16th Parliament · 1st Session
Mr. Speaker (Hon. W. M. Nairn) took the chair at 10.30 a.m., and read prayers.
– I produce a letter which I received this morning from a friend, Mr. E. J. Smith, of 45 King William-street, Adelaide. It bears a seal, on which are printed the words “ Opened by Censor “. The envelope is stamped
Passed by Censor “, and also has stamped on it the figures “ 4 “ and “A26 “. I ask the Prime Minister: On whose authority is a letter from an interstate capital to a member of this House, which did not originate in a military camp or other service establishment, opened by the censor? Will the right honorable gentleman have an investigation made immediately, and make a statement before the adjournment of the House to-day?
-I shall do my best to comply with the honorable member’s request.
Procedure on Motion for First reading.
-I wish to make a personal explanation, as I havebeen misrepresented in several newspapers in Australia in respect of the procedure that I followed when the National Security Bill 1943 came before the House on “Wednesday. I draw attention to an apparent lack of knowledge of the Standing Orders and of parliamentary procedure on the part of these journals. One newspaper has published the statement “ Mr. Fadden raised no objection to the billbeing dealt with on the motion for the first reading. This procedure prevented debate”. Another newspaper published the statement “ Mr. Fadden raised no objection to the bill being dealt with on the motion for first reading. This prevented debate “. As the House knows, Standing Order No. 157 provides -
The question “ That this bill be now read a first time” shall he put by the Speaker immediately the same has been received, and shall be determined without amendment or debate.
As you, Mr. Speaker, know, when the bill was received from the Senate, I moved “ That the bill be now read a first time”. That is all that I could do, in accordance with the standing order. I now request that those newspapers which have shown themselves to be not conversant with the Standing Orders and with the decent procedure of this Parliament shall amend their slurs and misrepresentation.
– I ask the Prime Minister whether the Government has yet given consideration to the proposal of the Minister for Labour and National Service, for the setting up of joint production committees, constituted of representatives of the workers and managements in war industries, with a view to achieving greater efficiency and harmony in such establishments? If not, can he indicate when the matter is likely to be dealt with?
-Cabinet has approved of the setting up of production committees. I understand that committees have been appointed in some establishments, and that one meeting has been held of at least one committee. I shall endeavour to ascertain the reason for the delay in the appointment of committees in other establishments. The formation of such committees is the function not of the Government but of the managements and the workers.
– Yesterday, I drew attention to correspondence and inquiries I had received concerning the impossibility of radiobroadcasting station 4BH, Brisbane, utilizing for the purchase of cigarettes and. tobacco for members of our fighting forces, who are sick or wounded in hospital, money which it had raised for the purpose by public appeal over the air. The Prime Minister undertook to advise me of the reason for the shortage of supplies. Can he yet do so?
– I regret that, owing to the illness of the Minister for Trade and Customs, my inquiry has been delayed.
– Is the Treasurer aware of the publicationby the Taxation Department of a list containing the names of persons who are in arrears with their tax payments, and the estates of taxpayers long since deceased who were in that category?Some time ago, I proposed in this House that negotiations be instituted with a view to achieving a compromise in respect of such indebtedness,because the children of many deceased taxpayers are not in a position to discharge the whole of the arrears, but nevertheless desire to do what they can to have the names of their deceased relatives removed from the list, upon which they have appeared for a considerable time. “Will the Treasurer consider such an arrangement?
– It is highly desirable that the Treasurer shall not have a voice in the determination of what shall be done in respect of outstanding tax accounts. In fact, it is his duty to refrain from participation in such decisions. I promise the honorable member, however, that I shall refer his request to the Commissioner of Taxation, whose responsibility this Parliament has placed on a very high plane, and ask that he present a report.
Mr. E. J. Ward M.P
– Has the Minister for Labour and National Service any information concerning a report that is circulating to the effect that Mr. Penton, editor of the Sydney Daily Telegraph,. has been found guilty by the Australian Journalists Association of deliberate distortion of a statement made by the honorable gentleman, and that Mr. Penton’s expulsion from the Australian Journalists Association has been recommended because of such conduct?
– I believe that I cannot do better than quote from a communication which I have received from the Australian Journalists Association. It reads -
For your information, the New South Wales District Committee of the Australian Journalists Association forwards the following report of the Ethics Committee, approved at its meeting on 18th February: - “The Ethics
Committee finds that the Daily Telegraph was guilty of deliberate and gross distortion in that on 16th December, 1942, it published the following sentence, attributed to the Minister for Labour and National Service, Mr. Ward: There is neither need nor justification for the people to pay in sweat, blood and tears while the war lasts ‘ and did not give Mr. Ward’s full sentence in this respect, which was: There is neither need nor justification for the people to pay in sweat, blood and tears while the war lasts, and, when peace comes, to be burdened with interest payments condemning them to perpetual misery, poverty and degradation ‘. Publication of the first half only of the sentence is a complete misrepresentation and places an entirely incorrect meaning on Mr. Ward’s statement. Evidence gathered by the Ethics Committee is that such deletion was deliberate. The Ethics Committee accepts the unrefuted evidence submitted to it by members of the Australian Journalists Association that the deletion was made personally, by Mr. Ponton, editor of the Daily Telegraph “.
Following acceptance of the Ethics Committee’s report, the committee recommended to its Federal Executive Mr. Penton’s expulsion from the Australian Journalists Association.
– Last night, the Minister for Labour and National Service stated that the Government was seriously concerned at the fact that strikers in the textile industry were ignoring the directions of their union leaders. The honorable gentleman appealed for a return to work. In view of the fact, reported in the press this morning, that last evening the executive of the union gave its support to the strike, will the honorable gentleman state whether he is still prepared to urge the workers to return to their employment, despite this apparent concurrence of their leaders in the stoppage?
– The honorable member is incorrect in saying that the executive of the union is supporting the strike. A general strike has not been declared in the textile industry. The decision is to hold a stop-work meeting next Monday. Every member of the union will have an opportunity to attend that meeting, and to decide whether the executive officers shall be supported or other action shall be taken. The union officials have given every possible assistance in order that production shall be continued, and are still working strenuously to overcome the present difficulties. It is true that, for some time, a number of textile workers have been dissatisfied with the general situation of their industry, and that complaint has been made in regard to the working conditions in certain of the mills. An investigation was carried out by the Department of Labour and National Service, through its welfare division. The department is making every endeavour to effect a rapid improvement of the conditions. The matter of wages has been before the Arbitration Court for some time. A good deal of dissatisfaction has been expressed in regard to what some members of the union believe to be the prolonged delay in arriving at a decision. This has led to spasmodic stoppages in the industry, which the officials of the union have endeavoured to avoid. The Department of Labour and National Service has worked in conjunction with those officials in attempts to ensure a continuance of operations. The Government takes a very serious view of the matter. It considers that work in this important war industry must proceed, and contends that there is no sense in the workers holding up operations at the present juncture, because such action will in no way assist to rectify the matters of which they complain. It is hoped that when all the members of the textile workers union meet on Monday they will decide to accept the advice of their officers, and will resume work. I hope that at an early date the court will be able to make its declaration with regard to wages, and that peace will again reign in the industry.
– Will the Minister for the Army state whether it is a fact that at the Red Army Day celebrations in Sydney, the senior military officer who represented Australia was a major, although at similar functions held in honour of other nations Australia has always been represented by a general? Does the Minister consider that just recognition was given by the services to our allies of the Red Army?
– I am informed that an invitation was extended to MajorGeneral A. G. Fewtrell, CB., D.S.O., V.D., of Sydney to attend the function on
Sunday, but he had a prior appointment and asked Major Irwin, one of his staff officers, to represent him. He then intimated that he would be able personally to attend the function held on Tuesday afternoon, which he considered to be the more important gathering. There was no intention on his part, or on the part of anybody in the Army, to slight those responsible for the function held on Sunday. Contrary to a -statement published in the press, it is not usual for a military officer to take the salute at a civilian procession, and certainly no discourtesy was intended.
– And none was given.
– That is so. The Commonwealth Government and the Army authorities have the greatest admiration for the Red Army’s magnificent fight, and due honour wa3 paid to it for its remarkablc achievcm ents.
– I refer the Minister for War Organization of Industry to the statement made by him recently regarding the number of labour units released as the result of the closure, for which his department was indirectly responsible, of some 500 branches of banks. Does the Minister still stand by his statement, that 6,000 labour units were released, and, if so, can he give particulars?
– If the honorable member reads the statement made by me yesterday he will find that what I said was that the total number of labour units released from the banking industry was 0,000.
– Is that by voluntary enlistments ?
– No. I did not relate that number to the plan for the rationalization of the banking industry prepared by my department, because that is a gross figure. The 6,000 labour units released from the banking industry include a large number of persons who have voluntarily enlisted. It includes persons who have been called up by the manpower authorities, in conjunction with the plan for rationalization put into operation by my department. It is not possible to separate those made available by any rationalization scheme from the numbers who have voluntarily enlisted, and those who have been compulsorily called up.
– About a year ago the small boats, including fishing craft, along the coasts of New South Wales and Queensland were commandeered for naval purposes or immobilized, and many of the owners of the boats have neither been compensated nor had their craft returned to them. Will the Prime Minister inform the House to whom they may apply for compensation, and whether they can get their boats back, because boats are essential to many of them to enable them to carry on the fishing and oyster industries?
– The Department of the Army is the responsible authority to which the owners of the boats should apply for compensation. The Army took action in respect of the craft as the result of an instruction from the Navy, and is responsible for the accountancy work involved.
– The right honorable member for Cowper (Sir Earle Page) addressed a question to me this week about the importance of taking steps to counteract dengue fever. I now desire to inform the right honorable gentleman that the Commonwealth has arranged conferences with State medical authorities to discuss ways and means of controlling the. spread of this fever. At the request of the defence authorities, regulations have been passed making it obligatory on every medical man to notify the first case of dengue fever attended by him, and to furnish a weekly return subsequently. The Minister for Health (Mr. Holloway) has had a personal consultation with the Queensland Minister for Health, at which the whole position was discussed. Queensland and New South Wales are actively concerned with mosquito eradication, and other measures, for the prevention of this epidemic. The Commonwealth Department of Health has prepared an Australian text book of reference on dengue fever. This is now with the printer, and will shortly be issued. It includes all the information which has been obtained concerning the conditions of development and spread of this disease in Australia. The School of Public Health and Tropical Medicine, which is a branch of the Commonwealth Department of Health, has carried out research work and local investigations, and has given advice on many aspects of this disease in Australia. Some of the questions asked by the right honorable member are now the subject of considered replies, but for my own part I find it extremely difficult to contemplate an increase of the price of butter as being a prophylactic for dengue fever.
– Is the Minister representing the Minister for Trade and Customs in a position to furnish a reply to the question asked by me last week relating to the method of fixing the prices of firewood in Tasmania?
Mr.BEASLEY.- I regret that a reply has not come from the Minister for Trade and Customs. He has been confined to his bed for some days, and no doubt that is the reason for the delay. I shall endeavour to get an answer to the question through the Minister now assisting him.
– Yesterday the honor- able member for Wannon (Mr. McLeod) asked me the following questions : -
Is it a fact that the price of butter was pegged at the outbreak of war by an order of the Minister for Trade and Customs, the Honorable John Lawson. a member of the Menzies Government? Was it by virtue of that order that power to fix the price of butter was vested in the Prices Commissioner? In view of the conflicting and often inaccurate statements on this subject by some honorable members, will the Minister for Commerce and Agriculture make a detailed statement covering the whole subject ?
I have ascertained that prior to the outbreak of war the decision in relation to the fixing of the Australian prices of butter and cheese rested with the Commonwealth Dairy Produce Equalization Committee. Immediately after the outbreak of war, however, certain essential commodities were declared and brought under the control of the Prices Commissioner. National Security (Prices’) Regulation Order No. 3, issued over the name of the then Minister for Trade and Customs (the Honorable John Lawson) listed the commodities so affected. As implied by the honorable member, butter was included in this list, which, in effect, pegged the price at prewar levels, and transferred the power of determining the future Australian price from the Commonwealth Dairy Produce Equalization Committee to the Prices Commissioner. I agree with the honorable member that loose statements have been made by honorable members concerning the war-time method of fixing prices for dairy products. The facts, however, are well known to the Australian Dairy Farmers Federation, representatives of which informed me during a recent interview that they were assembling the necessary data for the presentation of a case for consideration by the Prices Commissioner.
– Yesterday the honorable member for New England (Mr. Abbott) asked a question concerning the price fixed for broom millet. I am now advised by the Commonwealth Prices Commissioner that investigations were made of prices in past years, and the condition of the crop this year, and that officers of the New South Wales Department of Agriculture were consulted. There is a smaller planting this year, but the yield to the acre is up to average, and in the Tumut area slightly above average. Owing to a heavily increased demand and short supplies, prices rose to very high levels, reaching more than double the average price of recent years. Control was essential, and the Prices Commissioner fixed a price of£55 a ton at grower’s siding for prime quality broom millet. This price is more than 50 per cent. above the average of the past four years, and should be more than adequate to cover increased costs.
– I asked whether the organizations of the primary producers had been consulted.
Mr.SCULLY. - I understand that no such consultation took place.
Mr.MARWICK.- Will the Minister for Commerce and Agriculture state what assistance, financial or otherwise, has been given or promised to New South Wales or Western Australia to combat swine fever in those States, what compensation has been paid to the producers whose pigs were destroyed in order to prevent the spread of the disease, and by whom has such compensationbeen paid?
-I understand that negotiations have been undertaken with the Department of Health, which is the controlling authority. It was discussed in Canberra at the last meeting of the Australian Agricultural Council, at which I undertook to take the matter up with the States concerned and see whether itwas possible to draw up a scheme whereby the Commonwealth might assist them financially. The Minister for Agriculture in New South Wales informed me that a swine fever fund had been established in that State and that compensation had been paid in respect of pigs destroyed as a result of the epidemic, but I understand that no similar provision has been made in Western Australia. The ‘Government has received an application for compensation from Western Australia, and it has been passed on to the Department of Health for the purpose of evolving a scheme of compensation for the pigs destroyed in that State.
Tax and Interest Rates
– Yesterday the honorable member for Boothby (Dr. Price) asked me a question with regard to the taxation on deferred pay payable to members of the defence forces. I consulted the Commissioner of Taxation in regard to the matter, and he informed me that neither deferred pay nor the interest thereon is assessable income. But in the year in which the member of the forces receives his deferred pay, 5 per cent. of that total accumulated amount of deferred pay, plus interest, is treated as assessable income and brought into the member’s assessment. The amount of tax payable on 5 per cent. of the deferred pay, however, would be very small.
Yesterday the honorable member for Fawkner (Mr. Holt) raised the question of crediting the interest on deferred pay of members of the forces. The position is that interest on pay is at present credited to the defence pay accounts of members of the forces.Interest begins to accrue from one year after a member becomes entitled to deferred pay, and compound interest is credited to the member’s deferred pay account annually thereafter. The rate of interest is 3 per cent.
– Is the Minister for the Army aware that thousands of pounds are missing from a fund under the control of a commissioned officer of the Military Forces, and that this officer has been charged in connexion with the loss? Who was responsible for the appointment of this officer, and was any inquiry made into his previous civil record ? Will the Minister have inquiries made into the civil record of all military officers ?
– A full inquiry will be made into this matter, and information will be furnished later.
– As the Gov ernment took action to ensure prominence being given to Red Army Day, and as last year official recognition was given to American Independence Day, will the Prime Minister also take action to ensure that Empire Day is given official recognition, and made a day of real prominence in the Australian calendar, thus commemorating not only the Empire’s past greatness, but also its heroic stand in June, 1940, and the Battle of Britain, which undoubtedly was the turning point in the fortunes of this war ?
– Empire Day has alwaysbeen a day of great significance in Australia. I shall see that proper steps are taken on the next occasion to have its significance again brought, to the minds of the people of Australia.
Motion (by Mr. Curtin) agreed to -
That the House, at its rising, adjourn to Wednesday next, at 3 p.m.
– Will the Prime Minister consider the issue of a handbook by recognized authorities on the ethics and technique of distortion, and will he invite the Minister for Labour and National Service and the Minister for the Army to become joint authors of the work?
– As the House has important business to deal with, 1 ask that all further questions be placed on the notice-paper.
Debate resumed from the 25th February (vide page 1053), on motion by Mr. Chifley -
That the bill be now read a second time.
.- . When considering this bill, I asked myself the following questions: - (1) Does it lay the foundations of the reform of agricultural credit? (2) Does it propose a scheme for rural reconstruction, or does it merely propose to set up a government mortgage bank that will alleviate the lot of some primary producers who cannot obtain accommodation from the private banks? If the legislature does nothing about the reform of agricultural credit, and ignores the need for rural reconstruction, it will fail dismally to deal effectively with the needs of the Australian farming community. It is a simple but profound truth that any plan to reconstruct our national economy must have for its foundation a contented and prosperous countryside. Proposals for post-war reconstruction which ignore the plight of the agricultural industries cannot possibly succeed. It would be better if this bill were withdrawn, and redrafted to embrace a complete scheme of rural rehabilitation, than that we should pass it now and thus delude ourselves that we are getting something worth while. At best, it is only a palliative. It certainly provides no remedy for the ever-increasing ills that are denuding the countryside of virile young people and swelling the populations of the already swollen cities. The efforts of the Labour party to obtain a basic wage for farm workers and those engaged in rural industries are nullified by the conditions prevailing in those industries. The honorable member for Wimmera (Mr. Wilson) said that conditions in rural areas are such that farmers cannot win for themselves and their families that security and those reasonable standards of living which we of the Labour party demand for their employees. Dairyfarmers, in. far too many instances, cannot, and never could, carry on their farms except under sweating conditions, of which they and their wives and little children are the victims. As evidence of the unfortunate concentration of population in capital cities, I quote from the Victorian Year-Book for 1939-40. In this publication there is a set of figures under the heading, “Population of Victoria, Greater Melbourne and the remainder of the State, 1861- 1940”. The figures show that, in 1871, there were 206,000 people in Greater Melbourne and 523,000 in the remainder of the State. In 1921, there were 7S2,000 in Greater Melbourne and 740,000 in the remainder of the State. During the intervening 50 year§, the population of Melbourne increased by 350 per cent., but the population of the remainder of the State increased by only 48 per cent. The figures for 1940 show that Melbourne had then a population of 1,100,000, whilst the population of the remainder of the State was 841,000. During the nineteen years from 1921 to 1940, the population of Melbourne increased by 45 per cent., whilst that of the rest of the State increased by only 16 per cent. The story of Melbourne is also the story of Sydney. To-day, we find ourselves in the unfortunate position of having 2,500,000 people in the cities of Melbourne and Sydney, concentrated in an area of 800 square miles of Australia’s total area of 3,000,000 square miles. That is not healthy, economically or in any other way. Until we can devise an effective system of decentralization we shall not progress as a nation.
– -Australia is suffering from fatty degeneration of the head.
– It is certainly suffering from over-concentration of its people in two metropolitan areas. Prom the history of other countries we learn that an undue concentration of population in capital cities is generally a sign of national decadence. If we wish to build a new Australia, and double our population in the next 25 years by natural increase, as the actuaries assure us is possible, we must ensure that as many people as possible are placed on the land.
I quote the following from the report, of M. Louis Tardy to the League of Nations on systems of agricultural credit : -
The small family holding gives the worker greater freedom and independence. It is an observed fact that the small farmer who owns his land, and is thus master of all the means of production, obtains proportionately a higher gross yield than big estates, because he works harder, with greater care and attention, knowing that he is working for himself.
A comparison of the relative birth-rates of the urban and rural sections of the community is furnished in an as yet unpublished work on decentralization, written by Colin Clark, of the Queensland Bureau of Industry, and Dr. Andrews, of the University of Sydney. They write as follows: -
Over the Inst 30 years fertility has been declining in both rural and urban sections of the community, but it has fallen fastest in the metropolitan areas so that now it stands at a much lower level than in either the country towns or the rural areas.
In Sydney, a typical metropolitan city, in 19.”i:i .there were 200 children (under five year? of age) to each 1,000 potential mothers (women aged 15-44), whereas about 360 children would lie necessary to replace the existing population, In the country towns of N’ew South Wales there was a fertility index of 420 children and in the rural areas as a whole, 020 children. Fertility, therefore, is lowest in th« metropolis and highest in the rural ureas, with the country towns in an intermediate position.
A notable reinforcement of these figures is the fact that in the United States of America and in Germany, the fertility of rural areas is nearly double that of the large cities. The facts of rural and urban birth-rates being as they are, it might have been thought that special efforts would have been made by governments to encourage the one way of life which provides people for Australia. Our national history, however, is singularly barren of examples of that kind, and instead we are confronted with the catastrophic fact that whereas metropolitan areas have steadily increased in population over the last 50 years, the land proportionately has gone back, despite the higher rural birth-rates.
In this regard the figures revealed for the State of New South “Wales by the report of the Select Committee on the Conditions and Prospects of the Agricultural Industry (1921) received strong reinforcement from the Commonwealth census of 1933. The report of the select committee disclosed that -
In the same period of years the metropolitan and municipal population of Sydney had risen from 50.3 per cent. of the total to 68.2 per cent. The Commonwealth census of 1933 disclosed that the same bad position existed throughout the Commonwealth. Between 1891 and 1933 the proportion of the population living in the metropolitan areas rose from 32 per cent. to 46.8 per cent. In 1931, out of a total Australian population of 3,174,392, the population engaged in primary production was 430,278. In 1933, when the total population had more than doubled to reach 6,629,839, the rural population had not progressed at nearly the same rate, being only 703,782. The percentage of breadwinners engaged in agriculture declined from 24 per cent. in1891 to 19.4 per cent. in 1933. From the national viewpoint, in which an increasing population might well be classed as the first objective of national policy, the position might not have been so unfavorable if the drift had been from primary production to country towns, which in Europe is the normal method by which later children who cannot be maintained on the family farm are absorbed into economic life.
The Australian development, however, has been on different and disastrous lines. As Mr. Colin Clark and Dr. Andrews point out “ the reservoirs of the rural areas have been overflowing into the man-thirsty cities “, the trend being from country to metropolis. Thus, the most fertile section of the population is being sucked into the environment whose record of fertility is the worst of all. The significance of this survey lies in three clear deductions -
A policy which allows rural population to migrate to the cities is equivalent to killing the goose that lays the golden eggs. Consideration of those facts must lead to the conclusion that it is eminently desirable that the Parliament, after legislating to establish a mortgage bank, should devote its most earnest attention to the problem of reconstructing our Australian countryside.
– That is absolutely essential.
– The continued prosperity of the countryside is the only foundation upon which the greatness of Australia can rest. We cannot live by maintaining secondary industries in the capital cities if we have an impoverished agricultural community. Obviously an agricultural community which has no purchasing power cannot buy the products of the labour of the people who live in city areas. It is obvious, too, that a strong industrial system will give to the workers in industry the power to buy the products of agriculture. We can balance our economy; but we cannot continue to live as a nation if our primary producers are dependent upon seasonal variations, acts of God, and world parity prices for their products. It is most essential that in this “National Parliament the fullest consideration should be given to the utilization of our tariff provisions and our railway systems with a view to encouraging the development of country industries, so that they can absorb the later children who may be born on Australian farms. Unfortunately, in Australia authority is divided between the Commonwealth and State Parliaments, and development is retarded thereby. At the time of federation the railways remained with the States, because it was thought that railways were an essential adjunct of land development. But as customs duties were under the control of the Commonwealth there has never been a correlated plan under which railway freights, bounties, and customs duties would be utilized to enable the problems of agriculture to be viewed as a whole. I hope that the Commonwealth Government will make such representations to the State governments as will result in a plan which will, for the first time in our history, tackle the problems associated with Australia’s rural industries. At times, I almost despair of the possibility of the Commonwealth securing from the States that co-operation which is essential to the winning of the peace. In war-time we must prepare for peace, otherwise our problems in the post-war period will be greater than those which confronted us when we were catapulted into a war for which we were entirely unprepared. The behaviour of the State Parliaments in connexion with the transfer of powers to the Commonwealth does not encourage optimism, or the belief that we can expect from the States that co-operation in dealing with the problems of rural reconstruction which is essential to success. If it be impossible for the Commonwealth to get the co-operation of the States by a reasonable approach to the State governments, let us have a referendum to endow this Parliament with complete powers - concurrent powers might help - so that the Commonwealth Parliament will be able to deal with all the problems that will confront us after the war. I suggest that the Rural Industries Committee, which is representative of both Houses of the Parliament and of all parties, should be asked to consider a comprehensive scheme of rural reconstruction which would use the tariff, railway freights, and mortgage bank legislation to redistribute our population, decentralize industry, and promote healthier and more fruitful family life than we have hitherto known. Referring to the original hill which was introduced last September, the honorable member for Indi (Mr. McEwen), said that it was so conservatively drawn that he thought Mr. Montagu Norman must have had a hand in its preparation. The small improvements made since then by the Committee of this House which examined the original measure have not changed its character, nor have they, in my opinion, resulted in a more progressive measure despite the praise which the honorable gentleman now bestows upon it. The measure has, indeed, been “ damned with faint praise “ by every speaker who has contributed to the debate. It seems imperative, therefore, that the Government, whilst securing the passage of this legislation, should take early action to give effect to the valuable suggestions which have been made in the course of the debate. Every honorable member who has spoken desires to ensure that those who produce the wealth of this country through its primary producing industries shall be given those standards of living which we wis’h all Australians to have.
My criticism of the bill as it stands comes under six headings. First, the bill should provide for an advance of 80 per cent, against the valuation of the property. It may be said that there is no particular virtue in 80 per cent., but whatever limit may be fixed I urge that the advance should at least represent a big percentage of the valuation. Secondly, the interest rate should not be more than 2 per cent, or 2A per cent. It is a truism that interest is the killer. Both of my grandfathers ploughed virgin soil in this country. One bought land in the Kyneton district of Victoria at the first land sale in the ‘fifties. The other took up land in the Ballarat district after having worked on the diggings there without marked success. From my family experience I know that although several generations have tilled the soil, none of them made any great fortune out of their operations, notwithstanding that they worked hard and strove to succeed.
– They rendered a great service to this country.
– I thank the honorable member for Forrest for that tribute. I am sure that all those people who came to this country in cockleshells of ships and helped to open up the land rendered a great service to the country and to later generations. Seasonal variations and high interest rates ruined many thousands of fanners in Victoria. I mention Victoria particularly because it is the most closely settled State of Australia and has a population of about 27 persons to the square mile. Most of the arable land in Victoria has been alienated for many years, and no State was more severely stricken at the time of the bank smash in the ‘nineties than was Victoria. Thousands of young men had to leave that State and seek fresh opportunities in Western Australia where, fortunately, the goldfields had opened up. Western Australia absorbed thousands of the best of Victoria’s youth at a time when there was no opportunity at all for profitable or remunerative employment for them in their natal State. Western Australia conferred a ‘great benefit on Australia by its absorption of people from the eastern side of the continent, and in their turn, the “Easterners” helped to lay the foundation of Western Australia’s development and greatness. It must be said of Western Australia that not the same percentage of its .population lives in its capital city as in Victoria and New South Wales.’
My third criticism of the bill is that the period of repayment should be. raised from 41 years to 60 years. It is true that a period of 60 years is beyond the life of the average man who takes up land. For instance, should a returned soldier from this war take up land at the age of 24, the likelihood that he will live to 84 is not great. Although longevity is increasing, it is hardly likely that many of those who take up land in their twenties will be alive when the term of the loan expires. They could, however, pass on their estate to their heirs and successors. It might be a good thing for Australia if some future government hail the courage to abolish all freehold title in land and substitute a system of perpetual leasehold such as exists in the Australian Capital Territory. That is the only system which is equitable and reasonable, and ensures that we shall not have speculation which leads to accumulation of wealth in the hands of a few people at one end of the social scale and -abject destitution and, in some cases, degradation, at the other. The Honorable King O’Malley, to his eternal credit, insisted that in this Australian Capital Territory there should be a system of perpetual leasehold which would prevent the speculation which occurred in’ the federal capital district of Colombia in the United States of America. As evidence of what happened in the city of Melbourne because of the alienation of land-
– Order ! The honorable gentleman is making an extremely wide survey. He is now well outside the limits of this bill.
– I should like to make this point in regard to land speculation, which affects country districts as well as metropolitan areas. Speculation in city districts has been paid for, not only by city dwellers, but by the whole countryside. At the corner of Swanston-street and Collins-street, Melbourne, a block of two acres was sold for £140 in the early clays of Victorian settlement to Henry Howey. That land was valued in 1985 at about £1,100,000, and most of it is still in the possession of the Howeys who live in England as absentee landlords. They have drawn heavy tribute all through the years. If we do not extinguish freehold title in land and substitute leasehold, which is equally’ good as a security within a reasonable period. I doubt whether we shall ever be able to deal with the problems of agricultural well-being. 1 must criticize the observations made hy the right honorable member for Cowper (.Sir Earle Page), who said yesterday that he had remodelled the Commonwealth Bank Act. The right honorable gentleman should copyright that phrase, for it is the most delightful euphemism I have ever heard. Instead of saying that he remodelled the Commonwealth Bank Act, he should tell the (ruth and say that he sabotaged the bank, because he made it a bankers’ bank.
– No power which it formerly had was taken from it, and the bank was endowed with additional powers.
– It is true that the right honorable gentleman gave it additional powers, but it is equally true that he put it under the control of a board, although it had successfully functioned under the complete control of a governor. The actions and decisions of the Commonwealth Bank Board have retarded the development of Australia and have affected adversely both our primary and Secondary industries.
– ‘May it not be as truly said that the previous governor was the representative of the private banks?
- Sir Denison Miller, the first Governor of the Commonwealth Bank, came from a private banking institution, but, when he left the private banking institution, he became a Commonwealth public servant, and a very famous one too. He built the bank out of nothing. It was not until he died that the Bruce-Page Government took action to place the control of the bank in people who knew nothing at all about banking.
– Sir Denison Miller to-operated with the private banks.
– He may have done ?o, but he was not the agent for or under the influence of the private banks, as one might infer from the question asked by the honorable member for Gippsland in his desire to controvert my statement that the Commonwealth Bank Board was the agent of the private banks.
– I did not do that. I said that it, might as truly be said of one side as of the other.
– I hope I do no injustice to the honorable gentleman. I claim that, what was not true of Sir Denison Miller is true of the Commonwealth Bank Board, which is the agent of the private banks. What were the qualifications of the chairman of the Commonwealth Bank Board at the time of the depression? Sir Robert Gibson had been a. successful bedstead manufacturer. By what process of ratiocination could any body conclude that by virtue of having bren a successful bedstead manufacturer a man might become a successful banker.
– <Sir Robert Gibson made a death bed for the Seullin Government.
– The Commonwealth Bank Board, at the time of the depression, and in the days of the Scullin Government, acted adversely to the desires of that Government and, as events have proved, adversely to the interests of this Commonwealth. When the then Treasurer, Mr. Theodore, desired accommodation from the Commonwealth Bank Board to help to protect our primary industries and to put our people back to work in the cities, there was no cooperation from the Commonwealth Bank Board. As a matter of fact, the bill providing for the raising of £1.S,000,000 by the issue of fiduciary notes, of which £6,000,000 was to have been spent on the wheat-growers of Australia, was rejected by the Senate which, after having interrogated Sir Robert Gibson at the bar of the Senate, used as one reason for rejecting the measure the fact that the Commonwealth Bank Board had refused the Government’s request for accommodation. The right honorable member for Cowper, though he did increase the powers of the Commonwealth Bank, has much to answer for in having appointed that board. All the writers who have dealt with the subject have criticized, the right honorable gentleman’s action. Of what use is it to give the Commonwealth Bank increased powers if you appoint a board which never uses those powers? The Commonwealth Bank Board has not only acted in the interests of the private institutions in a general way, but also, in particular, has, by direction to its officers, refused to farmers and city dwellers alike who are indebted to private banking institutions, permission to open new accounts. The Commonwealth Bank refuses to take over overdrafts from the private banks, so that people are denied the advantage of the lower rate, of interest in the Commonwealth Bank. Persons . lIU want to transfer their overdraft from a. private hank to the Commonweal ih Bank have been told that they must discharge their liability to the private bank before they would be allowed to transfer their accounts to the Commonwealth Bank and, of course, that was generally an absolute impossibility. So the Commonwealth Bank Board, most of the members of which were, until recently, persons interested in insurance companies, pastoral companies and other private lending institutions, acted as a brake on the development of the Commonwealth Bank. How many branches of the Commonwealth Bank have been opened in the last two decades in rural areas or in capital cities? The Treasurer recently supplied me with a table showing the number of banks operating in country towns, and it was remarkable to see the number of country towns without a branch of the Commonwealth Bank.
– It has few branches in Victoria.
– Yes, it has hardly any branches in Victoria. My fourth criticism of this measure is that there should be no separate capital structure for the mortgage , bank. Mr. King O’Malley was mentioned last night by the right honorable member for Cowper. Recently, I asked Mr. O’Malley, in the presence of three ministers and several other members, in the Commonwealth Bank, Melbourne, whether he thought it desirable or necessary for the mortgage bank to have a separate capital and he said, “‘Certainly not!”. I give that as evidence in opposition to the statements made by the right honorable member for Cowper. Under the bill it is proposed that the mortgage bank shall barrow from the Commonwealth Savings Bank. Therefore, it will not be able to provide money at a low rate of interest, because the Commonwealth Savings Bank pays about 2 per cent, interest to its depositors, and it is obvious that the mortgage bank, borrowing money at 3 per cent, for the most laudable object of lending to primary producers, will not be able to lend at less than 3i per cent.; but, if the credit of the nation were used, it would be possible for the Commonwealth Bank to lend money at 2 per cent, to necessitous primary producers. I suspect that the provision to borrow from the Com monwealth Savings Bank was put in this bill to ensure that rural borrowers shall pay about the current rate of interest paid on war loans. I think that rural rehabilitation and investment in war loans are two separate subjects, and i hope that the Treasurer will agree in committee to wipe out the provision for a separate capital foundation for the rural bank.
My fifth criticism is that primary producers should be entitled to operate current accounts in the mortgage bank. It may be desirable in certain instances that they be compelled to do so, because, sometimes, farmers and others have to be protected against themselves. I see no objection to people whose mortgages the mortgage bank holds operating current accounts with that institution, but, of course, there will be stubborn opposition from the private banks.
– How could they run current accounts on fixed terms?
– They should have the two accounts, one relating to the fixed liability and the other a current account.
My sixth and last criticism is that under the bill, apparently, State instrumentalities, such as the Rural Bank of New South Wales, and, possibly, the State Savings Bank of Victoria, will be used as agencies for the Commonwealth Bank. It would be far better if the Commonwealth Bank boldly proposed to take over all rural hanks in Australia, just as it has already taken over all State savings banks with the exception of that in Victoria. About 1931, the Commonwealth Bank took over the State Savings Bank of New South Wales. Immediately prior to that date it had taken over the State Savings Bank of Western Australia, and, at much earlier dates, the State Savings Banks of Queensland and Tasmania. Although it would seem that under the Constitution we cannot prevent State governments from maintaining State banks, I submit that, in the interests of Australia as a whole, we should have only one public banking institution, and that should be controlled by the Commonwealth. By that means this Parliament could exercise much more effective control over our monetary structure. I am an advocate of nationalization of banking. That is a plank of the platform of the Labour party, which I hope to see implemented. Under the bill the Treasurer may make advances to the mortgage bank department of certain amounts and subject to such terms and conditions as are agreed upon between the Treasurer and the bank. That provision is undesirable in any legislation of this kind, because the Bank Board and not the Treasurer will finally determine the issue. At least that was the case during the troublesome days when the Scullin Government was in office. I hope that the conditions which then existed in this country will never be repeated.; but in order to ensure against the remotest possibility of their repetition, the Treasurer should be empowered under this bill to make advances to the mortgage bank regardless of the opinion of the Bank Board. Under the measure which established the Commonwealth note issue the power to issue notes was taken from the private banks and given to the Commonwealth Treasurer; but under an act passed in 1920, that power was transferred from the Treasurer to a Commonwealth Notes Board and in 1924 to the Commonwealth Bank Board, which is a non-pa rliamentary body.
– Who passed that act?
– The Bruce-Page Government. The Government, in accordance with the policy of the Labour party, should abolish the Commonwealth Bank Board and should restore control of the note issue to the Treasurer, with whom it should rightly reside. The position in Great Britain is that the Chancellor of the Exchequer controls the note issue. One advantage will be secured under this measure in comparison with the provisions governing the operations of theRural Bank of New South Wales. The latter places a limit of £2,000 on its advances, and charges interest at rates of from 4 per cent. to 4½ per cent.[Ex tension of time granted.] I now propose to refer to land settlement schemes in general, and in particular to one scheme which was undertaken in Victoria after the last war.I refer to the system of soldier settlements and closer settlement, in which the Victorian Government invested £20,000,000. That scheme was a grotesque failure. It caused much misery and suffering to unfortunate soldiers, who were placed on land which, in many instances, was worth only 30s. an acre, but for which the Government had paid from £6 to £10 an acre. Those soldiers were loaded with that debt, on which they were expected to pay interest at rates up to8 per cent. Many of them were settled - and I use the word in its more refined meaning - in marginal areas just outside the 10-in. rainfall belt where, prior to the inauguration of the scheme, no farmer had ever tried to earn a living. As the honorable member for Hume (Mr. Collins) and the honorable member for Wilmot (Mr. Guy) have said, they were well “ settled “ after a few years of heartbreaking toil and struggle. In many instances, they were forced to walk off their blocks. The Government of Victoria held a number of investigations of the whole problem of soldier settlement and closer settlement, and subsequently it wrote off millions of pounds of the indebtedness so incurred. Some soldiers were ordered off their blocks in order that two blocks could be amalgamated to provide an economic holding for one settler. For a number of years the Treasurer of that State provided for £1,000,000 annually to be written off the loss incurred in that scheme. I hope that when this war is over we shall not undertake any more schemes of soldier settlement, or any other form of settlement of that kind, but that the mortgage bank, puny child as it is, condemned to an unnatural period of adolescence and a considerable term of weakness, will nevertheless enable us to alleviate to some degree the conditions of many Australian farmers. At best, the bill is ameliorative. It will certainly not solve any problem. I hope that all honorable members will give earnest consideration to what can be done to ensure that our development during the next 50 or 60 years will not be along the lines we have followed during the 50 or 60 years prior to the outbreak of this war. Continuance along the same line? as we have followed in the past quarter of a century must result in our destruction as a white race. I commend the bill in spite of its shortcomings. It is better than nothing. However, it is not what the farmers, or the people, have been expecting. I hope that in the committee stage it will be improved in several important respects, so that we shallbe able to say, particularly to the farming community, that something at least has been done to meet the expectations they have entertained for many years.For a long time past promises have been made concerning mortgage bank legislation, and the hopes of our farmers were high prior to the introduction of this measure. However, whilst the bill is a disappointment, we can derive some satisfaction from the knowledge that the Parliament has at, last made a beginning in dealing with this problem.
. -I support the measure although it is not completely satisfactory. One honorable member referred to it as a monstrosity, and last night the honorable member for Eden-Monaro (Mr. Perkins) said it reminded him of a delicate child. It reminds me of a wormy poddy calf, a pot-bellied little fellow, scoured and ill, living on sour milk and a handful of bran and molasses to steer him through the winter in anticipation of the glorious spring to come, when, so he anticipates, he will get the necessaries of life, so that although stunted in infancy he will develop into a sturdy bullock. That is myview of the bill. This proposal was initiated by the Bruce-Page Government but was defeated. Since then several attempts have been made to revive it. This Government has now seen fit to resurrect it at a most difficult period when the country is engaged in war. Nevertheless, the bill is a move in the right direction, and like the poddy calf that gets the benefit of a luscious spring, it will develop if given assistance by this Parliament. The mortgage bank department must be encouraged, and it must operate for the good of our great rural industries. That is the primary consideration. However, I do not say that its operations should not be extended to other activities. The man on the land who has to fight for his livelihood must necessarilybe given first consideration. Our famous poet, Jack Moses, who is responsible for the monument of the dog on the tucker box on the road to Gundagai, has written -
The wheatand the meat and the fruit that we eat,
And the butter we spread on our bread,
All come from the hand of the man on the land,
And that is how the nations are fed.
Honorable members would do well to ponder on that thought. We must ensure that our primary industries are fostered and maintained at the highest standard of efficiency in order that our fighting forces and the civilian population shall receive plentiful supplies of foodstuffs to enable them to keep up their fighting spirit and morale. The present system of finance is difficult and uncertain. When money is plentiful, men are inclined to speculate a little and extend their properties. In that desire they are assisted materially by the banks. Usually, the local bank manager advises a client, that he cannot go wrong and the money he requires is available. The client then enters upon his new venture in good faith, but at the most inopportune times he is asked to reduce his overdraft and he finds himself absolutely helpless. I have no quarrel with the banks; they are doing an excellent job. They cannot see right into the future; but very often after making advances available they apply the screw when it is quite impossible for clients to reduce their overdrafts. On this point I quote some verse from the pen of an unknown poet -
Have you ever felt the burden of a mighty overdraft,
When your implements and stock were up the spout,
Whenan inch of rain would make you, or a wind from south would breakyou,
Did you ever try to sit and see it out?
Have you interviewed the banker, and crawled for all y’re worth?
Have you waited his reply with thoughts that burnt?
Have you ever trieda fake for the wife and kiddies’ sake
When he’s told you that he’s sorry but he durn’t?
Oh ! the strainin’ and the strivin’, and the plannin’ and contrivin’
When the bank begins a’drivin’ and puts off polite pretence,
When it comes to plainly statin’ that it’s gettin’ tired of waitin’
Tho’ it’s most accommodatin’ when the crop’s above the fence.
The Government deserves commendation for having introduced this bill, because, if properly administered, it will be of considerable advantage to primary producers. Al though the measure in its present form is not entirely satisfactory, wise and sympathetic administration will enable it to work effectively in their interests.
During the depression in 1930, an eminent student of finance visited Great Britain and wrote the following interesting commentary on the banking system there -
I was much impressed with the workings of the Agricultural Mortgage Corporation, formed in England two years previously. This corporation, which was established with a capital of £600,000, subscribed by ten of the leading banking institutions, including the Bank of England, operates under a charter from the British Government, and is guaranteed by the Treasury. It is empowered to offer long-term debenture stock for public subscription, most of which was taken up by investors of the type of insurance companies, trustees companies, and those looking for giltedged securities.
The purpose was to lend out its funds to agriculturalists, on the security of their land, at the lowest possible rates of interest. It struck me forcibly that, if such an institution was necessary inEngland, with all the sources ofsupply of capital at borrowers’ command, how much more necessary was it in Australia, where primary producers so frequently find difficulty, in spite of good security, in obtaining long-term loans on mortgage on the security of broad acres, ata reasonable rate of interest.
The last statement I have of the operations of this corporation shows that debenture stock, maturing in from30 to 40 years, for £10.500,000, has been issued to subscribers, while loans made on agricultural farming security amounted to approximately £10,000,000. The chairman, Sir Alfred Lewis, K.B.E., speaking at the last annual meeting of the corporation, said - “I think it would be difficult to find anything that had been done in this exceedingly difficult period, in the direction of helping the country in one of its great industries, which has proved so successful “. An emphatic opinion of this nature from such an authority, backed by his co-directors, is certainly worthy of most sincere consideration in the present time of stress.
While it may be said that the various State savings banks, and other institutions in Australia, do make loans of this description to primary producers, there is, in the first place, an overlapping and a certain amount of hesitancy mainly due to a lack of definite knowledge of land values, and a tendency, when money is temporarily plentiful and competition keen from other similar institutions looking for an outlet for surplus funds, to accept valuations that eventually prove irregular. Few institutions can afford the expense of an organization such as a corporation of this description could conceivably have to assure a uniformity of valuation that, in the first place. would check undue liberality in one case, tending to inflation, and undue carefulness in another, tending particularly in time of stress in the other direction.
I emphasized the need for that earlier in my speech. When money is plentiful, the banks are eager to offer it to clients for the purpose of enabling them to extend their properties or their industries. But the financial institutions become overcautious at other times and ask their clients to reduce their overdrafts. The commentary continues -
Conditions in Australia in the banking world are somewhat parallel to those existing in England, and if the associatedbanks, backed by the Commonwealth Bank, would sponsor such an undertaking, the big life and fire insurance companies would, no doubt, be willing to subscribe to the debenture issues with a much greater feeling of security than they do at present when making advances direct under the somewhat irregular and diffident manner now existing. Under such a system, once the operations became sufficiently large, the difference in the borrowing and lending rates could be reduced, due mainly to confidence in the security and reductions in costs of management.
If interest rates continue to fall for government stocks. I venture to say that such an agricultural mortgage corporation could put off its debenture stock at such a rate that would enable borrowers to obtain substantial relief in costs of production.
The outstanding advantages of such mortgage finance would be -
1 ) Bates of interest sufficiently low for loans over long period, to effect or complete the rehabilitation of the primary industry, giving security of tenure to all farmers availing themselves of the corporation’s operations..
The standardization of the rates of interest on agricultural mortgages, generally benefiting those, too, who do not come within the immediate scope of the corporation’s operations.
The standardization of district, State and interstate land values.
The elimination of competition in over lapping mortgage finance, making for economical overhead and administrative charges.
The resources of a powerful mortgage corporation wouldbe sufficient to carry theprimary industry through a period of depression.
Such an institution would not only carry the agricultural industry through a. depression but would also enable it. to progress for an indefinite period. The commentary states further -
Interest is admittedly one of the most important factors in the economy of industry, as well as that of public administration. The 22½ per cent. cut in interest rates was the basis of the Premiers’ plan, that momentous arrangement which not only saved Australia from economic collapse, but has also enabled this country to make more substantial progress towards recovery than any other country in the world. But much more remains to be lone before the rehabilitation of the primary industries, upon which final national recovery depends, can be effected - before the costs of producing for export can be reduced to that level which is likely to represent the price for some years of the commodities exported.
The wheat ali d wool industries are an outstanding example of those in a precarious position. In many instances, interest at predepression rates comprised 40 per cent, of the costs of production. Indeed, it was claimed by some that the interest take off was equivalent to 2s. per bushel on wheat. If that be so, the reduction under the Premiers’ plan would afford substantial relief. But that is not sufficient. The lowest possible interest rate is necessary if farmers are to emerge from their present difficulties.
The time is now opportune for the initiation of such a project, which can be considered national in its outlook, constructive in its scope, and necessary by reason of the present unstable conditions it would tend to correct.
If the Treasurer will examine that statement, he will discover valuable information in it, because the author possessed a practical knowledge of conditions in our great rural areas. Some honorable members criticized the speech of the right honorable member for Cowper (‘Sir Earle Page), but if they will read his statements carefully, they will find that he presented a most capable analysis of the present position. The right honorable gentleman deserves commendation for having placed on record such a speech, and although many honorable members opposite frequently interjected, their interruptions did not nonplus him, but enabled him to give even greater emphasis to his contentions. The honorable member for Kalgoorlie (Mr. Johnson) criticized the policy of the private banks, but he adroitly avoided any reference to the abandoned farms in Western Australia, nearly all of which were financed by, and are now in the hands of the State Agricultural Bank. In Western Australia the Labour party has been in office for many years, but it made no attempt to assist those farmers when they were compelled to walk off their properties. The Agricultural Bank acted merely as a distributing agent for Commonwealth funds. But this is no time for us to indulge in criticism of each others remarks. We must achieve unanimity for the purpose of introducing a system that will operate successfully and progressively in the interests of our country.
When settlers are compelled to carry a heavy burden of interest over and above working expenses, their position becomes intolerable, and they are unable to carry on. The honorable, member for Melbourne (Mr. Calwell) referred to the plight of soldier settlers in Victoria. When those men settled on the land, they were immediately “ settled “ in another sense. The land was over-capitalized and over-improved, and many of the men had no knowledge of agricultural industries. They received sustenance while they planted their orchards, but they wasted the best years of their life and finally, they walked off the properties poorer than when they began. A repetition of such failures must be avoided at all costs. We must profit from, experience.
– Some of those areas were too small to enable the settler to make a living.
– I agree. When they had planted their orchards, no ground was available on which to keep a cow or a horse. The properties were too small. I voiced that opinion at the time. The areas must be sufficiently large to enable settlers to engage in other activities in addition to fruit-growing. The Government has a big job to do, and the Opposition will render every possible assistance so that the bill may become a useful instrument for the benefit of present and future generations.
The long-term mortgage is of great assistance, but short-term mortgages often place farmers in great difficulties. If they obtain financial accommodation from a bank, they do not know from day to day when their overdraft will be recalled, and they will be compelled to dispose of their assets at sacrifice prices. The Government should provide safeguards against such dangers, and should ensure that men are given a fair opportunity to own their holdings. If they are efficient in their industry, they should receive every encouragement. Their efforts should not be retarded by lack of finance.
Some honorable members have referred to the high wages that were recently forced upon rural industries as the result of the determination of a special tribunal. Only a mean-minded man would take exception to paying wages comparable with those ruling in other industries; but when high rates are fixed in rural industries, the Government must ensure that the prices of the commodities are also adjusted so that the primary producer may be able to pay the increased wages. To fix high wages when the prices of primary commodities are low is to force farmers into bankruptcy. I favour long-term loans. Some honorable members have, suggested 80 years, which seems rather long, but if 50 or 60 years is proposed I shall support such an extension. We can decide that matter in committee.
– What about the rate of interest?
– That must be as low as it can possibly be made - the lower the better. We must not place unnecessary burdens on men who are endeavouring to make progress on the land. Rather we desire them to be assisted by the removal of every possible obstacle to their prosperity. The question of interest rates must be carefully considered. The interest paid on giltedged Government securities now is only S’i per cent. Some honorable members have suggested that 2- per cent, should be fixed for mortgage advances. T shall not quarrel with that, but I am confident that when the thinkers of this House get together in committee we shall arrive at a rate satisfactory to all who seek loan’s, and evolve a plan which will operate to the benefit of the country which we love so much, and also to the advantage of future generations.
.- As it appears to be the general desire of honorable members to conclude the debate on this measure to-day, I shall not unduly delay its passage. In any case, I am doubtful whether any greater advantage will accrue to the farming community than they can obtain in existing circumstances. I was looking forward to the introduction of the bill, and anticipated that the Government would bring in a comprehensive and up-to-date measure which would be of real assistance to those engaged in rural activities. Although I support the bill, I am noi enamoured of it. Any unbiased person must admit utter disappointment with it in its present form. It is too conservative, and too circumscribed. There is probably one definite advantage in it, over and above the facilities that exist to-day, in the provision for loans for a period up to 41 years. Some honorable members have suggested that the period should be even longer, but 40 to 50 years is a very definite term, and I would not support any term longer than 50 years. At any rate, 41 years offers a distinct advantage over the accommodation that can be secured to-day. Under the bill, the capital of the new department of the bank is limited to £4,000,000. If that were all that could be advanced, we should be only playing with the problem, because such a sum would not nearly meet the needs of the farming community. New section 60abu provides -
The Treasurer may make advances to the Mortgage Bank Department of such amounts and subject to such terms and conditions as are agreed upon between the Treasurer and the bank.
I assume that those advances are to be in addition to the £4,000,000 of capital already mentioned, so that the advances which the bank will be capable of making under the bill will be. practically speaking, unlimited. If the amount were limited to £4,000,000 it would be absolutely inadequate, because it would not meet the needs of the State which I have the honour to represent in this Parliament. There are 250,000 rural holdings throughout Australia, but no statistics are available to show their areas and other details. Undoubtedly, many of them are large, and would probably not need the financial .accommodation provided under the bill. Tasmania is probably the only ‘State iri the Commonwealth which issues statistics showing the details of its rural holdings. In that State there are 11,500 of them, of which 4,000 are so small, and give such small gross returns, that they can be practically eliminated as potential borrowers from the proposed new department of the bank. There are 250 holdings in Tasmania consisting of 5,000 up to 50,000 acres, and again I suggest that very few of those would need the financial accommodation permissible under the bill, but the balance of 7,250 holdings must be considered properties on which advances may be required. If those who wished to borrow were to require on the average £1,000 each from the £4,000,000, only 4,000 primary producers could receive assistance, although in my own State alone there are probably 7,000 who would need it. If applicants were to borrow an average of £2,000 each, assistance would be available for only 2.000. These figures demonstrate clearly that there is need for a much larger sum than the £4,000,000 named, if the bank, in this department of its activities, is to be competitive with other financial institutions, and of real service to primary producers. Consequently, I am glad that in addition to the capital of £4,000,000, the Treasurer has power to make advances to the bank under the provision which I have quoted. I find that there is no mention in the bill of procedure, but obviously that matter will be dealt with by regulations. I hope that no charges or, at most, only nominal charges, will be made for the execution of mortgages. The legal costs of executing and discharging mortgages are a very serious matter to primary producers throughout Australia. Tasmania has an Agricultural Bank, which functions on lines somewhat similar to the department which it is proposed to set up under this bill, and does not make such charges. I trust that the Treasurer will give an undertaking that provision will be made in the regulations that no legal charges shall be made against the borrower.
I suggest, that we must in this measure guard against inflated land values and at all costs avoid the repetition, of what took place after the last war. as mentioned to-day by the honorable member for Melbourne (Mr. Calwell), when land settlement schemes were adopted, and many settlers were ruined because they paid too high prices for their land. They paid £10, £15 and £20 an acre for land which was not worth half the sum. I do not think that we could place in the bill a provision to meet that problem, but doubtless those who will administer the act will have a true valuation made of the properties on their productive value, and protect the farmers in that way. I submit that loans must be based upon productive value, and not upon the purchase price of land. If purchasers of land are to borrow on what they are prepared to pay for land, it will not be of much useendeavouring to increase farm income, because that will be immediately reflected in higher land values. Loans should be on productive value only, otherwise the prices of land will rise with increased incomes, and, in order to enable the primary producer to make a decent living, prices of farm products will have to be raised again. Every time prices rise, land prices will rise if purchasers can borrow on the purchase price of the land. “Weshall thereby create a vicious circle, and the whole plan will become practically useless. As I said at the outset, this is essentially a committee bill, because there, is universal support for the general principle outlined in it. It is only a. matter of seeing in committee whether we cannot improve its provisions. Interest rates have been mentioned by practically every honorable member who has spoken. I think that the 5 per cent, suggested by the Treasurer, consisting of 4 per cent, interest, plus 1 per cent, amortization, is too high, and I shall certainly support a proposal to reduce it to a more reasonable, figure, ““cb as 2^ per cent., or whatever the committee regards as reasonable. The limit of the advance to two-thirds of the value of the property could also well be increased, and I shall have pleasure in supporting the amendment foreshadowed by the honorable member for Swan (Mr. Marwick), who suggested that advance? should be made up to 70 per cent. I shall certainly support in committee any amendment which will liberalize the provisions of the bill.
– I have listened with interest to the many suggestions made during the debate for the liberalization of the terms of the bill, but it is more important that we should first* make sure of establishing the new banking department upon a sound foundation. I take it that the Government, before it introduced the bill, consulted the Commonwealth Bank Board and the Governor of the Commonwealth Bank, as to the- terms and conditions on which the new mortgage department should be established, and this Parliament should hesitate before it departs to any extent from the proposals set out in the bill. It has been suggested during the debate that we should increase the limit of advances from 66$ to SO per cent. The proposals outlined in the bill are the safe ones te- adopt, and we should hesitate before making any radical increase of that kind. Much has been said about the rate of interest. As a matter of fact, it is not set out in the bill at all. The terms and conditions upon which loans are to be made are to be left entirely to the power and discretion of the bank board, but I suggest that at least a satisfactory basis upon which we should arrange for the interest to be charged on loans is the cost of the money to the country, as indicated by . the ruling rate of interest on Commonwealth bonds, plus administrative expenses. It has been urged that because rural industries are in a desperate plight we should reduce the interest charge considerably below cost. If industries need assistance we should adopt some means other than through the activities of the Commonwealth Bank. I have listened not only in this debate but during the last two weeks to various suggestions that the whole of the rural industries of Australia are in desperate straits, but honorable members should look at the last annual report of the Income Tax Commissioner for the facts.
– That is the way to tell.
– I agree with the honorable member. I find from the last annual report of the Commissioner that the second highest group of taxpayers in Australia, not only as to number but also as to the actual amount of income tax paid, is that headed “agriculture, pastoral and da irving”. “
– What is the position of the wheat- farmers ?
– I have no particulars of them. During the course of the debate a sort of general impression has been given that the whole of the rural industries of Australia are in a desperate plight. That is not borne out by facts. I have cited these figures because of the many misleading statements that have been made. This bill actually does not seek to establish a new bank; it provides for the establishment of a mortgage department of the Commonwealth Bank, and I am at a loss to understand how the right honorable member for Cowper (Sir Earle Page) and the honorable member for Flinders (Mr. Ryan) could suggest that the new department should have the right to issue debentures at a, rate of interest lower than that payable on Commonwealth bonds, which, after all, must be regarded as the highest security in .the land.
M!r. Abbott. - That is not always the case in other countries.
– That is so, but the honorable member will find that the financial structure of those other countries is entirely different from that existing here. It is obvious that if a man has a sum of money to invest, and he knows that he can obtain 34 per cent, interest from Commonwealth bonds, the highest security in the land, he will not invest his money in debentures issued by the Commonwealth Bank mortgage department at 2i per cent.
– What about the bank deposits? The interest payable on bank accounts is less than that on Commonwealth bonds.
– I remind the honorable member that savings bank deposits are made up of current accounts and are at call.
– What about fixed deposits?
– -It is true that the interest rate on fixed deposits is lower than that applying to Commonwealth bonds, but fixed deposits are in effect short-term loans; they are not invested for long periods. I mention those facts in passing because I do not want honorable members to be misled by what has been said in this House. I do not think that it would be practicable for the mortgage department to issue debentures at a lower rate of interest than that payable on Commonwealth bonds. Indeed, it would be impossible to fix a lower rate of interest than that ruling for Commonwealth borrowings. The valuations placed upon properties by the Commonwealth Bank will determine the amount that can be advanced. Reference has already been made in the course of this debate to varying land valuations throughout the Commonwealth, and I consider that’ the time has arrived when there should be some uniformity. At present there are different bases of valuation and different valuing authorities in the various States. In Queensland, for instance, there is a municipal land valuation for rating purposes, a State land tax valuation for taxation purposes, and a Commonwealth land tax valuation. In addition, there is a State valuation for the .purpose of assessing probate and succession duties. Such overlapping is unnecessary and uneconomic, and the establishment of a uniform system of land valuation has an important bearing upon the matter now under discussion. To summarize, the first essential is that the proposed mortgage department of the Commonwealth Bank should be placed upon a sound foundation, and I hope that the Government has consulted’ its advisers and officials of the Commonwealth Bank in regard to the basis upon which the new department is to he established.
– I rather doubt that.
– Perhaps, but surely the honorable member for Gippsland (Mr. Paterson) does not doubt that the similar measure brought down by a former Treasurer, Mir. Casey, was drafted after consultation with officials of the Commonwealth Bank.
– Oh, yes !
– Then I point out that there is little difference between this measure and the previous bill.
– There are some fundamental differences.
– In conclusion I emphasize that we must bear in mind that the mortgage department must be a business undertaking and not a benevolent institution.
– Apparently members of the Country party think that it will be a benevolent institution.
– I take this opportunity to sound a word of warning : If the rural industries of Australia are in such a serious plight that some action to assist them is necessary, this is not the proper way to approach the problem.
– w reply - I am afraid that some honorable members have a completely false idea of the real purpose of a mortgage bank. It is generally accepted that the purpose of establishing such an institution in this country is to fill a gap in our banking system, by making provision for the granting of financial assistance to farmers, under reasonable terms, to enable them to purchase their properties, over a long period of years. That is the simple answer to the question - what function is a mortgage bank intended to perform? The extent of its operations, of course, is another question. From remarks that have been made in the course of this debate, it is apparent that some honorable members believe that the mortgage department will be, as the honorable member for Lilley (Mr. Jolly) has said, a kind of rehabilitation bank, or benevolent institution, operating to lift the primary producers of this country out of whatever trouble they are in. It is just as well to dispel that idea at once, because that is not the function of a mortgage bank. The business of a mortgage bank is to enable men who are starting out on the land, or even those who have been on the land for a number of years, to purchase their properties, without having to resort to private bank overdrafts which, because they may be called up at any time, create a feeling of fear and insecurity. With that uncertainty eliminated, the farmers will have greater confidence in their ability to remain on their properties, and eventually to own them. It is hoped also to cover the case of the man who, although he would not be regarded by financiers as a gilt-edged security, possesses excellent personal qualities and has had the necessary experience to enable him to make a success of his undertaking. It is in the interests of the country that such men should be soundly established on the land. I do not visualize the mortgage department as an institution which will merely lend on gilt-edged properties in which there is a substantial margin between the advance that is to be made and the value of the security ; but I wish to make it clear that the impression that rural industries can be rehabilitated through a mortgage bank is sheer political nonsense.
If the rehabilitation of primary industries is to be undertaken, the problem must be tackled on a much larger scale and in a totally different way. Rural rehabilitation should not be associated with the business of the Commonwealth Bank. Whatever views honorable members may have about the Commonwealth Bank and how it should be run, I am sure it is agreed that all its activities should- be conducted on a sound business basis. I have never subscribed to the idea that the Commonwealth Bank should undertake debt readjustment and other activities of that nature. The object of this bill is merely to enable the bank to fill a very obvious gap in our banking system. The plain fact is that the private banking system in Australia, as in many other countries, depends on shortterm borrowing, and therefore ordinarily it cannot afford to advance loans for long periods. It is true that r,he private banks in this country make advances in the form of overdrafts which in effect are long-term loans, but these overdrafts are liable to be called up at any time, and in default, the properties may be sold. The general question of rehabilitating primary industries will have to be approached in an entirely different way. If the difficulties of primary producers are sufficiently serious to warrant government action, then such action should be taken, quite apart from this measure. I point out, however, that a large percentage of the revenue obtained from probate duties comes from the rich graziers of this country who apparently have done rather well out of primary production.
I appreciate the speech that has been made by the honorable member for Lilley, because he dealt with the matter from the common-sense viewpoint. The honorable member asked if there had been any consultations between the Government and the Commonwealth Bank prior to the’ drafting of this measure. I assure him that officials of the Treasury and representatives of the Government have kept in close touch with the Commonwealth Bank. Quite frankly, Commonwealth Bank officials take the view that in the present circumstances, particularly the shortage of man-power, it will be difficult to undertake the establishment of this new department. They also believe that the mortgage department should stand on its own feet and be completely solvent, so that it will not be likely to create a lack of confidence in the bank generally, because of the belief that it merely handed out money and did not operate on sound financial principles. It is the opinion of officials of the bank that advances should not exceed 60 per cent. The Joint Parliamentary Committee, which considered this measure, had the assistance of bank officers in preparing its report, and it is on that report that this bill is based. There was only one point on which members of the committee were not unanimous, and that was the percentage of the advances. Most of them thought that it should be more than the figure of 60 per cent, fixed by the Commonwealth Bank; some even thought that it should be as high as SO or S5 per cent., but I understand that at least, one member favoured the bank’s figure. Reviewing the matter as a whole, and having heard the expressions of opinion made by honorable members on both sides of the chamber, I am prepared to insert in the bill provision for the payment of advances up to 70 per cent., but no more. The Government is not prepared to accept any other amendmentThere has been some talk of this mortgage department providing a special rate of interest for primary producers. I am strongly of the opinion - I know that this view was shared by the honorable member for Warringah (Mir. Spender) when lie was Treasurer - that interest rates an this country are too high, and that they should be reduced. While I have been Treasurer, it has always been, my endeavour to reduce interest rates as far as possible, and the Government, by arrangement with the private banks, and in consultation with the Commonwealth Bank, fixed the maximum rate of intereston overdrafts at 5 per cent.; but I ask honorable members : Is there any good reason why primary producers should be able to obtain money at a lower rate of interest than it can be obtained by the rest of the community? I cannot see that the primary producers have any special claim in that regard. If honorable members believe that interest rates generally should be reduced, then by all means let us reduce them. I appreciate the value of the primary producers to the community, but to say that they should be able to obtain their financial accommodation at a special rate of interest, irrespective of common business principles, seems to meto be asking too much. Why should not a similar concession be given to the ordinary business man or to the home-builder? Whilst I support warmly the principle of reducing interest rates, I ask honorable members not to attempt to insert in this measure amendments designed to lower the interest rate to 3 per cent., 2½ per cent., or 1 per cent. As I pointed out in my secondreading speech on the first measurewhich was withdrawn in favour of this one, it is clear that loans can be made at about 4 per cent., and I am quite prepared to accept that figure as a maximum in the hope that with experience it may be reduced; but I say quite frankly that if honorable members endeavour to insert in the bill certain provisions that have been suggested, they “will succeed merely in wrecking the measure. It is of no use to attempt to include ridiculous provisions which run contrary to the general principle of banking and ignore the capital available to the bank. Although I am prepared on all occasions to do everything in my power to reduce interest rates, I appeal to honorable members to abstain from moving amendments to insert hardandfast limits in this measure.
Sitting suspended from1.48 to 8.15 p.m.
– Last night, the right honorable member for Cowper (Sir Earle Page) extolled in eloquent language the magnificent features of a bill brought down by a Government of which he was a member. What must amaze honorable members most is, that, despite its supposedly excellent features it did not become law. One would expect that, during his seven years tenure of office as Treasurer in a government which had a substantial majority in both houses of the Parliament, something would have been done along these lines. The opinion is unanimous that a mortgage bank should be established, in order to bridge a gap that now exists in the banking structure. The measure that we are now considering has been placed before the House in a non-party spirit, all parties, through their leaders, having expressed approval of the general principle. It is a matter upon which it would he impossible to obtain unanimity, even in the parties. I cannot allow that remark of the right honorable member for Cowper to pass without saying that this Government, which has not a majority in the Parliament, has at least shown earnestness in the introduction of the bill. The provisions of the measure were submitted to an all-party committee, which gave a great deal of consideration to all the aspects that have been raised in debate. Seven of the eight members of the committee agreed that the percentage of advance should be at least 66 per cent., and that percentage has been embodied in the bill ; but because the consensus of opinion among honorable members on both sides is that it ought to be raised, the Government is prepared to accept the amendment which has been foreshadowed, and I shall move later for an increase to70 per cent.
– Why not allow the amendment to be moved by the honorable member for Swan, who foreshadowed it?
M r. CHIFLEY. -I understand that the increase has been suggested by three or four members, all of whom could not be the first to move in the matter. In reality, it was first suggested by members of (he committee! which examined the bill. The honorable member for Indi (Mr. McEwen; was very prominent in his advocacy of it, and so were the honorable members for Ballarat (Mr. Pollard) andFawkner (Mr. Holt). I believe that the honorable member for Indi favoured going even higher than 70 per cent. Therefore, the proposal is not the monopoly of one member. I believe that the honorable member for Wimrnera (Mr. Wilson) would prefer to go much higher than70 per cent., although that is the percentage which he suggested during his speech.
Last night, the right honorable member for Cowper recited a most extraordinary story, in which he spoke of going out to the country and raising money by means of debentures. The honorable member for Lilley (Mr. Jolly) remarked a while ago that it appeared to be nonsensical to expect people to invest in debentures at a lower rate than they could obtain in government loans.
The right honorable member for Cowper expressed the view that, in the future, a lot of capital from overseas may be brought to Australia. The only salvation of this country that he can visualize is one due to investments by the financiers of the world, who have no soul above profits. I do not agree with that policy.
– British and American money is helping us to fight this war. We should have been in a sorry plight without it.
– We ourselves are not doing badly in that connexion. The right honorable member mentioned that certain industries had come to this country. They did so, I remind him, because of its protectionist policy.
– Which we put into operation.
– It was strengthened by the Scullin Government. Those enterprises would not have been established in this country had it been possible for them to make the same profits outside. I am not arguing that those who have money invested in such concerns have not some interest in humanity; but I do say that they have no national pride in this country, their principal concern being to make profits out of it. It is, of course, human to obtain the utmost out of one’s investments. I merely hope, in passing, that this country will not have to depend for its future salvation on money that it can raise outside. I positively decline to accept the doctrine enunciated by the right honorable member, that our rural industries will be rehabilitated by means of debentures issued by the mortgage bank, or that rural reconstruction will be achieved by wrangling at a meeting of the Loan Council as to whether or not certain expenditure should be undertaken. I do not propose to enlarge on that subject to-day. I say quite frankly, however, that after this war there will have to be a radical change of the whole of our economic system and financial direction; otherwise, we shall not achieve the objective of a new order for every body. I shall enlarge on that theme in due course. Several nights ago the honorable member for Robertson (Mr. Spooner), when questioned, admitted quite frankly that the financial policy which operated in this country during the years of the depression was one of the economic tragedies of the world. Those responsible were the very people who are now talking about what the Commonwealth Bank can do. The party which originally opposed the establishment of a Commonwealth bank has since adopted many aliases, but its identity has continued unchanged. Although we may differ in regard to details, this is the sort of measure which ought to find a place on the statute-book, in order to bridge a gap in the banking system ; not to rehabilitate all sorts of primary producers, many of whom are in a hopeless financial position. Seven members of the all-party committee presented a majority report, and the only ground for the minority report by Senator Allan MacDonald was that the present was not an appropriate time to introduce such a measure, because of man-power difficulties.
Some honorable members have asked why the building of houses by the ordinary citizen or the worker has not been included in the scheme. I do not believe that the housing problem can be solved in that way. The Joint Committee on Social Security, of which the honorable member for Flinders (Mr.Ryan) is a member, has made important recommendations to the Government on the subject of housing, and the whole matter, particularly as it relates to the masses of the people, must be tackled on a grand scale. That committee contemplated the building of 40,000 houses annually, but that could not. be done through a mortgage bank department of the Commonwealth Bank. Even prior to the entrance of Japan into the war, when the Commonwealth Bank offered advances to enable houses to be built, it was found that the average person requiring assistance had difficulty in providing a 20 per cent. deposit on the cost of his house, and in some States it was necessary for the State itself to advance a further 10 per cent. of the money required.
In meeting future requirements, it will be found necessary to build houses on mass production lines, in order to have them erected at the lowest possible cost. Even if the houses could not be mass-produced the components could possibly be provided on that system. It may even be necessary to subsidize bousing. In providing homes for workers in munitions factories, the Minister for Labour and National Service (Mr. Ward) has found that, owing to the economic insecurity of the majority of the workers, they have been disinclined to enter into mortgages for the purpose of purchasing homes. During the last decade, particularly, the workers have never known whether their employment would be constant, and therefore the great demandhas always been for houses at reasonably low rentals. The Government intends to have the whole matter thoroughly examined by competent officials, in accordance with the recommendations of the Joint Committee on Social Security. I trust that the result will be a far more extensive housing scheme than any which could be established through a mortgage bank. I urge honorable members to support the hill. The scope of the measure could easily be made more extensive than it is. The Government of the day would be in a position to determine the amount of money that should be available to the bank, and the rate of interest that should be charged. I shall not discuss the point raised by the right honorable member for Cowper as to the wisdom of stating in the bill the rate of interest to be charged on loans. Although I agree that the rate should be low, we should not insert a definite figure in the bill, because interest charges fluctuate. I hope that the rates of interest fall rapidly so that not only primary producers but also every other section of the community may have the benefit of cheap money.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 6 agreed to.
After Part VIb. of the Principal Act the following Part is inserted: - “ Pa rt VIc. - Mortgage Bank Department. 60abu. - (1.) The Treasurer may make advances to the Mortgage Bank Department of such amounts, and subject to such terms and conditions, as are agreed upon between the Treasurer and the Bank. “ (2.) The Treasurer may from time to time under the provisions of the Commonwealth Inscribed Stock Act 1911-1940, borrow money for the purpose of making advances to the Mortgage Bank Department under this section. “ (3.) The Bank shall pay to the Treasurer half-yearly out of the funds of the Mortgage Bank Department interest on advances made in pursuance of this section and not repaid -
in the case of advances made from money borrowed under the last preceding sub-section - at the rate or rates equivalent to the effective rale or rates of interest payable by the Commonwealth on money so borrowed; and
in any other case - at such rate as is agreed upon between the Treasurer and the Bank. “ (4.) For the purposes of the last preceding sub-section, the effective rate or rates of interest payable by the Commonwealth on money borrowed in pursuance of sub-section (2.) of this section shall be such rate or rates as is or are certified in writing by the AuditorGeneral as being the effective rate or rates of interest payable by the Commonwealth on loans raised by the Treasurer out of which those advances were made, or on any conversion or renewal of any such loan. “ (5. ) Where the Bank is unable to employ profitably in the Mortgage Bank Department any money advanced to that Department by the Treasurer under sub-section (1.) of this section, the Bank may from time to time repay to the Treasurer any sum not less than Fifty thousand pounds. Any sum so paid shall be applied proportionately in reduction of the several advances then outstanding.
.- I move -
That the proposed new section60abu be left out, with a view to insert in lieu thereof the following new sections: - 60abu. - (1.) For the purposes of this Part, the Bank may issue debentures or inscribed stock secured upon the general assets of the Bank. “ (2.) The existence under this section of any security upon the general assets of the Bank shall not in any way prejudice or affect the rights orpowers of the Bank - (a.) to reconvey, release or discharge any security, or the property comprised in any security, given to the Bank under any provision of this Act;
to sell or convey any such property;
to foreclose any such security or pro perty ; or
to deal with any such security or property under this Act. “ (3.) The amount of debentures and inscribed stock issued under this section and not repaid shall not at any time exceed six times the amount of the capital of the Mortgage Bank Department. “60abua. - Debentures issued for the purposes of this Part shall be in such form as is prescribed and debentures and inscribed stock so issued shall be subject to such conditions as are prescribed. “60abub. - Subject to this Part, the pro visions of Part VI. of this Act relating to debentures and inscribed stock issued by the Rank shall apply in relation to debentures and inscribed stock issued for the purposes of this Part.”.
The amendment is fairly complicated, and, as I had not time to distribute copies, I suggest that the Treasurer might defer consideration of this clause to enable my amendment to be circulated, so that it may be properly debated.
– The members of the committee are aware of the intention of the right honorable gentleman.
– The object of the amendment is to alter the manner in which the principal funds of the mortgage bank department of the Commonwealth Bank shall be raised. The main method of finance contemplated under the bill is that the Treasurer shall issue loans and that the proceeds shall be used to enable the mortgage bank to function. There is no disagreement as to the amount of other capital to be provided, but that is an insignificant portion of the total sum that will be needed. Take the wheat industry alone. The report of the Royal Commission on the Wheat Industry of which Sir Herbert Gepp was chairman showed that £140,000,000 was owing on mortgages on wheat farms. Therefore, one would be well within the total figure by saying that the mortgages on farms, including grazing properties, throughout Australia would amount to about. £500,000,000. Therefore, it is quite obvious that if a measure such as this is to have any appreciable impact on the problem, there must be a substantial addition to the £4,000,000 of capital referred to here. The Treasurerhas said that it is proposed to provide the extra money by raising loans. I ask honorable members to consider for a moment what chance there would be to raise loans for that purpose during the period of the war. The loan now about to be floated, and probably many more besides, will be absorbed in the prosecution of the war. Therefore it is evident that the Treasurer does not intend, so long as the war lasts, to finance the operations of the bank in that way.
– Does the right honorable gentleman contemplate that the public will be invited to take up deben tures for the mortgage bank, thus reducing the amount of money available for war loans?
– I do not. Government supporters have asked why previous governments did not introduce a measure of this kind in war-time. The answer, as the Prime Minister suggests in his interjection, is that there was not sufficient money available from any source to do the job properly.
– Why wasn’t it done in peace-time?
– We did introduce a bill then, and it embodied those principles which have been found acceptable in a great many other countries. It has been proved in Argentina that the mortgage bank there can raise money by debentures at a substantially lower rate of interest than that which the Argentine Government pays on its own loans. If the introduction of this bill is nothing more than a gesture, it is of no value at all. If it is more than a gesture, the bill should be on sound lines so that it can operate successfully in peacetime. I agree that there is not the slightest chance at the present time of raising loan money with which to finance the operations of the bank. The right way to raise money for this purpose is by the issue of debentures. The proposal of the Government to find the money by the issue of loans is dangerous. It would have the effect of making the mortgage bank dependent on the general policy and loan programme of the Government. Even in peace-time, in the 1920’s when the country was prosperous, it was often found necessary to delay the developmental programmes of the States because sufficient money could not be raised at a reasonable rate of interest. For instance, the Yallourn undertaking in Victoria was held up for two years because the Premier of that State said that, other undertakings had priority over it. If money with which to finance the operations of a mortgage bank is to be raised as part of the ordinary loan programme the bank will be established on an unsound foundation. There will be no security or continuity of policy, because the capital available to the bank will vary from year to year. The Treasurer spoke of several ambitious projects which it was proposed to put into effect after the war, and I presume that they are to be financed out of loan moneys. I take it that it is not intended that war-time taxation should be still further increased to carry out post-war undertakings. If loan moneys are to be raised for these ambitious programmes, what money will bc available to provide capital for the mortgage bank? I take it that it is the desire of the Government to keep the Common-wealth Bank and all its subsidiaries completely independent of political control. That can be clone only if the bank is free to choose for itself how it shall raise its capital. If it is to be dependent upon the Treasurer of the day for what it gets for the purpose of running a mortgage bank, then the policy of the bank will be governed by the caprice of the Treasurer. He can pay, “ If you do so and so you will be given £10,000,000; if you do not, you will get only £1,000,000 “.
– That is what the Commonwealth Bank Board says to-day.
– You” can have a bank run by politicians, or you can have one run by a board.
– I think that I would trust the Treasurer rather than the Commonwealth Bank Board to run this bank.
– Well, I would not.
– But the man now in charge of the country’s finances is not the “ tragic Treasurer “.
– The financial reforms in Australia, which I brought into existence, will persist for many years after the honorable member is dead, and a cheap gibe of the sort he has just uttered is no effective contribution to the solution of this problem. I repeat that if the bank is dependent upon loan raisings for its capital the policy of the bank will be determined by the government of the day, and that is wrong. When the Commonwealth Bank Act was passed 31 years ago, it provided that the capital of the bank should be raised by the issue of debentures for £1.000,000. and that advances by the
Treasurer, which were also strictly limited, should be made for certain specific purposes only. That is all the money that could be provided by the Treasurer. I hope that the Labour party desires, as I do, to keep the Commonwealth Bank free of political control. Every act dealing with the Commonwealth Bank has provided that, should there be any advance at all from the Treasury, it shall be of a relatively minor nature and specifically related to some object which is stated in the act itself. On the basis of that rule, it is clear that the proposal in this measure is wrong. Whether the Government realizes it or not, this bill means that the bank will ultimately become the plaything of politics, and in the conduct of its business be liable to act as the government of the day desires. I want to restrictto the minimum the possibility of political interference with the conduct of the Commonwealth Bank. The only possible way to get cheap money continuously is to have a method of finance which is independent of current government loan raisings in any year. In other countries, experience has proved that the best method is that which links up the capital issue with the mortgages on land. In order to obtain sufficient money to meet requirements, we must have, as I said yesterday, a source of income which is married to the need and is related to the number of mortgages that are issued. That is provided by the debenture system. Debenture issues have been proved to be a favoured class of international investment. When Germany was suffering from inflation, it was found that the only way to start again -with any prospect of success was to tie its currency to the fundamental values of land. People may distrust a government and yet they may be willing to make substantial contributions to debenture issues based on secure first mortgages on land with a good margin. The Treasurer referred with scorn to the idea of foreign money coming into this country.
– The right honorable member has exhausted his time, but if no other honorable member wishes to speak he may take his second period now.
– Should the result of this policy be that the interest rate is 1 per cent., or even i per cent., less than money can be obtained for ordinary governmental purposes, we should be foolish if we did not take advantage of it. “We have to go to other countries to obtain money to fulfil our obligations during the war. We are grateful for the help offered by the United States of America in the form of lend-lease, but does that mean that we are throttling our industries? In fact, it gives us much new equipment to start new industries. We are glad to accept financial assistance from Great Britain also in connexion with our war effort. After the war is over, the under capitalized countries of the world, of which Australia is one, must be prepared to accept a big inrush of capital, as well as of people, to enable them to proceed quickly with developmental and rehabilitation schemes. How could it harm us if they said, “Because of the nature of the security, we will give you money at 1 per cent, instead of giving it to the government at 3-^ per cent.”? That could not strangle anyone ; rather would it help us. It might help us also because of their direct interest in our agricultural development and their desire to make sure that their governments did not impose restrictions on the entry of our goods to their country, thereby raising their standards of living beyond the low standards which have been one of the most potent causes of war. If this bill is meant to be a pattern for legislation designed not merely to enable the Commonwealth Bank to carry out undertakings of this sort, but also to help other organizations to make more money available for agricultural development and to raise the standard of agricultural life generally, we should adopt something which is both sane and sound and which has universally been proved to be wise.
.- The right honorable member for Cowper (Sir Earle Page) seems to have mistaken the title of the bill. It would appear that, in his opinion, it is a bill to mortgage the Commonwealth Bank, whereas it is a bill to establish a mortgage department of that bank. I do not believe that we should mortgage the mortgage bank to any body of investors, and particularly not to foreign investors. The right honorable gentleman says that money should not be advanced by the Treasury out of loan raisings, first, because there may not be sufficient money available from that source to enable the Treasury, after discharging its special obligations, to assist the mortgage bank to the degree desired; and, secondly, because there might be priorities which would make it impossible for him to do so. The right honorable gentleman says that the mortgage bank should be able to issue debentures; but how can any mortgage bank do so at a lower rate than the Commonwealth Bank can raise loan money?
– That happened in Denmark.
– I have often heard that “ there is something rotten in the State of Denmark.” Money raised by debentures in the way suggested by the right honorable gentleman would be dearer money.
– The experience of other countries shows that that is not so.
– It probably would be dearer and the burden on the people who borrowed the money would be greater. I should not like the Treasurer to raise money by loan, and then advance it to the mortgage bank to be lent to the farmer.
– That is what the bill provides.
– If that were done, the farmer would not get the benefit of low interest rates. I should much prefer the use of national credit.
– We are using national credit now.
– Exactly. But this bill will operate in peace as well as in war.
– On real security?
– On real security, yes - something much more real thar armaments. If we could use national credit in days of peace to the extent to which we are using it to-day for destruction, we could create national assets and promote national welfare and happiness. I find it hard to understand why the right honorable member for Cowper should have argued as he did, because in a brochure entitled Report . on Mortgage Banking, published by the Australian Wheat Growers Federation, I find the following extract from a speech made by the right honorable gentleman when the Scullin Government proposed to issue £18,000,000 worth of national credit through the Commonwealth Bank in the form of fiduciary notes for use on public works and for the rehabilitation of wheat-farmers : -
When we lune restored confidence in the country-
There was great talk about the restoration of confidence at that time. Prosperity was just around the corner. Prosperity was still around the corner for many people in this country when war broke out. lt is remarkable that the only time that many Australian citizens have had anything like security and have appeared on a payroll has been since war broke out. A country which could not find enough to sustain the life of all its citizens in days of peace has been able to find everything necessary to protect life and property now that we are at war. The right honorable gentleman said -
When we have restored confidence in the country we would he able to obtain assistance immediately to deal with our deficits and so relieve the banks of some of their burdens of government overdrafts and enable them to give more assistance to industry. The next important thing to do, it appears to me. is to replace the gold which has been sent away from Australia. I believe that we could do that immediately if the Government would make the definite statement tha.t it would have nothing whatever to do with any scheme of repudiation or inflation. lt had never been suggested that the Scullin Government intended to repudiate or inflate, so the advice contained in that sentence was gratuitous. The right honorable gentleman continued -
Such a statement would, in my opinion, enable it to obtain a gold loan from France or England of £15,000,000 at about 4 per cent, at £94 or £90 with a. term of 40 years, repayment on ordinary sinking fund terms. This would not interfere with the production of roods here. If we could obtain this gold we should be able to use it as the .basis for additional credit on a pound for pound hacking.
Those of us who were interested in politics or were members of Parliament at that time will recollect that the Scullin Government introduced a bill to amend the Commonwealth Bank Act, whereby the gold reserve was reduced in order to meet some of our ‘overseas indebtedness. The immediate outcry was, what would happen if our notes did not have a gold backing? It was said that our credit would be destroyed and the nation would face ruin. I was a spectator in this chamber when the Opposition inserted a clause in that bill to the effect that when good times returned the gold backing was to be restored. At the next general elections there was a change of government, and it fell to the lot of the first United Australia party government, led by the late Mr. Lyons, to take Australia altogether off the gold standard. Our note issue became an entirely fiduciary issue, because the legal liability of the Government to exchange gold for notes ceased. We have some gold in the country, but it is not used for the backing of our currency. The right honorable gentleman’s proposal on that occasion to borrow go kl from -the Bank of France explains his views in favour of the issue of debentures by the mortgage bank.
– Where did the right honorable gentleman for Cowper make that speech?
– In Parliament in 1931. The right honorable member has not advanced with the times. Our national development has reached the stage at which we no longer ‘believe the stories’ told to us in the depression years that money could not be found for this or that and that fiduciary notes would destroy the nation. In times of peace, the most legitimate use to which national credit could be put would be the reduction of interest rates so that people might carry on their vocations with fair profit to themselves and lead reasonably happy lives. The right honorable gentleman was not fair to himself when he ignored the interjection by the honorable member for Bourke (Mr. Blackburn) asking howmuch money had been obtained for the establishment of the Commonwealth Bank by the sale of debentures. It is true that the Commonwealth Bank Act contained a provision enabling the bank to issue debentures in order to commence business, but it is equally true that it did not have to issue debentures and that it began operations on an advance from the Treasurer. The governor of the bank did not find it necessary to sell any debentures.
– And it may not be necessary now.
– Having laid his premises, the right honorable gentleman proceeded to say that the mortgage department of the Commonwealth Bank should also begin business by the issue of debentures.
– No. I said that the principle of issuing debentures had been established by the Labour party in the first Commonwealth Bank bill.
-If we could get rid of the Commonwealth Bank Board, that incubus which the right honorable gentleman inflicted on the bank and the nation eighteen yea rs ago, and if the control of the bank reverted to a governor with the acumen and imagination of the late Sir Denison Miller - and I have no doubt that Mr. Armitage could do a better job of work if he were left alone by the amateurs who restrict his activities - we could make the mortgage department succeed as well as the Commonwealth Bank succeeded after it was placed on a solid foundation by its first and greatest governor.
– I am not in favour of the amendment moved by the right honorable member for Cowper (Sir Earle Page). I made it very clear inmy second-reading speech thatI could not, understand how it could be argued that it would be possible to issue debentures in the mortgage department of the Commonwealth Bank at a lower rate of interest than is paid on bonds issued by the Commonwealth Government. Investors, whether at home or abroad, have enough foresight and are sufficiently human to make their investments in securities from which they will get the best return. My main objection to the right honorable gentleman’s amendment is that if adopted it would interfere with the work of the Australian Loan Council which he took a leading part in founding, and which has rendered great service to the country by controlling governmental borrowing. Parliament would be setting a very bad example to the State governments, if, under this bill, it permitted another body to compete with the Commonwealth and the Loan Council on the loan market. If such permission be given to the mortgage bank department, other instrumentalities are sure to ask for similar treatment. Under this bill we are establishing not a separate mortgage bank but a mortgage bank department of the Commonwealth Bank. We should not establish a precedent by allowing that department to issue its own debentures.
– The Rural Bank of New South Wales and the State Savings Bank of Victoria, in relation to its Credit Foncier funds, now have that power.
– Those bodies were established before the Loan Council was formed.
– Well, I am surprised that the right honorable member for Cowper, who established the Australian Loan Council, should now endeavour to set up a new body which will be permitted to compete with it, on the loan market. All public borrowing in Australia should be under the control of the Loan Council. I oppose the amendment.
.- I oppose the amendment. I am entirely at a loss to understand why the right honorable member for Cowper (Sir Earle Page) should take exception to these clauses. The bill provides that the Treasurer may make advances to the mortgage bank department of such amounts, and subject to such terms and conditions, as are agreed upon between the Treasurer and the bank. That provision has everything to commend it, because it leaves the Treasurer and the bank free to avail themselves of the best and wisest methods in the light of existing circumstances. The right honorable member for Cowper appears to be still wedded to the idea of importing money into this country. He has been consistent in his advocacy of that policy. He gave effect to it during his longte rm of office as Treasurer, with the results that our indebtedness overseas was tieri increased to a greater degree than in any other period of our history.
– That is absolutely untrue. I challenge the honorable member to prove his statement.
– I shall leave it to the right honorable member to make his own explanation. I stand by my statement.
– The honorable member runs away; he cannot prove his statement. That is a cowardly action.
– How does the right honorable member hope to bring new money into Australia? It cannot be brought in except in the form of goods. That is the usual process. Such a policy would result in this country being inundated with imported goods, as was the case when the right honorable member was Treasurer. The bill in its present form enables the bank and the Treasurer to provide the money required by the mortgage bank department by whatever means seem to be the most expeditious in existing circumstances. At present, for instance, it would not be possible, or practicable, to divert funds from loan raisings for the purposes of the bank. Therefore, I hope that the Treasurer, in consultation with the Commonwealth Bank Board will arrange for the issue of certain credits from the bank to the mortgage bank department to the degree required. No one expects that at present hundreds of millions of pounds can be made available to the mortgage bank department. That is not anticipated; but we hope that we are now laying the foundation of an instrumentality which will commence operations on a small scale, and, ultimately, will expand as circumstances permit when the war is over. That is a reasonable proposition; and no one expects more at this time. The funds required by the mortgage bank department could be made available in many ways. As I pointed out in my second- read ing speech, if sufficient national credit is made available to unfreeze many securities which are now held by all sorts of financial institutions and persons the result would be to throw on to the market a certain amount of investable funds. Some of that money would be available to the Treasurer un er the provision by which he takes a cer ;in amount of the investable funds of the banks; and other portions would be investable in war bonds and in other ways designed to help us to carry on our war effort. Therefore, I see nothing but good in the utilization of national credit. I cannot see any virtue in the contention of the right honorable member for Cowper that the issue of debentures would be the best way to secure the capital for the mortgage bank department. The Commonwealth Bank, on the occasion of its inauguration, found it unnecessary to resort to that expedient. Therefore there is no need to have recourse to it to-day. For these and many other reasons I oppose the amendment.
.- I wish to correct certain statements by the honorable member for Wimmera (Mr. Wilson) with regard to government borrowing during the regime of the Bruce-Page Administration. He repeated statements which are frequently made, both in and outside Parliament, that the Government of which the right honorable member for Cowper (Sir Earle Page) was Treasurer indulged in a wild orgy of borrowing at home and overseas. That is not true. It is true that during that period a good deal of borrowing was done on behalf of Australia, but the bulk of it was done by the States, or on their behalf.
– £207,000,000 was raised for the States, and only £12,750,000 for the Commonwealth.
– Yes. We had the spectacle of State after State competing overseas for money for public works and it cannot be denied that State Labour governments at that time were obliged to pay interest at a greater rate than non-Labour State governments. The facts are as stated by the honorable member for Gippsland (Mr. Paterson). During the regime of the Bruce-Page Government the national debt was increased by £207,000,000 in respect of borrowings on behalf of the States. But the increase of Commonwealth indebtedness during that period was about £12,750,000. Although these facts have been explained repeatedly, some people persist in misrepresenting the position. The Loan Council was established for the purpose of curbing this extravagant borrowing on the part of the States, which competed with one another for loans in London and New York.
– That is true.
– For taking the initiative in establishing the Loan Council, the right honorable member for Cowper deserves the gratitude of the country.
The right honorable gentleman pointed out that the Commonwealth Bank should possess the power to expand the capital of the mortgage bank department by the issue of debentures to the public. That contention contains a good deal of merit, and I shall support the amendment. During the debate on the motion for the second reading of the bill, it became abundantly clear that honorable members on both sides of the chamber are dissatisfied with the measure for many reasons. One of the principal reasons is that the bank will be of little use to primary producers for some time. I do not think that a greater leg-pulling measure has ever been introduced into this Parliament. The expectations which farmers have formed will by no means be realized. The bill is the agent for placing iri the control of a new department of the Commonwealth Bank a capital of £4,000,000, but the indebtedness of the primary industries amounts to hundreds of millions of pounds. Replying to the right honorable member for Cowper, the Prime Minister (Mr. Curtin) explained that no great expansion of advances from loan money could be expected in the near future. In fact, no great expansion can take place, because the demands of war will require almost every penny until the cessation of hostilities. Consequently, the right honorable member for Cowper, in his desire to empower the bank to issue debentures, is dealing with a peace-time situation.
It has been stated that investors will not be likely to take up debentures at the same rate or at a lower rate of interest than they would pay for government bonds. A distinction should be made in this matter. The rate at which the Government can attract loan money is frequently determined by the credit of the Government. I have a vivid recollection of the period between 1929 and 1931, when the credit of the Commonwealth. Government became so low that it was almost impossible to obtain any loan money. A loan had to be floated successfully if Australia’s name was to be saved from the stigma of repudiation, and the flotation was achieved largely through the influence of one man, and the patriotism of the people. The fact is undeniable that the rate of interest on any government loan is determined by the credit of the government of the day. The time may arrive, as it did in 1929-31, when the bank will require money for encouraging the development of primary industries. When that occurs, the credit of the government of the day may not be particularly high. If the bank is kept free of political control and is conducted on sound business lines, it will be able to place debentures on the market and the public will take them up at a lower rate of interest than government loans would carry. That happened in Denmark and Argentina. The political situation always has an effect upon national credit.
I support the contention of the right honorable member for Cowper regarding the necessity for attracting capital. I can never understand the opposition which is revealed from time to time to the attraction of overseas capital. In the post-war era, Australia will require migrants and capital. During the last 150 years, Australia has made phenomenal progress, unparalleled in history, but that development was possible only because capital flowed into the country, principally from Great Britain. The growth of our pastoral industry, of the iron and steel industry, and of almost every phase of our national life has been determined by the inflow of capital. If we are able to attract capital by sound business methods, our primary industries will be encouraged to expand. I do not suggest for a moment that the adoption of such a policy would place Australia under the heel of international capitalists. I do not accuse the Treasurer (Mr. Chifley) of stating it would, but that opinion is firmly held by some honorable members. The policy of the mortgage bank department of the Commonwealth Bank would be determined in this chamber and by the bank itself. Therefore, I have no hesitation in throwing that argument to the winds.
The proposal of the right honorable member for Cowper should receive full consideration. He has merely suggested that if the mortgage bank department deems it advisable, it may issue debentures to the public for the purpose of expanding its activities. Until the mortgage bank department is placed in that position, it will not, be of very much value to this nation.
.- I support the amendment moved by the right honorable member for Cowper (Sir Earle Page) for reasons which I explained at considerable length yesterday in my second-reading speech. I shall not recapitulate those remarks, but I desire to point out that the practice of issuing debentures is common to mortgage banks throughout, the world, with the exception of Australia. I see no reason why, in establishing this department for the first time, we should make an exception to the general rule. The honorable member for Melbourne (Mr. Calwell) put forward two reasons which seem to me to be completely lacking any basis. . He first asked why we should mortgage the mortgage bank department. What does he mean by that? He mig<ht as well ask why we should mortgage the Government by issuing loans to carry on the war.
Mi-. Brennan. - Is the honorable member satisfied that the mortgage bank department cannot issue debentures under this bill?
–I arn satisfied that it cannot issue them in the way in which they should be issued. It can only do so by permission of the Treasurer, and I see no reason why he should come into the matter at all, and no reason why the bank should, require a government guarantee. The honorable member for Melbourne also asked, “Why should we want any money at all? Why not use the national credit?” I echo, “Why not?” We are using it to-day, and calling upon the public for more loans, partly because we need the money, but mainly because we want to prevent that inflation which the undue pouring out of money by the population as a whole would certainly cause. If we use the national credit after the war in the same lavish way as is the case now, the same remedy will have to be applied. In other words, we shall have to call for money from the public by way of loans. In what better way can that be done than by offering the public debentures of the mortgage department of the Commonwealth Bank, which is the nation’s bank? The honorable member for Lilley (Mr. Jolly) said that he could not see how money could be obtained at cheaper rates by the issue of debentures on land than by the sale of ordinary government stocks. I agree that, at first blush, it seems strange, but the effective answer was given by the honorable member for Deakin (Mr. Hutchinson), who very well stated the difference between government credit and credit which is created by the security of land. The credit of the Government depends upon the Government itself, and there are governments and governments. Certain loans issued by States in the past would certainly not have been subscribed, because the particular Government in power at the time lacked credit. There have been other countries where the, credit of the government has completely gone, and yet it has been able to reform the whole of its currency by issuing money based on the security of land. A striking instance is Argentina, which I mentioned in my second-reading speech. There, although the Government has been stable for a. long time, unlike many other governments in South America not having been troubled by successive revolutions, and has enjoyed high credit for a considerable number of years, moneys have been borrowed on the security of land at lower rates than money borrowed by the Government itself on its own stocks. This is therefore a sound amendment, which will improve the basis on which we are founding the new department of the Commonwealth Bank, and should be accepted by the committee.
– I should not have taken part in the debate but for the statement of the honorable member for Wimmera (Mr. Wilson) that, the Bruce-Page Government increased the public debt of the Commonwealth by hundreds of millions of pounds. In saying that, the honorable member either speaks out of his complete and inexcusable ignorance of the record of the Bruce-Page Government, or else he is untruthful in a particularly malicious way. . The financial record of that Government is open to any honorable member who likes to look it up. “Whilst in office, it paid, if my memory serves me aright, over £47,000,000 off the public debt created during the world war of 1914-18. Its total borrowings for Commonwealth purposes amounted to about £5^,000,000, a high proportion of which was expended, under the direction of the then PostmasterGeneral, who is now Senator Gibson, in the development of the telephone services of country areas. Therefore, in regard both to the reduction of the dead weight of the debt, due ro war, and also to the extension of telephone services “in country areas, a member representing a country electorate ought to be the very last to castigate the Bruce-Page Government for raising money. There would not be the telephone services or the postal facilities that exist to-day in the honorable member’s electorate but for the work done by the then Postmaster-General.
– Why did not that Government pay for the work out of taxation ?
– The honorable member for Ballarat (Mr. Pollard) was not then in the House. He was struggling upwards, like the froth or the cream, in Victorian politics, qualifying, as I was myself, in the smaller, lower, and meaner, atmosphere of State politics for the distinguished positions that we hold to-day. I support the amendment moved by the right honorable member for Cowper (Pir Earle Page). No limitation should be placed on the power of the Commonwealth Bank to raise money for this purpose. If the Commonwealth Government thinks fit to establish a mortgage branch of the bank, the bank should have complete freedom in the method of raising the money required. It may be urged that there will be a conflict between government policy on the one hand and bank policy on the other. This bill arises from government policy, and the Government has disclosed its intentions to the extent of £4,000,000, and such other sums as the Treasurer may from time to time allocate to the bank. An indication of the magnitude of those sums can be gathered from a provision in another bill which the House is to consider. The mortgage bank department, if it has surplus funds, will be expected to return to the Treasury the insignificant amount of £50,000. With the debt structure of Australia in its present condition., no honorable member can expect the mortgage bank department of the Commonwealth Bank to have surplus funds on its hands within any measurable period of time. It is simply preposterous to suggest that such funds will be there. For years ahead, the activities of the new department will be absorbed in the investing of funds in country areas, and not in their repayment. Government policy may dictate what the new department shall or shall not do; but, once the department is put on its feet, the Commonwealth Bank Board may decide that the rate at which it shall proceed should be, in the interests of agriculture generally, greater than will be permitted by the amounts coming from the Treasury. If private individuals arc at liberty to place money in the Commonwealth Bank on fixed deposit, I see no reason why that institution should not be entitled to sell debentures. They are virtually the same thing. It is true that debentures are for a longer term than even fixed deposits, but, in any case, surely the method that is to be employed by the Commonwealth Bank in accepting money can be left to the Commonwealth Bank Board. The board should be completely untrammelled in determining the manner in which the bank will accept any floating funds, and also in regard to the manner in which it will invest its money. Therefore, I propose to support the amendment moved by the right honorable member for Cowper (Sir Earle Page). In reply to the criticisms of that right honorable gentleman that have been offered in this chamber, 1 say that I regard him as being a very much better representative of the primary producers than any of his critics. His work for the primary producers of this country will be remembered when many of his critics are justly forgotten.
– Before speaking to the amendment that is now before the committee, I wish to refer briefly to a statement made by the honorable member for Wimmera (Mr. Wilson) a few minutes ago. I was sorry to hear the honorable member resort to that oft-repeated fiction about the great increase of the Commonwealth debt during the regime of the BrucePage Government when the right honorable member for Cowper (Sir Earle Page) was Treasurer. Incidentally, the gibe at the right honorable member for Cowper which came apparently from the front bench on the Government side of the chamber, had nothing to commend it, except that it was a nice piece of journalistic alliteration. The statement made by the honorable member for Wimmera contained a half-truth, in that the public debt of Australia did increase substantially during the term of office of the right honorable member for Cowper as Treasurer of the Commonwealth, but surely the Commonwealth ‘ Treasurer cannot be taken to task for what was done by the States, which, after all, have their own sovereign powers ! The position was that during the seven-year period that I have mentioned the Commonwealth Government actually succeeded in decreasing our public debt by £6 per head of the population. Unfortunately, during the same period the State governments increased it by £21 per head, making a net increase of £15 per head. “ I remind honorable members also that during that period the debt for which the Commonwealth Government was responsible, increased by only £13,000,000, the amount paid to sinking funds being within £13,000,000 of the total borrowings. Unfortunately, State governments increased their indebtedness by £207,000,000, making a total increase for the Commonwealth of £220,000,000.
With reference to the amendment now under discussion, it seems to me that there are three schools of thought in this committee. First, there are the straight-out unabashed inflationists, who would simply provide the money for the mortgage department out of what they call national credit; probably the honorable member for Melbourne (Mr. Calwell) belongs to that school. Then there is another school of thought which would raise the money by means of ordinary treasury loans; I take it that the Government belongs to that school. Lastly, there are those who believe that the Commonwealth Bank should be empowered to issue debentures. In my early consideration of this matter, I was inclined to believe that the issuing of debentures could not cheapen mortgage interest rates, but I think now that this view is wrong. On giving the matter further consideration, it appears to me to be quite clear that debentures issued by an authority with the standing and reputation of the Commonwealth Bank must be regarded as being at least equal to gilt-edged securities, namely, Commonwealth bonds, and I believe that by issuing debentures, the Commonwealth Bank could obtain money for the mortgage department as cheaply as the Government obtains loans. Then, there is this advantage to be thrown on to the scale in favour of debentures: The debentures would be tied to the land, and at a time when the value of money may be slipping a bit, there is nothing so absolutely stable as the land. I am convinced that in this country, as has been the case in other countries, advantages could be derived by the use of this method of finance. The investor would say to himself, “ This is actually a giltedged security. It is issued by the Commonwealth Bank, which is a national institution “. In that respect, the debentures would start off on equal terms with Commonwealth bonds, and then, as I have said, they would have the added advantage of being tied to the land. The raising of money by this method is essential. I believe that it might ultimately be raised at a slightly cheaper rate of interest than is paid for ordinary Commonwealth loans, because the indebtedness would be tied to the land. For the reasons that I have given, I shall support the amendment.
Australian Army : Leave; Treatment of Malaria; Uniforms; Compulsory Vaccination - Anti- Vivisection League : Smallpox - Censorship - Aluminium -Commonwealth Powers Bill - Primary Products : Compulsory Acquisition.
Motion (by Mr. Chifley) proposed -
That the House do now adjourn.
.- I desire to raise with the Minister for the Army (Mr. Forde) a matter in connexion with soldiers who are on leave from the operations in New Guinea. These men have been infected with malaria. Very many of them, since arrival at their homes in different country districts, have developed a further attack, which has confined them to their beds for an appreciable portion of their leave. I impress upon the Minister that, before any men leave their battle stations in tropical areas and go on leave they should be supplied with at least one month’s supply of quinine, which they may take regularly, thereby averting any threatened recurrence of malarial attacks and enabling them to derive full benefit from the leave that has been granted to them.
– In reply to a question asked without notice by the honorable member for Gippsland (Mr. Paterson) on the28th January, I promised that I would make a statement to the House concerning developments associated with the establishment of the aluminium ingot industry in Australia. The story is a long one, marked by many difficulties and an insistence on the part of the Government that every effort must be made to surmount obstacles in an effort to establish in this country an industry that is vital not only to our war effort but also to our future as a nation. To save the time of the House, I shall confine this statement to a condensation of occurrences.
The previous Administration decided, as a matter of policy, that the aluminium industry should be established in Australia. It did not, however, find it practical to proceed with foundational arrangements.
It is necessary to realize that the first step which had to be taken was a survey of the bauxite resources of Australia,in order to establish that sufficient bauxite of a suitable quality was available for the sound establishment of the industry. This has been done, and a very comprehensive survey has proved that the necessary bauxite in quantity and quality is, in fact, available for the purpose.
The next step is the manufacture of alumina from bauxite, and the determination of the processes which have to be adopted for this purpose. The site of the alumina factory, and the erection of the necessary plant, are other factors. However, these cannot be finally determined until we are assured of the provision of the necessary plant, for much of which we are dependent upon other governments, as it must come from overseas. Finally, there is the production of aluminium ingots. Here, too, difficulties exist in regard to plant, but to a greater degree than in respect of alumina.
Initially, consideration was given to the production of 5,000 tons of ingot aluminium per annum. Recent surveys have shown, however, that this would be insufficient for requirements, and it has been necessary to consider a substantial increase. The Government’s attention is now being given to the production of ingots at the rate of approximately 10,000 tons per annum. An undertaking of this magnitude is fraught with great difficulties, both financial and practical. A continuous supply of not less than 40,000 horse-power is required, whilst large supplies of coal and water are also necessary. In addition, transformers, rectifiers and switch-gear are essential for the smeltery, as well as a carbon electrode plant. Much ofthis material must of necessity be obtained from overseas. Although strenuous efforts have been made to obtain it from the United States of America, I regret that our efforts have not been successful. Housing, man-power and materials, including large quantities of steel, must also be provided. Because of our great munitions effort, these factors will have to be carefully weighed in relation to our total war economy. For example, upwards of 1,000 men would bo required for operational purposes, and a much larger number for constructional purposes. Steel requirements would amount to not less than 11,000- tons a.nd’ coal consumption to 3-3’,000 tons- per annum, for the alumina Victory alone. If coal had to be used for the generation of power a very much greater quantity would be required; a:nd, in addition:, a generating plant.
The scale on which the Government considers that the industry should be established would necessitate an estimated expenditure of approximately £3,000,000. It is not this which has caused’ the delay, out rather the physical’ difficulties and the lack of assurances of plant from overseas. Despite the pressure which wo exerted* in many directions, we will not be able to obtain positive advice that this essential equipment would be forthcoming; consequently, it has been impossible to carry the matter to- finality. However, recently there returned from overseas a delegation of experts who had been sent to the United States of America, Canada and the United Kingdom to study all phases of manufacture-. This body has furnished’ its report, which rs now before the Government. Et is hoped that from that report and the other information obtained, together with such preliminary action- as* it has been possible to take, we shall now be able to proceed to a d’etermination in- this- important matter.
.- The right honorable member for Cowper (Sir Earle Page) has made the excellent suggestion’ that one month’s supply of quinine tablets bc given to soldiers in New Guinea before they go on leave. Speaking to me to-day in regard1 to the matter, the right honorable- gentleman pointed out that, numbers of soldiers, who had left New Guinea without quinine tablets had- had a recurrence of malaria fever. I shall immediately take up the matter with the Director-General of Army Medical Services, and hope to be able to advise the right honorable gentleman next week of what has- been done: It is the aim of the ‘Government to do everything possible to assist soldiers who- have unfortunately, contracted malaria in the New Guinea area-
.- The- time has arrived when, the- Parliament and the- people generally should be told the Government’s intentions with regard to the additional powers- proposed to be- granted to the ‘Commonwealth. In view of the great clash of legal opinion, it h impossible to proceed on the. basis that the States have power to lend or lease to the Commonwealth those powers that were agreed upon at the convention between representatives of the States and the Commonwealth. Nobody can say which opinion on the matter is right or wrong, but nobody can disregard the strong opinion of Mr. Fullagar, K.C., and M.r. Ham, K.C., supported in Western Australia by Mr. Norman Keenan, KC, -first, that the States cannot give to the Commonwealth the additional’ powers sought, except permanently, and’, secondly, that if tie States purported to grant them- for a limited time, and subject to conditions, they would not be giving them at all’ and the Commonwealth would be getting- nothing. The Attorney-General (Dr. Evatt), I understand, is to go to Great Britain and America next month, and will be absent from. Australia for a couple of months. If the Government is in earnest in seeking to acquire additional powers, it shouldtake steps to- get them, and- only one or two courses are open to it. One is that it sho.u-1’d get the States to support it andthe Parliament in asking for such an alteration of the Constitution as would enable the States to make such a temporary or additional grant of powers as would enable the States to carry out. the agreement which they intended to make at the recent convention. The other alternative is that, with the concurrence of the State Parliaments, the Commonwealth Parliament should ask- the- Imperial Parliament to grant to the States and’ to the Commonwealth- power,, on the one- hand, to lend power, and, on the other hand, to receive it.
In view of the -state of opinion that prevails in Australia, it is impracticable to seek further power from the- people, in face of the opposition- of the States. Whilst I should like to- see this Parliament vested with complete- legislative power; subject to certain safeguards of principle, which would bind-, not only the Commonwealth, but also the States, it is idle to expect success from a proposal for an alteration of the Constitution which would be opposed, not merely by powerful vested interests in this country, but also by the State Parliaments themselves. The Commonwealth Parliament and the people are entitled to a statement from the Government as to its intentions. This game of passing legislation through the State Parliaments, in which the States are acting on the advice of Mr. Ham and Mr.Fullagar, and making it perfectly clear that they do not intend to grant to the Commonwealth any power except temporary power based on conditions, is about played out. In view of the strong opinions expressed, it seems to me that it would be far too doubtful a course for the Commonwealth to assume that it hadcertain power validly conceded to it by the States, and to legislate on that basis. If, upon the belief that the measures the States are now considering are passed and the States do delegate powers to this Parliament and we proceed to legislate, we shall merely be sowing the seeds of trouble and giving a large subsidy to the lawyers of this country.
. -I strongly support the honorable member for Bourke (Mr. Blackburn). This Parliament has not proposed that its powers be amended. The proposal came from the government of the day. The story of this affair is without parallel in Australian constitutional history. We still have on the notice-paper before us the original bill introduced into this chamber by the Attorney-General (Dr. Evatt) for the alteration of the Constitution; but the Government has gone about as far away from that measure as Timbuctoo is from the South Pole. When the convention was summoned, that bill was not put before it.
– They are a lot farther away now than when they started.
– Yes. The convention was faced with an entirely different proposal from that which the Commonwealth Government originally drew up, and it decided to adopt one of those compromises, of which the public is becoming heartily sick and tired, Tinder which the State Parliaments were to hand over to the Commonwealth certain powers. The result was inevitable.No reasonable man could have read the report of the debates at the convention without coming to the conclusion that the members of a government who expected six State Premiers to get six State Parliaments to agree to exactly the same powers were qualified to be life members of an optimists’ society. Every member of this Ministry ought to be in such a society. The inevitable happened. The Premier of South Australia refused to bind his Cabinet and. his Parliament before he left the convention. In Tasmania, the bill “ took the count “ in the Legislative Council. In South Australia, after the bill had passed through the House of Assembly, only six of the fourteen proposed powers were agreed to, and, if I know the calibre of the Legislative Council in that State, the measure will have an interesting passage through that chamber. In Victoria a most extraordinary amendment has been inserted, providing that the bill must not operate until the other five States agree to the proposal. South Australia is quite capable of disagreeing with it, and Western Australia still has a chance to do so. The announcement has been made that the Attorney-General is to leave Australia shortly on an important mission. We do not detract from the importance of the mission, and I consider that a great compliment has been paid to him in that he has been selected by his colleagues for the second time in twelve months to go abroad ; but the man to whom this Parliament looks for a lead in constitutional matters will be out of Australia and out of touch with the situation here for a period of at least two or three months. None of us can tell what may happen while he is away.
– We may have a referendum in his absence.
– We may; but, whatever may be the feelings’ of the members of the optimists’ society, I have no doubt as to what the result of a referendum would be. The remedy lies in the hands of this Parliament. The present position is due to the complete and utter mismanagement of Commonwealth affairs, particularly during the last two and a naif years, and in the failure of the parties in this Parliament to get together under the stress of war. We have not provided an example to the people of Australia. We have not done anything which would lead the people to look up to us sufficiently to make them willing to place additional trust in this Parliament. Once that position obtains, any attempt to secure further powers by referendum would simply launch the country into turmoil, expense, and disappointment to the Government and to the members of the Parliament who agree with the Government on this matter. Such action would enable a large number of people to take what they would regard as a well merited revenge on this Parliament for its conduct during the last few years.
The other important point raised by the honorable member for Bourke should be considered. This Parliament, having been granted a constitution, we should not go back to London, especially since the passage of the Statute of Westminster Adoption Bill, when we took on ourselves all kinds of airs and graces-
– That measure preserves the position that- 1 mentioned.
– We could not say to the Mother of Parliaments, “ For Heaven’s sake, do for us something which we cannot agree among ourselves to do “. That would be a bad position for the Commonwealth to be placed in. Britain has had its House of Parliament blown to pieces by “blitzes”, whilst we in Australia are in a comparatively sheltered position. Are we then to go back to the much despised and so-called “ Pommies “, asking them to do what we cannot agree to do for ourselves? This is a ridiculous position in which the Commonwealth Parliament finds itself. However, the problem is largely one of out own making. Only when we improve the conduct of this Parliament can we win the respect and the trust of the people.
– Earlier to-day, the honorable member for Grey (Mr. Badman) referred to the censorship of letters. This censorship is the responsibility of the Director of Posts and Telegraphs. It does not come within the functions of the Chief Censor’s branch. I have ascertained that the letter that was addressed to the honorable member for Grey was mis-sorted at the General Post Office at Adelaide, and was inadvertently included amongst overseas mail for censoring. I regret very much that this should have happened. The occurrence may be said to be due almost entirely to the fact that, for some time past, the staff at the Adelaide General Post Office has been working under extreme pressure, for reasons which are fairly well known.
The position of the Commonwealth in regard to the proposed transfer of powers by the States to the Commonwealth Parliament is very clear. A bill was introduced into this Parliament in connexion with the matter, and the proposal was the subject of criticism in all the States and in some of the Parliaments of the States. It was the subject of special statements by some of the Premiers, who tabled motions in their Parliaments.
– Surely this Parliament has some rights in connexion with the matter.
– It has. The Government accepted the point of view that it was desirable that the additional Commonwealth powers should be secured with a minimum of misunderstanding and doubt. In order that the people might have a clear understanding of the reasons why additional Commonwealth powers were needed, representatives of the State Parliaments were invited to meet Commonwealth Ministers and members of this Parliament in consultation. The Premiers and Leaders of the Opposition of all States were asked to come to Canberra to meet a delegation composed of an equal number of representatives of the parties in this Parliament, and both Houses of Parliament were represented. It will be remembered that this assembly, notwithstanding its diverse political origins - though yet a body composed of men with some experience of administration - unanimously recommended that certain specific powers should be transferred by the Parliaments of the States to the .Commonwealth for a period of five years.
– Was that not on the assumption that it could be validly done?
– I now have in mind those problems which we can foresee will call for solution by the legislative instruments of the Australian people in the period immediately following the period of the war. The people of Australia, whether as Commonwealth or State electors, will be faced with certain difficulties which will arise during the period of transition from war to peace. In preparation for that period additional Commonwealth powers were sought. In the post-war period problems will emerge that will concern particularly the National Parliament, because of its responsibility to those who have served in the war, and made sacrifices for the safety of the nation ; and also because of obligations to other countries at present implied, but which, before the war is over, may have to be contractually expressed. It will be necessary to ensure that the Commonwealth Parliament shall have the necessary authority to carry out such international agreements that the Government shall be called upon to make. Our association with other nations in a common cause and for a common purpose surely carries with it the idea that weshall continue to co-operate with them after the war for the purpose of preserving the peace of the world. It seems to me that this will be one of the inevitable results of the present struggle. Moreover, this Parliament will inherit from the war period economic, financial and industrial problems, and the wisdom of the National Parliament will be called upon to deal with them. In anticipation of that state of affairs, Commonwealth Ministers applied themselves to considering whether or not the powers of the Commonwealth Parliament were wide enough to enable it to deal with those problems after the war, and they came to the conclusion that its powers were not adequate. They did not need to delve far into the Australian history for confirmation of that opinion. Therefore, a bill was introduced into this Parliament, the purpose of which was to extend the powers of the Commonwealth Parliament. The proposal was criticized on the ground that the powers sought were far greater than were required. The convention was asked to say whether the powers sought were too general and too vaguely stated, and the convention said that they were. The Commonwealth’ was asked if it wanted the powers for all time, and Commonwealth Ministers said that they would need the extra powers at least during the years following the termination of the war. The convention decided that it would be unwise to hold a referendum which would be disturbing to the proper conduct of the war, but it agreed that certain specific powers should be transferred, to the Commonwealth Parliament by the States, and a drafting committee was appointed to formulate those specific po wet’s. The drafting committee reported to the full convention, and the convention adopted the report.
– And all the State Premiers were members of the drafting committee.
– Yes, and they had their legal advisers with them. When I am engaged in a consultation as Prime Minister I can always go out of the room to consult legal or other advisers, and so can any State Premier. Therefore, it was a bit too silly to say that the State Premiers, at a conference of that kind, were sitting in the dark. At any time, they could have obtained advice to illumine their darkness. The convention unanimously adopted the report of the drafting committee, and it was agreed that the zero hour for determination of the matter by the parliaments of the States should be the last week in February. From that time to the present, neither I nor the Attorney-General (Dr. Evatt) has had anything to say on the subject. We have thought that it was proper to wait until the decisions of the State parliaments were made. I had hoped that those parliaments would adopt the bill, and that narrow, selfish, unnational interests would not mobilize themselves on the side of frustration of the Parliament of the Commonwealth in the years to come. I had hoped that there would be a recognition by the Australian people that problems which call for additional powers being granted to the Commonwealth Parliament would be regarded as an integral part of any “ new order and that whether this, or that, or some other political party was in power in the Commonwealth, it would be recognized that the Parliament of the nation should not suffer any constitutional impediment when grappling with the problems of the post-war era, or in carrying out the undoubted wishes of the people as a whole. If the predictions of the honorable members for Bourke (Mr. Blackburn) and Barker (Mr. Archie Cameron) be borne out, and these powers are not to be transferred to the Commonwealth Parliament, the Commonwealth Government, when it knows precisely what the situation is, will consider how and by what means the powers which were expressed in the report of the drafting committee are to be added to the existing powers which the Commonwealth Constitution has conferred upon this Parliament. In any examination of the powers of this Parliament, either in the light of the opinions that have been expressed during more than 40 years of experience as a federation, or in any analysis of those powers at the present time, it is clear to me that the powers entrusted to the Commonwealth Parliament by the Constitution, although adequate for war, are not adequate for the period after the war. The additional powers which the convention agreed should be transferred to the Commonwealth are -powers which, in some way or other, ought to be added to the powers of this Parliament, because if this Parliament does not possess them democracy in this country cannot conform to a sound system of law and order.
– Some time ago I referred to the cheaplooking and ill fitting uniforms worn by members of the Australian Army when compared with the uniforms worn by American troops. The recent issue of a green uniform to - men who have seen arduous fighting in areas adjacent to Australia brings the subject to light again. These pathetic green uniforms arc as impressive as a piece of dyed hessian, and are an insult to the men who have to wear them. The cut of the uniforms is bad, and the material has a tawdry appearance. 1 have no doubt that, for the price which the Commonwealth lias to pay for them, uniforms which fit as Well as those worn by the American troops could be provided.
Those uniforms are not specially tailored; they are all machine-made. It should not be beyond our capacity to provide a sufficient number of fittings to enable Australian troops to be as well dressed as their American brothers. There are only 22 fittings for Australian army uniforms, compared with 36 fittings for members of the Royal Australian Air Force. The American uniforms have a still greater number of fitting3, and, in addition, a variety of arm sizes. I ask the Minister for the Army (Mr. Forde) to take early action to ensure that Australian soldiers are clothed as well as are American troops in this country.
I again bring to the notice of the Minister for the Army the subject of the compulsory vaccination of members of the fighting forces. Last week I cited a case of a man named Stack, who was fined £2 for refusing to be vaccinated. This man has been fined a number of times, and the stage has now been reached when his pay does not cover hi= fines. He has applied for a court martial each time that he has been fined, but each time his request has been refused. He then applied for leave, as he intended to interview the Minister for the Army and the Minister for Labour and National Service (Mr. Ward) in the matter. He thought that he would be better off in prison than where he was. When he applied for twelve days’ leave due to him, his brigadier, for no apparent reason, refused it, and said that he would continue to fine the man. It appeared to Stack that the brigadier intended to send him away as soon as possible without any pay. The facts indicate that this unfortunate man, who has strong faith in the case against vaccination, is being victimized and hounded in a manner which no honorable member should defend. In view of the cases which have been brought forward, I had thought that the Minister for the Army would make some statement on the subject.
– Perhaps the man is trying to avoid service.
– The honorable member who has interjected may draw his own conclusion, hut I accept the man’s statement that he is conscientiously opposed to vaccination. I take it that he is prepared to go wherever he is sent,. so long as lie is not compulsorily vaccinated. The case against vaccination is so strong that I wonder that medical nien in charge of the armed services should continue to insist upon the maintenance of a regulation which was formulated when vaccination was compulsory in all States - a clay that has long since passed. Smallpox was not known in Australia until towards the end of the nineteenth century, and there have never been more than a few cases in this country, and most of them were traceable to importations from overseas. On the subject of smallpox, the Anti-Vivisection League has said -
In 1.01.4 the Commonwealth issued a service publication of 182 pages compiled by Dr. Cumpston entitled The History of Smallpox in Australia, J.788-1008. The AntiVivisection League thinks that it might almost be compared with the apocryphal “History of Snakes in Ireland “. where there are no snakes.
Almost, hut not quite, for there hae been a minute quantity of smallpox in Australia which, except for a sporadic case now and then of uncertain origin, can be traced wholly to importation from overseas. lt was brought in in this way many times, lint by the commonsense use of isolation and quarantine it failed to spread. In’ the 120 years so reviewed there were only 100 deaths from smallpox; 8(i of these resulted from live outbreaks, viz., Kew South Wales. 1881.-2, 40 deaths; Victoria, 1808-9, 10 deaths, and 1884-5, (i deaths; Tasmania, 1.887, 1.1 deaths, and 1903, 19 deaths, which leaves a total of only 20 deaths in the remaining 112 years! or one death every six years!
Test it in ‘mother way. In the first 40 yea in of this century there were approximately 2.200,000 deaths in Australia. Heart diseases top the poll with over 200,000, cancer comes a close second, whilst tuberculosis and pneumonic diseases, each of which caused about 180,000, are next. Then there is influenza 50,000, whooping cough and typhoid 12,000 each, measles 8,000, scarlet fever about the same and then, by aid of a microscope, we may find that out of these 2.200,000 deaths from all causes this so-called “dreadful scourge “ of smallpox was responsible for just 20.
Apply the term “ dreadful scourge “ to whichever you please of the other diseases just mentioned, but let smallpox in this country be correctly labelled as “ the most trumpery disease in the schedule “, ami let us have no more .medical hysterics about it.
Dr. Cumpston’s Hinton indicates that smallpox was first known in Victoria in 1857, being introduced by the ship Commodore Perry. ‘There were sixteen cases and four deaths. He refers to “ the very general disregard of the provisions of the Vaccination Act “ passed three years earlier and to refusal by parents to allow their children to be isolated. Yet ten of the sixteen were vaccinated persons. His further remark that “’ this attitude on the part of the individuals is in very marked contrast to the panic that would occur under similar circumstances today “ is to . be commended. And who but medical men are responsible for creating such panic? And who but medical men profit from it? What an outrageous price in suffering, in inconvenience to trade and traffic and in cash that the public had to pay in 1013 for the Sydney outbreak from which not one death resulted.
The first case in Kew South Wales was in 1874 - a vaccinated employee on the steam tug Aja at Newcastle and he died.
There was not a single case in Tasmania till 1887.
In Western Australia there is a suggestion that in I860 a few aboriginals were affected, but no white person before 1893.
The chronicler has difficulty in finding any smallpox in South Australia, but thinks he has run down one case in 1SS2, one in 1SS4 and a boat arrival in 1889. Three cases and no deaths in 120 years is the “tragic” history of South Australia!
But the worst is yet to be. There has been no vaccination law and no vaccination in Queensland and only one case, viz., in 1892, when, whisper it gently, a vaccinated quarantine official contracted smallpox from a passenger on the steamship Oroya.
Queensland therefore shows definitely and clearly that the absence of smallpox is not due to the presence of vaccination. And of what use was vaccination when smallpox did arise? In the Sydney outbreak of 1881-2 the official publication gives a list of 109 persons whose vaccinal condition was known. Of these, oil were vaccinated (48 of them within five ‘ years before they contracted smallpox) and only 50 were not vaccinated. As less than one-quarter of the whole population were vaccinated, there should have been only 2i5 such cases, not 59. Perhaps vaccination had made them more susceptible.
Although no precise knowledge of smallpox or its causes exists, the influence of certain conditions is abundantly clear and is repeated in the official report on this outbreak (p. 12).
The disease generally attacked the labouring classes, including two Chinamen, and, as might lie expected, it proved more prevalent and fatal among those occupying badly drained houses and residing in neighbourhoods the sanitary condition of which was seriously at fault “. The following factors are stated in the report to have been the principal influence favouring the spread of the disease: First, overcrowding; secondly, small size of rooms; thirdly, insufficient window space; fourthly, habits of uncleanliness; and fifthly, the impossibility of securing isolation of the patient. . . .
There yo,u have an epitome of the whole history of smallpox everywhere in the last 150 years. One hundred per cent, vaccination will not keep out smallpox if insanitary conditions exist. Conversely, given proper living conditions, food, light, air, sewerage, garbage disposal, &c., and vaccination, even if it did protect, is unnecessary, for with isolation of any person affected the disease cannot spread.
In the Victorian outbreak in 1884, which started from a case on the mail steamer Borne, half the 56 cases were in vaccinated persons. Of the 33 cases at Launceston in 1887 again half were vaccinated,, as were 28 of the 00 cases in 1903. Vaccination failed both to prevent infection or to avert death.
Australian experience since 1908 has been even more significant of the uselessness of vaccination. In Sydney in 1913 the proportion of vaccinated persons attacked was more than their due proportion of the community, and a vaccinated steward started it all.
In Bunbury, Western Australia, in 1914 there were eight cases. A vaccinated Lascar seaman was the first, six of the eight were vaccinated, four of them being nurses. One of these nurses had been vaccinated three times, another twice, and in two cases their vaccination had been only eleven mouths prior to their being stricken.
The last known case was a young woman returning from India in 1938, who died on arrival at Fremantle. It was this case that formed the text of a wireless address by a Sydney professor, extolling the virtues of and the need for vaccination, and ending with the words, “ Needless to say, the young woman was not vaccinated “. Her parents are authority for the statement that she had been twice vaccinated within the twelve months previous to her death, viz., on the arm in Melbourne and on the leg in Sydney. The professor was informed and asked to correct his statement. Apparently he never did.
In Victoria, from 1880 to 1900 there were 14 admitted deaths from vaccination and only 5 from smallpox. In England between 1915 and 1940 there were 118 deaths from smallpox of children under five, but 303 deaths from vaccination.
So here, in brief, is the wonderful “history of smallpox in Australia, 1788-1943,” as the Anti-Vivisection League sees it. ft would be impossible to find any one fatal disease that in the past 1.50 years has caused less sickness and death in this country.
Noel Coward might write a sequel to his “ Mad Dogs and Englishmen “ and entitle it “Mad Doctors and Australians” - for are we not all mad to continue so useless and injurious a practice as vaccination that has caused immensely more injury and suffering than smallpox. Is it any wonder that people are asking how much longer are the medical mcn of the armed services to be permitted to continue to impose their views on Ministries, Parliament and the people?
– On Wednesday, the honorable member for New England (Mr. Abbott) asked me a question in connexion with the action taken by the Government to control the disposal of the products of growers of citrus fruits. The statutory provisions imposing restrictions or obligations on growers of these fruits are on a different basis from those relating to the acquisition by the Commonwealth of other commodities under schemes established under Commonwealth law and, unless this fact is borne in mind, there is a possibility of some confusion. In the Apple and Pear Acquisition Scheme and some other schemes for the acquisition by the Commonwealth of primary produce or other raw materials, the acquisition is effected by order or other instrument executed by some Commonwealth authority. On the execution of the instrument of acquisition the goods become the property of the Commonwealth and the rights and interests of the producer, &c, are converted into a claim for compensation. In Tonking’s case the High Court held that in order that the compulsory acquisition of property by the Commonwealth may be on just terms there must be a right in the person whose property is expropriated” to have the compensation payable to him determined by an impartial tribunal.
In the case of citrus fruits, what happens in practice is that the Controller of Defence Foodstuffs, under powers granted by the Control of Citrus Fruits Order No. 2, directs that the grower of the citrus fruits is to sell or deliver the whole of his crop or a specified portion thereof to a processor or canner. The property then passes to the processor. The grower looks to the processor or canner for payment, and the price to be paid is the price determined by the Commonwealth Prices Commissioner. Citrus fruits so sold or delivered are processed and the juice therefrom is usually sold to the Department of Supply by the processor or canner for the purposes of the fighting services. The property then passes to the Commonwealth. The price paid to the processor is the price fixed by the Prices Commissioner in the exercise of his powers under the National Security (Prices) Regulations. The provision in the Citrus Fruits Order for the payment of the price fixed by the Prices Commissioner is intended to ensure that the grower shall receive a fair price for the fruit of which he is dispossessed. The payment to the processor of the price fixed by the Prices Commissioner simply constitutes a compliancewith the spirit of the law if not with its letter. The Citrus Fruits Order docs not provide in express terms for acquisition of citrus fruits, hut assuming that, in effect, it authorizes an expropriation of property, the question as to whether it accords with the principles of Tonking’s case would depend on whether the provision for the price to he paid constitutes just terms. This follows from the provisions of paragraph xxxi. of section 51 of the Constitution, which gives the Parliament power to make laws with respect to” the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws “ :
Summing up, the position appears to the Government’s legal advisers to he as follows: -
With regard to citrut fruits, it has not been brought to my notice that a legal claim has been made that, in any particular case, the price paid either to the grower or the processor is inadequate or unfair. As to the price of citrus fruits, the Prices Commissioner has made the following report, which shows that the price paid to the grower was determined by him after consideration by the Commissioner of all the facts: -
In determining the price of citrus fruit for processing, the Commonwealth Prices Commissioner convened a conference of representatives of growers and merchants, and reached an agreement that the prices should be £15 a ton at growers’ gate for oranges delivered to processors. It was also agreed that the prices of citrus fruit for the open market should not exceed 25s. a case prior to Christmas, 1942, and 35s. a case for the remainder of the season. The price of £15 a ton for processed citrus fruit is to be compared with the price of £9 a ton in 1941, £10 a ton in 1940, and £8 a ton in 1939. Moreover, theprices for the years 1939, 1940 and 1941 were f.o.r. capital cities, whereas the £15 a ton was at growers’ gate. In view of the higher proportion of fruit required for processing, a liberal maximum price was permitted in the open market, with the result that the growers received a much greater return for their citrus fruit in the season 1942-43 than at any other time. In these circumstances, there can be little complaint ontheground that the growers were treated inequitably asa result of any action by the Commonwealth in acquiring part of their crop.
.-The House is indebted to the AttorneyGeneral (Dr. Evatt) for his having placed before it the legal position in respect of the acquisition of citrus fruits as the result of the High Court’s judgment in Tonking’s case. I am sure that many producers of crops which are subject to acquisition will not be able to apply the interpretation of the High Court’s decision to their own products. It seems certain that the judgment must have some hearing on the acquisition of wheat on terms under which 4s. a bushel is paid for wheat grown in certain circumstances and 2s. a bushel for wheat grown in other circumstances.
– There is no question of of 2s. a bushel being the final payment; it is merely an advance, and 4s. a bushel is merely the guaranteed return; it is also an advance. The ultimate realization of the pool will he paid to the wheatgrowers.
– It is a nicety to say that it is an advance; but it seems to be quite clearly established that 4s. a bushel is estimated as being the basic price which a grower will receive for certain wheat. If the remainder of the crop is to- be paid for on a different basis I am unable to understand how theCommonwealth can consistently acquire different bags of wheat out of the same paddock.
– It is only in keeping with the scheme of the previous Govern ment, whereby a price of 3s.10d. a bushel was guaranteed for 140,000,000 bushels, and the residue was to be put into a pool and growers were to receive the realization of that residue.
– I do not agree that the cases are entirely parallel; but even if they were, my point is that a now legal position has probably been established as the result of this High Court decision. I am not questioning the bona fides of the Government in respect of its wheat acquisition scheme. Perhaps this decision establishes the legality of wheat acquisition schemes of previous governments. I do not know ; but it seems to me that the A ttorney-General might make a statement later in order to clear up doubts existing in the minds of producers other than growers of citrus fruits. This seems to open up a very wide and provocative field of thought for the primary producers. In my locality the produce of tomato-growers has been arbitrarily directed to certain processing works. The Prices Commissioner has fixed the price of those tomatoes at 3s. a case; and they become the exclusive property of the Commonwealth. At the same time, tomatoes are bringing up to £3 10s. a case, and nothing below £1. 5s. a case on the open market in Melbourne. Those tomatogrowers are concerned to know whether their interests are affected by this decision. Much the same can be said in respect of pig-producers whose products have been subject to price fixation. I admit that in this instance a new condition may obtain because the property rights of the producers do not pass to the Commonwealth. However, a pig may be made to weigh 1 lb. heavier, in which case its value is reduced by 12s. or 13s.
– I think that that will be rectified.
– I realize that many anomalies are bound to arise under the stress of war-time administration.
– Every owner who is dispossessed of property is entitled to just terms of compensation, but 999 out of every 1.000 persons so affected accept the position, and readily agree to the price they receive. That is the position.
– An owner whose property is acquired must make a claim through the court before he can obtain compensation.
– A person who claims that the terms are unjust or unfair has the right of access to the court, but no one wants every case to go to the court. That might create an impossible position.
– But, if the legal position has now been clarified, the Government should not adopt the attitude that every one must take his claim to court.
– No. As my colleague the Minister for Commerce and Agriculture has suggested an endeavour is made in every case to determine compensation on not only a fair but also a generous basis, having regard to the importance of the war work being done by the growers.
– The point I am endeavouring to make is that as there has now been a change in the legal position in respect of the acquisition of some products the Government should set out the legal position as it now sees it in respect of all products which are subject to acquisition.
– That is a reasonable request, and I shall have such a review prepared.
Question resolved in the affirmative.
The following papers were presented : -
National Security Act - National Security (Man Power) Regulations - Orders - Protected undertakings (113).
Wool - Report (abridged) of the Central Wool Committee for season 1941-42.
House adjourned at 4.41 p.m.
The following answers to questions were circulated: -
y asked the Treasurer, upon notice -
Mr.Chifley. - Inquiries are being made, and a reply will be furnished as soon as possible.
y asked the Minister representing the Minister for the Interior, upon notice -
– The answers to the honorable member’s questions are as follows : -
n. - On the 29th January, the honorable member for Melbourne (Mr. Calwell) asked the following question, upon notice -
How many meetings of the Australian House of Representatives, the British House of Commons, the United States of America House of Representatives, the Canadian House of Commons and the New Zealand House of Representatives were held in each month during 1940, 1941, and 1942?
The attached schedule shows the information asked for by the honorable member : -
n-Hughes asked the Minister representing the Minister for the Interior, upon notice -
– The answers to the honorable member’s questions are as follows : -
y. - On the 25th February, the honorable member for Grey (Mr. Badman) asked the following questions, without notice: -
If so, have the following factors been taken into consideration: -
the great amount of capital that has to be outlayed on raw materials; and
the increased disbursements on wages due to increases in the basic wage and by retrospective payments ordered by the Women’s Employment Board?
The answers to the honorable member’s questions are as follows : -
asked the Minister for the Army, upon notice -
With reference to the information given by the Minister on the 16th February to the honorable member for Parkes (Sir Charles Marr), that the Middle East canteens distribute, monthly, to unit trust funds, 8 per cent, of the monthly turnover of sales, and 2 per cent, to the General Officer Commanding special trust fund, and that the balance has been accumulated to assist in meeting the capital requirements of the service, will he furnish a detailed statement giving - (a) the amounts so distributed each month since the Middle East canteens were first established, under each of the first two headings, also the balance accumulated; (6) balance-sheets and profit and loss accounts, drawn up halfyearly; and (o) receipts for each month since the canteens were first established?
– Inquiries are being made, and a reply will be furnished to the honorable member as early as possible.
e asked the Minister for the Army, upon notice -
– The answers to the honorable member’s questions are as follows : -
n asked the Minister for the Army, upon notice - k
– The answers to the honorable member’s questions are as follows : -
Advisory “War Council.
l asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
Cite as: Australia, House of Representatives, Debates, 26 February 1943, viewed 22 October 2017, <http://historichansard.net/hofreps/1943/19430226_reps_16_173/>.