, proceeded to Brisbane yesterday to give his personal attention to this matter, and I am awaiting his report.
– Will the Prime Minister inform me who is responsible for the removal of Mr. Barrett, in view of the fact that Mr. Theodore is personally investigating the matter?
- Mr. Barrett has not been removed.
– It was proposed to remove him.
– No. I am not in a position to make a complete statement about the matter at this juncture. As honorable members are aware, the Allied Works Council is under the administration of the Minister for the Interior, but I hope to be able to make a statement to the House when I receive Mr. Theodore’s report. I am convinced in my own mind that a combination of circumstances has occurred which should not have been brought together.
– Will the Prime Minister undertake to make a statement to the House of the Government’s attitude regarding preference to returned soldiers?
– That has already been done. If the honorable member desires me to repeat the Government’s policy, I shall examine the previous statement with a view to ascertaining whether it contains any imperfections.
– The answer which the right honorable gentleman gave to the honorable member for Cook does not ensure preference to returned soldiers.
– Most certainly it is preference.
– To whom?
– To returned soldiers. The policy “which the Government has adopted is in accord with Australian sentiment, and has the approval of the trade unions. I have discussed this matter with senior officers of the Australasian Council of Trade Unions.
-How does it “ square “ with the award of the “Wheat Harvest Employment Commission ?
– The honorable member for Warringah asked mefor an announcement of government policy in respect of employment in the Public Service, and I have replied to the question. I inform the honorable member for Indi that awards come within the province of the arbitration courts or other tribunals.
– The Government is not concerned with them.
– It is; but the Government has not altered the practice which has obtained for 25 years. If there be any shortcomings, this Government is not responsible for them.
– Has the Minister for Labour and National Service received any complaints from Goulburn regarding the unsuitability of man-power offices in that city? Will he see whether it is possible to procure more suitable premises, if not for the staff, at least for the convenience ofthe public?
– I have received no complaints of the nature indicated by the honorable member, but I shall inquire into the matter.
Importations from America.
– Will the Minister for
Supply and Shipping inform me whether America is supplying Australia with farm machinery under the lend-lease agreement? If so, does he not consider that it would be more economical if Australian firms manufactured our farm implements, thus abolishing transport costs, and providing more shipping space for goods which are not made in this co.untry?
– The reception of goods in Australia under lend-lease conditions is dealt with by our division of Import Procurement under the administration of the Minister for Trade and Customs. I understand that the only machinerycoming into Australia at present from the United States of America is such as is required particularly for vegetable production. I know of no other American machinery which is being admitted to this country. This vegetable machinery cannot be manufactured in Australia at present. The need for attention to vegetable production was so great here that the Government considered it necessary to send a special mission to the United States of America three months ago in order to obtain vegetable seeds and machinery for vegetablegrowing. I hope that the honorable member will appreciate the urgency of the circumstances which caused the Government to take this action.
– I move -
That the bill bo now read a second time.
In addressing myself to this bill, I consider that it is necessary to give honorable members some idea of what has happened in the way of repatriation legislation since the commencement of the present war. I have heard it said that the act remains as it was framed in respect of the last war, and that nothing has been done to meet the needs of the soldiers of the present war. That conception is entirely wrong. In actual fact, a very great deal has been done, as I shall demonstrate, to bring the legislation up to date, and very many discharged soldiers of the present war are already reaping the benefit. The subject, however, presents many problems and although, by means of this bill, the Government is endeavouring to resolve them, inevitably, as the war progresses, or even if peace were- declared tomorrow, we shall be faced with problems which are not foreseen in the present bill.
First, I shall make a brief survey of repatriation generally, and outline the provisions of the amending legislation which was passed in 1940, together with the complementary measures which have since been taken by regulation. There is a popular fallacy that once hostilities cease and “ the tumult and the shouting dies “, the soldier is forgotten. To prove the contrary, I inform honorable members that the total sum expended on repatriation and general rehabilitation up to the 31st December, 1942, in connexion with the last war, has been as follows: -
The amount in respect of service pensions includes £32,274 paid to Australian South African war veterans, legislation for which was brought in by the present Government in 1941.
One might perhaps be excused for anticipating that, say, eight years after this war ceases, the granting of new pensions in respect of war disabilities to members and dependants will ‘have almost ceased, but what do we find has been our experience in respect pf the last war? Since 1926, that is eight years after the termination of that conflict, 11,450 new war pensions have been granted to exmembers of the forces, and 125,530 to their dependants. This is not said with a view to suggesting a curtailment of the granting of pensions, but to draw attention to what may be termed the enormous toll that war takes of a nation, and to impress upon honorable members the necessity for exercising vigilance for many years to come, in order to ensure that those who suffer as a result of this war shall not be debarred from receiving their just recognition. That is one of the reasons why the Government does not intend to interfere with the present system, under which no time limit is fixed in which a man may apply for recognition of a disabling condition, which he believes to be the result of war service.
To compare the Australian system with that of Great Britain and Canada, I cite the following figures: -
Although the relative figures of other countries are not available, it may be interesting to honorable members to note that at the 30th June, 1942, the percentage of members of the Australian forces of the 1914 war still living, who were in receipt of pensions was 35.47. The proportion of dependent pensioners to the number of surviving members of the forces at that date was 65.27 per cent.
It may be as well to refer also to the machinery which has been set up to ensure that applications for war pensions receive every possible consideration, even though it is 25 years since the Great War concluded. The Repatriation Commission’s investigation of a claim is most exhaustive. The various special tests, X-ray examinations and examinations by specialists, which may be considered necessary by medical authorities, are all carried out at departmental expense. In addition, where the soldier indicates in his claim that he has received treatment from, a private medical practitioner, or from a private or public hospital or a chemist, the commission, provided the soldier gives it authority to do so, obtains copies of all clinical notes, prescriptions, &c, and pays such fees as may be required. If the necessities of any such investigation prevent the soldier from following his usual occupation, authority exists for the payment of a sustenance allowance equivalent to the full pension rate. When all the evidence has been collected, it is summarized under medical supervision and submitted to the Repatriation Board for decision of the claim. Until 1929, an appeal from the decision of a Repatriation Board lay to the commission, and the commission’s decision was final. In that year, however, a system of appeal tribunals was set up, and these bodies are still functioning. There are two tribunals - one deals with appeals relating to entitlement to pension, the other is concerned with appeals against the assessment of the rate of a pension. The War Pensions Entitlement Appeal Tribunal is composed of three members, all of whom are returned, soldiers. The chairman must be qualified as a barrister or solicitor ; one member is representative of the soldiers, and the other is nominated by the Government. The Assessment Appeal Tribunal, too, is composed of three members, also returned soldiers, and, as in the case of the Entitlement Tribunal, the chairman must be a qualified barrister or solicitor; he, however, is the soldiers’ nominee. The two other members are necessarily medical men, selected, according to the pensionable disability of the appellant, from a panel of leading doctors in each State. By this means, the tribunal can be so constituted that each individual case may be reviewed by specialists in the particular form of disability suffered by the appellant. The chairman travels from State to State, but, as I have already explained, the medical members do not travel. Necessary travelling expenses are paid to appellants to either tribunal. Both tribunals are, of course, absolutely independent of the Repatriation Commission.
The restoration of the sick and wounded to health and strength, or, at least, the alleviation of their sufferings, is a primary consideration, and ever since the last war this wOrk : has formed a major part of the repatriation programme. For this purpose, the commission conducts its own medical institutions in each of the State capitals, and where it is not practicable or necessary to bring country cases to the metropolis there is an arrangement throughout the Commonwealth whereby treatment is afforded by local medical officers or at the local hospitals, according to the requirements of the patient. As at the 31st December, 1942, there were 1,751 patients undergoing in-patient treatment, including 160 of the 1939 war, whilst 29,739, including 2,336 of the 1939 war, were recorded as out-patients, lsa. addition to these medical institutions, there is a repatriation artificial-limb factory in each State, where not only artificial limbs, but also various types of splints, spinal jackets, surgical boots, wheeled chairs, and almost every other description of surgical aid are manufactured. I may say that the work in these factories is so highly esteemed that the commission has been embarrassed at times through civilians,, in need of artificial limbs, desiring that they be permitted to have them made at the Repatriation factories on payment of the cost. While on this subject of treatment, I should, mention that, where a soldier is required ito undergo a course of treatment and by reason of such treatment is prevented, for the time being, from following his usual occupation, he is paid a sustenance .allowance of an amount which, together with any war pension, will assure him of a weekly income equivalent to full war pension.
It will thus be seen that, when the present war commenced, there was a department .already established which was well equipped to undertake such fresh tasks as the times demanded; and, as I have already recalled, the Australian Soldiers’ Repatriation Act was amended in May, 1940, to make provision for the payment of war pensions to eligible members of the forces serving in connexion with the 1939 war and to the dependants of those members. The amending act also contained appropriate provision for the making of regulations to ensure the availability of medical treatment for exsoldiers disabled as a result of their service in the war. Provision was also made to enable assistance by way of certain general benefits to be granted to members of the forces who enlisted for or were employed on active service outside Australia. These benefits included the soldiers’ children education scheme; the medical treatment of widows and widowed mothers, and the children of deceased soldiers; and funeral benefits. Provision was made also for an employment scheme for the soldiers of this war, including the payment of sustenance to those awaiting employment.
Regarding the employment scheme, it is interesting to note that, of a total of 6,106 registrations for employment up to the 31st December last, 4,982 had been placed, in positions by the department. Of the balance, 816 had allowed their application to lapse - presumably because they had found jobs for themselves - and 308 were still awaiting suitable positions, the large majority of whom had registered for employment only during December, and even of those, very many were suffering more or .less severe disabilities. In all, sustenance amounting to £33,709 had been paid to those awaiting positions.
Co-operative action between the fighting services and the Repatriation Commission has been evident in countless ways ever since the current war began. Repatriation has been in a position to supply indoor accommodation for Defence patients, army money has been used to enlarge the number of beds available to it in one repatriation general hospital, artificial limbs and surgical aids are supplied by Repatriation ito the disabled men in the services on the order of the branch concerned, Repatriation medical officers are members of discharging boards, and so on. One of the most recent developments was the appointment by both the Army and the Air Force of rehabilitation officers to attend at discharging depots with a view to advising personnel about to ‘be released as to their civilian obligations. In these days of war, the discharged man might overlook or be unaware that, in addition to the ordinary obligation of being on the electoral roll, he has to obtain an identity card, register with the man-power authorities, obtain ration tickets, and so on. Advice and assistance, tendered by the Service rehabilitation officers, might save some heartburnings. These rehabilitation officers have been welcomed by the Repatriation Commission, which sees in them a still further means of co-operating with the services as it is considered that they will be an active and continuous liaison which will, no doubt, redound to the benefit of the man whom it is desired to assist.
Under the Man Power Regulations, the discharged soldier is no different from any other disemployed man; therefore, it is necessary for him to register at a national service office. The need for men in national employment is realized by the men, but there is not always the capacity to undertake it; therefore, any placements in civilian employment are made by the commission with the cognizance and concurrence of the man-power authorities. Some men who normally would have gone into fulltime vocational training, have been placed in employment and are undertaking their training outside working hours.
In addition to the benefits to which I have already alluded, provision was made for small cash payments of up to £5 to soldiers who, after their discharge from the forces, find themselves in urgent need of financial assistance. There was also a measure authorizing the supplementing of wages of apprentices or trainees whose training was interrupted by war service, so as to bring the amount up to what they would have been earning if their training had not been interrupted, or up to an amount equal to the minimum wage for the particular industry in which they are engaged, whichever is the lesser. Grants of fares to places of employment, tools of trade, &c, also have been authorized. Free passages to the Commonwealth for the wives and children of soldiers who married during the period of their overseas service are available, as they were in the last war, but owing to the dangers of sea travel at the present time, the scheme is virtually suspended. Those, however, who elect to make the voyage independently may, upon arrival in Australia, claim refunds up to the normal tourist class fare.
Land settlement, of course, is another most important phase of rehabilitation, but I do not propose to attempt to deal with the subject. It has never come within the purview of the Repatriation Commission, but the Government has recently appointed a special commission under the chairmanship of the Hon. H. J. Wise, of Western Australia, to deal with the whole question of rural development. This naturally will include the important question of soldier settlement, and the closest consideration will be given to any recommendations brought forward in this regard.
Other important legislation relating to the welfare of soldiers was the introduction, under the National Security Act, of regulations whereby an employer is compelled, having regard to the state of his business, to reinstate a soldier in the position which he previously occupied, or a similar one. This applies to all services - Royal Australian Navy, Australian Imperial Force, Royal Australian Air Force and the women’s auxiliaries. Other regulations have been made under that act for the benefit of ex-soldiers, such as the War Service Moratorium Regulations.
I desire now to refer to the procedure which has been arranged between the service departments and the commission to ensure, as far as possible, that there shall be no gap between the date of a soldier’s discharge and the payment to him of a war pension when eligible. War Cabinet decided that a repatriation medical officer should be included in the personnel of service medical boards convened for the purpose of making a recommendation in regard to a soldier’s discharge. A repatriation clerical officer is also in attendance specially in order to advise soldiers in pension and other repatriation matters, and arrangements have been made for each man to be handed a copy of a booklet giving full details of the benefits available, appeal procedure, &c. It was decided, moreover, that the medically unfit would not be discharged from the services until there was no need for further active medical treatment and they were capable of taking up civilian employment. There are cases, of course, in respect of which further active medical treatment might be of a prolonged nature, and, in these circumstances, discharge from the forces is effected after treatment in a service hospital in Australia has totalled six months, whilst, in cases having special features, retention in a service hospital up to a maximum period of twelve months may be authorized. Under these arrangements the commission receives 30 days’ notice of an impending discharge, and if, for some reason, the commission is unable to make a decision in regard to war pension within that period, it notifies the service department concerned so that the date of discharge may be deferred.
I believe that the references which I have already made are necessary in order to remove possible misunderstanding. I want, also, to quote some statistical data concerning war pensions of this w,ar. Of course, the expenditure on this item so far has been comparatively small, but so, fortunately, have been the casualties to date compared with those of the last war. The expenditure for the year 1940-41 was £18,722; in respect of 1941-42, it had risen to £207,324, and during the* six months ended the 31st December last, £236,134 was spent. The estimate for the current financial year is £750,000. It is interesting to note, also, that up to the 30th June, 1942, the number of soldiers of the 1939 war who had been granted pensions on the grounds of incapacity was 2,334; by the 31st December the number was 5,050^- considerably more than double. The position is similar as regards dependants of deceased soldiers - on the 30th June, 1942, the number of pensions granted was 3,832 and by the 31st December the number was approximately 6,097. As I have already said, however, the figures are, so far, comparatively small. To illustrate: Up to the 30th June, 1916, after two years of war, the sum of £137,920 had been expended; in 1916-17 the expenditure was £1,212,632; in 1917-18, £2,772,077; in 1918-19, £4,828,072; in 1919-20, £5,372,770; and in 1920-21, £7,386,842. The figure has remained round about the £7,000,000 mark ever since, despite the number of deaths, both of soldiers and dependants. As the total number of personnel in this war will be at least double that of 1914-18, we must expect a rapidly growing pension liability for many years to come.
On the subject of general repatriation benefits, other than war pensions and medical treatment, it would have been a simple matter to have extended them., as they applied in the last war, for purposes of the present war, but such a course would not have been sufficient, because the conditions of the present war differ materially from, those of the last. In this war the numbers engaged are far greater, the Pacific situation having brought the possibility of invasion to our own shores. The questions which will arise in connexion with demobilization must, therefore, be infinitely mere complex than those with which we were faced at the end of 1918. Among those questions is that of the training or retraining of demobilized men. In this regard a subcommittee of the inter-departmental committee, which some time ago gave consideration to the various phases of post-war reconstruction, outlined a training scheme of a most comprehensive character, but the seriousness of the war situation, necessitating the calling up and setting apart of thousands of men, not only for the fighting services but for work of vital importance, rendered impracticable any attempt to organize and launch a scheme of the dimensions contemplated. The war effort was paramount and all else had to be more or less submerged. At the same time, personnel were being discharged who were incapable, because of war injuries, of resuming the occupations they followed before enlistment, and to meet the immediate needs of these the Government authorized the Repatriation Commission to organize a tentative training scheme. The Government has since approved of this scheme being extended to the Citizen Military Forces personnel, that is, members of the Militia who were enlisted or called up for full-time duty for the duration of the war. The associate benefits of the employment scheme - sustenance while awaiting employment, grants of up to £5, immediate assistance in necessitous cases, and the provision of tools of trade - have also been made available to this class.
In the matter of vocational training, let me say that there is complete cooperation between the Repatriation Commission and the Department of Labour and National Service, which controls the
Commonwealth training plan for munitions production, and certain phases of the technical side of the Army and the Air Force, as well as in other spheres. Training committees, upon which are skilled technical training personnel, a medical officer, a vocational guidance expert and others, exist in each State, and their wisdom is brought to bear in selecting the avenue into which the war-damaged soldier should go. I cite two cases to illustrate the value of interview and tests undertaken by these committees. A man with -a gunshot wound of the knee expressed a wish to be trained as a.suburban bootmaker so that he could sit down during the day if need be. This trade was not regarded as being in his best interests and, though there were certain difficulties ,at the outset in obtaining his co-operation, it was found that he had an intelligence quotient- as high as that of am honours university student and aptitude of a similar order. He was eventually trained as a skilled instrumentmaker and last August was placed in an ordnance factory, where he has done well.
In the scholastic field there is a case worthy of mention. A man of 23 years of age had his eye and knee damaged and had suffered the loss of both hands. He had been doing a correspondence course before enlistment with the hope of entering civil engineering, and when asked a few months ago what were his desires regarding training he said he wished to qualify in this profession at the University. His school results were by no means good and at first glance the prospect seemed unpromising, but when he was given intelligence tests his rating was so high that the commission has arranged for tuition, which should permit him to matriculate this year and commence his course at the University next year. These two cases are sufficient in my opinion to .show to you that no rule of thumb methods are being used in attempting to meet the needs of war-damaged men, so far as their rehabilitation is concerned.
The recommendations of the Parliamentary Committee, in regard to Vocational Training, are being investigated by the Government, and as a result of the amendment proposed in this bill, which will permit of regulations being made to provide assistance for all members of tie Forces under certain conditions, the necessary power will exist to allow of the Government’s plans in this connexion being given effect to, when a decision is reached as a result of the investigations which are now taking place. When a full training plan is commenced two factors will be uppermost in the minds of those who implement it. The first is that the individual is suitable for the calling, and the second is that there is room in that avocation for him. Any training given will be designed to bring the man to full wage-earning capacity in the trade or calling.
One important phase of reesta’blishment in civilian life has been given special attention, and that is the wellbeing of sailors, soldiers, and airmen who have been blinded. Committees have been set up in each State of highly respected voluntary workers to undertake such functions as hospitality, training, and welfare. The chairman in three States were blinded ex-soldiers in the last war. These committees, in the States to which blinded men have returned, have done good work already, and two men have been placed in industry at £5 8s. weekly, in addition to their pension and allowance for an attendant and in the first week of employment earned a five shilling bonus. The Repatriation Commission is prepared to meet the cost of training and any necessary equipment. It is not unlikely that a man about to be discharged from the Royal Australian Air Force will be taught music and piano tuning with a view to his using the instruction as a means of supplementing his war pension. The children are eligible to participate in the commission’s soldiers’ children education scheme. For the guidance of sighted relatives and as a stimulus to the blinded soldier, the commission has published a useful booklet entitled Helping the War Blinded to See.
To advert for a moment to the soldiers’ children education scheme, I would like to draw attention to the following figures in the commission’s annual report of 1941-42. A total of 24,810 children had benefited under the scheme, and of this number 223 are children of soldiers of the 1939 war. The latter figure, will, of course, grow considerably and, when the act is extended to cover the children of home service personnel, it is obvious that there will be a material increase in the numbers which will become eligible.
In what I have said I have endeavoured to give something of the background of repatriation and to outline what has been done in connexion with the present conflict. Honorable members will, I think agree with what I stated at the outset : “ That a very great deal has been done in the matter of bringing the legislation up to date”. The Government has, none-the-lesS) realized for some time that much more will be required and, in this regard, it is of interest to recall that, when the Repatriation Bill was before the House in 1940, the then Minister, the Honorable G. A. Street, expressed the view that the problem of repatriation would .be solved largely by trial and error, and that only experience would reveal in what way the bill, which was then under consideration, would fall short of requirements. When the honorable member, whose lamentable death, under most tragic circumstances, will readily be recalled, expressed that view the Pacific had not become a theatre of war. Following the entry of Japan on the side of the Axis Powers, the whole repatriation outlook changed, as the calling up and enlisting of a much larger number of men than had previously been contemplated became imperative. Other factors also affected the position - the rise in the cost-of-living figures since the outbreak of war and in wages rates, increases in the pay of members of the forces, and the fact that, in contrast to the present struggle, the large majority, of enlistments in the Great War was for service outside Australia, in consequence of which the provision made by way of repatriation general benefits centred mainly in persons so enlisted.
After giving consideration to these factors the Prime Minister, following consultation with the Leader of the Opposition, appointed a joint parliamentary committee, consisting of the Honorable R. T. Pollard, Chairman, Senator C. A. Lamp, Senator the Honorable H. B. Collett, the Honorable Josiah Francis, the Honorable A. McK. McDonald and
Mr. D. 0. Watkins, to inquire into and report on the general question of the Australian Soldiers’ Repatriation Act and the amendments, if any, which the committee might consider desirable in the light of the conditions caused by the 1939 war. The present bill consists largely of recommendations made by this Joint Committee, and the Government takes this opportunity to express its keen appreciation of the thorough manner in which the committee approached and dealt with this difficult question. The committee took evidence from the Repatriation Commission, the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, the Tubercular Soldiers’ Association, the Limbless Soldiers’ Association, and members of the services, and members of this Parliament were invited to submit their views. It is most gratifying to note that the returned soldier organizations mentioned expressed their approval of the act as a satisfactory instrument for the carrying out of the wishes of Parliament. They were satisfied, moreover, that the act was being administered sympathetically. This expression of approval is appreciated, especially when it is realized that there will always be room for differences of opinion, where the question of eligibility for war pension is concerned. However, when one considers the very thorough investigation provided and the facilities for appeals which the Australian soldier has at his disposal, it can be said unhesitatingly that our system is at least as liberal as that of any other country in the world. I say, further - and those honorable members who have, in other days, held the portfolio of Minister for Repatriation will no doubt agree - that the Repatriation Commission’s administration of the act which Parliament has placed in its hands has been of an order which is commendable. The commission and its officers, all of whom are returned soldiers, have tried, to my own knowledge, to be just and honest in the interpretation of the act and the regulations.
I come to the. bill itself. Members will have already received the statement which has been prepared, comparing the provisions of the existing act and the proposals of the parliamentary committee, together with those of the Government. Probably the most important item which the bill incorporates is that which provides for an increase of war pension rates. This increase will approximate 20 per cent., and is estimated to cost £1,620,000 per annum - i.e., for a full financial year - immediately. It is obviously impossible even to attempt to forecast the cost over succeeding years. The increase will be applied on a flat rate basis, irrespective of the service rate of pay or the rank of the person pensioned. In other words, the increase which will be granted to, say, a private will be the same, on any given rate of assessment, as that granted to, say, a general. A greater increase, however, has been provided in respect of children of deceased soldiers. In these the increases will be: For the first child 25 pex cent., i.e., from 10s. to 12s. 6d. a week; and for the second and subsequent children 66§ per cent., i.e., from 7s. 6d. to 12s. 6d. a week. The proposed increase is substantially the same as that which was recommended by the parliamentary committee, and the Government is of opinion that it is justified, having regard to the increase of the cost of living since the commencement of the war, the general increase of wages, the present rate of pay of members of the forces, and the amendments which have been made in the rates of invalid and old-age pensions. However, although cost of living has been mentioned as one of the reasons for the increase, it is not intended to reduce the rates should the cost of living or wages rates fall.
The Government has also agreed with the parliamentary committee’s recommendation to regroup the rates of service pay in the first schedule to the act, so as to have, instead of innumerable rates of pension, not more than twenty rates, thus giving a more balanced schedule. Whilst the increase is of a general nature, I must emphasize that there are certain types of dependants’ war pensions which are subject to a means test, that is, the granting of the pension or the continuance thereof is contingent on the person’s financial circumstances. For example, dependants, other than widows, wives and children and the widowed mothers of deceased unmarried sons, cannot receive pensions if evidence reveals that they possess other income or property which exceeds the amount of -allowed income, namely, 3Ss. 6d. a week. I am emphasizing tl is because it is quite possible thai the class of pensioners referred to may not derive any benefit from, the provisions of the bill. Review7 will disclose that, together with other income, they already have adequate means of support, and in some cases increases will have been received in consequence of rises effected in the statutory allowed income under the Invalid and Old-age Pensions Act.
To avoid misunderstanding, I must emphasize also that although the wife and the first child of a service pensioner are to have their service pensions increased, no increase is provided in this bill of service pensions for members. Service pensions are subject to the same controlling factors as apply in respect of invalid and old-age pensions. The position is that service pension rates for members are amended automatically from time to time, in consequence of amendments to invalid and old-age rates, and the members, therefore, have had their pensions increased on several occasions since 1936.
The general increase of war pensions will necessitate corresponding increases nf other repatriation payments, such as living allowances, medical sustenance allowances under the soldiers’ children education, scheme, &c. All of these are payable under the regulations, and approval has been given for the increases to operate concurrently with the pension increase provided for in this bill.
Before I proceed farther, I should state that the Government has decided to retain the present principle of war pensioning for soldiers, other than those who are totally and permanently incapacitated, who are specially pensioned. That is, that pensions be medically assessed according to the actual degree of warcaused incapacity and regardless of the economic position of the pensioner. This is a recognized war pensioning principle which is adopted throughout the British Empire, and, I believe, in most other countries. It is a sound principle - assessment of incapacity on equal terms for men disabled in like degree.
In order that honorable members may have some idea of what the position of a pensioner will ,be when the proposed new rates operate, I give a few examples of weekly payments -
Example 1. - Blinded soldier with wife and three children -
Example 2. - Soldier totally and permanently incapacitated, with wife and three children -
Example 3. - Soldier 100 per cent, incapacitated, unable temporarily to engage in any occupation. with wife and . three children -
Example 4. - Soldier, single, totally and permanently incapacitated -
Example 5. - Soldier, single, 100 per cent, incapacitated, unable temporarily to engage in any occupation -
Example6. - Soldier, leg amputated above knee, with wife and three children -
Example 7. - Widow with three children -
Example 8. - Soldier, with wife and three children, drawing 50 per cent. war pension and who is permanently unemployable by reason of his war disability, plus an unaccepted disability. He possesses no other income -
Equally important with the general increase in war pensions is the widening of the basis of entitlement to war pension in respect of those who serve in Papua or New Guinea. The proposal is to place such personnel on the same basis as those who serve overseas. In effect this means that they, or their dependants, will be eligible for war pension and medical treatment in respect of incapacity or death resulting from an occurrence during the period of service, instead of on the basis of the incapacity or death being directly attributable to service. It follows also that they will be eligible on the score of aggravation of a priortoenlistment disability if, in the opinion of the commission or of a Repatriation Board, the conditions of service contributed to a material degree to such incapacity or death. This will apply without the six months’ qualification applicable in the case of service in Australia. This means that war pensions for -the full degree of incapacity will be paid. I make a point of mentioning this matter of aggravation in order to remove what I believe to be a somewhat common misunderstanding, that in the case of war-aggravated disabilities, pension is paid only for the degree of aggravation.
The bill also provides that the wider basis of eligibility - the “ incurred during service “ principle - which is applied to those who serve outside Australia, may alsobe applied to such areas, within Australia as may be prescribed as combat areas. Provision is also made that this basis may be extended to members, where, in the opinion of the Commission, the service is deemed to be actual combat against the enemy.
In the matter of the basis of eligibility for war pension, the Government has also decided to amend the existing provision in respect of those whose service is confined to Australia. This will be brought about by the deletion of the word “ directly “ from the term “ directly attributable “, and provision is also made for acceptance of all physical and mental disabilities which arise from service. This alteration will give effect to the expressed wish of the Parliamentary Committee that provision should be made to allow of acceptance of the incapacity or death of a member arising from accident, disease, or infection, which would not have occurred or been contracted but for his being a member of the forces, or but for changes in his environment brought about by his service. In addition, liability will be accepted in respect of accidents which occur while travelling directly to or from the member’s place of employment. Provision previously existed for this where the member was actually travelling on leave, but the provision contained in this bill will cover the member who was travelling to or from his place of employment, whether on leave or otherwise, subject, of course, to the qualificationthat the member was not absent without leave, or had not contributed to the accident by his own default. I should mention that this decision has been made, although the Canadian Government recently saw fit to tighten up the legislation in that dominion in regard to pension entitlement for those whose service occurred only in Canada. It will be interesting to honorable members to know that, in deciding to restrict entitlement in such cases to disabilities which arose out of or were directly connected with service within Canada, the Canadian Government had in mind that thousands of men on active service in that dominion were engaged in their military duties for only a limited number of hours each day, and in the evenings and at week-ends were at liberty in very much the same way as the ordinary civil employees of the Government, and that thousands of men were being enrolled on the understanding that their service would be confined entirely to Canada. This Government realizes that, to a certain degree, a similar position exists in Australia, but, on the other hand, it considers that some widening of the present basis is justifiable in order to allow the Repatriation Commission to pension certain classes of disabilities which at the present time are, strictly, not within the scope of the act.
Another important extension of the act is the provision which has been made for the members of the women’s auxiliary services. The continued and rapid growth of these organizations has produced a problem which did not confront the nation during the 1914-18 war, and it is, therefore, necessary to provide pensions and other benefits for those members who suffer incapacity or other material prejudice because of their war service, as well as for their dependants.
The Government considers that in respect of compensation for pensionable incapacity, there is no warrant for differentiation between men and women members. Pension scales will be those applicable to male members in receipt of similar rates of pay. The rate of pension payable to male members in the lowest scale will be applicable to all women members who are in receipt of a rate less than, or equal to, the male rate. Service pensions also will be payable to eligible women.
Honorable members will, of course, understand that the provisions concerning dependants of women members must be different from those relating to the dependants of male members of the forces, having regard to the fact that the responsibility of women for the support of dependants is not normally the same as that of men. In consequence of this fact, no pension will be paid to the husband of a woman member unless she is receiving a pension of at least 50 per cent. rate, and the husband is incapacitated and without adequate means of support. Certain other minor modifications in respect of this point are set out in the bill.
Provision is made for an important departure from the principle which existed in respect of the last war. The act is to be amended to allow of regulations being drawn up for the provision of general repatriation benefits other than war pension and medical treatment, to members of theForces enlisted only for home service. This is in addition to the power which already exists to make regulations for such benefits for those who have enlisted for service outside Australia in the present war.
I have already mentioned that Government approval has been given for the Repatriation Commission to provide vocational training for those home service personnel who have been incapacitated to such a degree that they are unable to follow their pre-war occupations, and also to allow employment sustenance to be paid, together with other benefits associated with the employment scheme. However, when the act is amended it is intended, in addition, to introduce regulations to allow the following general repatriation benefits both to members of the Australian Imperial Force and to Home Service personnel : -
Advances may be made by way of loan up to £250 for the purchase of plant or stock, or livestock if the applicant is not eligible under a land settlement scheme. The following classes are to be eligible : -
A grant of £15 funeral expenses and an amount up to £15 towards the cost of transport of the remains will be provided in the case of Home Service personnel on the same basis as exists at present for members of the ‘ Australian Imperial Force. This will also include provision for a funeral grant in the case of a widow or child, or widowed mother of a single member, who died in indigent circumstances.
Regulations will also be introduced to provide for a furniture gift of up to £75 in the case of a totally and permanently incapacitated member, blinded member or widow with children desirous of establishing a home.
Other benefits which will be extended to Home Service personnel enlisted for the duration of the war are medical benefits for widows and children of members whose deaths were due to war service and widowed mothers of deceased unmarried sons and also the extension of the scheme for the education and training of the children of deceased or of totally and permanently incapacitated members, and living allowances to supplement war pensions in cases of temporary total incapacity.
The living allowance to which I have referred is that payable to a soldier who is receiving 100 per cent. pension rate, but is not totally and permanently incapacitated, entitling him to the full scale of special pension. Should the member be certified by a departmental medical officer as unable to work by reason of his war disability for a period of three months, his pension is in certain circumstances supplemented by a living allowance. It is proposed to introduce a scale of payments ranging from 15s. a week for a single soldier to 24s. a week for a married soldier.
I consider that I should refer to the decision of the Government to extend the service pension scheme to the soldiers of this war. It will be remembered that this scheme was not introduced until some seventeen years afterthe termination of hostilities in the last war. The Government, however, has given full consideration to the matter, and is of opinion that it would be inequitable to withhold those benefits from those who serve in the present war. The Government, I should explain, has already given approval to the extension of service pension provisions, and the facilities for free medical treatment to sufferers from pulmonary tuberculosis not caused by war. It now desires to ask Parliament to extend the scheme to the other two classes, that is, those who served in a theatre of war, who are now permanently unemployable, and whose disabilities have not been accepted as due to war service; also, those who have attained the age of 60 years and have served in a theatre of war.
I shall briefly summarize other benefits which are contemplated in the bill -
This speech would be incomplete without a reference to certain criticism which has lately been directed at the Government and the Repatriation Commission. Several items have been selected for special reference. Briefly stated, they are as follows : -
In order that honorable members may learn the true position in regard to these matters, I intend to deal separately with each item.
The statement that in Canada the “ insurance principle “ is applied to all cases in which men are accepted as fit for service and that, in consequence, every disability suffered by a member upon discharge is accepted as being due to war service, is inaccurate in several respects. It is difficult to explain how such an obvious misunderstanding has arisen, and how the impression could have been gained bv some persons that the Canadian legislation in this particular matter is more generous than the Australian legislation. In order that the matter may be understood fully, it is necessary to go into a certain amount of detail, as it is somewhat involved. The Canadian Pensions Act, provides that, in respect of men whose service occurs in Canada only, no disability or death is pensionable unless it arose out of or was directly connected with war service. The act was amended in 1941 to impose this restriction, which took effect, from the 21st May, 1940. This amendment was brought into operation because the Canadian Government felt that it w,as unreasonable to accept the deaths and disabilities of all persons who enlisted for service in that country only, and who met with accidents or contracted a disease which would probably have arisen had they not enlisted. The Canadian Minister for Pensions, introducing the new legislation, made it clear that many thousands of men in that dominion who had enlisted for service would be living more or less normal lives ; therefore it was considered that the Government was justified in making the change. Moreover, in regard to service in Canadaa only, there is no evidence that provision exists whereby accidents occurring to members travelling to and from their place of employment shall be pensionable. Honorable members are aware that in Australia this provision does exist, and that, further, the Government intends to widen the basis of eligibility in respect of other disabilities by deleting the word “ directly “ from the term “directly attributable”, and, as I have already explained in this speech, providing for the acceptance of all physical and mental disabilities which arise from service.
In regard to aggravation of priortoenlistment disabilities, where service occurred in Canada only, as far as can bo seen from the study of that dominion’s legislation, should the disability be aggravated, a pension would be payable only for the degree of aggravation; for example if a man enlisted with a disability assessed at 50 per cent., and it was shown subsequently to have been aggravated by another 20 per cent., making a total of 70 per cent., the Canadian Government would pay a pension for 20 per cent., whereas in Australia, under the same conditions, if the member had service exceeding six months, a pension would be paid not merely for the degree of aggravation, but for the total degree of incapacity - which, in such u case, would be 70 per cent.
The misunderstanding on the part of those who are advocating the adoption of the Canadian provision probably arises as a result of section 11, 1 c. This section was inserted in the Canadian act for the purpose of ensuring that where a disability was aggravated in the case of a man who had served in a theatre of actual war, the full amount of the incapacity would be pensionable (the same as is done in Australia), but this principle would be followed only where the disability upon enlistment was not wilfully concealed, was not obvious, and was not recorded. This is practically the same principle as is observed in Australia, excepting that under the Australian act the fact that the disability was concealed, was obvious, or was recorded upon enlistment, may not necessarily prevent the payment of a full pension for the degree of incapacity if the disability was materially contributed to by service overseas. In addition, this principle is extended in Australia to include those whose service occurred wholly inside the Commonwealth under certain conditions.
It would be grossly wrong to accept the principle that every person enlisted as fit was fit, because so many disabilities or diseases are practically undiscoverable unless with the full co-operation of the enlistee. Common among these are fibrositis, neuritis, spondylitis, certain forms of kidney trouble, knee conditions, headaches, ulcers and dyspepsia, epilepsy, sinusitis, mental disorders, neuroses and stricture. I cite a few examples typical of many such cases which will, I am sure, convince any reasonable person of the inequity of adopting the principle suggested -
Case (a). - This man enlisted in the second Australian Imperial Force, -when he declared that he had no disabilities and that he was not suffering from any diseases, except that he had had an operation for varicose veins. He embarked for service overseas, but a fortnight after arrival in the Middle East, he was medically boarded and found to be suffering from epilepsy and chronic alcoholism. He was returned to Australia, medically unfit, and statements given by him to the Army Medical Board show that epilepsy and chronic alcoholism had existed for many years. He had been in the Reception House in Darlinghurst on ii. number of occasions after epileptic seizures and excessive indulgence in alcohol. He also admitted having had fits for 24 years at irregular intervals. It will be apparent that this man was not lit at the time of enlistment, and no sane person would suggest that he should receive a war pension for these disabilities.
Case (6). - This man served in the 1914-18 war and received a war pension for heart trouble. He also suffered from stomach trouble, which was considered to be unrelated to service in that war. In addition, he was in receipt of an invalid pension when he enlisted in the second Australian Imperial Force. At the time of this enlistment, he did not disclose history of ill health or the fact that he was in receipt of pensions as above. He served in England only, and was later discharged. With evidence of this nature, how could any one say that this man was fit on enlistment ?
Case (c). - This ex-soldier suffers from insanity. He did not disclose any symptoms on enlistment, although subsequent evidence revealed mental derangement on four previous occasions, with one period of three months in the Bendigo Mental Receiving Home. He did not serve overseas. The pension claim has since been rejected, as the disability was not considered to be directly attributable to his service.
Other cases exist where men in receipt of invalid pensions have been accepted, subsequently discharged with very little service, and who have claimed acceptance of their invalid pension disability as a war condition. These cases are only mentioned in order, as I said before, to show how difficult it is to depart from a system which recognizes only the conditions which actually arise on service other thai, where material aggravation occurs. It may be that the desire of those who so keenly advocate the acceptance of the socalled “ insurance “ principle is really to ensure that no soldier who has served overseas shall be refused a pension in respect of incapacity which results from something that happened during the course of his service, and I can assure honorable members that that is the intention of the Government and the commission. That principle is, of course, embodied in the Australian Soldiers Repatriation Act, and I am satisfied that it is being given effect, and has been in operation ever since 1920.
It may be of interest to honorable members to know that the procedure followed by the Repatriation Commission in determining whether material aggravation of a prior-to-enlistment disability has occurred has been closely examined and the commission’s instructions to its State branches clearly show that a most generous interpretation of this section is to be followed in relation to service in a theatre of actual war or battle zone. Briefly, the commission has decided that where a member of the forces has served in a theatre of actual war or battle zone, this in itself will be regarded as sufficient evidence that there has been material aggravation of any prior-to-enlistment disability, the main condition, of course, being that there has been no concealment or misrepresentation on the part of the member at the time of enlistment, and that a pensionable degree of incapacity exists on discharge. In all other cases where the question of aggravation is under consideration, and where the conditions referred to previously by me have not been fulfilled, the rule is to take into consideration all factors and find the answer to the question, “ Has war service worsened the prior-to,enlistment disability to a material degree?”. But in respect of the men who have seen actual battle service, this question is not even asked, but the aggravation is conceded.
In another part of this speech certain comparative figures are cited to show the numbers of pensions payable in Great Britain, Canada and Australia, in proportion to the number of persons discharged from the forces. Consideration of those figures will, I feel certain, show to any unbiased mind that it is quite obvious that if the Canadian principle included the acceptance of all such disabilities, the percentage of pensions would be much greater than that of Australia. As will be seen from the figures, however, such is not the case.
In regard to onus of proof, there has probably been more misunderstanding regarding this term than there has been regarding any other in the Australian Soldiers Repatriation Act. Actually the onus of proof is placed on .the Repatriation Commission when a case goes before the War Pensions Entitlement Appeal Tribunal, and this has operated ever since 1929. Amendments affecting this subject were made to the act in 1934 and then again in 1940. These amendments removed the onus from the appellant to make out a prima facie case in support of a claim, and the appellant is now deemed te have made out a prima facie case when he avers that the incapacity or death resulted from war service. In addition, section 39b provides that the commission shall, in the determination of appeals, act according to substantial justice and to the merits of each case and give the appellant the benefit of the doubt. The Government intends going further than this in the present bill, as has already been referred to in this speech. I have closely examined this phase of the Repatriation Commission’s activities. Before reaching a decision in any case, the commission explores every avenue with a view to obtaining a man’s complete history, both during his service and subsequent to his discharge - in many cases this has operated ever twenty years - and defrays the expenses associated with the getting of specialists’ reports, X-ray examinations, pathologists’ tests, &c, and, of course, pays sustenance to the soldier should it be necessary for him to attend hospital for diagnostic purposes.
Provision for compassionate grants exists in the Canadian Act, but I am satisfied that there is no real need for a similar one in Australia. Apart from the undesirability of departing from the recognized principle of paying pensions in respect of those conditions which are related to, or aggravated by, war service, it is contended that social legislation such as the widows’ pension scheme and invalid pension scheme in Australia removes the necessity for the introduction of the principle asked for.
This Government believes that all its fighting men are worthy of equal consideration, and does not think that it is the desire of the Australian people that special treatment should be given to those who have merited special recognition and have earned decorations and other honours on the field. The principle to be followed by this Government and the Repatriation Commission is that all who serve, and their dependants, shall be entitled to full provision in respect of the results of war service. To do otherwise would be to cause immediately undesirable controversy as to the relative merits of the service of individuals, and it must be realized that bestowal of decorations or length of service cannot be regarded as the only means of gauging the value of a man’s service to his country in time of war.
Another matter which has been raised i* that of free hospital treatment for twelve months after discharge from the forces for disabilities or diseases not due te, or aggravated by, war service, and once again the Dominion of Canada has been cited as an example. The Government has considered this question and similar requests have been dealt with from time to time by previous governments. It is, however, necessary to point out that adequate facilities exist for treatment in repatriation institutions for all time for those conditions which can be properly ascribed to war service both in respect of this war and the last. Provision of treatment as requested for all conditions, m the opinion of the Government, would not be justified.
I reiterate the remarks made earlier in this speech that prior to discharge from the service a member is given all necessary hospital treatment for a period of three months, and this period is extended to six months, and even twelve months, in certain cases, even though the disability or disease is in no way associated with war service. If at the end of this period further treatment is still required it is reasonable, I think, to ask that the ordinary civil hospital treatment be availed of which, in cases where the person is not able to pay for it, is given free in the many hospitals throughout the Commonwealth. I repeat that adequate treatment for all disabilities due to war service will continue to be made available.
So many misstatements have been made regarding the conditions operating in Canada in connexion with discharged soldiers that I do not propose to go into detail concerning the system of treatment of non-war disabilities followed there. It is grossly unfair to “ pick the eyes “ out of any legislation which may exist in other countries instead of viewing the matter as a whole. To say that Australia treats its service men less generously than” Canada is, at least, an exaggeration.
Do these people who are asking for the Canadian legislation wish the Government to bring in a bill to provide that when a soldier receiving a pension at less than 50 per cent, rate dies from other than his war disability, the pension payable to his wife shall cease and not continue on for her lifetime as is the case in Australia? Will they take the responsibility of requesting the Government to bring in a time limit- the 1st July, 1936 - in which members who did not serve in a theatre of actual war in the World War may claim a pension ? Do they wish me to fix the year 1930 as the latest date a woman may marry a man and receive a widow’s war pension in respect of the last war when there is no time limit at all existing in this country in connexion with this particular type of case?
It may interest honorable members to know that the latest advice from Canada shows that the war veterans’ allowance, known in Australia as the service pension, has not been made available to members serving in this war. Is it desired that we cancel the provision which this Government has recently brought in to provide for service pensions for tubercular soldiers, and also withdraw the provision which is made in the present bill to extend the service pension to the soldiers of this war in respect of old-age and permanent unemployability?
The fifth item is a request for a minimum increase of 50 per cent, in all war pensions. The reasons for a 50 per cent, increase in all war pension rates have not been fully explained, but it is presumed that the request must have some relation to the increased cost of living. The increase of the cost of living from 1939- 1942 amounted to 20.7 per cent., whilst the increase of the basic wage over the same period was also approximately 20 per cent., although, however, the increase of the basic wage from 1920, which was the year when the present scale of pensions was fixed, amounted to approximately 12 per cent. The Government had decided, therefore, to approve of the parliamentary committee’s recommendations in this respect, further details of which have been given in another part of this speech. I may mention, incidentally, that the increases of general pension rates as recommended by the committee are substantially the same as those asked for by soldier organizations at the time when the parliamentary committee was considering this matter.
Another matter which received considerable attention is that of allegedly low assessments of pensions. A little reflection will show that unless the system of paying lump sums for certain specific disabilities is adopted, a proportion of seemingly low assessments is inevitable. For example, no one would suggest payment of a 50 per cent, or 3.00 per cent, rate for the loss of a finger or toe or any other minor injury which would have no real effect upon a man’s earning capacity. Moreover, it is sometimes necessary to give a small assessment when entitlement is granted where there is only a negligible degree of incapacity present. Some men on discharge from the forces may show no signs of incapacity, but, giving the benefit of the doubt, acceptance is granted in order to safeguard the man’s own interests should his condition necessitate treatment in the future. Mostly, in individual cases where these small pensions are paid, it would be just as easy to refuse to grant any pension at all, but this would probably be unfair to the member. The system of granting small pensions in respect of small degrees of incapacity operates in Canada and New Zealand, but not in Great Britain, where a final award or lump sum is generally granted in. lieu of pension for all disabilities assessed at less than 20 per cent, incapacity. This
Government does not favour the granting of lump sums, as the history of these payments, which were made in Australia after the last war, does not make very pleasant reading.
It is interesting to note that 1914 war statistics show that in Canada, at the end of the year 1941-42, there were 9,600 members in receipt of pensions at the 5 per cent, rate, as against 446 in Australia.
In considering the general question of assessments it is, of course, obvious that a good part of the misunderstanding concerns cases in which the soldiers are dissatisfied with the assessment of their war pensions. I desire, therefore, to stress the fact that when men are being boarded for discharge from the services they are assessed by a service medical board, on which the commission has a representative, and the commission grants a pension at the rate so assessed. Wherever possible, any further examination for assessment purposes by a repatriation medical board is avoided, as this would necessarily make for delay in the completion of the case, and cause inconvenience and annoyance to the men who, in many cases, are absolutely fed up with the process of being boarded and medically examined, which must necessarily form a considerable part of the soldier’s life when he is about to be discharged medically unfit. Moreover, after being boarded for discharge, which is usually dated one month ahead, men are sent on leave, and sometimes proceed to remote country areas. To bring these soldiers back to the Repatriation Department’s office for additional medical examination would be to cause no end of unpleasantness, inconvenience to the soldier, and needless expense.
Delegates to the Federal Congress of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, in November last, which was attended by the acting chairman of the commission, continually referred to the necessity for accepting the assessment of these services’ discharging boards with a view to short-circuiting the procedure necessary before a grant of pension could be made. When the pension is granted by the department the man is informed of his right of appeal to an independent assessment appeal tribunal. Arrangements have been made that where such an appeal is lodged the department will review the files, particularly those having regard to in-patient and outpatienttreatment, and, where it is indicated, a fresh assessment is made so that it will not be necessary for the soldier to wait for the hearing of his case by the tribunal. It is further pointed out that Whether or not the department, after consideration of the case, increases the assessment, the soldier’s right of appeal to the tribunal is preserved. It is only reasonable to assume that from the large numbers of assessments which are made by these discharging boards some eases will arise where the soldier’s condition may deteriorate within a short time of the assessment. This cannot be avoided, but such cases are relatively few when compared with the large number dealt with. The degree of incapacity in any given case, particularly in the early stages, is subject to variation, and that is why facilities exist for the review of assessments at any time at the request of the applicant.
We hear much about these few cases of alleged under-assessment, but nothing i3 said of the many hundreds of cases -where assessments have been made which have given entire satisfaction to the soldier concerned. The fact that a man is discharged from the forces medically unfit does not mean that he is 100 per cent, incapacitated; in many cases it merely means that he is not considered by the medical board to be suitable for army life, but his earning capacity in the general labour market may not be affected materially.
It is a remarkable coincidence that in the fourth year of the last war the first Minister for Repatriation, the late Senator the Honorable E. D. Millen, introduced the original bill, as a result of which the foundation of the existing department was laid. Upon that foundation much that has been in the interests of the living soldier and his dependants, as well as the dependants of those who have passed on, has been built. Now, after a lapse of over a quarter of a century, it is my privilege to submit a bill in the fourth year of another war to amend still further the Australian Soldiers’ Repatriation Act. This bill is in a form which, in the light of certain experience, I and my colleagues of the Government consider appropriate to present to Parliament for consideration. The experience to which I refer is mainly the lessons which we have learned in watching from afar the progress of a war that is unrivalled in its intensity, its global aspects, and in the diversity and lethal power of the weapons. Aud while watching we have become conscious of those things which are due to the men who, in their youth and vigour, go forward on our behalf, to fight for, all that. this Parliament stands for in justice, fair dealing, and the freedoms which mean so much to us who are proud of our liberties. Those real men who have fought the enemy in battle, on the land, on the sea or in the air, and those who have given their lives and health in so doing, have an entitlement, which Parliament recognizes, to compensation for the prejudice which Avar has imposed upon them and their dependants. The first step in meeting the nation’s obligation is to provide a pension which will adequately compensate a man for any physical or mental damage which he has suffered as a result of his war service, and also to ensure that the rate payable to the widows and children will provide for them the normal amenities of life.
It would be so pleasant far me to submit a bill which would allow money to be dealt out with both hands, but in this and other things we have to be practical. So far as war pensions are concerned, we have the existing rates provided by the act, and we know of old that no matter what is suggested above those rates, some one will consider that the increase should be even higher. Some one will then say that it should be still higher. It has already been said publicly that the increases which the bill includes should be doubled. But may I remind honorable members that this is not an auction sale whereat the highest bidder obtains something, and, in this instance, the greatest acclaim. And it would not be out of place to suggest that we, who have been associated with the department which has heen charged with the responsibility of administering the benefits under the act, are likely to have a knowledge of what is befitting, and that those who have the task of finding funds and allocating them know what is possible in the matter of finance. In this House there are numerous honorable members who in the capacity of Treasurer have held the financial reins, and also many others who have served as Minister for Repatriation. It would not be remarkable for me to seek the co-operation of all those honorable members especially, in effecting the passage of this important bill. This I do. And, in so doing, I say to them and to all honorable members that provisions for soldiers should not become now or at any time a matter of politics. I mean what I say and nothing more. Your sons and my sons, and the sons of men like you and me throughout this country have gone into the Services in this war. The sisters of those boys have gone into the women’s auxiliaries of the Forces. And the mothers of those boys and girls await with longing the satisfactory termination of the war; the wives look forward to the return of their husbands; the children yearn for their fathers. It would be hurtful to these people to read or to hear that when the national legislature debated a bill to make provision for such damage as war may cause to the physical well-being of their menfolk, or for those who may, through war service, become widows or orphans, unpleasantness was evident. The Government is grateful to the men who are serving or have served in the Forces, and I am sure that our friends of the Opposition are no less grateful. It appears to me that as we, as a nation, repose our faith in these men of ours, and in those other men who in the rest of the Empire have donned the King’s uniform, and also in our gallant allies who are just as determined as we are to throw off those frightful things which menace us all, we must have no disunity. Unity means that our common enemies will be beaten, and soundly beaten at that. This suggests to me, and I am sure that it is also suggested to each honorable member, that in honour of the valiant men and women, whether wearing uniforms or not, who have felt the impact of hateful war, this bill should receive careful and close consideration. But let it not be cause for disunity or recrimination. Therefore, I ask that the House, with the dignity due to the purpose of the bill, shall facilitate its passage so that those benefits which it aims to provide may be made available as speedily as possible.
Debate (on motion by Mr. Francis) adjourned.
– by leave - read a copy of the statement made in the Senate by the Minister for Trade and Customs (vide page 747).
Order of the day No. 2 - Commonwealth Bank Bill 1942 - Second Reading - Resumption of debate - read and discharged.
Motion (by Mr. Chifley) - by leave - agreed to -
That leave be given to bring in a bill for an Act to amend thu Commonwealth Bank Act 1911-1932, and for other purposes.
Bill presented, and read a first time.
– by leave - I move -
That the bill be now read a second time.
In September last, in accordance with an undertaking given by the Government, I introduced a bill for the establishment of a mortgage bank department of the Commonwealth Bank. By arrangement between the Prime Minister (Mr. Curtin) and the Leader of the Opposition (Mr. Fadden) a special committee, representative of both Houses of the Parliament, was appointed to consider and report upon the provisions of that bill. After considerable discussion the committee decided to recommend certain alterations to the bill which were set out in its majority report, dated the 11th February, 1943, and laid on the table of the House on Friday last. The Government has decided to adopt the recommendations in that report.
In view of the number of alterations that would have been necessary to bring into line with the committee’s recommendations the bill that was presented to the House last September, I thought it preferable to withdraw that measure and introduce the present amended bill in its place. For the convenience of honorable members a memorandum has been circulated showing the manner in which the present bill differs from that of last year.
I do not propose to repeat the remarks that I made in my second-reading speech on the original bill, but I ask honorable members to take that speech as being also applicable to the present bill, subject, to any modifications, necessitated by the amendments that have been made.
In accordance with the committee’s” recommendations the Government has seen fit to vary the period in respect of which loans may be made from a minimum of three years to a minimum of five years, and from a maximum of 35 years to a maximum of 41 years. The object of this bill is to provide long-term loans to primary producers. It is considered that existing facilities for short-term loans are ample to meet the demands for such loans and that the minimum period for loans, in respect of which this mortgage bank department should cater, should be five years. The maximum period was extended to 41 years in order to provide for the repayment of a loan over the full period by an amortization payment of 1 per cent, per annum.
Provisions have also been made in the bill for the repayment of loans by halfyearly instalments, the minimum halfyearly instalment being one-half of 1 per cent, and to enable a borrower to repay his loan in full prior to maturity, or to pay to the bank, from time to time, any sums in excess of repayments provided for in the mortgage, which moneys may be applied in reduction of a loan.
A further important alteration that has been made is contained in section 60aby. It increases the upper limit to which loans may be made from £4,000 to £5,000 and increases the percentage of the amount of the loan to the value of the property from 60 per cent, to 66§ per cent. This will considerably increase the scope of operations of the mortgage bank department.
.-I am glad to say that the Opposition will give general support to this hill. All political parties, and all sections of the community, recognize to-day that the establishment of a service to provide long-term credit to our land industries is much overdue. Such provision is an unquestionable necessity. I agree with the procedure of the Treasurer (Mr. Chifley) in moving for the discharge of the. Commonwealth Bank Bill, which was introduced last year, and substituting for it the bill which he has just introduced. The new bill incorporates the recommendations of a special committee of honorable senators and honorable members appointed by the Government to report upon the bill introduced last year and upon the subject generally.
The subject-matter of this measure has been discussed for many years. For a long time prior to my entry into this Parliament I advocated the . establishment of a mortgage bank, and I have consistently done so since my election in 1934. One of my first acts in this Parliament was to move for the appointment of a royal commission to inquire into the reform of the banking and monetary systems, including the possible structure of a mortgage bank. Such a royal commission was appointed and the Treasurer was a member of it. ‘The commission recommended to the government of the day that a mortgage bank should be established, and the recommendation was accepted by the Lyons Government. In 1938 a bill was introduced into this Parliament ‘by the former Treasurer, Mr. Casey, and broadly upon the structure of that bill this measure has been modelled. In view of the historical link between what is being done now with what was done by previous governments supported by honorable members now on this side of the chamber, it is easy for the Opposition to support this bill, particularly as members of the Opposition sat on the committee whose recommendations are incorporated in the bill. I am therefore able to say that the Opposition gives its general blessing to the measure.
It lias become crystal clear through the years, ‘because of the bitter experiences of those engaged in the land industries in Australia, that an assured lending authority, competent to make long-term advances on fixed mortgage, has become an urgent necessity in this country. Certain financial requirements of the land industries are, in fact, peculiar to them. These industries rely more upon capita! credit than do any other major industries. “Whilst this is true of land industries in other countries, it is particularly true of them in a new country such as Australia, where much of the agricultural and pastoral land is still in the course of development, and in the process of being carved, almost from its primeval state, into areas suitable for cultivation under conditions which meet the requirements of modern civilization.
– That is, where the land is not being carried away into the sca by erosion.
– Quite so. This development is also needed in respect of lands that are now in the course of transfer from Crown ownership to private, ownership. On such properties a continuous capital expenditure is necessary because, in many instances, the land is still -being cleared and fenced, and is being provided with the water services or being sown down to permanent pastures, or planted with vines or trees, or, in other ways, converted to horticultural uses. Irrigation schemes are necessary in many districts in order to develop the land and put it to its best use. Homes are still being built throughout the length and , breadth of the continent for the owners of properties, and, in all too few instances, adequate homes are also being provided for the employees of owners. All this normal and proper process of development necessitates long-term credits. It is true, not only in the broadest sense, that these agricultural and pastoral industries require such credits, but also that, in proportion to the number of men employed and the value of annual producton, they lean upon capital credit to a greater degree than do any other industries. As we all know, they are subject to far more violent seasonal fluctuations and consequent fluctuations of the annual incomes of those engaged in them than are any other industries. Another circumstance which is peculiar to them is that in large measure they are dependent upon export for the disposal of a high proportion of their output. The proportion would be 50 per cent, or even higher in some rural industries. I am now, of course, directing my observations to the conditions of normal times. The wool, wheat, dairying and other primary industries have depended, and in the future will continue to depend, upon overseas markets in the United Kingdom and foreign countries for the disposal of this high proportion of their production. In the majority of foreign lands, if not in all of them, the standard of living is lower than in Australia; certainly, the base valuation of primary products is lower. Almost without exception, these Australian industries have to dispose of a substantial proportion of their products in markets in which they can exercise no control over the prevailing price levels; and in the very nature of things it is to be expected that the prevailing price levels will be low. These circumstances, collectively, establish beyond argument the necessity for not only an ever-present institution for the purpose of making long-term loans, but also, and in equal degree, for these credit requirements to be available at as low a cost as possible, by which I mean as low a rate of interest as can be fixed. Because in this country so many of those engaged in the land industries are for the first time in their lives embarking upon their own enterprise, this fact, and the other circumstances in relation to development to which I have referred, make it necessary that there shall be available a source of loans on as high a ratio to the value of the property as can prudently be established. All of these features combine to establish the necessity for not only this credit provision, but also an arrangement under which those who avail themselves of it shall be enabled to discharge their debt over a very long period; because, whereas in normal businesses - in which the volume of the turnover and the number of employees engaged are large in relation to the capital invested - it is possible for the profits to be large in relation to the capital invested and the debt incurred, in the land industries, on the other hand, -because of the circumstances to which I have referred, it would be, to state the position mildly, unlikely and unusual for the annual profits to be large in relation to the capital debt incurred. On account of the violent fluctuations of price levels and seasonal conditions, unquestionably those who borrow in order to engage in such industries must have provided for them an opportunity to liquidate their indebtedness over a long period. Of course, the disadvantage which has confronted those who are engaged in these industries has been the absence of those facilities, the necessity for which I have endeavoured to establish.
Let us examine the sources which hitherto have been, and at present are, the only sources available for borrowing by those who are engaged in these industries. They number two. One is an overdraft from the trading bank, and the other the customary fixed mortgage - which inevitably has a short term. It is not to be denied that considerable advantages accrue to the borrower who avails himself of the overdraft advance from a trading bank because the interest is calculated on the daily balance. Unquestionably, the great advantage of that system is that a man engaged in a primary industry is able to make a substantial reduction of his overdraft at certain seasons, and an equivalent diminution of his interest obligation, from the return from his harvest, his woolclip, his fruit, and so on. On the contrary, there are disadvantages which more than counter-balance that advantage. Such a borrower has no capacity, and no expectation of being able, to liquidate his debt at an early date. He borrows by means of an overdraft from a lender who has the right to demand the repayment of the money at any time. There are scores of thousands of farmers in Australia to-day who have pledged the whole of their assets as security for advances which may legally be called in at any time, although in actual fact the borrowers have no prospect whatever of being able to discharge their debts at an early date. If these contracts were harshly enforced by the lenders, a chaotic state of affairs would result, and the fact that that has not happened is a tribute to the bona fides of the trading banks. The money which t]ie trading banks lend on overdraft has been deposited with them by the public for short terms, rarely more than two years. Therefore, it is unfair to expect the banks to lend out this money on longterm mortgages. It has never been the practice to do so in Australia, but in other countries it has been done, and from time to time there have been epidemics of bank failures when the public have sought to withdraw their shortterm deposits. Although I am criticizing the system of borrowing on overdraft for this particular purpose, I am not criticizing the banks themselves. They are performing an essential service to the community, and they cannot be charged with neglect of duty because they have refrained from making long-term loans out of funds which they themselves hold as short-term deposits. However, in the nature of things, there must come- a cycle of bad seasons, when the incomes of the banks’ farmer clients decline; or, with the same unfortunate regularity, there are slumps in the prices of the primary products. A period of deflation begins, land values fall, and, as a natural corollary, bank deposits are withdrawn, so that the banks find it necessary to press clients to reduce their overdrafts. Thus we arrive at an unfortunate and intolerable combination of circumstances; the farmer client of the bank is pressed ta reduce his overdraft at the very moment that he is least able to do so.
The only present alternative to borrowing on overdraft is the short-term mortgage, the money being borrowed either from a private lender or from some institution, such as an insurance company or a trustee company, which holds investment fluids. The money is lent on first mortgage, and, with few exceptions, at a moderate rate of interest, having regard to the ruling rate. Because of the circumstances of the lender, such loans are necessarily for short terms, ranging from two to five years. Very few are for longer terms than five years. Under this system, the borrower does not face the possibility of having the money called up at any time, but he may still find himself in a difficult position when the term of the loan expires. A private lender may, for personal reasons be unable to renew the loan; or, in the case of a financial institution, renewal may be against policy. If prices for the product raised on the land concerned have been had for a number of seasons, the lender may feel that it is prudent to call upon the borrower to reduce the amount of the loan, and that at a time when the borrower is least able to find the money. My criticism of the short-term mortgage system is not to be interpreted as a charge of harshness against the private or institutional mortgagee; the disability of the borrower results from the compelling circumstances of the lender. The depression years showed to the world the terrible hardship that results from the shortcomings of the system. As the result, governments were obliged in the period of the depression to direct their attention to the problems of the mortgagors, and all the governments of Australia have made it pretty clear that a general policy in Australia will be that when borrowers in rural industries fall into trouble in respect of payment of the interest on loans or the repayment of loans, the good offices of the government will be directed to aiding him rather than protecting the lender. Ear from offering any criticism of that policy, I have advocated it. But its application has to a very great degree dried up the sources of loans. In the last decade we have seen the spectacle of many thousands of private lenders and institutional lenders being unable, because of government moratoriums, to repossess themselves of their loans. That has resulted in a reduction of the public estimate of the virtues of lending money on the security of rural land, with a concurrent growing unwillingness of private persons, particularly trustees of estates, and institutions to tie up funds in private loans; whereas, a decade ago, it was the common practice for trustees and insurance companies and the like to lend substantial parts of their investment funds on first mortgage on country lands. There is a noticeable swing which is likely to continue towards lending on city and suburban lands rather than country lands. If for no other reason than that it is necessary for governments to provide for those engaged in rural industries not only a better means of credit, but also a substitute for those private and institutional sources which to such a substantial deg.vee have dried up.
I do not propose now to deal at great length with the details of this measure, because I shall have an opportunity to do so when the bill is taken into committee. I shall content myself with some general observations, particularly about the recommendations of the allparty committee that was appointed by the Ministry to consider the bill which was withdrawn to-day. That committee performed a very useful function; its deliberations and recommendations have resulted in a substantial liberalization of the provisions of the original measure which was astonishingly conservative. I am glad that the Treasurer and his colleagues have found it possible to heed the recommendations of the all-party committee, and to bring down a more liberal measure.
Digressing slightly, I may say that I thought that the public advocacy by the honorable member for Wimmera (Mr. Wilson) of the establishment of a mortgage bank and his undoubted influence, both in Parliament and with the Government at the present time, due to the Government’s dependence on his support would have affected the structure of the Government’s first proposal to establish a mortgage bank. I have the clearest recollection of the Deputy Prime Minister, the honorable member for Capricornia (Mr. Forde), standing where I stand to-day and making a speech on a censure motion directed against the then government’s conduct of the war. The honorable member made scarcely a reference to the war, but dealt exhaustively with the unquestionable and immediate necessity to establish a mortgage bank which would fulfil all the publicly stated requirements of the honorable member for Wimmera. Those of us who are able to evaluate properly things which occur here were not in the slightest doubt that the honorable member’s speech was directed, not to honorable members generally, but to the honorable member for Wimmera, and was calculated to influencehis vote on the censure motion. lt was, in fact, a public demonstration by the honorable member for Capricornia of the readiness of his party to pay a part of the price of achieving office. I was surprised that that debt could so easily be discharged as by bringing down a measure of the most extraordinary conservatism. When I read it I wondered whether Mr. Montagu Norman had been brought to Australia to aid in its drafting. The label “ Conservative “ is placed on honorable members on this side of the House rather than on the Labour party. Well, we brought down a proposal for the establishment of a mortgage bank which would make advances of 662/3 per cent. against the Commonwealth Bank’s valuation of the property, but the proposal of this Government, which I expected would, in framing its legislation, have some regard for the requirements of the honorable member for Wimmera, provided that no advance would exceed 60 per cent. of the valuation made by the Commonwealth Bank. Certain other features made that bill fall far short of the wishes of those who hoped to see a really effective measure placed on the statute-book. But that is now history.
The recommendations of the all-party committee, over which the Treasurer presided, fell upon fertile ground. The new legislation contains some important changes. For example, the maximum amount that may be borrowed has been increased from £4,000 to £5,000, and the percentage of the advance that may be made against the bank’s valuation has been raised from 60 per cent. to 662/3 per cent. These variations are most important to prospective borrowers, and they also bring within the scope of the bill additional properties, which otherwise would have been excluded. Under the original proposal to advance a maximum sum of £4,000 on 60 per cent. of the bank’s valuation, only properties of a value of £6,666 or less could be brought within the scope of the measure. But under the new proposal for a maximum advance of £5,000 on the basis of662/3 per cent. of the bank’s valuation, properties up to a value of £7,500 are now included.
– That will be on the bank’s valuation.
– Yes. I congratulate the Government upon its willing acceptance of those recommendations, because they greatly improve the measure.
In like manner, the period of amortization has been raised from 35 years to a maximum of 41 years. That figure has been reached by a calculation backwards from the period necessary to amortize the capital lent upon a basis of 1 per cent. until repayment, and it appears to me that 41 years is quite reasonable. By their very nature, the rural industries are unable to sustain repayment of capital borrowings in a short period, and a mortgagor should not be driven to contemplate the repayment of borrowed capital over a longer period than the working life of the borrower. A period of 41 years seems to bear some relationship to what one may describe as “ the working life of the borrower “. In addition to the reduction of the capital by amortization, the borrower will be permitted further to reduce his borrowings at halfyearly periods by payments as low as . 5 per cent. of the amount borrowed. Furthermore, the borrower will be permitted to repay the whole of the loan after the expiration of five years, which is a reasonable period. It would be an abrogation of the purpose of this measure if credits could be made available to borrowers on a 41-year basis, but could be repaid within a period of a few months. That would inevitably result in the use of the facilities of the bank by speculators, and the consequent diversion of funds from bona fide borrowers. I concur with the introduction of a minimum period, short of which a borrower will not be permitted to repay the loan but beyond which he will be enabled to discharge the whole of the loan.
– What will be the position of the bank if the borrower neglects the property ?
– That will be an administrative problem of the bank. The institution will no doubt protect itself against that possibility in the drafting of the mortgage documents, and by periodical inspections of the land. I have no doubt that the Commonwealth Bank will he able to deal with that possibility. The general capital structure of the bank will be provided by establishing a fund of £4,000,000.
– That is not enough.
– Of course, that does not indicate the ultimate funds which will be available to the bank for the purpose of making loans. The money will be provided by the transfer of £1,000,000 from the special reserve now held in the Note Issue Department, which is a part of the premium received by the Commonwealth Bank from the sale of gold. To that sum will be added one-quarter of the profits of the general banking department of the Commonwealth Bank, estimated at not less than £100,000 per annum, and £150,000 per annum from the profits of the Note Issue Department. In addition, funds will be made available by way of advances from the general department of the bank, not exceeding £1,000,000, together with such advances from the investable funds of the savings bank department as the board may determine. These provisions appear to be very proper, and, broadly, they are in line with the provisions of the bill introduced by a former Treasurer, Mr. Casey, in 1938. In addition to the amount to which I have referred, funds will be provided by the Commonwealth Treasury, which will allocate to the Commonwealth Bank moneys for this purpose. That is a satisfactory association of influence and responsibility.
One highly important aspect of this provision is not dealt with in the legislation. I refer to the rate of interest to be charged on loans. The rate should be as low as can possibly be provided. The Treasurer, in his second-reading speech on the original bill, said that he hoped or expected - I am not sure which -that loans would be available at 4 per cent. I hope that the honorable gentleman will be able to say something in the later stages of the debate on the bill to indicate clearly that that is the intention of the Government. As I interpret the intention of the Government, which, of course, will become the intention of the Parliament if the bill be passed, it is that funds shall be made available to borrowers at the rate of interest prevailing for normal govern ment loans of a like duration, plus some loading for administrative charges.
– That is correct.
– Should there not also be included a figure that has some relation to Ohe risks involved?
– In the broad sense the administrative loading to which I have referred would cover such risks. I shall be glad if, at a later stage of the debate, the Treasurer will make this point clear, in words of his own choice. His remarks will then be a policy guide to the authorities administering the law. I hope, also, that it will be the policy of the present Government and of succeeding governments to be liberal in making funds available to the mortgage department of the bank, so that the conduct of its business will not be hampered by shortage of funds.
The report of the special committee contained a paragraph concerning the policy aspect of this subject which, of course, could not be stated in the statute itself. It reads as follows: -
The committee desires to express its view that the objective to be attained in lending policy should be to assist those cases, having an approved margin of security as provided in the bill, most deserving of assistance and not necessarily because the individual applicant has the best financial margin of security.
I trust that the Treasurer will make some reference to this aspect of the subject, also, at a later stage of the debate. As one who had some responsibility for the framing of that passage of the report, I wish to explain my interpretation of it. It was in the minds of the members of the committee - and I hope that it will be clearly shown that it is in the mind of the Government, and, consequently, that it is the intention of the Parliament - to provide that, as a matter of policy, the practice of this department of the bank will not be comparable in any way with the cold-blooded normal banking practice which is determined by the objective of direct profit-making. Normally, profit-making is a legitimate objective of banks; but it should not be the objective of this department of the Commonwealth Bank. There should be a different approach in the selection of prospective clients of this department of the bank. Normally, a bank selects its prospective clients with an eye to the soundness of their financial position, and it chooses the financially soundest of those who approach it, because they are least likely to involve it in loss. Such a practice is beyond criticism in ordinary banking business. If one prospective client measures up more satisfactorily, in this respect, than does another prospective client, it is unquestionably sound banking policy for the bank to choose the former. But such a man, in consequence of his ability to borrow money from alternative sources, would approach the mortgage bank department of the Commonwealth Bank principally because he could obtain money more cheaply from it than probably from any other source, and he would be within his rights in doing so. Every man naturally tries to obtain money at the lowest possible rate of interest, because thereby additional profit will be shown on hisannual balancesheet. If, however, the mortgage bank department of the Commonwealth Bank uses such a measuring stick in selecting its clients the whole intention of this legislation will be abrogated. I do not suggest, of course, that funds should be made available to the least stable applicants.
– Or to applicants who are already almost bankrupt.
– Not at all; such a practice would be ridiculous and irresponsible.
– Is the honorable member suggesting that the mortgage department of the Commonwealth Bank should accept responsibility for the bad accounts, and leave the better accounts for the private banking institutions?
– I am not. In this respect the Commonwealth Bank would have, as its cover, not only the prudence and skill of its own administrators, but, also under this legislation, the provision that advances shall not be made in excess of 662/3 per cent. of the value of the borrower’s security, as assessed by the bank’s own valuers. That surely must establish a sound basis for operation. What I am saying is that, within the range of its selective option, the mortgage department should not select the most financial among its prospective clients. I suggest that the policy of the mortgage department of the bank should be this: Hav ing first satisfied itself that the desired loan did not exceed 662/3 per cent. of its own valuation, and then having satisfied itself of the probity, responsibility, energy and experience of the prospective borrowers, it should not vitiate the intentions of the legislature by superimposing a further consideration as to the financial stability of the persons applying for loans, and on that consideration, select the most satisfactory banking risks. I hope that the Treasurer will comment upon that aspect when he makes his reply to the debate.
In general terms, this is a good proposal. It has long been necessary. It will establish what the majority of other countries have already established, namely, a government institution to engage in long-term rural lending. There are those who will say that the plan is too circumscribed, in that the funds are to be loaned only upon rural lands. I agree that an equally forceful case could be put for the establishment of facilities for borrowing for purposes other than the conduct of rural industries. It is beyond question that there is need in this country for comparable facilities that would enable the wage-earner and the self-employed person to build and own a home or to establish himself in a business or enterprise other than a land industry. I recognize, however, that the whole of the circumstances of war - the shortage of men and material, and the lack of finance - make it impossible to contemplate the inauguration of a nationwide home-building project, the stimulation of new businesses, or the expansion of existing businesses. These will be essential ingredients of any policy to grapple with the post-war problems of this country. I do not imply that plans for the establishment of credit facilities to deal with such requirements should be deferred until the termination of the war. I confidently expect that the Treasurer, as Minister of State for Post-war Reconstruction, will direct his thoughts to the provision of comparable credit and ancillary facilities in connexion with a nation-wide home-building scheme and the other matters I have mentioned. Their incorporation in a legislative proposal of this character is not necessary. It is reasonable that this matter should be confined to land industries; because, whilst the expansion of such industries will not be substantially stimulated as a result, those who are engaged in them should have the opportunity to escape from the position which I outlined earlier. Having borrowed in order to conduct an enterprise which, because of its very nature, has no hope of returning profits which would make possible the amortization of the loan within a short period, it is necessary to substitute for the existing shortterm loans something such as is proposed by this legislation. Therefore, I give the measure my support. The influence that the Opposition generally, and I, personally, can exert will be used in order to ensure that there shall be planned, in the very near future, and established immediately after peace arrives, a comparable facility which will enable credit to be obtained by other sections of the community.
– Will this help a large number of those who have asked for it?
– I believe that it will aid a large number. I am pleased to give general support to the measure. Perhaps I shall offer further observations at the committee stage.
.- 1 am pleased to be associated with a Government that has introduced this long-awaited legislation. Although we are at the height of the greatest war in which Australia has engaged, it is gratifying to find the Treasurer (Mr. Chifley) bringing down legislation for the relief of the long-suffering primary producers. The matter has been exhaustively investigated by the committee which recommended certain of the provisions of the measure. I regret that it did not recommend that the rate of interest to be charged should not exceed 2 per cent, or 2i per cent. The overcapitalization of land, coupled with the high rates of interest, is the great burden of every primary producer. The Treasurer has intimated that the rate of interest will be approximately 4 per cent. That is altogether too high. I may be unorthodox in my views upon finance, but I consider that orthodox finance has been responsible foi- the world having reached the condition in which it is now placed. A beginning has to be made along new lines of finance and credit, and the present is an opportune time to establish a mortgage bank with credit made available from the Commonwealth Bank at not more than 1-J per cent. All of us know that money was made available for the rehabilitation of many primary producers, particularly wheatgrowers, at an interest rate of 1 per cent. If money could be lent at 1 per cent, for that purpose, why cannot it be lent at the same rate under this scheme? If the primary producers of Australia are ever to be put on their feet, there must be a system of cheap loans, coupled with guaranteed prices for primary products. 1 congratulate the Treasurer upon having introduced this measure at this time. When the present Opposition was in power, I asked when it was intended to bring in legislation to establish a mortgage bank, and I was told by the then Treasurer (Mr. Fadden) that, because of the demands of the war, no money could be made available for such a scheme. The present bill is a big improvement on the previous one, but does not go far enough, particularly the provision raising the maximum loan from £4,000 to £5,000. At the present prices of primary products, I do not think that the farmers can make a, success of their undertakings unless they can borrow at a low rate of interest. When a man goes to a private bank for an overdraft, he has to pledge his property and almost his life for the promise of something which does not actually exist. That bank credit is created out of nothing is proved by the evidence of all leading bankers in England before the McMillan commission in 1935. It was proved before the Royal Commission on Banking that the farmers owed to the banks a total of £290,000,000, although at that time there was only £60,000,000 in money in Australia. Obviously, the private banks were creating credit out of nothing, for which they were charging interest, and if the private banks can do that, surely the national bank can do it on the strength of the best security in the country, namely, the land, the source of all natural wealth. The honorable member for Indi (Mr. McEwen) said that there was little inclination at the present time to invest money in land. That is not surprising when we consider the unfavorable conditions which those on the land have to endure. The drift from the country to the city is perfectly natural, and will continue until those on the land are given a fair deal. If there was ever justification for using the national credit, it is now, for the purpose of assisting the primary producers. I am very disappointed that the proposed rate of interest has not been fixed at, say, 2^ per cent. A rate of li per cent, would pay all expenses, and another 1 per cent, could go into a sinking fund for the repayment of the loan. I hope that the Treasurer will use his influence with the Commonwealth Bank Board to have the rate of interest fixed at not more than 2£ per cent.
.- After many years of delay we have at last before us a ‘bill for the creation of a mortgage bank. The proposal to establish a long-term mortgage bank originated in 1936 when the Royal Commission on Banking and Monetary Systems visited Western Australia, and Mr. Faulkiner of the Primary Producers Association, gave evidence in which he advocated a system of long-term loans for financing those engaged in rural industry. Mr. Faulkiner had studied this system of banking in other countries, and I think he was able to impress the members of the commission with the force of his arguments. The Treasurer (Mr. Chifley) was a member of that commission, and will no doubt remember Mr. Faulkiner’s evidence. He resided in my district, and I heard from him a great deal about the advantages of a mortgage bank long before I ever thought that I should be a member of this Parliament. The introduction of this bill must have given him great satisfaction.
One of the worst features of overdrafts at call is that the borrowers have no security of tenure. This has a bad moral effect on those who spend their lives in developing, clearing and fencing their land, and in providing water supplies. They never know upon what day they may be dispossessed of their properties. The money from their products comes in only about three times a year - when they sell their wheat, their sheep and their wool. It may happen that a man cannot meet his commitments on the due date, and if a buyer is prepared to offer a good price for the property, it is sold and the occupier is turned out. I hope that, in the future, the system of longterms loans will be extended to meet the needs of home-builders and those engaged in secondary industries in a small way. The provision for amortization is excellent. I do not agree that a maximum advance of 66$- per cent, on the value of property is sufficient. If 66f per cent, is advanced in the beginning, the indebtedness will be reduced under the repayment system to less than 55 per cent, in five years. Therefore 66f per cent, would not be a generous advance to make. Since the debt will be amortized over 41 years the maximum advance could easily be 70 per cent. I fear that for a long time to come the mortgage bank will not be able to do very much good, owing to the small amount of capital that will be available to it, and having regard to the enormous debt of the primary industries. Wheat-growers alone owe about £160,000,000. A capital of £4,000,000 will not allow the mortgage bank to operate very widely. I realize that it will have other sources of revenue, for instance the savings bank and the note issue.
– The honorable member overlooks the fact that the Treasurer will provide the funds. The capital of £4,000,000 will be only a small part of the funds at the disposal of the bank. They may easily amount to, say, £140,000,000.
– The bill says that the Treasurer may provide funds. Why place such a limitation in the bill? I should like the Treasurer to say as nearly as he can what the rate of interest will be in addition to the amortization fee of 1 per cent. I agree that the rate of interest charged should be no higher than that which the Government itself is prepared to pay on the public loans, plus sufficient to cover the administrative costs. I welcome this bill, which will alleviate many of the worries of the primary producers and their families, who do not know from day to day when they will be dispossessed. The state of insecurity in which they live does not improve the morale of those who are charged with producing the foodstuffs of the nation.
– Nor do the excessive interest rates.
– The rates of interest have been enormously high and have had no relation to the part that money plays in the development of Australia. 1 have had to pay8½ per cent. on money borrowed in order to develop my farm, and in bad seasons I have not had a return of8½ per cent. There is, therefore, no relationship between the price which primary producers have to pay for borrowed money and what that money earns.
– The honorable member will be converted to socialism.
– No; at any rate not to the honorable member’s kind of socialism. The honorable member would like to socialize the wheat industry one day, but I hope that that day will never arise.
Sitting suspended from 6.15 to 8 p.m.
– Primary producers who were fortunate enough to secure long-term mortgages, enjoy greater security of tenure than other primary producers with overdrafts renewable from day to day. In the near future, Parliament will be called upon to consider the adjustment of secured debts in rural industries. The adjustment will have to be made according to the productive capacity of a property. Earlier, I pointed out that one of the greatest burdens that primary producers have been obliged to bear is that of interest rates. Although primary producers have actually repaid the principal over and over, the debts remain undischarged. These debts should, in fairness, be adjusted for the purpose of enabling a large section of primary producers to take advantage of the provisions of this bill.
I sincerely hope that the bank will not compete with State instrumentalities such as the Agricultural Bank of Western Australia, by taking their good clients and leaving with them their doubtful clients. The closest cooperation should exist between the State banks and the Commonwealth Mortgage Bank.
At this stage, I announce my intention to move in committee an amendment for the purpose of increasing the maximum advance from 662/3 per cent. to 70 per cent. of the bank’s valuation of the security. My reason is that long-term mortgage banking, with amortization fee, differs greatly from the system of banking which has operated in the Commonwealth in the past. The element of risk in a long-term mortgage bank is not so great as it is in ordinary banking practice, because from the first year the debt will be steadily reduced. The amortization fee will be about 1 per cent. In view of the fact that the client will begin to redeem the debt from the first year that he opens his account with the bank, I contend that 70 per cent. is not an unreasonable or unsafe advance for the bank to make. After all, the bank will place the valuation upon the security.
– Is the difference of 31/3 per cent. important?
– It may debar a primary producer from deriving the benefits of this legislation. That statement applies particularly to Western Australia, where agriculture is in its infancy compared with the older settled States. Only in the last 30 years has any great progress been made in Western Australia. Although the farms are fairly large, they are not fully developed. Big areas still remain to be cleared, and they have not the same carrying capacity as have the longer established properties. Many improvements which have been effected in the past few years carry a greater burden of debt, on an average, than do farms in the older settled communities of other States. Whilst the difference of31/3 per cent. may not appear important to the honorable member for Parkes (Sir Charles Marr), it will mean a great deal to settlers in Western Australia.
.- If a person were not familiar with the names of Commonwealth electorates, he could be forgiven for referring to the honorable member for Indi (Mr. McEwen) as the honorable member for India. His conception of rural finance, and the ideas that he ventilated this afternoon, would be more acceptable to the people of India than to his electors. A parliamentary committee carefully considered the provisions of the Commonwealth Bank Bill and submitted to the Government a majority report and a minority report. The latter, which is signed by Senator Allan MacDonald, is worthy of attention. It reads -
With the threat of invasion hanging over our heads necessitating the employment of all man and money power to the task of building up our fighting machine, I consider this is not the time to introduce a proposal for the formation of a mortgage bank. I would prefer to sec this matter left over until the post-war reconstruction period, and the necessary capital required plus the trained man-power should be applied to first-priority war work.
I am sure that the gentlemen who examined the resources of the Commonwealth had ample opportunity to judge whether they could be employed at the present time to establish a mortgage bank of the type which primary producers require. The majority report recognizes the necessity for establishing the bank, though the recommendations fall short of requirements if anything substantial is to be done to supplement the assistance to primary producers given by existing financial institutions. Referring to State instrumentalities, the report reads -
The Committee is of the opinion that whilst every effort should be made to use State instrumentalities, it would not bo in the capacity of the principals, and recommends that provision be made in the bill for the Commonwealth Bank, with the consent of the Treasurer, to enter into arrangements with any authority of a State for the performance by the authority of such functions of the bank as are specified in the agreement.
The provisions of this bill compare unfavorably with the terms and conditions granted by existing State banking institutions. The Commonwealth mortgage bank would receive scant support if State instrumentalities told their customers, “ If you do not want the favorable terms which you are now enjoying, we shall give you unfavorable terms “. That would be an absurd proposition to place before a customer, but that, in effect, is what customers will be told.
Mr.Lazzarini. - The bill provides that the advance shall not exceed 662/3 per cent. of the valuation.
– Is the recommendation of the committee on this matter incorporated in the bill?
– The committee was not unanimous on the point.
– Are we to accept only those sections on which the committee was unanimous, and leave Parliament to make decisions on matters in respect of which the committee was not unanimous? The majority of the committee expressed the opinion that the proposed limit of 60 per cent. was too low, but made no specific recommendation.
A customer who, having rejected a certain proposition from a bank manager one evening, went back to him next morning and was offered a less favorable proposal would consider that the bank manager had a “ hangover “ from the night before ! The Rural Bank of New SouthWales offers loans of up to 66 per cent. of the value of a property for a 30-year term at 4¾ per cent., including interest and amortization. Those are better terms than will be offered under this bill, for the rate of interest under this scheme will be 4 per cent., plus 1 per cent. amortization, making 5 per cent. in all. This measure is inadequate to meet the needs of the man on the land who requires help. If the idea behind this measure is mainly to establish the principle of a mortgagebank department of the Commonwealth Bank, with the hope of some future development, I am sure that honorable members will adopt it. As a means of providing immediate financial help under easy terms for primary producers in need of such help, the scheme of this bill must be regarded as ineffective.
When the wheat industry was being discussed in this House last week and early this week the consensus of opinion was clearly that the farmers were in a much more difficult financial position than persons engaged in other industries, and that it was necessary to do something to help them. Unless Parliament does go to their aid the majority of them will be ruined. If this bill is the answer to the appeals that have been made to help the farmers, it is seriously inadequate. That the measure was agreed to by an all-party committee shows clearly that an all-party committee is not an effective way to deal with the problem. We all know that one party in this Parliament is anxious to preserve the status quo, and, consequently, has come tobe known as conservative; and the other party, which desires to change the existing order, has come to be known as extremist or revolutionary. The fact remains, however, that the status quo of the farmers must be changed, and changed quickly, if the farming industry is to survive. Some honorable members may think that if a mortgage bank department of the Commonwealth Bank be established the existing financial institutions will be stirred out of their present complacency; but the history of financial institutions, and what we know of the efforts they have made in every country of the world to hold the preserves of high finance, do not justify such an outlook. The financial institutions will bludgeon their profits from the weak sections of the community as long as they are permitted to do so. They will disgorge their undeserved profits only when they are forced to do so. They will cease their depredations on the community only when their power is taken from them. When I look at some of the names appended to the report of this all-party committee, I am forced to the conclusion that the Bank of New South Wales, the Union Bank, the Commercial Banking Company, the English, Scottish and Australian Banking Company, and a few other financial institutions that I could name could scarcely have been better represented than they were.
– Which members of the committee has the honorable member in mind ?
– Probably I should be charged with indulging in personalities if I mentioned names; at any rate, I should lay myself open to a rebuke from the Chair.
– Does the honorable member think that it is quite fair to say what he has said and to go no farther?
– I am not in the witnessbox to answer questions by the Opposition. As an ex-speaker of the House, the honorable member for Darwin (Sir George Bell) should conform to the rule against interjecting and should not seek to cause turmoil in debate.
– There is no turmoil.
– It has been said by some persons outside of this House that recent happenings in King’s Hall, and even within the chamber, have almost turned Parliament into a bear garden. We should be striving to direct the ship of State in a proper manner through the troublous seas of the present day, and I do not intend to reply to interjections.
I pointed out in a speech on the wheat industry that the interest burden being carried by the farmers would bring disaster upon the industry. If the farmers travel much farther along the road on which they are going they will be ruined. Other honorable gentlemen on both sides of the chamber supported that view, but very little has been said on that subject by some of the honorable gentlemen who signed the report of the special committee on this bill. The honorable member for Indi (Mr. McEwen) gave the bill his benediction, but he did not expatiate on this aspect of the subject. I shall be interested to hear what some other honorable members of the committee have to say upon it.
– Why does not the honorable member himself say something about the bill?
– I entered four or five times for short periods while the honorable gentleman was making his speech and each time I listened to him he was dealing with the same point. An honorable gentleman who takes an hour and a half to discuss one point can scarcely be expected to appreciate the merit of the speeches of other honorable members.
It seems to me that some of the members of the special committee who examined the financial resources of the Commonwealth with the idea of suggesting a workable scheme for a mortgage bank department of the Commonwealth Bank came to the conclusion that we had insufficient financial resources to do what ought to be done for the farmers, although I am sure that some of their colleagues were not of that view. I am prepared to accept the measure as a seed to be sown in the hope that, in a good season, it will grow and bring forth fruit. I do not expect much from this scheme.
.- This bill has been promised for a number of years. During the 1937 election campaign each political party indicated that it was favorable to the establishment of a mortgage bank. I know, definitely, that the Country party promised that it would take steps to cause a bill to be introduced to alleviate the financial difficulties of the primary producers. That promise was redeemed when the Treasurer of the day, Mr. Casey, brought down the Commonwealth Bank Bill in 1938. The measure was not well received. After the Treasurer had made his second-reading speech, the bill remained in abeyance because honorable members of all parties seemed to be dissatisfied with it. It is somewhat astonishing, therefore, to find that this bill is almost identical with that which was introduced almost five years ago. The capital of £4,000,000 is the same. The percentage of advance to security is relatively the same. The diversion of the profits of the note issue is the same. There are slight variations in regard to the issue of inscribed stock. In all essentials, this measure is identical with that presented by Mr. Casey five years ago. The Government of that day was not very proud of its child. As a matter of fact, as I have already remarked, it aroused so much hostility among members representing country constituencies that it was dropped.
– The family left it on the doorstep and cleared out.
– And quite properly. Last year, during the debate which led to the defeat of the Fadden Government, the then Deputy Leader of the Opposition (Mr. Forde) made a speech that I well remember. One of the allurements and inducements which he held out to the honorable member for Wimmera (Mr. Wilson) in particular - he addressed his remarks almost exclusively to that honorable member on that historic occasion - was that if a Labour government were placed in office it would introduce a mortgage bank bill which would give great pleasure to the honorable member and be an advantage to the farming community, which he and others in this House represent. The primary producer, the agriculturist, the grazier, and all others who are looking to this measure for some financial relief will be sorely disappointed. The Government would do the honest thing if it made clear to those hard-pressed people in the country who are hopeful that this will be the means of getting them out of some of their financial difficulties, that the bill will not have that effect. The very small sum of £4,000,000 is to be the limit of the capital to be provided. The original capital will be little more than approximately £2,000,000, and the balance will be made up from the accumulation of profits from the note issue and the general trading operations of the bank.
– It is not suggested that that is the limit which will be available for advances.
– That is not the point that I am making. An original capital of £4,000,000 is indicative of the very limited purposes which the Government intends that the bank shall discharge. It has been stated that, in addition to this back-stop capital of £4,000,000, the Treasurer will from time to time make available certain funds, and that in addition the Commonwealth Savings Bank will make available money - we do not know what amount or under what conditions. The proposal is so enshrouded in uncertainty, the finance to be made available to the farmer is to be so subject to the whimsies of politics, that the Treasurer of the day may make available £2,000,000 or £3,000,000; and he may be so hardly pressed by other interests needing money for developmental works, social services, or other purposes that he will probably divert mortgage bank funds to them. Therefore, the amount which in any year will be available to primary producers as mortgage bank funds will be governed strictly by the whimsies of politics. If this legislation is to be of any use to the primary producer, it will have to offer to him something a little better than he can secure to-day from either the trading banks or government institutions, such as the Rural Bank of New South Wales. It is true that repayments will be spread over a period of from 5 to 41 years. That is a very great advantage to persons who are engaged in such a gambling type of industry as farming undoubtedly is - in the sense that one. does not know in any year what his income is likely to be, owing to seasonal and market fluctuations. The provision that one’s liability shall be spread- over a long period, and that one shall not be subject to the risk of being suddenly called upon by a bank, or a financial institution such as an insurance company, to repay the whole of one’s indebtedness, is excellent. There is a distinct advantage in a long-term mortgage bank on that ground alone. Rut of what advantage will it be to a farmer to be told that he is entitled to repay his loan over a period of 41 years if the percentage of advance to security is so low that he cannot get the loan in the first place? The Government has been so conservative that the majority of those who need the assistance of the mortgage bank will be precluded from taking advantage of its facilities, because the limit of the advance will be only 66ft per cent, of the value of the security. Why should a farmer who seeks to borrow from the mortgage bank be placed at a disadvantage compared with a townsman who wishes to borrow from a bank that finances building construction, for the purpose of providing himself with a home? A man in the city, or in an urban area, is able to obtain an advance of approximately 90 per cent, of the value of his security. I believe that to be the case in Victoria ; I know that it is in New South Wales. The farmer is to be told that he may borrow only up to 66ft per cent, of the value of his security.
– Would the honorable member favour an advance of 90 per cent. ?
– I shall probably seek the support of members on this side of the House in a proposal that I may make later. It may be argued that the value of the security of a farm fluctuates to a greater degree than does that of a villa in a suburban district. Under present conditions, with prices unstable and primary producers having the greatest difficulty in making a living, that argument may have some substance.
– Those conditions will always exist.
– I do not agree with the honorable member. The farmer is entitled to the same degree of security for his future as is the workman who seeks to establish a home for himself.
– Does anybody deny that?
– It is denied by the provision of the bill that a farmer may obtain an advance of not more than 66j per cent., compared with an advance of 90 per cent, which a workman may obtain. One of the matters which we shall have to consider, in conjunction with these provisions, is the general stability of the farming industries and the formulation of a scheme which will give to the rural community such an assurance of the future that they will be able to meet their commitments over a period of years with a reasonable degree of certainty. The amount to be advanced will be based on the valuation made by an officer of the bank. If a property is worth £3,000, a borrower may raise £2,000 on it. But the value placed on the security by the bank’s valuer may be conservative, and not anything like what the farmer considers it is worth. The owner’s value may be £3,000, whereas that of the valuer may be only £2,500. The advance made to him would be only two-thirds of the latter figure. There is no reason why the percentage of advance to security cannot be raised to approximately 80 per cent.
– An advance of 66ft per cent, is the highest that is made in any other country which has a mortgage bank.
– I do not consider that that is correct.
– It is.
– In any event, the amount which the bank will advance is not to be based entirely on - the value of the security, but will take into account considerations affecting the individual who is borrowing.
– That is very important.
– I agree with the honorable member. The personal element is to intrude, as it does when a trading bank makes an advance. There are probably many honorable members who have sought to raise loans from trading banks. I have done so. I have known the time when, if I could have borrowed only in proportion to the security which I had to offer, and the personal confidence which the bank manager had in my ability to use the money wisely, and ultimately to repay the loan, had not been taken into account, I would have been very much at a disadvantage. That can be said of thousands of others. When trading banks lend money they take the personal factor into account. It is also intended that it should be taken into account under this scheme, because there is a clause in the bill which forbids the transfer of a mortgage without the consent of the bank when a borrower sells his property and the bank reserves the right to attach such conditions to the transfer as it thinksfit. When a bank lends money it takes into account the borrower’s personal integrity, his ability as a farmer, and the chances of his being able to repay the money. Therefore, if the personal factor is to be taken into account under this scheme, I can see no reason why the amount of the advance should be limited to 662/3 per cent. of the value of the security. Unless it is possible to advance a greater percentage of the valuation than that, the vast majority of those who may wish to take advantage of the scheme will be unable to do so. It may be suggested that it would be unwise to lend to a farmer as much as 80 per cent. of the value of his security, yet the housing authorities do not hesitate to lend up to 90 per cent. to city dwellers for the erection of homes. If a workman in the city were required to find 331/3 per cent. of the cost of his home as a deposit, very few of the beautiful little homes that are erected in the suburbs under the housing schemes would be in existence. I am all in favour of advancing up to 90 per cent. for such purposes, and I am in favour of making larger advances to the farmer under this scheme.
– But in respect of advances for the worker’s home the value is always there in the house.
– So it is in the farm.
– A lazy farmer can ruin the farm.
– And a lazy workman will ultimately lose his home.
Mr.Langtry. - Does the honorable member think that the average primary producer could pay 4 per cent. on 90 percent. of the value of his property?
– That is another matter. I repeat that if the Government proposed to stand hard and fast on the 662/3 per cent. limit, this arrangement will be. of no use to 75 per cent. of those who will wish to avail themselves of it.
Another fault in the bill is that it makes no provision for lending money to tenant farmers who lease their land from private landlords. It is a fact that half the farms in Australia are held on leasehold tenure. Unfortunately, the leasehold system has become firmly established in this country. I have here a book by Cohen on Mortgage Banking in which particulars are given regarding the percentages of land held on lease in various countries. The highest percentage is - or was some years ago, when this bookwas compiled - in Great Britain, where80 per cent. of the land is held on lease. In Australia about 50 per cent is held on lease. In some other countries the mortgage bank schemes provide for the lending of money on good leasehold security.
– This bill provides for advances to persons who hold leases from the Crown.
– Yes, but not to those who lease their land from private landlords. In many instances, Crown leases are as good as if the land were freehold. Probably half the number of farmers in my district on the north coast of New South Wales are tenant farmers. Years ago, the owner of the farm felled the scrub, erected fences and buildings, and established a dairy. Later, when he retired, he either could not sell his property, or he wished to keep it as a source of income, and so he leased the land to some one else. In my opinion, this is a vicious system,and is prejudicial to the future of the primary producing industries. Nearly all such leases are for a short term of either five or seven years, and the tenant has no incentive to improve the farm or to maintain fences and buildings. Every year his equity in the farm declines. If he were to improve the farm it would be only so much the worse for him because, when the lease expired, the owner would be disposed to demand a higher rent because the value of the property would be greater. The tenant farming system obtains in England, but it is a better one than ours. The great majority of the tenants there hold their land on long leases, some of them up to 50 years.
Indeed, the general practice is for the farm to pass from father to son. Under the system of short-term leases which obtain on the north coast of New South Wales, the farms in general are being allowed to run down. Little, if anything, is being done in the way of pasture improvement, fences and buildings are neglected, there is no proper subdivision of the property for rotational grazing, and not so much cultivation is done as should he done. The bill should provide for the making of advances to tenants who hold their land on lease of twenty or more years from private landlords. The advance would be repaid over the period of the lease at the rate of so much a year, and there would be no risk. An advance of £1,000 would be repaid at the rate of £50 a year over twenty years. Without some such provision, the bill can do nothing for the young man who starts out with Tittle or no capital. In many instances, the young man saves enough money to buy 40 or 50 cows and some plant. He has not sufficient capital to buy a farm for himself, so he is compelled to lease one. He wishes to improve the farm, because he cannot obtain a full return from his herd without doing so, but he cannot raise capital for improvements. The result is that he battles along for years without being able to make the necessary improvements until he is an old man and sick of the struggle.
The bill makes no provision for advances to farmers for the erection of homes. We hear a great deal about slum dwellings in the cities, but we do not hear so much about the kind of homes in which many people in the country are compelled to live because they lack the capital with which to build better ones. The New South Wales housing scheme makes no provision for these people, either, and it was hoped that when this bill was introduced it would contain a provision to meet the needs of those to whom I have referred. In general, the farm dwellings in New South “Wales and Queensland are a disgrace to the country, while bearing testimony to the tenacity of purpose of those who go on living in them.
I regret that the Government, in its anxiety to placate the honorable member for Wimmera (Mr. Wilson), and to give him some sort of a measure that could be called a mortgage bank bill, should have introduced so inadequate a piece of legislation as this. It would have been far better to defer action until such time as a bill could have been brought down that would be of real value to the farmers. Those who can get along with an advance of only 66ft of the value of their security will not need to approach the mortgage bank; they will have the representatives of the private banks waiting at their doors begging for custom.
– Why did not the last Government bring down a better scheme?
– The honorable member for the Riverina could not have heard me when I told the House that this bill is the twin of the bill introduced by a former Treasurer, Mr. Casey. We were so ashamed of it that we told him not to show it to us again until it had undergone considerable improvement. This Government reminds me of the school child who copies the work of his class mates. It is so bereft of originality that one after another of its measures is copied from our policy. I instance the recent, defence legislation, and the decision to tax the lower ranges of income, and I am sure that before long it will come forward with a proposal for post-war credits or compulsory loans. I should have thought that the Ministry would have sufficient imagination to bring down something, better than the identical twin of a most conservative measure introduced, some years ago by Mr. Casey and received so badly by us that it was not persevered with. I should have thought that the Minister assisting the Treasurer (Mr. Lazzarini) would want something much less conservative than this bill is, because, when he was in opposition, he repeatedly told us how easy it would be to provide all the amenities the community needs and said that a Labour government would bring in the millennium. A conservative is an individual who is rooted to a single idea and cannot look ahead. He is content to do as his grandfathers did. The brand “ Conservative “ must be affixed to the Labour party because it is content to do what Mr. Casey wanted to do but was not allowed to do because we were ashamed of his proposal. The times are changing, the new order has arrived; honorable members on this side of the House are the progressives and those on the treasury bench are the stick-in-the-muds.
– I wonder where I shall find a place now?
– The honorable member for Batman is the most conservative of all honorable members, because he has not advanced from the stand he took 27 years ago.
– Order ! I suggest that it would be better if the honorable member reverted to the bill.
– I use a much abused term when I say that this bill should incorporate or be accompanied by a measure of social security for the primary producers. First, it should contain provision for the making of adequate advances which would enable a larger number of people to participate in the alleged benefits of the mortgage bank, and, secondly, the Government should stabilize the prices of the products from the sale of which the borrowers will expect to earn sufficient to meet interest charges and repay the principal. Those two things go hand in hand. Until primary industries are placed on a stable footing with guaranteed prices, based on the cost of labour and other costs, which will ensure a fair return from the goods produced, we shall not find much satisfaction. A measure such as this merely tinkers at the problems of the primary producers, and either this Government or some succeeding government will have to stabilize the prices of meat, wheat, butter and all the other products upon which the primary producers depend for whatever little profit - if the word “ profit “ can be applied to primary industries - they earn.
An expert committee appointed by the Minister for Commerce and Agriculture to inquire into the dairying industry said in its report that if the butter producers did not receive 4d. per lb. more for their butter they would be unable to meet their costs. The Government gave them an increase of 5/8d. per lb. Under this scheme it proposes that they may be advanced on security certain moneys on which they will be required, as the honorable member for Riverina pointed out, to pay interest. They will receive for their butter insuffi cient money to meet living costs, to say nothing of interest payments. We cannot allow such a state of affairs to continue. We must cease saying, “But the farmer has always been able to struggle on “. I prophesy that unless we have a change of heart we shall be unable to induce the rising generation to stay on the land. The drift from the farms to the cities is growing, largely because the farmers have not been able to earn sufficient from the sale of their products to meet their set commitments, such as interest on mortgages or loans from trading banks and the cost of farm improvements. Stability of agricultural production should be one of the first considerations of any country. The maintenance of vital food supplies had been discovered by more than one country to be of first importance. I do not exclude ourselves from blame for the neglect of the primary industries of this country. That neglect has been common to all political parties, and I do not say that in that respect the Labour Government has been much worse than preceding governments. We all take a selfish view. The majority of honorable members are more interested in the cities, where the bulk of the people live, than in agriculture; but the time has come when we shall have to take very careful stock of the position. I repeat that in committee I intend to move that the amount of the advance against security that the mortgage bank may make to a farmer be raised from 66$ per cent, to 80 per cent. The bill provides that, in deciding whether or not to advance money to a farmer, the bank manager shall take into consideration the personal factor. That applies not only to the original borrower, but also to the person to whom the loan may be transferred. No manager will be able to make an advance of money to an inefficient farmer and, if an inefficient man wants to buy out another man, the bank will refuse to advance him 66$ per cent, of its valuation of the property and the advance to whatever percentage of the value it considers fit. In view of the fact that the personal factor will determine the bank’s course, I see no reason why the amount of the advance should not be raised to SO per cent, of the value of the security offered.
– The increased interest payments that would Le involved would increase the burden on the farmer.
– The burden on the farmer is his first consideration. The burden of paying interest on an advance of 662/3 per cent. would be about as great a consideration with the farmer as would be the burden of paying interest on an advance of SO per cent. It all depends on the capacity of the farmer. I know men who have borrowed 100 per cent. of their capital. Friends have backed them. They have come through and their properties are now free of mortgage. Why debar a man from making a start because lie has no capital? The bank manager will assess not only the cash value of the security offered, but also the personal characteristics of the man who seeks the advance, and I can think of no logical objection in those circumstances to the amount of the advance being up to 80 per cent. of the security.
.- It has required the advent to power of the Labour party to translate into action the talk which has gone on for many years of the need for a mortgage bank to assist in the solution of the problems of primary producers. I was surprised at the candour of the honorable member for Richmond (Mr. Anthony), who admitted the laxity of his own party in this matter. I remind the honorable gentleman that the parties opposite, not only had greater opportunities than we to establish a mortgage bank, but also were in office from 1930 onwards when the mortgage bank was most needed.
The honorable member likened this bill to that introduced by Mr. Casey, but this Government does not propose to hand over the mortgage bank to private investors by selling to them debentures in the bank. That is the main difference between the two bills. This measure is capable of improvement, but I accept it as the first step, for I believe that we shall advance further as time goes on. The Commonwealth Bank was commenced in a very small way with much less capital than this bank will have at its disposal. Had the private banks realized what a great competitor the Commonwealth Bank would be their opposition to its establishment would have been even greater than it was.
– The Commonwealth Bank receives deposits, but this bank will be lending money.
– Never mind about that. This bank will have considerable capital, but I think that the amount ought to be increased. There are problems of administration to be overcome and I am inclined to agree with some of the criticism on that score that has been advanced. The advance of 662/3 per cent. will be of immediate advantage to many primary producers who, owing to the war, have gradually slipped into a dangerous position. They may have a one-third equity in their property, and they will be able to obtain protection through transferring their mortgages from the private mortgagees to the mortgage bank. I do not blame any government for this position. If any one is to blame, it is Tojo, because the entry of Japan into the war has deprived farmers of adequate supplies of superphosphate, without which the productivity of their land will decline. Many of us are soldier-settlers, who were placed on the land under the provisions of an act of Parliament. Fortunately, we are not subject to the whims of the private banks. But the position will arise when our equity will decline seriously, because the carrying capacity of the land will be reduced.
The scope of the bill is too narrow. The burden of the debt structure on the rural community is tremendous, and causes a national, economic headache which will not be cured by the establishment of a mortgage bank. I take a practical view of these matters. I realize that the Treasurer cannot, by a wave of the hand, settle all of the problems of the rural industries. Sometimes governments take the easier course of administering palliatives in the form of bounties, but the solution of the great problem confronting the rural industries is the pegping of land values. Some honorable members may not be aware that land values in Australia are higher than the values of land with similar productivity in Great Britain, although Australia is 12,000 miles from the principal markets of the world. Many factors contribute to that anomaly. For example, most of the best land in Australia was taken up in the early days by men with a little capital. They received from the Crown grants of the finest land. When the demand for land in the best rainfall areas became sufficiently great to create competition values began to soar. Some of our difficulties have been caused by fluctuations of prices. After the last war, land values in some districts soared to £20 an acre, and the private banks were willing to lend money to settlers for the purpose of enabling them to obtain properties at those exorbitant prices. The United Country party has always sidestepped these problems, although honorable members opposite are in a great hurry now to urge the Labour Government to settle them. About 80 per cent. of our farmers are up to their neck in debt and they will obtain no relief until the present system of finance, involving a revaluation of the land, is altered. The Treasurer expressed the opinion that the granting of loans at 1½ per cent. or2½ per cent. interest would greatly assist primary producers. I consider that if farmers are able to get cheap money from the Government, they will bo tempted to sell their properties.
– Or buy larger properties.
– If that occurred, the farmer five years hence would be again obliged to ask the Government for assistance. The position must be faced. The adoption of my proposals would un- doubtley entail the expenditure of many millions of pounds, but year after year the Commonwealth Government expends considerable sums in bounties, and the farmers hand the money to the banks. It is a peculiar system. The Government borrows money from the banks for the purpose of assisting the farmers. When the farmers receive the money, they pay it to the banks. I prefer a system of leasehold tenure of the land, and a reduction of interest rates. Until such a policy is adopted the great problem of the rural industries will remain unsolved. After this war the Commonwealth Government will doubtless settle many returned soldiers on the land, but the men will not be able to succeed unless the old system of debt be abolished.
The farmer is the nation’s greatest asset. Our finest men are reared in the rural areas, where they learn to work hard and to be self-reliant. Many sons of farmers attend agricultural colleges, but when they complete their course their parents are unable to settle them on properties because of the high cost of land, which is sometimes twice the value of the productivity of the soil. Consequently, the parents are compelled to borrow money from the banks for the purpose of establishing their sons on farms, and at once a burden is placed around their neck in perpetuity. The secondary industries are the only section which is making a profit out of the land, although they know nothing about the cultivation of the soil. They are investing heavily in land, with the object of selling it to soldier settlers after the war at inflated prices. Such investments are most attractive now, because they carry taxation concessions. Undoubtedly, my proposals will encounter great opposition from the financial institutions, and even many farmers, but I am glad to say that some farmers are beginning to realize that the freehold of land is a myth. They are waking up to the fact, as I woke up twenty years ago, that they have to work from daybreak until dark for men who do not know the difference between a Corriedale wether and a Shorthorn bull. By the manipulation of markets, these men reap the benefits of the harvest. Of course they never actually kill the farmer, because there are various ways of persuading governments to pay bounties for the purpose of saving him from total bankruptcy. Stability is the last thing that those men would grant to the farmer.
One thing which I learned, being a little Scotch, is that my interest rate never varied, although the prices for my wool bounced up to 26d. and fell to 12d. per lb. If the farmer always received a reasonable return for his produce, he would probably be able to. repay his indebtedness in ten years unless the financial institutions prevailed upon him to buy another block. That often occurred in the past. The bank persuaded him to purchase another block, and when prices slumped, helost not only the new holding but also the original property. The bank will never, if it can help it, let him get out of debt. If my sheep die I have no wool. If I discharge my indebtedness, the banks will not have me working for it. So the bank endeavours to keep the farmer perpetually in debt. This bill is a step in the right direction. Under existing war conditions, farmers may require assistance until the private banking system is abolished.
If my plan were adopted a financial institution would not be permitted to foreclose on a property. I should like the Treasurer to explain how this legislation will be administered. I have a vivid recollection of the administration of the Closer Settlement Act. Control was exercised from Melbourne by men who had no knowledge of practical farming. In my opinion, branches of the mortgage bank should be established in all big centres so that farmers may be able to interview the manager whenever they wish to do so. If the mortgage department is centralized in the capital cities considerable difficulties will arise.
– That centralization will not be satisfactory.
– The Commonwealth Bank Board will control the scheme.
– I am not in favour of that.
– I agree with the honorable member.
– In my opinion, the Commonwealth Bank Board should be abolished and the national institution should be placed under the direction of a governor, who would be empowered to carry out the proper functions of the bank. The honorable member for New England (Mr. Abbott) knows that the Commonwealth Bank Board is dominated by the private banks.
– I do not know that at all.
– I am telling the honorable member a few home truths. The honorable member for Richmond believes that 50 per cent, of our farmers are heavily in debt, but I consider that this estimate is too conservative. As I stated earlier, 80 per cent, of our farmers are up to their ears in debt. The banks are the landlord.
Even under this legislation, the rate of interest is excessive, though I appreciate the reasons. The value of the land should bo pegged, so that the property cannot be sold at inflated values. A man who has an equity of one-third in a property should be granted a loan bearing interest at the rate of 2£ per cent. A safeguard should be included in the bill to prevent trafficking in land. It will be of little use for us to help a farmer to meet his debts if, when the debts are paid, the farmer sells his property and walks out. Our object should be to assist the farmers to establish themselves on a permanent basis. We should not condone land trafficking.
– The provisions of this bill are not in any sense revolutionary. Little change is being made in the conditions upon which primary producers may obtain help from existing State instrumentalities. I consider that the bill will cause grave disappointment to those country people who have been expecting that substantial assistance -.would be provided for them through the proposed mortgage bank department of the Commonwealth Bank. I must be fair, however, and admit that the bill provides one important improvement. The granting of mortgages on long terms is a highly commendable innovation. Farmers have longed for such a provision for many years, and they will welcome it with pleasure. Unfortunately, there seems to be little prospect of money being made available at a low rate of interest. When the proposals were first made for the establishment of a mortgage bank department of the Commonwealth Bank, it was suggested that some part at least of advances would be made available interest-free and that the remainder would involve the payment of only a low rate of interest. We had hoped that the rate would not exceed 2i per cent. All hopes of anything as satisfactory as that have been dispelled. It appears that the interest rate will be comparable with the rate which the Government has to pay for the money it borrows in order to make funds available to the bank. In the past, rural banks in the various States have operated under conditions which have allowed the bank to make some profit, and it appears that that principle is to be retained.
I am not much concerned about the proposal that advances should not exceed 662/3 per cent. of the capital value of properties, for I have long since realized that the method of valuation is far more important than the proportion of the advance to the value of the security offered. The Agricultural Bank of Queensland provided for advances in accordance with the valuation of properties, hut in practice land-owners frequently did not receive an advance of more than a small percentage of the true value of their properties. Because of that fact, grave injustices have been done to primary producers and the owners of rural properties. Even rural banks have adopted conservative standards of valuation which have debarred necessitous persons from obtaining adequate loans. The inspectors of the rural banks are tied down by certain fixed principles, and unless we are careful we shall find ourselves saddled with a similar system. Unless the basis of valuation be generous, it will not matter whether the proportion of advance to the security offered is 60 per cent. or SO per cent. Everything will depend upon the standards adopted bv inspectors, and these, of course, will be fixed by the bank authorities.When the Agricultural Bank was first proposed in Queensland, it was arranged that advances should be limited to £600. As the result of party influences the amount was raised to £800 and then to £1,000, and, ultimately, to £1,700. It was provided also at one stage that £200 could be advanced without security, and, again as the result of party influences, that amount was increasedto £400 without security. But farmers who expected to receive assistance on that basis were bitterly disappointed. One man who applied for an advance of £400 was told that if he mortgaged all his possessions and offered all his equity in the property as security he could obtain £32 ! Yet, theoretically, he should have been able to obtain £1,700. That was the amount which the Parliament intended to be made available to him. He was denied such assistance because of the manner in which the law was administered. The basis of valuation was all wrong. I hope that we shall not lend ourselves to anything of that description.
The bill provides that the mortgage bank department may, with the consent of the Treasurer (Mr. Chifley), enter into agreements with any State authority for the purpose of arranging for the performance of certain functions of the bank by such State authority. I believe that the Government will make a serious error if it delegates any part of the administration of this measure to existing State agencies. It will be particularly serious if any agreement is entered into for the use of State inspectors for valuation purposes, because experience has proved beyond question that such inspectors are seriously conservative in their outlook. Any agreements entered into on the basis of the use by the Commonwealth of State instrumentalities will merely redound to the advantage of the State authorities. Such agreements will certainly not be in the interest of the farmers. After the last war, millions of pounds were made available by the Commonwealth for the purpose of making advances to returned soldiers, but the administration of the scheme was placed in the hands of State authorities. In Queensland, the State authority was empowered, by the State, to advance up to a fixed amount to returned soldiers to enable them to settle on the land, but when the Commonwealth scheme was handed over to the State authorities for administration the returned soldiers found, to their sorrow, that the State authorities merely applied Commonwealth money to their own scheme. Not an extra penny was necessarily made available to the soldiers. If the State authorities considered that they were unable to advance more than, say, £1,000 of State money to a soldier they did not do so; and when Commonwealth money was made available to them for the assistance of the soldiers, they simply retained their existing valuations of properties and declined to make any more money available. In effect, therefore, the Commonwealth money was used to bolster up State schemes. I hope that that will not happen on this occasion. It is absolutely essential that proper provision shall be made to ensure the fair valuation of lands offered as security for loans from the mortgage bank department that is now being established.
The two points that I submit for serious attention are, first, the fixing of a low interest rate; and, secondly, the ensuring of adequate guarantees in relation to valuations. Unless those aspects of the situation be properly covered the whole scheme will fail.
It seems to me, from, the speeches so far made on the bill, .that the measure is disappointing to both sides of the House, and yet, for some reason, honorable members are prepared to grasp it with both hands. The measure is disappointing, partly because it is proposed that the maximum amount to be made available to the bank shall be only £4,000,000. Such an amount, . in my view, will not meet more than 10 per cent, or 20 per cent, of the applications that will ,be made to the bank for assistance. Proposed new section 60ade provides -
The capital of the Mortgage Bank Department shall be the aggregate, not exceeding Four million pounds, of the following amounts: -
The amounts are then stipulated. The aggregate is far too small, particularly if, as we hope, the valuations of inspectors who will serve the bank be based on reasonable principles. This inadequate aggregate provision, with the proposed substantial rate of interest - the Minister has said that he expected a maximum of 4 per cent., and I do not see how it can be lower - causes me to be critical of the measure.
It is essential that provision shall be made for advances to farmers in order to enable them to build reasonable homes for their families. A worker in an industrial area in Queensland is able to obtain an advance of £1,000 for homebuilding on the security of an allotment of land; but farmers in that State cannot obtain more than £300 for such a purpose, and some of that money must be used for fencing.. The two amounts are altogether disproportionate. A home built on a farm will last just as long as a home built on a city allotment, and the primary producers, in my opinion, are entitled to the same treatment, in this respect, as workers in secondary industries.
A good deal has been said this evening about the desire of the people of
New South Wales and Queensland to become land-owners. I point out that 95 per cent, of the land in Queensland is still under the control of the Crown. It would seem, therefore, that the people of other States may have to go to Queensland in order to satisfy their land hunger. We must be prepared to advance an amount sufficient to provide a comfortable home, which is a greater necessity in those districts than in the city, where other comforts are available. I hope that the Minister will find it possible to reduce the interest rate to 2^ per cent. If he can do that, this bill will be a fairly good one. He will also have to provide for a much larger capital than £4,000,000. If the position of the primary producer is to be properly righted, however, an investigation will have to be made of the avenues that are used for the disposal of his products; a fair price will have to be guaranteed to him; he will nave to be assured of all that is essential to his well-being; and he will have to be freed from the need of financial accommodation from a mortgage bank, and be enabled to improve his property with the cash that is available to him. Thus production generally, throughout the Commonwealth, will be raised to a higher level, our exports will be increased, and capital will flow into the Commonwealth.
.-Whilst I support the establishment of a mortgage bank, I am not completely enamoured of the basis on which the bill proposes that it shall be established. It is to be altogether too rigid in its operations, too conservative in the margin of its advances, and too restricted in regard to capital. If Australia is to be developed as it should be in the post-war period, and the farmers are to be relieved of the burden of debt which they have had round their necks in past years, much more progressive legislation than this will have to be passed ; because, not by any stretch of the imagination can the bill be regarded as very progressive or radical. I welcome the statement of the honorable member for Richmond (Mr. Anthony) that he proposes to submit an amendment providing that the margin of the advance shall be increased to 80 per cent. Even that cannot be regarded as unduly liberal, because other institutions are making advances to a considerably higher percentage. The Rural Bank of NewSouth Wales is a successful institution, although its charter is limited, as it has not the right to create credits and it is not a bank of issue as is the Commonwealth Bank; nevertheless, it has made considerable profits, and is on a sound basis. It’ is able to make advances of up to 95 per cent, for the erection of workers’ homes, without incurring undue risk. It has made liberal advances for rural purposes, and has done good work generally for the man on the land. We cannot expect very much in the way of a radical policy from the Commonwealth Bank under its present conservative control, or look to its being a true people’s bank, as was originally intended. The long terms provided for the repayment of loans indicate that there is to be a continuance of the old order. The farmer will still have the yoke of orthodox finance round his neck, and will have to climb the same old greasy pole of economic crises and international upheavals. Having paid interest and other outgoings, and been subjected to the fluctuations of markets, he will eventually find himself back where he started. I remember a recital which a couple of years ago the honorable member for Wannon (Mr. Mcleod) gave of his experiences. He pointed out that he had been financed under a returned soldiers’ settlement scheme. Although his total payments during a period of fifteen years had amounted to over £2,000, he had reduced the mortgage on his property by only a few pounds, the remainder having been absorbed by interest, rates and taxes, and other payments. He said that if he continued at the same rate his indebtedness would be fully discharged in 1,500 years. That has been the experience of many other persons on the land. We shall have to adopt a more bold and progressive policy if we are to settle their problems and open up the country in the post-war period. The Minister for Post-war Reconstruction (Mr. Chifley) has announced that it is proposed to build up the population to 20,000,000. That can be achieved only by the adoption of a more radical and progressive financial policy than has operated in the past. I should like to have been told that the rate of interest to be charged by the mortgage bank is to be on a much more, liberal basis than has been indicated. Perhaps the bank will conduct its operations along orthodox lines at an interest rate of £ per cent. That is unnecessary. The Commonwealth Bank could arrange financial accommodation for men on the land, and for other purposes, at a considerably lower rate of interest. The London Economist not long ago pointed out that the amount needed for bookkeeping in connexion with the creation of credits is not more than one-half of 1 per cent, therefore, if 1 per cent or 2 per cent, were charged, a handsome profit would be made by the bank, and the farmers would be enabled to own their properties in a reasonable period. What satisfaction will they have in looking forward to doing so in 40 or 50 years? There is no assurance that a man will even be given a start in his early years. Because of the conservative margin provided, he will have to find onethird of the purchase price bef ore he will be able to obtain an advance from the bank. On account of the ups and downs through which the people will have to pass, particularly those who return from the war, a man will probably be 30 or 40 years of age before he will be in a position to pay the initial deposit; and if he lives to be i00 years he may own the property under this scheme. As the honorable member for Wannon has asserted, it is not the intention of those who hold the financial strings that the man on the land shall reach the stage of owning his own property. It would be much better for the development of this country if provision were made whereby the debt would be discharged in 15, 20 or 25 years, so that, having reached the age of retirement, and his children having had a decent education, he would have economic security and be able to enjoy some of the fruits of his early labours. It is within the province of the bank to make provision along those lines if a moderate interest rate be stipulated.
I should have liked the bill to provide for financial accommodation for housing purposes. We are aware of the deplorable condition that exists in connexion with housing, and the shortage of accommodation prior to the war.
– Will the honorable member support an amendment to that effect?
– Will the honorable member move it?
-I am glad to know that. If such provision be made, I trust that there will not be a repetition of the fate which befell the Commonwealth Housing Act passed in 1928 by a previous Administration; although it reached the statute-book, it has never been put into operation, and the Commonwealth Bank has not advanced a single penny under it. This indicates that that institution is not sympathetic in regard to housing. That this is so I know from practical experience. I was associated with a cooperative building movement in New South Wales when a scheme was launched by the Government of that State, of which the honorable member for Robertson (Mr. Spooner) was a member. Numerous societies were formed. The directors and other officials associated with them considered that the logical institution to provide the necessary finance, particularly as repayment of it was guaranteed by the State Government, was the Commonwealth Bank, because it could do so at a lower rate of interest than would be charged by private institutions. A large number of the societies approached it, and at one stage it appeared to be sympathetic to the proposal. At the time, the private banks were offering finance at an interest rate of4½ per cent. The Bank of New South Wales offered to provide finance to one society at that rate; but when the Commonwealth Bank announced that it would not come into the scheme, the Bank of NewSouth Wales immediately raised the rate to 5 per cent., and that became the prevailing rate charged by the private banks and insurance companies throughout the operation of the scheme. The Commonwealth Bank came into the scheme later, when it had been proved a sound and profitable investment for the private financial institutions, but it provided only £1,500,000 of a total of £15,000,000. This proves that under its present direction, the bank is not so liberal and progressive as it might be in the development of this country, and in facilitating housing projects, slum clearance, and the financing of soldiers and munitions workers. I read only yesterday that seven families occupy one house in Sydney, and all of them have to use one bathroom and other conveniences. That is deplorable. Many of those who are living under such conditions, which are worse than the slums that existed at the outbreak of the war, are engaged in war industries or are otherwise actively associated with the war effort. Such conditions must undermine their efficiency. The Government should give its attention to the matter, and not allow the evil to become accentuated. I am glad to know that the honorable member for New England (Mr. Abbott) supports me in that regard.
– Will the honorable member support an amendment?
– I shall support any amendment which will liberalize the provisions of this measure; because it is a non-party measure, and I understand that we are free to express our views and to vote accordingly,
I should like some provision to have been made for the financing of community settlements and co-operative schemes; because I consider that the day of individual farming, with its wastefulness, inefficiency, load of debt, and undermining of health, has gone or is going. In the post-war period, our farmers will have to compete with highly developed schemes of collective and cooperative farming which are already in operation in Russia, the Scandinavian countries, and other parts of Europe. These provide an example of team work. Our farmers are battling along individually. Added to their other difficulties are those associated with shipping, because of their long distance from the markets of the world. If this country is to be properly opened up and developed in the post-war period, some consideration will have to be given to the encouragement of community settlements and cooperative farming schemes. I hope that the Treasurer, who is also the Minister for Post-war Reconstruction, will see that provision is made for the encouragement or not only the Australian farmers, but also those who will come to this country fi om other parts of the world. Smith’s Weekly recently published this article in regard to co-operative farming - co-operation and the wai out.
At Curlewis, New South Wales, a very successful co-operative lias developed. Any social experiment which suggests, an improvement on the present system is worthy of attention. Curlewis Farmers’ Co-op has already revealed definite benefits, and holds out prospect of further developments. Ideal of co-operation, of a number of small men linking together, is not new. Nearly 100 years ago first consumers co-operative originated in England. Now 28,000,000 people in Britain alone are members of consumers co-operative. As joint owners they control £100,000.000 or capital.’
But as an organization among .producers it has not gone very far.
There is, of course, the full co-operatives or collective farms in Russia. Also in certain parts of United States, full-blooded producers’ co-operatives are functioning.
Nearer home we have the co-operative butter factories which have improved position of many dairy farmers in Australia.
Need for some organization among small producers is obvious.
In the modern world the individual is an extremely small unit. To meet vast economic forces operating, to hold his place along with large scale industry, to enjoy benefits of large scale production, combination is necessary.
Very often this combination occurs, but at a heavy price. In fascist countries groups are organized but price is loss of initiative and individual liberty. In Russia evolution of the collective was not painless.
If co-operation keeps the middle path between complete regimentation and complete anarchy, combining best of one with best of the other, it may prove to be the way out.
Possibilities of co-operation are suggested by brief yet successful history of the group of farmers at Curlewis.
In 1936 a meeting was called at the local public school to discuss formation of a cooperative. Only seven attended, but they agreed to register with minimum holding of shares. By canvassing farmers, £28 was raised as paid-up capital.
During first twelve months membership increased to more than 40 and at end of the year £360 was distributed. This was derived largely through purchase of farming utensils, kerosene, wool-sacks, wheat-bags, tractor parts, and so on, discount going to the co-op instead of commission agents.
During second and third years over £500 and £800 respectively was paid out after providing for reserves.
By this time it was felt that the organization was too much to- be carried out by voluntary effort and a manager was appointed.
For first year with a paid staff, profit amounted to £1,372, of which £1,234 went back to farmers. In the next year .profit rose to £1,898, and for the last six months of 1941, £1,990 profit was shown.
This money was earned in a small mixed farming district of about 12 square miles.
Not all the money came from handling farm requirements, for gradually the co-op had extended its functions.
For instance, recent wheat crop was handled through this organization.
Result was a profit to the farmers exceeding £900. When it is realized that in New South Wales there are more than 420 wheat handling centres, opportunities farmers have been letting slip through their fingers can be appreciated.
Amazing feature of this movement is small amount of capital involved. Even now paid-up capital is only £300, while value of property - a small tin shed has been acquired - is £400.
Advantages of co-operation had been brought home very effectively.
This organization which has been of such obvious benefit to the farmers carries no .bad debts, has always operated on a cash basis, and has required no capital.
Rebates are allowed according to business done, but control is based on democratic principle of one man ‘one vote.
Financial benefits have accrued because the farmers are, by combining, entering the field of distribution. Results are very important both to producers and taxpayers.
In 1940-41 wheatgrowers were paid in relief £2,468.593. If farmers can augment their incomes this must be of advantage to them and the taxpayers.
Monetary advantages are, however, secondary.
Of greater importance are various effects of getting together.
They are now provided with a. common ground upon which they can exchange ideas and experiences. For all the important work done by agricultural scientists and bureaux, agriculture is still largely a matter of trial and error. Further, because they mix more, they have more opportunities to learn of latest methods.
Another important advantage is the experience gained in business methods.
A really good farmer is a good business man. He keeps books on the lines of an industrial or commercial enterprise. Not many farmers do this. By getting experience they are initiated into these methods:
Because they are linked together, mutual loyalty is encouraged. In the near future it is certain, that farmers must co-operate by .pooling man-power, .possibly machinery, with the organization of the co-op, the way has been paved.
This is as far as has been gone for the present. But there are possibilities.
To-day the large enterprise has the advantage. Why cannot the co-op act as the large enterprise while the farmers retain their individuality? The small farmer cannot afford to spend too much on stud cattle. Through the co-op it would be possible to buy expensive stock, use of which could be shared.
Similarly with expensive machinery. It would even ‘be possible for men to try experiments with new crops and methods, if they knew that it was not their sole responsibility.
Whether these things appeal to the Australian farmer remains to be seen. In Britain recently Sir Daniel Hall, an agricultural authority, recommended nationalization of land. Important changes are occurring in agriculture. Australian farmers have been reared on the individual theory. Co-operation allows him to retain his individualism while guaranteeing his place in the social fabric.
It can work as the Curlewis farmers have already shown, as many other small farming communities throughout New South Wales are showing. Future of farming does not necessarily rest with Government boards, controls and subsidies.
Under pressure of war, changes are occurring all the time. Industries are .being eliminated and telescoped. Others are languishing through lack of raw materials and labor.
With all these things there has been a strong trend towards centralization.
Maybe better results could be achieved if the farmers, the workers, and the businessmen could be given more scope.
It is better that farmers should develop their own solutions for their own problems than that they should be adjusted from above.
Ako, controls now must have some bearing on post-war controls.
To predict, now, what sort of society will emerge after this war is not possible. One thing is clear. There will be no road back to the anarchic system of the years between the wars.
Co-operation does suggest a compromise.
The provisions of the bill should he widened so as to cover the activities of co-operative farming and industrial groups, and also to assist in the building of country dwellings and the establishment of model factories in order to decentralize our industries. In this way it would be possible to open up the country, and to develop the hinterland so as to permit of the carrying of a larger population, thus ensuring the future safety of the nation.
.- I support this measure, but I do not like the name “ Mortgage Bank “, which is being popularly applied to the institution which it is proposed to set up. It has a deadly significance because of its bad associations. For too long the private banks and the financial institutions have fed fat on the community. They have been Shylocks, and that is why I am pleased that the Government, through the Commonwealth Bank, is setting up an institution to take their places. Mr.
Roosevelt and Mr. Churchill drew up a charter in which were set forth the four most desirable freedoms, and one of them was freedom from fear. How many of us are to-day free from economic fear? How many of us enjoy economic security? The setting up of the mortgage bank department of the Commonwealth Bank should free a great many of our farmers from economic fear. It establishes a principle. I am not enamoured of the bill as it stands; it could be better, but the fact that the principle has been recognized makes it possible for us in the future to mould the scheme nearer to the heart’s desire. In the past, when a person borrowed money from a bank or a financial institution, he never felt secure. At any time he might be faced with a demand to reduce the amount of his indebtedness, and that at a time when it was least convenient for him to do so. From the new department borrowers may at least expect sympathetic treatment, and money should be lent for long terms -at a low rate of interest. When times are good the banks are kind. As a matter of fact, the banks are not the worst; there are other financial institutions much worse than the banks. When times are bad, when there is a drought, or a glut, or sickness, or a plague, or pests, the banks and financial institutions are not as sympathetic as they should be, and there is no way of getting back on them because they have neither a body to be’ kicked, nor a soul to be damned. Proposed new section 60 is as follows : - (1.) A mortgage given as security for repayment of a loan under this part shall provide for the payment of equal half-yearly instalments of principal and interest and for the payment, at the end of the period of the loan, of the balance (if any) then outstanding. (2.) The amount of each such instalment shall be a sum equal to six months’ interest on the original amount of the loan together with an amount not less than one-half of one per centum of the original amount of the loan.
At the end of 41 years the debt will be extinguished. In this provision we have, as it were, an antitoxin to counteract the creeping paralysis that threatens to overcome those who have dealings with private financial institutions. I maintain that the rate of interest should be not more than 2£ per cent. Some years ago, the Government of Queensland established a State insurance office. Probably the
Legislative Council, which was then in existence, was having a nap when the measure was put through. The first action of the new insurance office was to reduce premiums by 33-J per cent., and all the private insurance companies were compelled to follow suit. Something of the same sort might be done in regard to interest rates under this scheme. If, a low rate of interest were fixed by the new debt department of the Commonwealth Bank, the private banks and other financial institutions would have to bring down their rates to conform with it.
The Gepp Commission found in 1935 that the primary producers in Australia owed about £600,000,000, of which the wheat-farmers owed £140,000,000 ‘ and the wool-growers £150,000,000. This state of affairs came about during the terms of office of governments supported by honorable members opposite, honorable members who now weep crocodile tears over the disabilities of the farmers. During the last 40 years, the Labour party has been in power for only three years. Therefore, if things are wrong, as we know they are, we know why they are wrong ; it is because hitherto nothing has been done to put them right, and even in this measure honorable members opposite are trying to damn it with faint praise. Every man, woman and child in Australia is paying tribute .to the financial institutions because of the country’s enormous debt structure, and there seems no escape from this while the present economic system continues. I appeal to the Government to fix a low rate of interest for advances under this scheme. Just as the Government should be a model employer, so it should, through the Commonwealth Bank, be a model mortgagee.
This evening, the honorable member for Wide Bay (Mr. Bernard Corser) referred to Queensland as the promised land, and he advised people from Victoria and New South Wales to go north because of the better conditions that prevail there. A great proportion of the land in Queensland, he pointed out, had never been alienated, and still belonged to the Crown. Again, I ask why? I am one who looks for the relation of cause and effect, and it seems obvious to me that conditions are better in Queensland than in the other States because a Labour government has been in power in Queensland for a long time. For many years, we have been rid of the incubus of a legislative council. Every man, woman and child in this Commonwealth is labouring under this load of debt and is placed under tribute by those who neither toil nor spin. I should be much more enthusiastic about this bill if I knew that the rate of interest would be about 24 per cent., but I hope that through this bank the Government will become a model mortgagee and that the people who are seeking relief will obtain it.
Debate (on motion by Mr. Abbott) adjourned.
House adjourned at 10.17 p.m.
The following answers to questions were circulated: -
Compulsory Trade Unionism.
– On the 10th February the honorable member for Wentworth (Mr. Harrison) asked, without notice, whether the questionnaire issued under the National Security (Man Power)
Regulations contained a question asking the rate of salary or wage earned by the person to whom the document was issued. He also asked me why such information was required.
I desire to inform the honorable member that it is a fact that the questionnaire issued by the Man Power Directorate contains a question asking the rate of salary or wage earned by the person to whom the document is issued. On the same questionnaire appears another question, namely, “ What is your trade and grading?” Past experience has shown that a very great number of persons either do not know exactly what their trade and grading is or what their award classification is, and, in a number of cases, the answers to such questions have been quite unsatisfactory. The reason for asking the rate of salary or wage to be stated is to assist in determining with reasonable certainty the award or trade classification of the person concerned.
y. - On the 29th January, the honorable member for Melbourne (Mr. Calwell) asked the following questions, upon notice : -
The answers to the honorable member’s questions are as follows: -
The figures for Great Britain, Canada, New Zealand and South Africa are as at the 31st March,1942; Australia as at the 30th September, 1942; and the United States of America as estimated in budget for end of the fiscal year 1942. No information is available regarding the Union of Socialist Soviet Republics. 3. (a) The latest available information concerning the debts of the Dominions to Great Britain and the United States of America are -
The figures for Australia are as at the 30th June, 1942; for the other countries as at the 31st March, 1942.
The figures for Australia are as at the 30th June, 1939, and for other countries as at the 31st March, 1939.
The following table shows the increase ( + ) or decrease ( - ) in indebtedness since the war and up to the dates mentioned in 3 (a) : -
Mr.Beasley. - On the 5th. February, the honorable member for Swan (Mr. Marwick) asked me whether I would have a statement prepared showing the progress of investigations of the production of agar agar, and whether I would see that reports of deposits of seaweed in Western Australia suitable for the production of this substance were investigated.
This matter has been investigated by the Department of War Organization of Industry, in conjunction with the Council for Scientific and Industrial Research, whose officers have, through the courtesy of the Minister for War Organization of Industry (Mr. Dedman) made the following information available: -
The fact that the Japanese agar could be replaced by a product of Australian seaweed was first demonstrated by an officer of the Fisheries Division of the Council for Scientific and Industrial Research, who determined the general lines the manufacture should follow. Following upon this, several firms undertook investigation of the problem, notably Angliss and Company and the Davis Gelatine Company. Since the former are dependent upon supplies of agar for meat packing, this firm is now producing only a little less than their own requirements and have plans in hand which, if successful, will meet or nearly meet the requirements of Australian meat-packers. In order to do this, some 2,000 tons of wet gracilaria weed would have to be harvested. It is not known whether the fields along the coast of New South Wales are sufficient to supply weed at this rate even for one year, still less whether they can be depended upon to do so year in and year out. In order to settle this question a survey is required. At the request of the Council for Scientific and Industrial Research, therefore, the Department of War Organization of Industry was instrumental in securing a grant for this purpose from the Treasury, and this survey is now being made by officers of the Council for Scientific and Industrial Research. In order that current requirements of weed may be met, arrangements have been made under which firms will be able to obtain the required supplies.
As regards Western Australia, an officer of the Fisheries Division of the Council for Scientific and Industrial Research recently mode a preliminary examination of the weeds there, and found several which yield agar. Certain firms have expressed interest in the development of the manufacture in that State, and the Council for Scientific and Industrial Research and the Department of War Organization of Industry are prepared to give whatever assistance is necessary for this purpose.
Taxi Services in Hobart.
y. - On the5 th February, the honorable member for Denison (Mr. Beck) asked me whether I would review the case of taxi-drivers in Hobart, and allow them sufficient petrol to earn, at least, the basic wage, and whether there was any reason why the taxi-drivers of Hobart should be allowed only 50 per cent. of the petrol allowed to taxi-drivers on the mainland.
I am now in a position to inform the honorable member that the Hobart taxidrivers are in no way placed at a disadvantage by reason of any discrimination between them and operators on the mainland. The fact is that petrol for this use is rationed on a uniform basis, allowing 30 per cent. of pre-war running with a maximum of 50 gallons or 80 per cent. of pre-war consumption, whichever is the less. Ordinarily when a producer gas unit is fitted, the petrol ration is arbitrarily reduced, but, in view of special conditions obtaining in Hobart, the taxi-drivers were allowed a fixed ration of 40 gallons per month. This, generally, is considerably in excess of the amount that would be received if the normal procedure were adhered to, and is on a par with the quantities received by taxi-drivers in Sydney, where similar conditions prevail. There are fourteen taxis in Hobart, all of which are now fitted with producer-gas units, and operate under the above conditions.
Private hire cars, too, are now eligible to have producer-gas units fitted. There are 42cars registered for this use in Hobart, the majority being registered for State-wide operation, and individual petrol rations for which vary between 28 and 47 gallons a month. The view of the Liquid Fuel Control Board is that the major part of their operations having been for extensive journeys by tourists, vehicles of this type should do their extra running on producer-gas and that an increase in the petrol allowance is not warranted.
In these circumstances it does not appear that a lack of sufficient petrol is a factor in any circumstances which prevent taxi-drivers earning the basic wage; but if the honorable member can cite a specific instance of hardship, I shall be glad to have the matter investigated.
Interment of Japanese.
Mr.Forde. - On the 10th February, the honorable member for Moreton (Mr. Francis) asked the following question, without notice: -
Has the Minister for the Army read in the latest issue of Smith’s Weekly evidence in support of an early report that two Japanese had been buried in the Australian Imperial Force portion of a Brisbane cemetery ? Will the Minister investigate this statement immediately and inform the House of the facts?
I now furnish the following reply: -
A section of Lutwyche Cemetery, Brisbane, was set aside for the burial of soldiers of the present war, and, as in all war cemeteries, a section is reserved for the burial of enemy dead, in accordance with the Geneva Convention, which states that deceased belligerents shall be honorably buried, their graves permanently marked and carefully maintained.
It is only by the observance of this Convention that we may expect reciprocal action from the Japanese. In addition to this, while we remain signatories to the Convention we are bound by its terms.
The section set aside for the Japanese in
Lutwyclie Cemetery was separated from the portion in which deceased Australian service personnel would be buried by a pathway some 25 to 30 feet in width. In the section reserved for the burial of enemy dead were buried two Japanese who had died of wounds in Queensland and one German prisoner of war.
Cite as: Australia, House of Representatives, Debates, 17 February 1943, viewed 22 October 2017, <http://historichansard.net/hofreps/1943/19430217_reps_16_173/>.