House of Representatives
12 June 1945

17th Parliament · 3rd Session



Mr. Speaker (Hon. J. S.Rosevear) took the chair at 3 p.m., and read prayers.

page 2844

QUESTION

NORTH-WESTERN AUSTRALIA

Mr JOHNSON:
KALGOORLIE, WESTERN AUSTRALIA

– In view of the demands that will arise for land for soldier settlement and post-war development generally, will the Acting Prime Minister arrange to co-operate with the Government of Western. Australia in sending a parliamentary delegation, representative of all parties, to inspect and report on the possibilities of the north-west of Western Australia, particularly the Kimberley district?

Mr CHIFLEY:
Treasurer · MACQUARIE, NEW SOUTH WALES · ALP

– Even if it were decided that an inspection of the kind suggested should be made by an all-party parliamentary delegation, the legislation yet to be considered will keep honorable members busily occupied for some time. However, I shall examine the proposal.

page 2845

QUESTION

LAND SETTLEMENT OF EX-SERVICEMEN

Mr FULLER:
HUME, NEW SOUTH WALES

– I desire to preface a question to the Minister for Post-war Reconstruction by a quotation from the Wagga Daily Advertiser issue of the 5th June. Under the heading “ Large Estates; Selection for Soldier Settlement”, the following paragraph appeared : -

Particulars of 21 large estates in New South Wales, situated in districts where the average rainfall is from 27 to 30 inches, have been forwarded to the Minister for Post-war Reconstruction (Mr. Dedman) by the New South Wales Minister for Lands (Mr. Tully). This was done with a view to obtaining the concurrence of the Commonwealth Government in their purchase or resumption for soldier settlement.

Carr the Minister give to the House the names and the area of the large estates in New South Wales which have been submitted to the Commonwealth Government by the New South Wales Minister for Lands, Mr. Tully, for purchase or resumption for soldier settlement?

Mr DEDMAN:
Minister in charge of the Council for Scientific and Industrial Research · CORIO, VICTORIA · ALP

– My attention has been drawn to a press paragraph on the subject. It is true that particulars of a number of areas which the Government of New South Wales thinks are suitable for settlement by ex-servicemen have been submitted to my department; they came into my hands at the end of last week. [ am not quite sure whether it would be appropriate at this stage to make available the general particulars of the areas. We have to determine their suitability and how much i’. would cost to make them suitable for soldier settlement. The agreements between the Commonwealth Government and the State governments - which have yet to be ratified by this Parliament - provide that the areas for soldier settlement shall be brought to such a stage of production that the settlers will have a good opportunity to make a living. A good deal of detailed investigation will have to be made and negotiations of a somewhat delicate nature will perhaps have to be undertaken.

Mr FRANCIS:
MORETON, QUEENSLAND

– Why cannot the Government make a start?

Mr DEDMAN:

– I have already said that the particulars reached me as late as the end of last week. Does the honorable gentleman expect me to be able to make a start two or three days later?

Mr SPEAKER:

– Order ! The honorable member for Moreton is not entitled to an answer. The answer ought to be given to the honorable gentleman who asked the question.

Mr DEDMAN:

– I shall see whether the details can be made available to the House.

page 2845

HOUE OF MEETING

Motion (by Mr. Chifley) agreed to - That the House, a.t its rising, adjourn to to-morrow, at 10.30 a.m.

page 2845

THE WAR

borneo OPERATIONS.

Mr CHIFLEY:
Acting Prime Minister and Treasurer · Macquarie · ALP

by leave - An extract from a communique issued to-day by General Head-quarters, South- West Pacific Area, reads -

Elements of the 9th Australian Division have landed simultaneously at Labuan Island, Brooketon and Muara in Brunei Bay on the western coast of Borneo, 800 miles north of Singapore and 000 miles east of the shores of Indo-China. Naval and air bombardmentlevelled the enemy’s beach defences and the assault troops swept ashore with only scattered opposition. Warships of the United States Seventh Fleet and Royal Australian Navy and bombers and lighters of the Royal Australian and Thirteenth Air Forces are supporting the operation. This landing, following our seizure of Tarakan 000 miles away by sea on the opposite side of Borneo, took the enemy by surprise, unprepared to offer effective resistance, and consequently our casualties have been rie.crligi.ble. Our forces already have captured Labuan town and airfield and on the mainland have advanced 4,000 yards inland from Brooketon towards Brunei town.

The most powerful force of Royal Australian Air Force aircraft and men ever concentrated in the South-West Pacific helped to’ prepare the way for the latest Australian landing in Borneo. The enemy was mercilessly hammered and harassed by Royal Australian Air Force squadrons for weeks before the actual invasion. There have been several heavy bomber attacks by Liberators, and-strafing hy Beaufighters. The Royal

Australian Air Force also gave continuous air cover to the invasion convoy, and strafed the beach-head as the Australian Imperial Force went ashore. Experienced air field construction squadrons of the Royal Australian Air Force travelled to Borneo with the Australian Imperial Force.

page 2846

QUESTION

AUSTRALIAN FORCES

Withdraw Al of Long-service Personnel - -Demobilization- Call-up ov Youths.

Mr McLEOD:
WANNON, VICTORIA

– Does the statement made recently by the Acting Prime Minister that all members of the Army and Air Force with operational service overseas, who have had over five years of war service, will be given the opportunity to take their discharge, mean1 that all those who come within that category will, upon making application obtain their discharge? Does this decision apply to all members regardless of their rank, or the areas in which they are serving? Will the Acting Prime Minister take steps to ensure that such discharges shall lie effected within a short period from the date of application, such period to be specified, in order to obviate undue delay in the release of these men?

Mr CHIFLEY:
ALP

– In reply to a question on this matter last week I said, as I had indicated earlier to the House in n general statement, that discharges to be made on the basis referred to would be made on a graduated scale, and that the method of effecting such releases was ‘being examined .by the responsible authorities. I have not yet received a report on that aspect of the matter, but so soon as it comes to hand it will be carefully examined. I do not suggest that great difficulties arise in the matter, but the releases must be effected on an orderly plan. When that report has been prepared, I shall advise the House regarding it.

Mr FRANCIS:

– Has the Minister representing the Acting Minister for the Army seen a published statement by Major-General Fewtrell that a “ points “ system, should be established for the purpose Of determining the priority in which men shall be discharged from the services before the cessation of hostilities? Whilst not saying that the proposal is an ideal one, I ask the Minister to examine it, and similar suggestions in order to ensure that members of the forces shall be released according to a sound and equitable priority system?

Mr DEDMAN:
ALP

– Al though I have notseen the statement, I assure the honorable member that the matter is receiving the consideration of the Government. In fact, a decision has been reached.

Mr Francis:

– What is it?

Mr DEDMAN:

– At the appropriate time, I shall present to this House a statement on the whole subject of the demobilization of servicemen, and the system of priorities that will operate during that period.

Mr HAYLEN:
PARKES, NEW SOUTH WALES

– Can the Acting Prime Minister say whether the Government has reached a decision regarding the calling-up of eighteen-year-old youths for the Army? In view of the present state of the war, and the fact that a soldier is not required to participate in operations against the enemy until he is nineteen years of age, will the Acting Prime Minister consider the fixing of the call-up age at nineteen years instead of eighteen years?

Mr CHIFLEY:

– No decision has yet been reached on this point. There are several factors to be taken into consideration, and they are now being examined.

page 2846

QUESTION

HOUSING

Mr SHEEHY:
BOOTHBY, SOUTH AUSTRALIA

– Will the Minister for Post-war Reconstruction ascertain whether the South Australian housing authorities are prepared to give consideration to construction of the type of house to which I referred in this chamber last week, when I said that the walls of a five-roomed concrete dwelling could be poured in one day?

Mr DEDMAN:
ALP

– I have asked for a report on the matter, and, if it shows that that method of construction could be

Used to advantage in relieving the shortage of houses, my department will bring it to the notice of the authorities in South Australia, with a view to its adoption, if practicable.

page 2846

QUESTION

INCOME TAX

Mr FADDEN:
DARLING DOWNS, QUEENSLAND

– Will the Treasurer have an immediate review made of the “ pay-as-you-earl “ provisions of the income tax law, to ascertain whether producers in drought-stricken areas are being inequitably treated through being compelled to meet an unduly high provisional .tax based, not on present income, but on that for the previous year? la cases where it is obvious that, because of drought conditions, a large proportion of the provisional tax will be refundable, will the Treasurer, in consultation with the Commissioner of Taxation, endeavour to devise a formula whereby such provisional tax will be reduced by the approximate amount of the ultimate refund ?

Mr CHIFLEY:
ALP

– I should imagine that other taxpayers, as well as those mentioned by the right honorable gentleman, might regard the payment of the provisional tax in the year in which the assessment was issued as a hardship ; but I shall examine the matter with the Commissioner of Taxation to see whether anything that would be reasonably equitable can be done with regard to it. I assume. however, that the commissioner himself has ample power to deal with such cases.

Mr Fadden:

– I do not tb;uk that he has.

Mr CHIFLEY:

– In any case, the matter will be fully examined.

page 2847

QUESTION

LETHAL WEAPONS

Mr CHAMBERS:
ADELAIDE, SOUTH AUSTRALIA

– Will the Minister for Munitions have an investigation made of the assertion by the honorable member for Richmond that there are in the hands of the police, 24 machine guns which were obtained from Army stores, munitions factories, or some other government source? Can the Minister given any further information to the House on the matter?

Mr MAKIN:
Minister for Munitions · HINDMARSH, SOUTH AUSTRALIA · ALP

– I have had this very grave statement ,by the honorable member for Richmond (Mr. Anthony) investigated, and I find it to be quite as unfounded, as was the implication in the question which he asked last week. Two officers of my department visited police head-quarters in Sydney, and their investigations proved the truth in every particular of the statement which I made last week. At the time, the police were able to produce only four guns which, to their knowledge, had ever had any connexion with the Sydney underworld. Later, officers of my department wencalled upon to view two other guns at tinthe Liverpool-street police station. They bore all the Army markings, and were of the type issued by the’ Army. The honorable member for Richmond said that it was reported that the police had in their’ possession 24 guns.

Mr Anthony:

– That statement appeared in the press, and I asked for nu inquiry.

Mr MAKIN:

– The honorable member sponsored the statement in this House. He said that 24 of these guns were in the hands of the police, and he indicated that they must have come from the Army, the Munitions Department, or from some other government source.

Mr Anthony:

– They must have come from somewhere.

Mr MAKIN:

– The police have i” their possession guns which, never had any connexion with the underworld, in Sydney or anywhere else. They were left with the police for safekeeping, some of them being souvenirs of this war, and others of the last war, and their owner? were perfectly entitled to possess them. Included among these are five German guns, one of which was used in the last war. They were souvenirs. There are three trophies from the present war against the Japanese, one American carbine, one Browning machine gun rifle, an Owen gun issued to the Police Department for test purposes, and another Owen gun which was presented to a high official of the department. The rest are American Thompson sub-machine guns of a kind which can be purchased by any civilian in the “United States of America. They were left with the police for safekeeping by people who had a perfecright to own them. They are in no way connected with the underworld. I add that the police authorities are greatly disturbed by such extravagant statements, particularly when they emanate from public men. They do not help individual citizens or the country as a whole.

Later:

Mr Anthony:

– I rise to make a personal explanation. My remarks on this subject have been entirely misrepresented by the Minister for Munitions (Mr. Al akin), who said that I made assertions as to the origin of certain lethal weapons in the hands of members of the underworld. I made no assertions whatever, as the Hansard record of my remarks will show. I said that there were reports that arms were coming from certain sources and I asked the Minister as the only person competent to make an inquiry to have the reports investigated.

Mr Makin:

– The honorable member went further; he laid charges against persons in the employ of the Small Arms Factory at Lithgow.

Mr Anthony:

– I mentioned that I had heard that they came from there and asked the Minister to make an investigation. On Friday afternoon last the Minister again attempted to distort my statement.

Mr Makin:

– The honorable member is quite irresponsible.

Mr Anthony:

– If the Minister will listen to me, he might ‘learn what is going on in this country. He appears to be very concerned about the views of certain police officers, but I am concerned about the lives of the people of Australia. The Minister referred to only four weapons on Friday. I said that, according to a report in the Sydney Sun, there were 24. guns in the hands of the police and that as some of them had Army serial numbers on them, it was the duty of the Minister for Munitions, or the Minister for the-Army, to have the weapons traced back to their sources. The Minister has completely distorted the purport of my statement, which was that a number of guns in the hands of the police were of the types issued by the Army.

page 2848

QUESTION

POTATOES

Mr GUY:
WILMOT, TASMANIA

– I preface a question to the Minister for Commerce and Agriculture by stating that I have received numerous letters from potato-growers in Tasmania, one of whom states -

May I respectfully ask that something be done in the matter of my pitted Bismarck potatoes. I have only been able to get 180 bags away to date out of approximately 53 tons. The first potatoes pitted are showing a big percentage of deterioration.

In view of the serious deterioration of the Bismarck potato crop in Tasmania, will the Minister cause an immediate assessment to be made of the Bismarck crop, to be followed by an assessment of all other potato crops in that State?

Mr SCULLY:
Minister for Commerce and Agriculture · GWYDIR, NEW SOUTH WALES · ALP

– I shall have the matter investigated and let the honorable member have an answer to-morrow.

page 2848

QUESTION

MIGRATION

Mr HUTCHINSON:
DEAKIN, VICTORIA

– Has the Acting Prime Minister seen a cable message published in the newspapers on Saturday that a White Paper dealing with Empire migration policy has been prepared in London, but will not be issued until after the British general elections? Is the statement in that cable message correct that the Australian migration scheme has been referred back to Australia three times by the Dominions Office for certain adjustments sought by Great Britain?

Mr CHIFLEY:
ALP

– I have not seen the statement, but there has been an exchange of cables and other correspondence between the two Governments regarding migration to Australia from the United Kingdom. Certain points have been the subject of consultation and I understand, from memory, that agreement has been reached on some but that a few other points are still the subject of discussion. I am not aware of the intention of the British Government regarding the issue of a White Paper, but I sec no reason why, when discussions have been completed, the final arrangements should not be communicated to this House.

page 2848

QUESTION

FROST DAMAGE

Mr SMITH:
WAKEFIELD, SOUTH AUSTRALIA

– In view of the effective experiments carried out, particularly in England, for the dispersal of fogs to make the landing of aircraft safe, will the Minister for Post-war Reconstruction request the Council for Scientific and Industrial Research to have similar experiments carried out here, with a view to preventing frost damage in parts of the Commonwealth subject to that scourge?

Mr DEDMAN:
ALP

– I acknowledge the very great interest taken by the honorable member in this matter of frost damage. He has discussed with me on several occasions the work that the Council for Scientific and Industrial Research could do. It does appear that what has been done in England in relation to dispersal of fogs in order that aircraft may land at times when otherwise they would be unable to, is associated with the frost problem. I shall ask the Council for Scientific and Industrial .Research to ascertain whether the means employed in England can be applied in this country so as to prevent frost damage. I am sure that the Council for Scientific and Industrial Research will see that the matter is followed up close.lv.

page 2849

QUESTION

DAIRYING INDUSTRY

Prick of Milk - Report of Professor Gillum

Mr ABBOTT:
NEW ENGLAND, NEW SOUTH WALES

– I ask the Acting Prime Minister whether it is a fact that Professor Giblin in his report to the Government stated that the actual results of Professor Copland’s inquiry into milk zone prices in New South Wales were not such that any valid determination of subsidy could he , based on them ; that the determination of the subsidy at 2/d should rest, not on the costs inquiry, but on the broad judgment of what was required in relation to the general price structure under conditions existing at the middle of 1944; and that the costs inquiry failed mainly because the selection of farms for examination was unsatisfactory? If so, does not the Acting Prime Minister regard this as a very severe stricture upon the methods employed by Professor Copland in the conduct of that inquiry, especially in view of the fact that grave dissatisfaction exists amongst many manufacturers and businessmen concerning the methods of the Prices Commission in fixing prices and the limitation of profits which, it is alleged, are illegal? In view of Professor Giblin’s report and criticism, will the Acting Prime Minister order an independent inquiry into the whole of the methods of the Prices Commission?

Mr CHIFLEY:
ALP

– As I indicated last week, Professor Giblin prepared his report for the personal information of the Prime Minister in order to enable the Prime Minister to inform his mind of various aspects of the dairying industry in relation, to the subject of the dispute. I also indicated last week that I did not, propose to table Professor Giblin’s report, but that I would consider tabling his conclusions. Last Sunday I released his conclusions in a statement to the press. I cannot remem!ber the particular passages to which the honorable member lias referred; I do not know that one could say that the conclusions are inconclusive, but it appears that both sides to the dispute have derived satisfaction from them, and that would appear to indicate a perfect report. So much argument has taken place about this matter that I do not propose to enter the lists. With respect to the latter part of the honorable member’s question, I see no reason to arrange a special investigation of the methods of the Prices Commission. The Prices Commissioner was appointed by a previous government and although officers of the commission may have made mistakes, human natura being imperfect, I say frankly that the Commissioner and his staff, having regard to all the difficulties confronting them, have done a splendid job for this country.

Later:

Mr ABBOTT:

– On Friday last the Acting Prime Minister said that he would make Professor Giblin’s report available to the honorable member for Eden-Monaro (Mr. Fraser) and the honorable member for Robertson (Mr. Williams), and that the conclusions arrived at in the report would be made available to me and other honorable members on this side of the House who were interested, in the matter. I now ask whether he will give to honorable members on this side the same consideration in this matter as ho has promised to honorable members supporting the Government by making the report available to all honorable members who are interested?

Mr CHIFLEY:
ALP

– T ‘ shall give consideration to the honorable member’s request. I thought that I had made the position clear.

Mr Abbott:

– The Minister drew a distinction between honorable members on different sides of the chamber.

Mr CHIFLEY:

– As the honorable member for New England (Mr. Abbott) said on Friday last that he had a personal interest in this matter, it was my intention to discuss it with him, personally. I shall do so, either later to-day or to-morrow.

page 2850

QUESTION

VICTORIAN SUGAR SUPPLIES

Mr HOLT:
FAWKNER, VICTORIA

– A dispute in the sugar industry in Victoria has occasioned great inconvenience to domestic users, and, I understand, is causing factories to cease or reduce the production of urgentlyrequired foodstuffs. Has the Acting Prime Minister taken any action to treat this dispute as an emergency, requiring the transport of refined sugar from other States to Victoria? If not, will the honorable gentleman consider such action? Have inquiries revealed that the attitude adopted by the Colonial Sugar Refining Company Limited, has been endorsedby the appropriate industrial tribunal? If it has, what action is the Government taking for the purpose of ensuring that the men shall work in accordance with the prescribed law?

Mr.CHIFLEY. - The possible effects of this dispute were first brought to my notice by the Chairman of the Rationing Commission, Mr. Coles, who pointed out that shopkeepers would have difficulty in supplying the quantity of sugar represented by the coupons as they became due. I discussed the matter with the Minister for Trade and Customs, and asked him to obtain a return showing the quantities of raw and refined sugar stored in the various capital cities. Except for a very small quantity in one instance, the excess over the normal requirements of each State was inconsiderable. Consequently, very little could be done in regard to shipping refined sugar from other States to Victoria. The stocks of raw sugar in certain localities are fairly substantial. The industrial aspect has been followed very closely by the Minister for Labour and National Service and myself, but I shall not weary honorable members by recounting the history of the dispute. As to what action the Government proposes to take, the Minister for Labour and National Service arrived in Canberra from Sydney to-day, and I shall discuss the matter with him. this afternoon.

page 2850

QUESTION

WHEAT INDUSTRY

Temporary Shelters

Mr RUSSELL:
GREY, SOUTH AUSTRALIA

– There is a serious shortage of galvanized iron and timber in South Australia, and the demand for those materials is urgent. Will the Minister for Commerce and Agriculture discuss with the Australian “Wheat Board the necessity for dismantling temporary shelters which were erected in South Australia to protect large quantities of wheat that accumulated in the early stages of the war? Most of those temporary shelters are now empty, and it does not appear that they will be required again.

Mr SCULLY:
ALP

– I shall discuss the matter with the Australian Wheat Board for the purpose of seeing whether the iron and timber can be made available to persons who urgently require those materials. I shall supply an answer to the question at an early date.

page 2850

QUESTION

COAL-MINING INDUSTRY

Wood Carters

Mr JAMES:
HUNTER, NEW SOUTH WALES

– I ask the Minister representing the Minister for Supply and Shipping whether it is a fact that following the recommendation of an increased remuneration for carters transporting safety timber to the mines of John Darling and Broken Hill Proprietary Company Limited, the carting contractor sought to pass the increase on to the Broken Hill Proprietary Company Limited, but was not permitted to do so by the Prices Commissioner who claimed that the existing rate, which had been in operation for a considerable time, was adequate to enable him to pay his carters the increased wage recommended. As the Broken Hill Proprietary Company Limited has indicated its willingness to pay the extra amount to the contractor, will the Minister take the matter up with the Prices Commissioner with a view to allowing the increase to be passed on by the contractor and so avoid industrial’ trouble?

Mr BEASLEY:
Vice-President of the Executive Council · WEST SYDNEY, NEW SOUTH WALES · ALP

– The catch inthe willingness of the Broken Hill Proprietary Company Limited to pay the increased amount is that if that were sanctioned, the company would apply immediately to the Coal Commissioner for a subsidy to cover the higher payment. However, I shall have the matter further examined and advise the honorable member accordingly.

page 2851

CANBERRA

House Tenancy of Soldiers Wife

Mr ANTHONY:
Richmond

by leave - On Friday last, the VicePresident of the Executive Council (Mr. Beasley) invited me to tender certain evidence concerning the proposed eviction, and dunning by the Department of the Interior of the wife of a prisoner of war. In presenting the case now, I shall recapitulate some of the facts so that honorable members may have a full comprehension of the activities of the department in this regard.

NX67681, Sapper L. J. Pedvin, was employed by the Department of the Interior as a works supervisor. He was continuously in the employ of the department for nine years. With his wife and child he occupied a government house in Canberra, and paid a rent of 32s. 6d. a week. He was in occupation of the dwelling for seven years, during which time the rent was regularly and promptly paid. He was a good tenant, and during1 bis absence, his wife also has been a good tenant and has paid her rent regularly, with the exception of a certain amount which is in dispute. When Mrs. Pedvin was served with an eviction notice the amount in dispute was only £23. At the time of Pedvin’s enlistment, he was in receipt of approximately £10 a week from the department. He volunteered for war service during the black days of the Dunkirk evacuation. Incidentally, a9 his department was a protected undertaking, he was not subject to call-up in the usual way. His enlistment was patriotic in the true sense of the word. He entered the Army in January, 1941, on a sapper’s pay of 7s. a day, including deferred pay. This, including allotments to his wife and child, brought the total to £4 7s. 6d. a week, which represented a direct monetary sacrifice on enlistment of £5 12s. _ 6d. a week. Pedvin sailed for Malaya-

Mr James:

– I rise to order, Mr. Speaker. Is the honorable member for Richmond, by reading his speech, contravening the ruling which you gave in this House recently?

Mr SPEAKER:

-If the honorable gentleman has been reading his speech he must not continue to do so.

Mr ANTHONY:

– This is a statement.

Mr SPEAKER:

-lit is a speech nevertheless.

Mr ANTHONY:

– Pedvin sailed with the ill-fated 8th Division and was taken prisoner when Singapore fell on the 15th February, 1942. He is now, so far as we know, a prisoner in the hands of the Japanese. Prior to the fall of Singapore, he was promoted to the rank of corporal. This fact has great significance in this case, and I shall refer to it later. It is fitting to mention at this stage that the Menzies Government approved of the granting of a rent rebate to tenants of government-owned properties in Canberra who were serving in the fighting forces and whose financial circumstances were such as to warrant a concession. Pedvin applied for the concession and was granted it at the maximum rate of 10s. a week, his rental being reduced from 32s. 6d. to 22s. 6d. The concession was made applicable from the time when he enlisted in the Army. In June, 1942, after the concession had .been operating for eighteen months and after Pedvin had been reported missing, his wife, in order to augment her income, obtained employment in a government office in Canberra. She advised the Department of the Interior of this fact, and the concession was immediately stopped. There is not the slightest complaint about that; Mrs. Pedvin concurred in the decision. However, she was advised to reapply for the concession if she ceased work or if her circumstances changed. She continued in employment for about eighteen months, but, owing to ill-health, she decided to relinquish her employment at the end of December, 1943. During the entire period in which she had been in employment she paid her full rent of 32s. 6d. a week regularly and without demur or complaint. I emphasize that there is no objection on that account. In January, 1944, being without employment and entirely dependent upon her income from the Army, she re-applied for the concessional allowance of 10s. a week. In response to her application, she received only a bald notification from the Department of the Interior that the concession was refused; no reasons were given. She applied again, with the same result. She then forced the issue by reverting to the payment of rent at the concessional rate of 22s. ‘6d. a week, which she paid regularly. In the meantime, she strongly, and in view of all the circumstances courageously, resisted the department. Having precipitated a crisis, she received a letter from the secretary to the Minister for the Interior stating that the reason for the refusal to grant the concession was that she was receiving increased allowance because her husband had been promoted from sapper to corporal. That was the only reason ever submitted by the department, and I emphasize the fact in view of the inquiries and Criminal Investigation Branch tactics that, have been loosed upon her. As I shall show, the reason was utterly fallacious. The only increase of income that the woman had received, apart from the period during which she earned money, was- the statutory increase made to all servicemen and their dependants. I .shall now deal with the facts relating to the promotion of Pedvin from sapper to corporal. When, in this House on the 28th February, I mentioned the treatment which Mrs. Pedvin had received, the Minister for Works (Mr. Lazzarini) made allegations concerning income that she was said to be receiving from property in Sydney, despite the fact that on two occasions she had made a sworn declaration in rebuttal, which she had supported by the production of her bank pass book. I understand that she has since produced the books to the parliamentary committee. They show that her income is derived solely from her Army allowance. This has not yet been controverted. If and when the report of the committee is placed before the House, I shall comment further on this aspect of the matter. The statement of the department that her income had increased in consequence of the promotion of her husband, is untrue; because, although Pedvin was promoted, he became a prisoner-of-war almost immediately, and no authority to increase his- allotment has ever appeared in Army records. Consequently, under

Army regulations, his wife has continued to receive an allowance based on the rate of pay of a sapper. That is the position at the present time. Despite the fact that the rent not in dispute had been paid right up to date, that Pedvin was an employee of the department which owns the dwelling occupied by his wife and child, that he was a prisoner-of-war in the hands of the J apanese, and that the very small sum of £23 was in dispute, an eviction notice, signed by the Minister for the Interior and directed to the soldier himself, although at the time he was a prisoner-of-war in the hands of the Japanese, was served on his wife, instructing her to quit possession of the cottage by the 15th May last. I have a copy of that notice. With rare callousness, it was dated the 14th February, the eve of the third anniversary of the day on which Pedvin became a prisoner-of-war. It was at this point that I raised the matter in this House. The Prime Minister (Mr. Curtin) considered it of such importance that, on the 2nd March, he said that he would appoint a committee, consisting of members of all parties, and would ask a senior Minister to discharge the duties of chairman if he were unable to do so personally. The Vice-President of the Executive Council (Mr. Beasley) was appointed chairman of the committee. It has had three months in which to determine this simple matter, hut has not yet made a report. The delay is said to he due to the absence in San Francisco of the honorable member for Ballarat (Mr. Pollard) a member of the committee. The committee had ample time to finalize the matter long before the honorable member’s departure from Australia. Despite the denials of the Vice-President of the Executive Council, the dunning of this lady still goes on. ‘She has not received one line from the department, stating whether the eviction notice has been withdrawn or will be executed at a later date. Whenever she makes a payment of rent, the receipt issued to her has on it a reminder of her alleged arrears. I shall show to the satisfaction of any fairminded person that those receipts constitute consistent dunning. First, they record that she is in arrears with her rent to the amount in dispute. Secondly, they record the increasing amount of those arrears week by week. I have four of the receipts that have been issued to Mrs. Pedvin; they cover a period of six weeks from the 27th April. Two of the amounts Mrs. Pedvin paid personally, and on the other two occasions she left money with a neighbour for payment to the collector. I emphasize the recognition by the department that the form of receipt issued personally to Mrs. Pedvin inflicted humiliation which should be kept from the knowledge of neighbours. The procedure to which I am about to refer may be regarded as the only consideration which the department has shown to this woman. The form in which the receipts were issued proves that the department recognized the doubtful character of its actions; in other words, that the receipts undoubtedly were dunning documents. The first receipt is dated the 28th April, 1945. The payment was made by Mrs. Pedvin, and the amount recorded is £2 5s., which is stated to be rent to the 18th April. But, so as to remind her that the amount in dispute is neither forgotten nor forgiven, the words “ Balance, £28 “, appear at the bottom of the receipt. On the 10th May and the 24th May, the payments were made by a neighbour. In deference to Mrs. Pedvin’s feelings, the receipts make no reference to a balance being outstanding.

Government members interjecting,

Mr SPEAKER:

– Order !

Mr ANTHONY:

– The interjections show what consideration those making them have for the wife of a prisonerofwar who sacrificed a salary of £10 a week to accept a sapper’s pay of £4 7s. 6d. a week. The last payment was made by Mrs. Pedvin personally, only last Thursday. The sum of £2 5s. is recorded as having been received for rent due to the 6th June. I again emphasize that this lady is right up to the minute with the payment of what she considers is her proper rent. The receipt issued on that occasion reveals greater refinement of feeling than had been shown previously, because it contains only the inscription “ £31”, not prefaced by the word “ balance “. Thus, while the committee has been considering its report the department has been piling up arrears of rent, and has lost no opportunity to stress

Mrs. Pedvin’s remissness in the six weeks under review. According to the department, her arrears increased from £28 on the 27th April to £31 on the 7th June. Any intelligent person can construe the form of the receipts only as an implied demand for the payment of the amount said to be in arrears. When the committee was appointed early in March, the disputed arrears amounted to only £25. The Vice-President of the Executive Council may interpret the expression “ dunning letters “ entirely to his own satisfaction, but that these receipts which I have produced are dunning intimations is beyond dispute. What is more, they are so regarded by the recipient of them. Since the whole of the arrears are the subject of a parliamentary investigation, all reference to them by the department should have been suspended, pending the presentation of the committee’s report. In this view I am supported by the Vice-President of the Executive Council himself, because, in the course of his reply to my question on Thursday last, he said, “ Until the matter is finally adjusted, it should remain as it was when the committee started its deliberations.” I think that I have proved conclusively that the matter has not remained as it was since that time. As a matter of fact, the arrears in that period have increased from £25 to £31. Yet the department says that there has been no dunning of Mrs. Pedvin.

This case has gone far beyond the responsibility of the Minister for the Interior, and. the dispute will not be resolved by making a. scapegoat of the Minister. The responsibility now rests squarely on the Government as a whole. Since the attention of the Parliament has been directed to the case and the Prime Minister has appointed a. committee to investigate it, the matter has been taken out of the hands of that Minister, and the delay on the part of the committee in presenting its report cannot , be excused. No semblance of consideration appears to have been given to the fact that the tenant’s ultimate fate caused harrowing anxiety to a soldier’s wife. She has been in a constant state of nervous tension ever since the receipt, in February last, of the eviction notice, which still hangs over her head. If the Government delays action much longer the returned soldiers at Canberra will settle this matter themselves. They have long been prepared to do that.

Mr Dedman:

– Does the honorable member advocate that?

Mr ANTHONY:

– They have long been prepared to subscribe the miserable sum in dispute, but they have refrained from doing so, believing that the principle at stake should be upheld. Mrs. Pedvin took the same view of the matter. They are prepared even to buy the house at the Government’s valuation, so that the tenant may be no longer molested. A point has now been reached, however, where that principle must be sacrificed, if necessary, in the interests of Mrs. Pedvin’s health. She cannot stand this strain much longer. I therefore urge that the committee should complete its report, and that in the meantime the department, which owns the house, should be instructed that this lady must not be further pestered.

Mr BEASLEY:
VicePresident of the Executive Council · West Sydney · ALP

by leave - On the 7thJ une last, the honorable member for Richmond asked a lengthy question on this matter, and at about the concluding portion of it he used these words - “ Will the Minister see that these dunning letters which Mrs. Pedvin is still receiving from the Department of the Interior shallbe stopped?

Mr Anthony:

– That was not said at the conclusion of my question.

Mr BEASLEY:

– I have read from the Hansard proof. I repeat the words “ dunning letters “, which left no doubt in the minds of honorable members that the department was sending letters to Mrs. Pedvin in connexion with this matter, and, in fact, harassing her in the process. That is the impression created by the honorable member’s remarks. I thought at the time that possibly that was happening, and I said that no such letters should be sent to her. That is how I sincerely felt about the matter. Next day I inquired from the department whether this practice was being followed, and I received a reply to the effect that no letters had been sent by it to Mrs. Pedvin. I remarked at the time that any employee of the department who gave false information to me on the matter had better put on his coat and hat, because in matters of that kind everything must be clear and above board and truthful statements must be made. It is very clear that letters have not been sent. The honorable member for Richmond ought to be more careful in his statements, because it is common knowledge in the parliamentary lobbies that he is “easy meat”, and that “ Larry “ Anthony can be induced to ask any question in the House, whether it relates to facts or not. That, I think, is a bad reputation for the honorable member to have earned.

It is true that whilst receipts tendered to Mrs. Pedvin from time to time bore a reminder of the unpaid balance, receipts left with a lady living next door to her bore no reference to balance due. The rent collector did not wish to make any reference on the receipts to the balance unless he was handing them directly to Mrs. Pedvin. When she returned to Canberra after having been absent for some time, and a receipt was handed to her, a note was made on the butt, which I now have before me, that the balance due was £31. I have made inquiries and am informed that ordinary business principles are observed in matters of this kind, and that until a proper authority determines whether the outstanding payments are to be made or not, they must be stated in the receipts from time to time.

Mr Anthony:

– That is contrary to what the Minister said on Thursday.

Mr BEASLEY:

-It will interest the honorable member to know that the action taken by rent collectors in this territory conforms with an instruction issued in 1940 when Senator Foil was Minister f or the Interior.

Mr Anthony:

– But he was not trying to evict anybody.

Mr BEASLEY:

– The honorable member cannot get away from the fact that a departmental instruction was issued in 1940, when Senator Foil was Minister, to the effect that this practice must be followed, and it has been followed ever since. The Treasury is interested in the matter, because public money is involved. Under Treasury Regulation No. 39, an officer who receives any money must give a receipt or acknowledgment on a printed form taken from a boole of receipt forms supplied to him for the purpose. The regulations do not prescribe any form of receipt, but it is generally understood that all written receipts should include the date and number of the receipt, the name of the person from whom the amount is received, ;md the amount in words and figures. The regulations also provide that, when part payment of a sum due is made, it is imperative that the officer issuing the receipt shall indicate on it that the n mount has been “received on account”. The insertion on the receipt of the amount of the balance due, while not essential for the purposes of the receipt, is not an unusual procedure, and does afford protection in the collection of public moneys. That is the instruction which was issued by the Treasury to officers of the Department of the Interior, and those instructions are followed in all such cases. If there are arrears, they are set forth as such.

Mr Fadden:

– And if an amount is in dispute, is that also stated?

Mr BEASLEY:

– That is not a matter for the officer to determine. He has instructions to follow, instructions which were issued’ in 1940 when Senator Foll was Minister for the Interior. They have been followed ever since, and are in accordance with the regulations. Last Thursday, the honorable member for Richmond said that dunning letters had been sent to this lady. As a matter of fact, no dunning letters were sent to her. On the days on which she was present the rent collector discussed the matter with her when the receipt was handed over, and she made no mention of anything of the kind.

Mr Anthony:

– Of what use would it. have been to have mentioned it to him?

Mr BEASLEY:

– Whether the honorable member for Richmond has some source of information which the rent collector has not, I do not know; I am citing the collector’s experience. It is clear beyond any shadow of doubt that the honorable member expressed an untruth here last Thursday, and he should to-day have got up and retracted hi3 statement, saying that he had been wrongly informed.

Mr Anthony:

– I have proved the* case to the hilt.

Mr BEASLEY:

– The honorable member would. have .been much more respected if he had admitted his mistake. The honorable member may play politics with us if he likes, but he has no right to play politics at the expense of this unfortunate officer of the Department of the Interior. He should not try to place the onus on him.

Mr Anthony:

– And the Minister hae no right to play politics at the expense of the wife of a prisoner of war.

Mr BEASLEY:

– These rent collectors in the Department of the Interior are themselves returned soldiers. This returned soldier business is only skin deep with the honorable member for Richmond. He started playing politics in the House over .this matter, and has come out of it very :badly indeed. I do not know what the honorable member’s colleagues think of him, but it is interesting to note that the .two Opposition members of the committee which was appointed to inquire into this case have not sought to capitalize the delays which have taken place. They have acted very decently, and have ‘been content to wait. They may have thought that the inquiry should have been pursued with greater speed, but I am sure that, if they had been disposed to take any action on that account, they would have como to me, the chairman of the committee, and discussed it with me. That is the decent way to do these things, as one member to another, but the honorable member for Richmond seems to have got beyond the point of acting decently. I do not want to prejudice this woman’s case.

Mr Anthony:

– Tho Minister has done so already.

Mr BEASLEY:

– I believe C-Q honorable member for Richmond has prejudiced her case to such a degree that, if her health has been affected, his handling of the matter has certainly not helped. He has been using for political purposes the situation in which this unfortunate woman finds herself. I am anxious to see that she is treated justly and decently, and I ask the other members of the committee to say whether that has not been my attitude all through. There is another aspect of this inquiry which I shall not mention, because I do not think that it would be right to do so at this stage. It involves factors which should not be discussed, even in this Parliament, but it makes it necessary that inquiries be pursued in Sydney, and we propose to do that. It may be unfortunate that one member of the committee, the honorable member for Ballarat (Mr. Pollard), is absent at San Francisco. It may be that we should have reached a decision earlier. If so, I shall take the blame. Senator Finlay, another member of the committee, has not been able to attend meetings. Members of Parliament have many duties to attend to, and it is sometimes difficult to get them to meetings. As soon as it is possible to complete our inquiries the result will be made known to the House. The honorable member for Richmond said last Thursday that dunning letters had been sent to this lady. It has been proved that nothing of the kind took place. Now, if he desires to do the decent thing, he will get up and apologize.

page 2856

QUESTION

DISPUTE AT LYSAGHT’S LIMITED

Mr HARRISON:
WENTWORTH, NEW SOUTH WALES

– Three weeks ago, the Acting Attorney-General promised to make a statement on the attitude of the Ironworkers Union to the reinstatement of returned servicemen at Lysaghts Limited, Newcastle. In view of reports that a further dispute has occurred at these works about the reinstatement of a returned serviceman, can the Minister yet say wherein the policy of the Ironworkers Union differs from that of the Government as expressed in the National Security (Reinstatement in Civil Employment) Regul ations ?

Mr BEASLEY:
ALP

– I was not sure that the original question was addressed to me, and I regret that a reply has not been sent to the honorable member. I shall discuss the matter with the SolicitorGeneral.

page 2856

QUESTION

PETROL RATIONING

Mr CONELAN:
GRIFFITH, QUEENSLAND

-Will the Minister representing the Minister for Supply and Shipping inform the House of the present position in relation to stocks of petrol in this country, and the possibility of an increased supply of petrol to motorists in the near future?

Mr BEASLEY:
ALP

– For obvious reasons, it has not been the custom to disclose the actual stocks of petrol in Australia. I shall discuss this matter with the Minister for Supply and Shipping, and ascertain his views. The cessation of hostilities in Europe and the reduced risk to tankers in areas close to Australia may permit more favorable consideration to be given to requests for increased supplies of petrol to motorists.

page 2856

QUESTION

RAIL TRANSPORT

Priorities

Mr GUY:

– Can the Minister for Transport say whether it is a fact, as announced in the Senate last week, that fines for “border-hopping” are not to be lifted, although the Travel Permit Regulations have been declared invalid by the High Court?

Mr WARD:
Minister for External Territories · EAST SYDNEY, NEW SOUTH WALES · ALP

– The regulations referred to were not declared invalid; the decision of the High Court related to an order made under the regulations.

Mr Guy:

– The effect is the same.

Mr WARD:

– It is not. The order which was declared tobe invalid has been superseded by another order issued by the department. At the time that the decision of the High Court was made the order to which it referred was not operative. If the honorable gentleman will furnish me with particulars of any case in which he is specially interested, I shall endeavour to supply him with the information he seeks.

Mr Guy:

– I am not interested in any particular case, but only in the general administration.

page 2856

INVALID AND OLD-AGE PENSIONS APPROPRIATION BILL 1945

Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message) :

Motion (by Mr. Chifley) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of Consolidated Revenue Fund a sum for invalid and old-age pensions.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

That Mr. Chifley and Mr. Lazzarini do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Mr. Chifley, and read a first time.

Second Reading

Mr CHIFLEY:
Acting Prime Minister and Treasurer · Macquarie · ALP

– I move -

That the bill be now read a second time.

The purpose of this bill is to provide £27,000,000 out of the Consolidated Revenue Fund for the payment of invalid and old-age pensions. Bills seeking appropriations of this nature are submitted to the Parliament periodically to enable amounts to be paid to a trust account from which the actual payments of pensions are made at rates already approved by the Parliament. The balance of appropriation now remaining is sufficient to meet pension payments to the end of June, and the Parliament is asked to appropriate £27,000,000, which is approximately sufficient for next year’s expenditure. The amount will, however, not be withdrawn from revenue immediately, as only sufficient funds are paid to the trust account as are required to meet the periodical payment to pensioners. Thisbill has no relation whatever to the rates or conditions under which invalid and old-age pensions are paid; it merely seeks the provision of funds to enable payments to be made on the basis already approved by the Parliament.

Mr Spender:

– I rise to order. For the purpose of determining the extent of the debate, I ask you, Mr. Speaker, whether it would be permissible to draw attention to a serious anomaly which has arisen in the administration of this legislation, namely, the amount allowed to a person who owns a home.

Mr SPEAKER:

– Notice has been given to-day of a bill to amend the Invalid and Old-age Pensions Act. A more appropriate time to raise the point referred to by the honorable member will be when that bill is before the House.

Debate (on motion by Mr. Menzies) adjourned.

page 2857

ADDITIONAL ESTIMATES 1944-45

Message from the Governor-General reported transmitting Additional Estimates of Expenditure for the year ending the 30th June, 1945, and recommending appropriation accordingly.

Ordered to lie on the table, and to be referred to Committee of Supply forthwith.

In Committee of Supply:

Motion by (Mr. Chifley) agreed to -

That the following additional sum be granted to His Majesty to defray the charges for the year 1944-45 for the services hereunder specified, viz. -

Part I. - Departments and Services - other than Business Undertakings and Territories of the Commonwealth.

Resolution reported.

Standing Orders suspended ; resolution adopted.

In Committee of Ways and Means:

Motion (by Mr. Chifley) agreed to -

That, towards making good the Additional Supply granted to His Majesty for the service of the year 1944-43, there be granted out of the Consolidated Revenue Fund a sum not exceeding £20,000,000.

Resolution reported.

Motion (by Mr. Chifley) proposed -

That the report be adopted.

Mr FRANCIS:
Moreton

.- Before the report is adopted, I should like to learn from the Treasurer (Mr. Chifley) whether the proposal to appropriate a further £20,000,000 for defence and war services is an indication that the whole of the money already appropriated this year for those services, well over £500,000,000, has been expended and that the appropriation of a further £20,000,000 is therefore necessary.

Mr Chifley:

– It is not so bad as that.

Mr FRANCIS:

– Well, I should like to have an explanation.

Mr Chifley:

– That will be given.

Question resolved in the affirmative.

Ordered -

That Mr. Chifley and Mr. Lazzarini do prepare and bring in a bill to carry out the foregoing resolution.

page 2858

APPROPRIATION BILL (No. 2) 1944-45

Bill presented by Mr. Chifley, and read a first time.

Second Reading

Mi-. CHIFLEY (Macquarie- Acting Prime Minister and Treasurer) [4.30]. - I move -

That the hill be now read a second time.

The purpose of this bill is the appropriation of an additional £20,000,000 of revenue for war purposes. When the budget was presented to Parliament in September last, I estimated that the total revenue would be £359,000,000. A like sum, which included £177,000,000 for war purposes and the balance for other expenditure, was appropriated from revenue. Some revenue items will exceed the budget estimate. Income tax may yield an increased amount of £15,000,000 Sales tax is expected to exceed the estimate by £2,000,000. Customs and excise and post office revenue show a tendency to buoyancy 01’Cr the Estimates and, as other items of revenue show the same trend, the budget estimate may be appreciably exceeded. It is anticipated that non-war expenditure will be approximately the same as the budget estimate. It is diffiCUt at present to forecast accurately the total revenue for the full financial year, but the indications are that the improvement will be from £15,000,000 to £20,000,000. It is necessary that an additional appropriation, whatever the amount may be, should be made to enable the use of that increased revenue to meet war expenditure. Appropriation of £20,000,000 is therefore sought.

In the budget, I informed the Parliament that war expenditure in 1944-45 would be £505,000,000. Owing to unavoidable delay in the rendition of accounts for heavy overseas liabilities, there has been a substantial falling off of the rate of expenditure, and it is now possible that the expenditure for the year will not exceed £470,000,000.

Mr CHIFLEY:
ALP

– If those accounts do not come forward we shall naturally have a heavy leeway to make up next financial year. If the improvement of the revenue amounts to £20,000,000, the effect of the proposed appropriation will be to relieve the loan fund and charge to revenue £20,000,000 without increasing our total expenditure. The honorable member for Moreton (Mr. Francis) probably knows that this surplus revenue must be appropriated.

Mr BERNARD Corser:

– Could we not reduce taxation?

Mr CHIFLEY:

– No; but the surplus must be .appropriated.

Mr Menzies:

– Otherwise, we may have to carry out the terms of the Constitution.

Mr Fadden:

– And give it to the States.

Mr CHIFLEY:

– Yes; unless we appropriate the surplus we may lose it. and we cannot afford to lose it. Whereas £20,000,000 would have had to be found from loan funds for war expenditure, that £20,000,000 will be found from revenue.

Mr Francis:

– I appreciate the point clearly. It was not what the Treasurer said, but what he implied that worried me.

Mr Menzies:

– Could the Treasurer throw any light on the £15,000,000 extra revenue from income tax, not now, perhaps, but at a later stage? I should like to know whether . it is personal tax or company tax, or both.

Mr CHIFLEY:

– I confess that so far’ I have not looked this gift horse in the mouth, and attempted to dissect the different items, but I shall see whether that can be done.

Debate (on motion by Mr. Menzies) adjourned.

page 2858

SUPPLY BILL (No. 1) 1945-46

Message recommending appropriation reported.

In Committee of Supply:

Motion (by Mr. Chifley) agreed to -

That there be granted to His Majesty for or towards defraying the service of the year 1945-40 a sum not exceeding £55,557,000.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Resolution of Ways and Means, founded on Resolution of Supply, reported and adopted.

Ordered -

That Mr. Chifley and Mr. Lazzarini do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Mr. Chifley, and read a first time.

Secondreading.

Mr CHIFLEY:
Acting Prime Minister and Treasurer · Macquarie · ALP

– I move -

That the bill be now read a second time.

The purpose of the bill is to grant Supply to carry on the normal services of government for the first three months of the financial year 1945-46. The amount is £55,557,000. The provision may be summarized under the following heads : -

The provision made in the bill covers only the estimated requirements to carry on the essential services on the basis of the provision in the Appropriation Act passed by Parliament for the current year 1944-45. The amounts set down for ordinary services represent, with minor exceptions, approximately onequarter of the 1944-45 appropriations.

Excluding special appropriations, it is estimated that in the first three months of 1945-46 the total war expenditure will amount to £105,102,000. This amount is substantially less than one-quarter of last year’s appropriation, due principally to the reduction in expenditure in England and America, to the lag in expenditure in the first quarter of the financial year, and to some extent to a falling off in war expenditure in Australia. The sum of £40,000,000 provided for war services in this bill represents the estimated amount which will be available from revenue receipts for the first three months of the year to meet war expendi ture after making due allowance for other obligations. The balance of war expenditure will be met from loan appropriations.

As in previous years, provision is made in the bill for “Advance to the Trea surer”, the amount being £5,000,000. This amount is required mainly to carry on uncompleted civil works which will be in progress at the 30th June, and also to cover unforeseen and miscellaneous expenditure. No provision has been made for any new expenditure except in respect of Defence and war services, and there is no departure from existing policy.

Debate (on motion by Mr. Menzies) adjourned.

page 2859

COMMONWEALTH BANK BILL 1945

In committee: Consideration resumed from the 8th June (vide page 2829).

Clause 38 agreed to.

Clause 39- (1.) For the purposes of this Part, there shall be a Note Issue Department of the Bank.

Mr FADDEN:
Darling DownsLeader of the Australian Country party

.- I move-

That, in sub-clause (1.), after the word “Bank” the following words be added: - “ which shall be provided with separate management, and with the necessary liaison to ensure a co-ordinated policy with the other departments of the Bank “.

The reason for my amendment must be obvious to the committee. Under the measure, various departments of the bank are to be set up, including the central bank, an extension of the central bank into trading bank activity, the Note Issue Department, the Industrial Finance Department, the Rural Credits Department, and the Housing Department. Under the measure the whole of the control and management of those departments is to be in the hands of the Governor, who will be subject, of course, to political direction bythe Treasurer and the Government of the day. Consequently, having regard to the fact that the Bank Board which has stood the test of time is to go out of existence, and the Government will not accept in its place an advisory body consisting of persons who are or have been actively engaged in agriculture, commerce, finance or industry, the alternative is to provide a Note Issue Department with separate management, but with the necessary co-operation and co-ordination in matters of policy with other departments of thebank. Indeed, this provision should be made in respect of all departments of the bank. Even in a departmental store, managers are provided in each department and they confer and act under the direct control of the general manager, who, in turn, is under the control and direction of a board of directors. If that method is good enough for the successful and competent management of commerce and industry, it should be an essential requirement for the management, control and co-ordination of the basis of the whole of our financial structure, namely, the Commonwealth Bank.

Mr LAZZARINI:
Minister for Home Security and Minister for Works · Werriwa · ALP

– This amendment seeks to place a department of the Commonwealth Bank under separate management. The policy of the Government, as the Treasurer (Mr. Chifley) outlined in his second-reading speech, is to place entire control of the Commonwealth Bank under a governor. As the amendment conflicts with that policy, I am notable to accept it.

Mr MENZIES:
Leader of the Opposition · Kooyong

– The amendment submitted by the Leader of the Australian Country party (Mr. Fadden) will not achieve the form of management that the right honoralble gentleman would like best but represents a kind of middle course. The existing law provides that the note issue shall he controlled by the Commonwealth Bank Board. The bill provides that the note issue shall be controlled by the governor of the Commonwealth Bank, and, therefore, be under the control of the Treasurer. With his amendment, the right honorable gentleman is seeking to recover something from the wreck by providing that, at least, the note issue shall have separate management from the other activities of the bank, the idea being that the note issue is of such far-reaching importance that it should be divorced as far as possible from immediate political control. It is quite true that in the long run, the note issue of a country - particularly a country under parliamentary government - is subject to political control, because the Parliament may always pass special legislation in relation to it. But there is very great force in the view, which was argued during the secondreading debate on this bill, that to put the note issue under the direct control of the Treasury is to invite, in some circumstances and under some treasurers, a disastrous handling of the note issue.

In his second-reading speech, the Treasurer (Mr. Chifley) said that the note issue was only a reflection of credit policy, and, therefore, he rather deprecated any suggestion that the note issue, of itself, was a very significant matter. He looked at the note issue as the result of certain causes, and not as a cause in itself. In the event of inflation, he would look to central bank policy as the major cause, and would look upon an inflated note issue merely as a result of what had been done by the central bank. Similarly, the Minister for Post-war Reconstruction (Mr. Dedman) in addressing himself to this matter (Hansard, page 803) said -

The a mount of the note issue is a matter of minor importance when considering the stability of the currency.

I desire to say a few words about those points. It would, I think, be a great mistake if anybody gained the idea that the increase of the note issue from about £40,000,000 to about £200,000,000 is a matter of no great significance. It is quite true that in many respects, the note issue does reflect central bank policy and, in particular, that aspect of central bank policy which concerns itself with the lending of money to the Government. If the central hank decides to advance very large sums of money to the Government, on treasury-bills, for example, the amount of money that will go into circulation will immediately be increased, and according to the velocity of its circulation, the demand for currency will be increased in the community. Quite normally, in times like these, when large sums of money are being made available to the Government by the central bank, we expect to find an increase of the note issue. But that ignores, or gives insufficient weight to, two considerations. The first of them is that, just because we cannot expand central bank credit greatly without expanding the note issue, it follows that if we cannot maintain some limit upon the note issue, we have to put a limit on the effective use that we can make of central bank credit. Let us suppose that in Australia we had had, at material times, some upward ceiling for the note issue, adopting one portion of the proposal discussed at one stage by Lord Keynes, to which I referred in my second-reading speech. Let us suppose also that the ceiling on the note issue had been £100,000,000. That being the limit to the amount of currency which could go into circulation, it would have some damping effect upon the use of central bank credit and the availability of central bank lending to the Central Government. That factor, though not of enormous consequence, should not be overlooked.

The second factor is certainly not to be overlooked. Currency inflation can, of itself, be used, irrespective of general central bank policy. For example, the central bank might be pursuing a policy which would result in a stable currency, and the Treasurer of the day, given command over the note issue, as he is under this legislation through the person of the Governor, might very easily say, “ Very well, I shall finance a new social service by printing notes. I shall use the note issue as the direct originating means for bringing about this new expenditure “. That increase of the note issue would be utterly unrelated to the supply of commodities, the demand for commodities, and any ordinary economic indices which determine sound central bank policy. It would have a purely political cause, and might produce, in one hit, an inflation of the note issue by £20,000,000 or £30,000,000. In those circumstances, the currency inflation would be the direct result of a direct control over the note issue itself. I emphasize that point, although it, is, no doubt, a truism to those who have given thought to these problems, because it would be a blunder to accept this rather comfortable notion that the amount of the note issue is the mere reflection of credit policy, when, as a matter of fact, it may, under the terms of this bill, have nothing to do with credit policy at all, but have everything to do with a direct inflation of the currency for some political purpose.

Because I believe that, my own view - I have expressed it before, and I do not desire to repeat it - is that the control of the note issue by the board is theproper kind of control. After all, we began by having Treasury control of the note issue; then we had control by a Not&s Board; and we then had control by the Bank Board itself. Wherever we have control by a board, with the board’s corporate responsibility and variety of experience, we have a much greater safeguard over our currency than we have if the matter is left to the fluctuating politics of the moment.

The Leader of the Australian Countryparty, I have reason to believe, agrees with that broad thesis. But that broad thesis has been rejected by the Government, because it has abolished the Bank Board. Now, the right honorable gentleman seeks to do the next best thing, namely, to provide that, at any rate, the note issue, which is so important and farreaching in character, should, in its management, be divorced- from other aspects of the bank’s activities. For those reasons, and to that extent, I support the amendment.

Mr ABBOTT:
New England

– I believe it is essential that there should be a board to manage the central bank of this country, but as this legislation does not provide for such a board, the Treasurer (Mr. Chifley) would he well advised to adopt the recommendation which he, Professor Mills and I made as a dissent from the report of the Royal Commission on Monetary and Banking Systems. Dealing with this matter, the honorable gentleman, as a member of the commission, said on that occasion -

In our opinion, the present separation of the Note Issue Department from the General Banking Department of the Commonwealth Bank should be discontinued. The bank could then treat its central bank activities as one and would not have to show separately the accounts for each department. We can see no good reason why the profits of the note issue, which is a central bank function, should be separate from the profits of the General Banking Department.

Although I deplore the fact that, in deciding to remove board control of the bank, the Government has departed from the chief recommendation of the royal commission, I still believe that the recommendation of the Treasurer, Professor Mills, and myself, in dissenting from the commission’s report with regard to the separation of the control of the note issue from that of the central bank, should be incorporated in this legislation. I believe that control of the note issue should be the function of the central bank, but I do not agree with what the Treasurer said in his secondreading speech, namely -

It must be appreciated that in modern banking policy more emphasis needs to be placed on the control over that part of the credit base which consists of deposits with the Central Bank, rather than over the note issue, which is only a reflection of credit policy.

I am sure that honorable members will appreciate what has been -said by the Leader of the Opposition (Mr. Menzies) with regard to the possibility of an embarrassed government being able to use the control of the note issue, which lt will have as the result of control by the Treasurer of the policy of the central bank, to do exactly as the German Government did in the inflationary period 1920-1923. In his presidential address - “German currency: Its collapse and recovery, 1920-1926 “ - to the Royal Statistical Society on the 16th November, 19’26, Lord d’Abernon said that the main cause of inflation in Germany was the ill-regulated issue of notes by the central bank. Lord d’Abernon was the United Kingdom ambassador in Germany from after the cessation of hostilities in the last war until approximately 1926. He was in Germany for the entire period of inflation and was able to study events with the eyes and wisdom tff a man who had a high reputation in his own country as a great economist. The German economists, professors and other learned gentlemen of those days said that the amount of internal currency in circulation had little influence on its external value. The latter was determined, so they contended, mainly by the passivity or activity of the trade balance. On the 7th August, 1923, Dr. Havenstein, then president of the Reichsbank, speaking before the Reichsrat said -

The Reichsbank to-day issues 20,000 milliards of new money daily. The note issue at present amounts to 63,000 milliards; in a few days therefore we will be able to issue in one day two-thirds of the total circulation.

The effect of that, of course, was that internal price levels in Germany rose so fast that they were changed hourly. I can quite understand the Minister for Works (Mr. Lazzarini), and other Government members, insisting that these things cannot happen in this country, but to a government which encounters embarrassing financial problems the uncontrolled issue of notes can be a very tempting way to get out of its immediate difficulties. As with a man who seeks solace in drink or opium, once a start has been made on the slippery slide, recovery is most difficult. For that reason it is vital that the note issue should have a limit, and should be controlled by an independent authority, as under the existing Commonwealth Bank legislation. But I cannot see any great advantage in placing control of the note issue in the hands of a separate department, when it is truly a central bank function, and I cannot understand why the Treasurer himself, in this legislation, has departed from our recommendation in dissenting from the report of the royal commission.

Mr SPENDER:
Warringah

.- I support the amendment, although I am not optimistic that even if carried, it will reduce greatly the dangers inherent in having the note issue completely in the hands of the Treasurer. What seems to me to be an absurdity is this: Running right through the legislation like a crimson thread, is the effect of clause 9, and no matter what safeguards we may seek to impose in this part of the legislation, or in any other part, that clause !) will nullify our efforts. Treasury control of the note issue can be a great danger, quite apart from the possibility of inflation. The psychological factor must be considered. I deny that the note issue is always a direct result or consequence of central bank policy being carried out from time to time, but even if that were true the effect of a large amount of notes upon the market can, from a psychological point of view, be to depreciate the value of the currency. This legislation does two things: First, it removes the sterling reserve for the note issue, and to that degree it eliminates completely all safeguards on the amount of the note issue from time to time.

Secondly, clause 9 enables any portion of the bank s policy in any of its departments, to he determined by the Treasurer. No one can deny that in this country at present, as in most countries at war, there ure very dangerous elements which can lead to inflation. During the war we have been able to control inflation very largely by our controls, particularly over manpower, wages and prices, but when the war ends control of man-power will be relaxed, as has been indicated by the Government’s White Paper on full employment and wages will prove incapable of being pegged indefinitely. As to control of prices, I think that honorable members will concede that a continuance of existing measures will not be possible, nor do J think it desirable that they should be continued permanently. That points to the danger which we shall face when the war ends. The quantity of notes issued at any time may be of no more consequence, or oven of less consequence, as an element of inflation, than the amount of bank deposits. During the war, savings bank deposits have increased by well over £200,000,000, trading bank deposits by a similar amount, the note issue by about £150,000,000, and treasury-bills have advanced from a total of £50,000,000 to over £200,000,000. These are dangerous factors, which can lead to inflation. One of the most dangerous factors to be considered is the psychological effect of the note issue being subject to the vagaries of government policy. In my opinion, inflation springs not only from economic factors but also from psychological factors, and the most important psychological factor is the amount of notes current in the community. We ought to apply some brake to the issuing of notes, and therefore I support the amendment. The Government would not be in any way prejudiced, if the amendment were accepted, because clause 9 gives the Government overriding control in the event of any disagreement with the bank. The amendment at least provides for separate management of the note issue, so that the special factors related to increasing the note issue would bo considered by a body of men specially appointed for the purpose. I urge the Government to accept the amendment, which will in no way affect the main purpose of the bill.

Amendment negatived.

Clause agreed to.

Clause 40 agreed to.

Clause 41-

Australian notes may be issued in any of the following denominations, namely, Five shillings, Ten shillings, One pound, Five pounds, Ten pounds or any multiple of Ten pounds.

Mr FADDEN:
Darling DownsLeader of the Australian Country party

– I move -

That the following proviso be added: - “ Provided that the maximum limit of the notes so issued shall be not greater than an amount approved by Parliament”.

As the bill stands, there is no provision for any restriction on the issuing of notes. In this connexion, it is interesting to read the findings of the Royal Commission on Monetary and Banking Systems, of which the Treasurer (Mr. Chifley) was a member. In paragraph 579, the commission summed up theposition as follows:

The present position is that the Commonwealth Bank is compelled by law to hold in the form of gold or English sterling a reserve of 25 per cent, of the notes issued. If an emergency arises, as in 1931, in which the Bank wishes to be free from this restriction, legislation is required. Wherever there is a legal restriction of this kind there is a tendency to hold a reserve in excess of the legal minimum. In the absence of such, restriction, the Bank would be able to use these reserves in any way it chose. Formerly, when the holder of a note was entitled to exchange it for gold, it was necessary that some gold “ bucking “ for the notes should be kept, and it was customary to limit the amount of the note issue by reference to the gold held. Now, however, that the note carries with it no such obligation, there is no need for such “backing” except as a method of limiting the volume of notes. But for this purpose the reserve limitation, as at present interpreted, is of little use. For if the Bank wishes to increase the volume of the note issue, it can. by raising the exchange rate, increase the value in Australian currency of the note issue reserve, whilst keeping within the legal limits. On the other hand, the reserve limitation may cause embarrassment to the Bank if circumstances arise in which it wishes to reduce the exchange rate. It is desirable that some limit should be placed on the note issue, but the issue should be capable of some expansion when necessary.

This paragraph shows that the commission considered that the note issue should not be too rigidly controlled, but should be capable of expansion to meet unforeseen and extraordinary circumstances. The commission made the following recommendations : -

  1. The statutory provisions which require the Commonwealth” Bank to hold gold or sterling in proportion to the amount of Australian notes on issue should he repealed.
  2. The note issue should be limited by law to a fixed maximum (for example, £60,000,000) subject to the right of the Bank to exceed the maximum by a stated amount (for example £10,000,000)’ with the consent of the Treasurer.

The figures mentioned in the recommendations are used only for illustrative purposes. There should be a limit as to quantum, with a “ safety valve “ provision, to be used in the event of emergency, for fixing an amount .by which that limit may be exceeded.

Mr Scullin:

– –A maximum of £60,000,000 would look rather peculiar now.

Mr FADDEN:

– Those figures were used only for the purpose of illustration. I have framed the proposed amendment so that Parliament may be able to meet changing circumstances. It should be obvious to everybody that there must be some specified limit to the expansion of the note issue. When all is said and done, the stability of the value of the Australian £1 note is of great importance to the community. The purchasing power of wages must be maintained in order to uphold the appropriate values of insurance policies, war gratuity payments, deferred pay and so forth. The Parliament has a responsibility which cannot be lightly brushed aside, and the Opposition wishes to accept that responsibility by providing that the maximum amount of the notes issued shall be not greater than a limit approved, by the ^Parliament. If my amendment be agreed to, any extension of the note issue will “have to be considered by Parliament in “the light of existing circumstances and with due regard to possible future con- ditions

Sir EARLE PAGE:
Cowper

.- ^Clause 41 is the crucial clause of this -division of the bill. Judging by the experience of other nations, it appears to be essential that, if this legislation is to operate in peace.time as well as in times of national emergency, such as the present state of war, there must be some method of controlling the total issue of notes. An investigation of the laws of other countries shows that there are two main methods of applying such control. One is the establishment of a proportional reserve, against which notes can be issued to a specified number of times the value’ of the gold or international exchange backing. The other is the imposition of a maximum limit ou the fiduciary issue, in addition to having a fully covered issue, as is the case with the Bank of England. I notice that there is a very interesting provision common to the laws of most countries, namely that when notes are issued in excess of the legal backing, a tax in respect of that excess is paid by the issuing .bank. A good example of this is the United. States Federal Reserve Act, under which the tax is 1 per cent, per annum if the proportion of gold reserve is between 40 per cent, and 32£ per cent., and 14 per cent, per annum for each. 2 per cent, or part thereof] by which the reserve falls below 32^ per cent. Most of the acts of the different countries provide for increasing taxes in similar steps, and nearly all of them have the provision in the Federal Reserve Act that the tax or a proportion of it must be added to the rate of discount. The effect of this would be that, as inflation occurred, there would be some measure of control, by reason of the tendency of interest rates to increase throughout the whole of the banking system, because discount rates had risen. It is obvious that there must be proper control of the note issue if the Government’s stated policy of having low-interest rates is to be given effect. I shall place on record the methods of issue in most countries; because it is worthwhile to remember that we must expect to get our migrants from those countries; and we shall not have a large number of migrants bringing to Australia big sums for investment unless they are assured that our banking system will contain real safeguards at the end of the war. In their existing legislation there is provision for a maximum note issue in England, Finland, Japan, Norway, Spain and Sweden. There is a statutory proportional reserve in Australia, Austria, Belgium, Bulgaria, Canada, Chile, Colombia, Czechoslovakia, Danzig, Denmark, Estonia, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Netherlands, New Zealand, Peru, Poland, Portugal, Roumania, Russia, South Africa, Switzerland, United, States of America, and Yugoslavia. I emphasize the inclusion of Russia in that list of countries, because, although the Government does not always seem anxious to “ lie in the same bed “ as that country, it has adopted many of the Russian policies. There is provision in some countries for a tax if the reserve falls.

Mr Chifley:

– Whom do they tax?

Sir EARLE PAGE:

– The bank discount rate automatically rises, and with that rise there is an increase of the interest rates generally throughout the country. That has been found to be one of the best means of resisting inflation. Those countries are: Austria, Bulgaria, Chile, Colombia, Czechoslovakia, Danzig, Denmark, Estonia, Germany, Greece, Hungary, Italy, Japan, Norway, Peru, Poland, South Africa, Spain, and the United States of America. In many of them there is provision for the raising of interest rates as the note issue increases. Let us consider the example of England, which we might well follow whilst doing away with the present system. English legislation provides a definite safeguard against permanent inflation. According to the Currency and Bank Notes Act of 1928, the Bank of England may issue notes up to the amount representing the gold, coin and bullion in the Issue Department, plus notes amounting to £260,000,000 in excess of the gold holding - a fiduciary issue. At the request of the bank, the Treasury may authorize an issue of bank notes in excess of the £260,000,000 for a period not exceeding six months. Any such authority may bs renewed or varied, but no such authority shall remain in force for two years unless the Parliament otherwise determines. The Treasury minute authorizing an increase of the fiduciary note issue must be laid before both Houses of the Parliament forthwith. We have been striving to secure the acceptance of that principle of responsibility to Parliament in connexion with every vital matter of policy throughout the consideration of this measure. The Government would be well advised to consider very cardfuly the insertion, if not here then in the Senate, of a provision of that sort, which the experience of practically all civilized countries has shown to be necessary if there is to be confidence in the financial structure. The matter should be viewed realistically. Inflation is merely a form of concealed tax, especially on the poorest section of the community. It does not contribute to the general fund of the Government out of which the cost of public works and services is defrayed. The tax of inflation, although invisible, is none the less real, and it does not benefit anybody in the community, except the few who are able to make fortunes by taking advantage of it. Even for the protection of the Treasury, a provision in this legislation making reference to the Parliament necessary would be a wise course to adopt.

In a time of war, practically all laws go by the board. But we do not always have a temperature of 104 or 105 degrees, such as accompanies a bad attack of pneumonia, when clear mental decisions are not. possible. We should not base legislation on war-time experience, but should follow the practice almost universally adopted. I assume that the Government, having brought to this Parliament the Bretton Woods Agreement, will take steps to implement it. The amount of international exchange that will be available to us from the pool formed under that agreement will depend upon the reserve that we have against our note issue. It would be inconsistent were we to agree that we should have a reserve as a member of this international monetary organization, but not for our domestic purposes.

Mr Chifley:

– Something will have to be put into the Bretton Woods pool before anything can be taken from it.

Sir EARLE PAGE:

– We shall not obtain anything from a local note issue unless our contribution be in the form of real wealth, irrespective of the volume of the note issue. To make certain that the note issue will bear some relation to the wealth produced, we are endeavouring to ensure that the Parliament shall be heard, should it be desired, for some extraordinary reason, to raise the note i .me above what is regarded as reasonable.

Mr HARRISON:
Wentworth

– A deliberative assembly - which, of course, this is not - would not in any circumstances give to the Treasurer the power to issue notes to an unlimited value, thus vitally affecting the national economy. We have been told repeatedly that the difference between Australia and a fascist country is that this country, being a democracy, has a Parliament that is vested with complete power. Yet this supreme institution in a democracy is being asked to delegate its power to a Government! The proposal is that we should, not only abolish all controls connected with finance, but also give to the Treasurer a blank cheque, by the use of which he might ultimately ruin the whole of our financial structure. Surely adequate control of the issue of notes is vital to the national economy ! An uncontrolled note issue could destroy the value of the currency. The purchasing power of the people, and the value of the wages of working men, the return from investments, and every pension payable, could be immeasurably affected by injudicious action. The inflation of the currency could result in ruin comparable with that which has been experienced by countries on the continent of Europe. This is far too big an issue for any Government to handle alone. As the right honorable member for Cowper (Sir Earle Page) has argued, the bill should make such provision as will safeguard not only the people but also the Treasurer himself. The matter is one for determination by the highest authority, the Parliament of the country. After all, the Government represents only a section of the total population. The Parliament should be the supreme authority- to authorize what amount of notes shall be issued. For these reasons, I support the amendment.

Mr SPENDER:
Warringah

.- I draw the attention of the people to what is being done in this Parliament by legis lation of this character. It is idle, however, to hope that the Government will accept any amendment; the Treasurer (Mr. Chifley) has -made abundantly clear that he will not do so. The honorable gentleman, in his second-reading speech, claimed to have the support of Lord Keynes for his proposal not to tie the note Issue to a specified reserve. That is true. But he did not tell the whole story, because Lord Keynes made it clear that the most satisfactory method for maintaining control of the central bank is to require from time to time legislative approval of the note issue. What has disturbed me most has been the continued decline of the purchasing power of the £1. That has been the trend for the last 25 years particularly, and it will continue. Whilst the impact of war is further diminishing the value of the £1, the policy of governments can increase that tendency. Therefore, it is important at all times to assert the authority of Parliament over the action of the Executive. To-day the Treasurer (Mr. Chifley) submitted certain proposed appropriations, the debate upon which has been postponed, so we shall have an opportunity later of speaking on matters affecting public expenditure. Why, however, is it regarded as les3 important to debate whether or not a large increase of the note issue is desirable? No opportunity is to be afforded under this bill to debate that vital issue in Parliament. During the war the value of the £1 has fallen, according to official figures, by over 20 per cent.; in my opinion the real reduction of purchasing power is considerably more. When the war controls are lifted, it will be revealed that the reduction has been much greater, and the effect will be serious on member* of the community who have been thrifty and have invested money in liquid assets, particularly those who for many years have paid premiums regularly to life assurance societies. Those who have invested in life assurance during the last five years will receive, in real money, much less than they had expected to get.

Mr Archie Cameron:

– >A similar remark is applicable to those who have invested in war loans.

Mr SPENDER:

– Yes, to all who have invested in liquid assets in any form. The diminution of the value of the £1 as a result of government policy, means the imposition of a fiat tax on all who hold liquid assets. As the right honorable member for Cowper (Sir Earle Page) remarked, the tax is indirect, and people do not become aware of its effect until they wish to use their money. In the price-fixing policy of the Government, we have seen the “ profits squeeze “ being used as a means of taxing industry. In this bill . we have another example of action by the Executive in a matter the’ decision of which should be the sole prerogative of the Parliament. As the Parliament substantially has surrendered its power in respect of expenditure, it is now surrendering, it in respect of taxation. I cannot see why any government should not be content to have an upper limit of 20 per cent, above i lie present issue of notes, beyond which it should not be permitted to go without parliamentary approval. If Parliament has any real rights, why should not its permission be necessary before the note i:sue could be increased to a greater extent than 20 per cent.?

Mr Chifley:

– The note issue increased to £196,000,000 even with the present .provision in the law with regard to the 25 per cent. reserve-

Mr SPENDER:

– The sterling reserves conditioned the amount of notes which could be issued. I agree that there should be no tied limit to any specific reserve, but debate of an increase of the note issue is as important as debate of an increase of taxation. Both have the same effect. Indeed, in their , economic consequences, they are very largely the same.

Mr Chifley:

– So we could borrow £10,000,000 in London and build up the note issue by another £50,000,000.

Mr SPENDER:

– But before we borrow, we have to obtain parliamentary approval. Whether taxation be imposed bv means of a profits squeeze, or by central bank control which affects the purchasing power of the £1, those are both matters which should be debated in this Parliament. I realize that I am as one crying in the wilderness, because the Government intends to go ahead with its policy, irrespective of any views advanced by the Opposition. I urge the Treasurer that there should be an upper limit of 20 or 25 per cent., beyond which the Government should be unable to increase the note issue without parliamentary authority. If that is not provided, one can only infer that the Government does not propose to use its powers exclusively in the interests of sound finance. Serious consideration should be given to my suggestion before the bill reaches the Senate.

Mr ARCHIE CAMERON:
Barker · ALP

.- The Treasurer (Mr. Chifley) made a significant interjection when, referring to the agreement reached at Bretton Woods, he said that it was necessary to put something in before we could get anything out. So far as the note issue is concerned, after the passage of this bill it will not be necessary to put anything in before we can take out as much as we like in the form of paper currency. There will be no limit to what the Government can do in the issue of paper money once this bill becomes law. Last week I referred to the fact that gold had reached a record price. I notice that according to the press the price has risen over the week-end to another record and is now £10 15s. 9d. per oz. In other words, the price of a sovereign at the Commonwealth Bank to-day is £2 10s. I have heard, since this Parliament rose on Friday last, that one could obtain £5 for a sovereign on the black market. I have never been to the black market, but I am told that, provided that one can produce the money demanded, and can speak the right language, one can purchase almost anything on the black market at King’s Cross, Sydney.

The ultimate measure of the currency will be gold. That has always been the position, and it will continue to be so. The test will come in future when the Treasury will be asked to relax the present restrictions on the sale of gold. The balance between paper currency and gold prices will be determined by a free market. When that time comes we shall witness a continual increase of the prices of commodities as compared with the value of paper currency. If the Government forces this legislation through the Parliament, as no doubt it will, it will have to carry the responsibility which goes with legislation of this kind.

Mr MENZIES:
Leader of the Opposition · Kooyong

– I had hoped, though not confidently, that the Minister for Home Security (Mr. Lazzarini) might have had something to say on this matter. After all, there are two things to be done about clauses in a bill of this nature; one is to hear some criticism of them, and the other is to hear some justification of them. In this case we have heard no justification whatever. If ever a set of proposals has been thrown at the Parliament with accompanying observation that no amendments will be received, that has happened with this bill.

Mr Chifley:

– I referred to this particular matter in my reply to the debate on the second reading.

Mr MENZIES:

– If the Minister finds his reply either cogent or relevant I cannot share his view. I thought that it was a very adroit speech, but its outstanding feature was that it did not answer anybody or anything. There are three broad principles which can be ap- plied in relation to the matter of the imitation of the note issue. We may decide to go on with the system that we have had - that of having a reserve which has been made flexible enough because it is represented by either gold or sterling. The advantage of that system is that it recognizes one of the basic facts of a nation’s finance, and that is that in the long run an international debt or obligation must be met in either goods or gold, or some currency which has international value. Accordingly the existence of a reserve of gold or of English sterling at all times is of importance to Australia, so long as it engages in international transactions. That is one way of doing it. The second way is that indicated in the amendment, namely, to fix an upper limit, not a narrow upper limit, but one that allows for some proper adjustment, with a provision that parliamentary authority must first be obtained to exceed the limit. The Government rejects that method. It does not say why. Not one reason has been given why it is thought to be a good thing that the Executive uncontrolled by either discussion, or decision, in Parliament should have the right to increase the note issue at will and without limit. The third course is, apparently, the course which commends itself to the Government; and that is to have no upper limit and no provision for reserve - in other words, to have a note issue which is uncontrolled except by the mere whim of the Executive. I put this to the Treasurer as a matter which deserves his serious consideration. Is there any reason to believe that the provision which exists to-day for a 25 per cent, reserve of gold, or of sterling, has handicapped us during the war?

Mr Chifley:

– No; but it is an empty thing.

Mr MENZIES:

– I do not want a rhetorical answer. Is there any evidence whatever that during this war, when our financial structure has been subjected to the greatest strain in its history, the requirement of a 25 per cent, backing of gold, or sterling, for the currency has handicapped Australia in its war finance, or finance for civil purposes?

Mr Chifley:

– It could have done so.

Mr MENZIES:

– I do not want some hypothesis. All I am asking for - and I know that even with the best intentions in the world, the Treasurer will not give it to me - is some evidence that this requirement of reserve has imposed some hardship, some limitation, some awkward consequence upon Australia in financing its war effort. If it has, this Parliamenthas never been told about it. Not once from the day war broke out until now has the Government ever come to Parliament and said, “ Alter this 25 per cent. We find it a handicap “. Of course, the truth is that at all material times, and particularly in recent years, our sterling position in London has been pretty good, and sometimes uncommonly good; and the result is that this limitation imposed by a reserve has rested quite lightly upon the Treasury. Why is it to be removed ? Is it because the Treasurer wants to reduce the note issue? Of course not; because if he does want to reduce the note issue there is no point in striking off any of the existing light shackles. Or is it because the Treasurer wants to increase the note issue? If he contemplates increasing the note issue at a time when war expenditure is falling, then we are approaching a period when, instead of full employment prevailing in Australia, a condition of full disaster will obtain. There may be plenty of work to do, but the real standard of living will not rise, and the real value of. the wages people receive for their work will not be maintained. However, I repeat the one point which I rose to emphasize. Will the Treasurer show us why at this stage it is thought necessary to get rid of a reserve provision ? I have circulated an amendment, a new clause; and I do not desire to speak on it again. There are two ways of imposing control. I shall be quite content with either. I am quite happy with the way proposed by the right honorable member for Darling Downs (Mr. Fadden) ; or I shall be quite happy with a continuance of the present reserve provision which I have foreshadowed in a new clause. But I am completely unhappy that there shallbe no restriction, no condition whatever, no parliamentary control, but utterly uncircumscribed executive control over the amount of currency which may at any moment be put into circulation.

Mr CHIFLEY:
Acting Prime Minister and Treasurer · Macquarie · ALP

– I propose to deal briefly with this matter. The whole basis of a reserve is to my mind a complete sham. The fact of the matter is, as I mentioned by interjection when the honorable member for Warringah (Mr. Spender) was speaking, that the Government can borrow £10,000,000 overseas and increase the note issue by £50,000,000.

Mr Menzies:

– Could the Government borrow without parliamentary approval?

Mr CHIFLEY:

– It could borrow; it need not necessarily say that it was borrowing for that purpose.

Mr Menzies:

– The Treasurer does not suppose that any Treasurer would mislead Parliament?

Mr CHIFLEY:

– No. The position, as the right honorable gentleman has said, is that the reserve is 25 per cent. of the note issue. Speaking from memory, the note issue rose to £196,000,000. Merely because we were able to acquire London funds, and so long as we had plenty of London funds, we could increase the note issue.

Mr Menzies:

– Is that what we did?

Mr CHIFLEY:

– No. I have never regarded the note issue, and I do not regard it now, as being anything more than the financial result of some happening, such as an expansion of credit. Because of great commercial activity there has been a demand for an increase of the note issue, and that demand has simply been met by the bank. Therefore, it is not a matter of the Government coming into the picture at all. The bank has met the demand for notes. It is apparent to anybody who has studied the matter at all that the increase of the note issue has been the result of some cause.

Mr Spender:

– That has not been so. What about Germany’s experience for example?

Mr CHIFLEY:

– The honorable member is correct, assuming that some government will decide to print notes by the hundreds of millions.

Mr Abbott:

– The Germans used arguments similar to those now being used by the Treasurer.

Mr CHIFLEY:

– The fact is that the increase of the note issue at present has not been due to anything but a demand for notes following increased commercial activity. Therefore, it is only an effect, not a cause. Let us see what a sham the note issue reserve can be. It is generally conceded that we do not have to hold £25 in sterling against every £100 of Australian notes on issue. All we have to hold in sterling is the equivalent of 25 per cent. ofthe Australian note circulalation. Whenever the currency is depreciated, as it was by the raising of the exchange rate, more notes can be issued on the basis of the same sterling reserve. If the exchange rate is lowered, less note currency can be issued.

Sir Earle Page:

– That is the best reason for the amendment.

Mr CHIFLEY:

– Unfortunately, whenever a measure is brought before Parliament with respect to banking or money, the Opposition, regardless of party political affiliations, sets out to create all sorts of fears that government policy, again regardless of party affiliations, is absolutely unsatisfactory. Does not the right honorable member for Cowper (Sir Earle Page) believe that that would have been the position had the Government brought down about six or seven bills during the last two or three years to increase the note issue?

Sir Earle Page:

– It would not have been a bad thing. We would not now be in the dark.

Mr CHIFLEY:

– Having regard to some of the wild, irresponsible statements which the right honorable gentleman himself made when an earlier Labour government proposed to send abroad a portion of the gold reserve, I can imagine the sort of statements that would be made in this Parliament in any debate on a subject of this kind. I said the other night, and I repeat, that the more silently and smoothly the financial machine is working the more satisfactory it is, and fewer fears are created in the mind of the community. But, unfortunately, the public takes notice of irresponsible statements, or statements made without full knowledge of the subjectand without regard to the fact that they might create fears in the public mind ; and that has been the case with respect to this measure.

Mr Fadden:

– I heard one Minister in this Government say that the Commonwealth could not afford to pay interest on government loans.

Mr.CHIFLEY. - Since this measure was introduced, all sorts of statements have been made about the great dangers arising under it. However, we have had a fair instance of the worthlessness of such talk. Since the Government announced its banking proposals, it has floated a loan in which all honorable members assisted. In such circumstances, could they frankly and conscientiously have gone to the country and advised the people to invest in that loan, if they thought that all these fears were going to be realized ? They could not have honestly done that; and that is the blunt fact. I repeat that in every discussion on finance in this chamber statements are made which create fears in the minds of the public.

Mr Menzies:

– If the Government is going to treat the support of its war loans by the Opposition as public approval by them of the Government’s financial policy, then we shall have to reconsider our position.

Mr CHIFLEY:

– What I do say is this: Surely, honorable members would not advise the people to invest in war loans if they really believed that all the dangers of which they have spoken were going to arise. I realize that the financial machine can be used badly. There is no doubt about that. Indeed, it has been used badly in the past in order to deflate the currency. In reply to the Leader of the Opposition (Mr. Menzies), it is true that the Commonwealth Bank’s sterling reserve in London was in danger of running very low. In 1939 it dropped to £33,000,000, and at that level would not have been sufficient finally to have provided the necessary reserve to the note issue.

Mr Menzies:

– It was ample for the note issue at that stage.

Mr CHIFLEY:

– But not ample to enable us to meet other commitments. At one time it looked as though our sterling reserve would drop to a dangerous level. The honorable member for Warringah spoke about the necessity for having sufficient reserves in London. If we had not adequate reserves what should we be obliged to do? If the note issue reserve were the only money we had available in sterling, we should have to introduce a measure to wipe out the 25 per cent. provision? And if we reached the position where the note reserve was high we should have a great amount of London funds immobilized behind the note issue, which we could not use without enacting a special measure for that purpose; and by enacting such a measure we should only create fears in the minds of the people and attract the attention of. the world to the fact that we were in difficulty, whereas we could probably overcome our difficulty by handling the matter quietly.

Mr SPENDER:
WARRINGAH, NEW SOUTH WALES · IND UAP; UAP from 1940; LP from 1944

– Does the Treasurer say that any substantial increase of the note issue is not a matter for Parliament to debate? If not, why not make some provision that in the event of a substantial increase of the note issue the matter would automatically come before Parliament?

Mr CHIFLEY:

– Parliament can always debate the matter; but it has not shown any particular anxiety to do so during the last few years.

Sir EARLE PAGE:
Cowper

.- I take strong exception to the statement of the Treasurer (Mr. Chifley)’ before the dinner adjournment that because we on this side support Commonwealth war loans we thereby admit that there i3 no danger in the Government’s banking legislation. He might as well say that no soldier who is fighting should take any exception to what is done by the Government because his action in righting means that he supports whatever is done. When a country is at war every true patriot is prepared to do his best, even though he may not agree with the Administration. He will not stop from resisting an enemy because he believes that in some respects the Government has acted foolishly. We are justified in pointing to the dangers of this legislation, and in assuring the people that it will be changed at the (first opportunity. I take exception to the remarks of the Treasurer because my record during the war shows conclusively that I have been prepared to assist the Government, regardless of what I have thought of some of its legislation. For nearly a year I represented the Commonwealth Government in London, and since I returned to Australia I have continued to assist it. I suggested a stabilization scheme the greater part of which the Government ultimately accepted, and I have sat on the Advisory War Council at the ‘invitation of the Prime Minister (Mr. Curtin). The speech of the Treasurer to-night is the first that I have heard that my acceptance of these opportunities to Tender public service means that I must condone whatever action the Government takes. I am astonished that the Minister should think that safeguards which other countries have embodied, -in their banking legislation in order to protect the note issue are a sham. He would appear to be the. only man occupying a responsible position who holds that view. This afternoon I gave a list of countries which had provided the safeguards that I advocated. No one can say that there was anything in my speech but constructive attempts to improve the bill. I showed how in other countries limits had been placed on the note issue by the Parliament, that various safeguards bad been provided and that there had been an increased discount rate on any excess note issue. The Treasurer said that 1 spoke in an irresponsible way sixteen years ago, but events have shown that what I said then was correct. This bill will affect the lives of every person in the community. Although supporters of the Government have little to say regarding the bill, they describe constructive suggestions from this side as so much sham. I remind the committee that when Mr. Theodore was Treasurer he introduced a Central Reserve Bank Bill which provided for a reserve to be placed on the note issue. The record in Hansard will show that he insisted on having a reserve of gold or sterling, if only for psychological reasons. To-day the Acting Prime Minister, who is also Treasurer, says that a provision that the people should be told of any extraordinary increase of the note issue would undermine public confidence in the Commonwealth Bank. In Great Britain Parliament has provided that the volume of the note issue shall not be altered without the consent of Parliament. That is the view Qf a country which financed about twenty Allied governments during the war. In Great Britain any proposed increase of the fiduciary note issue must be laid before both Houses of Parliament forthwith. The remarks of the Acting Prime Minister can be interpreted only to mean that Australians are cowardly people who cannot face the truth. That is contrary to our experience. Honorable members know that when the people of Australia realize that there is a real obstacle to overcome, or danger to face, they face it bravely as true Britishers; and generally they overcome it. The difficulty confronting us cannot be met by attempts to sidestep it, or by the making of adroit speeches, or by deciding to handle it silently and secretly. As I pointed out earlier, harmful germs which destroy the human body work silently and secretly. All that we on this side ask is that our well-reasoned arguments shall be given due consideration. Government supporters seem to take no notice at all of the views expressed by honorable members on this side, but that is not the way to get the best legislation. It is well that we should recall the attitude of honorable members now on the Government benches during the years of the depression. I remember well that when the depression came, following a tremendous drop in the prices of wool, butter, wheat and other primary products, the then Labour government took more and more money out of the pockets of the workers by imposing the highest taxation that Australia had known up to that date. It brought about a measure of deflation by restricting the importation of goods from overseas which, had they been allowed to come in, would have increased the incomes of the people generally. Things got so had that every four minutes another worker was thrown out of a job. That was the direct result of the policy of the Government of the day. The then Opposition was able to check some of the Government’s proposals, as, for instance, the imposition of an export duty on sheepskins.

The CHAIRMAN (Mr. Riordan).The right honorable member must confine his remarks to the amendment.

Sir EARLE PAGE:

– This clause says, in effect, that the Government itself, shall control the volume of the note issue. It will not be left to the experts, or even to the Parliament. It is for that reason that I ask honorable members to recall what took place during the regime of a previous Labour government. Because of the constant changes which take place in the political sphere, it may be that in the event of another depression public opinion will force a reduction of the note issue when experts advise that it should be maintained in order to provide employment. In this legislation the Government is wielding a two-edged sword. I urge it to place in the bill provisions which will ensure that the will of the people, as expressed through their representatives in the Parliament, shall prevail.

Mr ABBOTT:
New England

– I was astonished to hear the speech of the Treasurer (Mr. Chifley) in relation to the amendment moved by the Leader of the Australian Country party (Mr.Fadden) for a limitation to be imposed on the issue of notes by the Commonwealth Bank. I cannot understand how any man can change his opinion as rapidly as the Minister has done during the last seven or eight years.For about two years I was associated with him on the Royal Commission on Monetary and Banking Systems.

Mr Haylen:

– The Minister and the honorable gentleman did not always agree.

Mr ABBOTT:

– The honorable member for Parkes (Mr. Haylen) has probably never read what the present Treasurer said as a member of that royal commission. At that time he did not dissent from the view of the commission, as set out in paragraph 579, that it is desirable that some limit should be placed on the note issue, hut the issue should be capable of some expansion where necessary. Nor did he dissent from the royal commission’s recommendation in paragraph 580 -

The note issue should be limited by law to a fixed maximum . . . subject to the right of the bank to exceed the maximum by a stated amount . . . with the consent of the Treasurer.

In his remarks to-day the Treasurer dealt with a reserve against the note issue and not with the limitation of the note issue. History shows that there have been metallic inflations as well as inflations of the note issue. Sir “William Allison in his History of Europe attributes the deep slumber of the middle ages and the downfall of the Roman Empire largely to the failure of the mines of gold and silver in Spain. That period of a shortage of precious metal lasted until the discovery of the new world by Columbus.

Mr Lazzarini:

– Can people eat gold?

Mr ABBOTT:

– I know that the Minister (Mr. Lazzarini) explains with over-simplification all banking problems in his pamphlet on finance. I am not offering a solution; I am simply stating the facts of history and attempting to draw some deductions about what will happen here if economic laws are not observed. In the age after the discovery of America by Columbus, Europe began to be faced with a metallic inflation. Prices rose sharply and prosperity came to the people. Throughout history, when the amount of currency, either credit or the note issue, has increased greatly, prices have risen swiftly. If the process is continued indefinitely without limit to the number of notes printed, we reach the position wherein the monetary unit has no command over goods and prices soar to the skies. All that the Leader of the Australian Country party (Mr. Fadden) is seeking in his amendment is some check on the unlimited inflation that could take place under this legislation. The Treasurer reiterated that the note issue was only an effect from other causes. That may be so to a limited degree, hut, as a matter of fact, the excess note issue was the direct cause of the inflationary conditions in Germany and other European countries after the last war when the monetary units of certain European countries were smashed. All the precautions, if one can so describe them, in this bill and the Banking Bill to prevent inflation will be useless without the precaution sought in the amendment moved by the Leader of the Australian Country party. As Lord D’Abernon writes, if the fundamental error exists none of the correctives will have any effect. Though our voices may be ineffective, we are particularly concerned in asking that the Government protect the currency against the possibility of Australia’s utter ruin. We are speaking, to a larger audience than the Government benches. We are speaking to the people of Australia in the hope of implanting in their minds the will to make it clear to the Government that they will not stand for the depreciation of the value of the currency that is possible from the unrestricted note issue envisaged by this clause. I was astonished to hear the Treasurer state to-night that the currency of Australia had been depreciated by the pegging of the exchange rate at £130 to £100 sterling, at first, and, later, at £125 to £100 sterling. He spoke as if it had been a bad thing. So did the honorable member for Calare (Mr. Breen). But the Treasurer spoke as if something terrible had happened. So I refer honorable members to paragraph 551 of the report of the Royal Commission on Monetary and Banking Systems, to which, not eight years ago, in July, 1937, the Treasurer was a signatory

The movement in the exchange rate in January, 1931, was one of the major contributions of monetary policy to recovery in Australia.

The honorable gentleman subscribed to that and the following sentences in the report : - lt increased the returns to exporters in terms of Australian currency which tended to increase the volume of export productions, and it tended to restrict imports. Had the movement come earlier the fall in the national income would have been less, and the task of recovery easier.

The depreciation of the Australian £1 in terms of sterling stopped the rapid appreciation of the currency and fall of prices that were causing disastrous unemployment. I am, therefore, astonished that honorable gentlemen opposite should talk about a wrong having been done to this country by raising the exchange rate. A racehorse which showed such a reversal of form as the Treasurer has shown would be the subject of an inquiry by the stewards into his form. The member of the royal commission, who, in 1937, ran a dead-heat with its other members straightly, truly and determinedly in saying that there should be a limit on the note issue seems now to have been “got at” by some insidious influences in caucus, deliberate in their intention that at some time the Australian currency shall be smashed to pieces. I do not believe that the Minister assisting the Treasurer is responsible for his reversal of form. I hope that members of the Government are big enough, strong enough and brave enough to flout caucus and think only in terms of the financial security of Australia.

Mr ARCHIE CAMERON:
Barker · ALP

– A good deal has been said on this clause about the currency, but one of the most important aspects has been overlooked. In my opinion, a note issued by the ‘Commonwealth Bank is in the same category as any other paper money issued by the Commonwealth Government - a debt due by the Commonwealth Government, through one of its instrumentalities, to the person or corporation for the time being in possession of it.

Mr LAZZARINI:
ALP

– That applies to all kinds of currency.

Mr ARCHIE CAMERON:

– I know, but one would not think so from the fact that the note issue is to be the only exception in which there shall be no parliamentary control over the extent to which indebtedness may be incurred by the Government. That is the important point. If the Executive proposes to borrow money or raise money by taxes, it must ask the Parliament for the right to do so; but, once this bill is law, there will be no obligation on the Government to ask Parliament for the right to increase the note issue. The position was infinitely clearer before the issue of paper currency was handed over from the Treasury to the Commonwealth Bank. The Treasury notes bore the inscription -

The Treasurer of the Commonwealth of Australia promises to pay the bearer– in gold coin on demand at the Commonwealth Treasury.

The note was signed by the Secretary to the Treasury and the Governor of the Commonwealth Bank.

Mr Conelan:

– When was that changed?

Mr ARCHIE CAMERON:

– When we went off the gold standard.

Mr Conelan:

– How long ago was that?

Mr ARCHIE CAMERON:

– I am dealing with a serious matter, not kindergarten things. When the issue of notes was transferred to the Commonwealth Bank under authority conferred upon it by this Parliament, the inscription was altered and there is now no reference to redeemability in gold. All the inscription says is -

This note is legal tender for– in the Commonwealth and in all territories under the control of the Commonwealth.

The position was clearer still when,before the Australian Note Act was passed, the currency bore an intrinsic value equal to the value represented thereon. Every one knows what he is handling when he handles gold, but when he gets token money - silver, bronze or paper - the position is entirely the opposite. This clause enables the Commonwealth Bank to create as much paper currency as it likes. The history of the world, not ancient but modern history, the history of the period between the two world wars, shows that wherever this authority has been issued it has ended in disaster followed by complete reconstruction of the currency of the country concerned. Any honorable member who has studied the affairs of countries like Greece, Italy, France and Germany after the last war must realize the disaster that overtook them because there was no legislative control whatever of the limits of the note issue. Consequently, a state of affairs occurred which is best illustrated by what took place in Germany, where, after the note issue had been inflated to the stage at which it took about a barrow-load of notes to buy a loaf of bread, the political leaders and financiers of the country got together and devised the Reichsmark, which was backed by a 5 per cent. tax on land values and by the big industries on a ratio of 50 : 50. I raise this because I want the committee to realize that the basis of the stability of any currency is its backing. When we had a gold or sterling currency every one knew that there was a gold reserve of at least 5s. for every £1 note issued.. It is physically impossible for every note to be presented at the Commonwealth Bank or the Treasury at the one time. So we had a system under which the value of the paper money in circulation was much greater than the value of the gold reserve. But henceforth, if this bill is passed - and I have a strong suspicion that it will be - there will be absolutely no reserve behind the currency; it will be based on nothing at all.

Mr Chifley:

– The honorable member has heard about the fiduciary - faith and trust - issue in the United Kingdom?

Mr ARCHIE CAMERON:

– Yes. The British note issue is on a different foundation from the Australian. The Treasurer should not think thatI do not know the financial conditions in Great Britain. The fiduciary issue of Great Britain is definitely limited, but here the Government is asking us to give the the Commonwealth Bank untrammelled power to issue fiduciary money to an unlimited extent. I am surprised that the Treasurer, or one or two of his noble henchmen, have not come to light with a declaration that the foundation upon which the Australian note issue will rest is to be the credit of the Commonwealth. I anticipate that declaration by saying that the public credit of this country has been seriously impaired by the conduct of the war. We have doubled our public debt, increased the issue of treasury-bills by several- hundred per cent, and increased the note issue by several hundred per cent. I - have pointed out before that every treasury-bill and every bank note is a debt owed by the Commonwealth Government to those that hold them. I have also pointed out that there has been no increase of the productive capacity of Australia commensurate with the increased obligations of Australia. In other words, we have pledged the public credit of Australia in the last six years in a way which has never been done before in the history of .Australia. We have pledged it in a way in which the right honorable member for North Sydney (Mr. Hughes) would never have dreamed of doing in the first world war.

Mr Lazzarini:

– Did the honorable member want us to pull out of the war?

Mr ARCHIE CAMERON:

– The Minister should not ask kindergarten questions. When members of the Labour party were opposed to the sending of the Australian Imperial Force overseas, I was advocating the raising of ten divisions. We have pledged the public credit of Australia in a way never thought possible six years ago, and it stands to reason that the public credit of the nation is no more inexhaustable than is the credit of a corporation or a private person. There must come a day of reckoning. Honorable members opposite will not always be in control of the treasury bench. They are creating a liability which must be met ultimately out of taxation. At the same time, through some of the financial provisions recently submitted to Parliament, the Government is undermining the very basis upon which successful industries can be established. By increasing the note issue, the Government is destroying the value of wages. The purchasing power of money is linked intimately with the volume of notes in circulation, yet the Government wants to throw down all the barriers and have an open go in the issue of notes. There can be only one end to that. The day of reckoning may be staved off for a while, but wc must consider eventually how we are to meet the interest on the national debt, and what we are to do with the £400,000,000 worth of treasury-bills still unfunded. Peace will bring problems even more complex and difficult than those of war, and they will have to be solved. Therefore, it is necessary that some restraint should be applied so that the note issue may not be increased without the approval of Parliament. For that reason I support the amendment.

Mr BURKE:
Perth

.- In normal times there would appear to be little need for a reserve behind the note issue. Trade and commerce go on, with tho people paying little heed to the currency, and probably most of them do not even realize that there is any such thing as a reserve either in “gold or in sterling. It may be assumed, therefore, that it is only in time of crisis, such as war or an economic depression, that there would be any need for a reserve at all, and we invariably find that, at such a time, the legal provisions for stabilizing the currency are suspended. The English Bank Act of 1844 provided for a fiduciary note issue of a certain fixed amount, while all notes issued over and above that amount were to be backed, £1 for £1, by gold. Within the first quarter of a century after the passing of the act it was suspended three times. Now, it is not even necessary to suspend the act in order to increase the note issue in Great Britain. The Bank of England merely applies to the Treasurer for permission to increase the issue, the Treasurer approves, and a minute to that effect is placed before Parliament. No Treasurer has ever refused such an application. It is true that- the Royal Commission on Monetary and Banking Systems suggested that the Australian note issue should be limited to £60,000,000, but we all realize now how inadequate that would have been during this war when the value of notes in circulation has increased enormously. On the subject of the note issue R. G. Hawtrey, a high official in the British Treasury, and a lecturer in economics, wrote as follows in a book which has become a standard work of reference in Australia -

The bank ought not to be restricted by a law limiting its fiduciary issue or requiring a minimum proportion of ite note issue or of its demand liabilities to be covered by gold or even by gold and foreign exchange.

There is, therefore, a very strong presumption in favour of complete freedom from reserve restrictions.

In the Macmillan report, at page 123, it is stated -

There is also a further principle of central banking of a somewhat different character which must be observed if central banks are to be in complete control of the situation, namely, that central batiks must not be unduly limited in their power to expand their deposits otherwise than against a corresponding increase in their holdings of gold or the equivalent of gold. Such undue limitation may result if the class of assets which the central bank is entitled to hold is too narrowly prescribed by law. Similarly, it should lie within the power of a central bank to restrict the volume of its deposits otherwise than by decreasing its holdings of gold.

Everything indicates that a reserve behind the note issue is powerless to achieve the end which it is supposed to promote. In order to expand the note issue without raising prices, the issuing authority must watch the situation very closely. It must note how production is affected, and keep constantly in mind the relation between the volume of the note issue and the production of: consumable goods. Even if the Australian note issue had been based £1 for £1 on gold it would still have been necessary, during the war, to increase its value very greatly, and prices would have risen because there was not in the country a sufficient volume of goods to match the increased issue. Thus, we come to the point that a reserve behind the note issue is merely a survival, a tradition, which experience has proved to be of no real value. The honorable member for New England (Mr. Abbott) said that currency inflation in Germany after the last war had been brought about by an increase of the note issue. It has been established, however, that bank deposits expanded first, and the note issue was increased in order to catch up with them. It has not been proved1 that the movement was begun by an expansion of the note issue. Actually, although the note issue expanded, the value of! the currency in terms of gold dropped by far more than the expansion of the note issue. We have been told that a note reserve has both a practical and. a psychological value. A great point was made of this when the Scullin Government was in office, but when the gold reserve was finally exported there was no psychological reaction whatsoever. It was found that the people were not in the least worried whether or not there was a gold reserve behind the currency.

The Leader of the Opposition (Mr. Menzies) suggested that a reserve had a practical value, but I fail to see wherein it lies. A reserve of gold earns no interest. It is valueless to the country. It would be better employed in the purchase of foreign securities, because they would, at least, hear interest. The honorable member for Warringah (Mr. Spender) said that even though it might not be necessary to hold a reserve in Australia against the notes in circular tion, it would be advisable to hold British or foreign securities. That is probably true, but at the same time it would be foolish to hold a rigid amount against th’e note issue. If we were able to provide foreign currency for the purchase of capital goods, it would seem paradoxical to have a large reserve of foreign securities, sterling or otherwise, tied up in such a way as to prevent us from using them for our immediate needs. A reserve of gold, as a backing for the note issue, has been proved by history to be valueless and a definite loss to the country. A reserve of securities, if tied rigidly to the note issue, would also be a disadvantage and would have to be suspended in the same way as the gold reserve has had to be suspended from time to time. The Government is dealing with the problem in a realistic manner. The fears which members of the Opposition have attempted to instil in the mind of the public are historically baseless and will not affect the value of Australian currency.

Mr FADDEN:
Darling DownsLeader of the Australian Country party

– I understood the Treasurer (Mr. Chifley) to say that the gold and sterling reserve was in a precarious position in 1939.

Mr Chifley:

– No, I said that the reserves amounted to £33,000,000.

Mr FADDEN:

– Statistics show that the total value of notes in circulation at the 30th June, 1939, was £47,530,124. The minimum reserve required by the act was £11,882,531, and the amount of gold and English sterling actually held was £16,029,604. That constituted 33.73 per cent, of the actual notes in circulation. Those figures put a different complexion on the position from that described by the Treasurer.

Mr.Chifley. - I said that in 1939 overseas funds amounted to £33,000,000.

Mr FADDEN:

– I thought that the honorable gentleman referred to the reserve of gold and English sterling.

Mr Chifley:

– No. Perhaps I did not express myself very clearly.

Mr FADDEN:

– The notes in circulation on the 30th June, 1944 - the last available date- amounted to £189,512,068. The reserve required under the act was £47,378,000, and gold and English sterling actually held amounted to £49,203,000, or 26.01 per cent. of the total notes in circulation. Clause 8, which is one of the principal provisions of the bill, provides -

It shall be the duty of the Commonwealth Bank, within the limits of its powers, to pursue a monetary and banking policy directed to the greatestadvantage of the peopleof Australia, andto exercise its powers under this Act and the Banking Act 1945 in such a manner as, in the opinion of the Bank, will host contribute to -

the stability of the currency of Australia.

This omission or neglect to provide a reserve against the note issue is not calculated to be in the best interests of the people or the stability of the currency of Australia.

Mr CONELAN:
Griffith

.- WhenI asked the honorable member for Barker (Mr. Archie Cameron) to inform the committee who was responsible for withdrawing the “promise to pay” on Australian bank notes, he did not reply. I shall repair that omission. In 1932, the Lyons Government withdrew the gold reserve to the note issue of Australia, and introduced legislation which made it compulsory for this country to have a reserve of English sterling, instead of gold, to the value of 25 per cent. of the note issue. What is the difference between English sterling and Australian currency? Surely the value of Australian currency should be comparable with that of the currency of Great Britain ! It is all a matter of psychology. In 1931, the Scullin Government attempted to issue fiduciary notes totalling £18,000.000, of which £12,000,000 was to relieve unemployment, and £6,000,000 to relieve necessitous farmers. This chamber passed the bill, but the Senate rejected it. In the same month of the same year, Great Britain printed a fiduciary issue of £68,000,000, and the fiduciary notes were of a different colour from that of the ordinary bank note.

Mr Archie Cameron:

– So that the people would know the fiduciary notes from the ordinary notes !

Mr CONELAN:

– No one took exception to the fiduciary notes, because people did not play politics in Great Britain as they do in this country. It was only because a Labour government was in office in Australia in 1931 that some people here played politics, and the proposal to print a fiduciary note issue was defeated. Of course, the honorable member for Barker has a “ craze “ regard ing gold. He believes that gold is supreme. Perhaps he has a financial interest in a gold mine.

The CHAIRMAN:

– Order ! I ask the honorable member not to digress.

Mr CONELAN:

– To-day, nearly all the gold in the world is held by only two countries, and if other countries were compelled to rely upon gold as a reserve against their note issues, they would be bankrupt. The abolition of the reserve will not open the way to inflation. Under modern conditions, the volume of the note issue is a reflection of the volume of bank credit. That fact is recognized in Australia and overseas. The London Stock Exchange Gazette, on the 17th March last, published the following comment: -

It should be remembered that Great Britain did the same thing when the exchange equalization account was set up in 1932. The backing of our own notes is almost entirely our own Government security.

That is exactly the position in Australia to-day. On the 18th March last, the London Sunday Times stated -

The abolition of the reserve requirements against the note issue is a reflection of the policy which in this country now expresses itself in a flexible fiduciary issue, changes in which now excite no attention.

That is why I contend that the size of the note issue is a matter of psychology. The British Treasury is able to regulate the note issue without exciting attention. But the moment a Labour Government attemptsto adopt a similar policy in Australia, the Opposition protests and asserts that the fiduciary note issue must be supported by a gold reserve. If that financial policy can operate successfully in Great Britain, it can function with equal success in Australia.

Question put -

That the proviso proposed to be added (Mr. Fadden’s amendment) be so added.

The committee divided. (The Chairman- Mr, W. J. F. Riordan.)

AYES: 18

NOES: 30

Majority…… 12

AYES

NOES

Question so resolved in the negative.

Mr ARCHIE CAMERON:
Barker · ALP

– Speaking before the suspension of the sitting, the Treasurer (Mr. Chifley) used the words “ demand for notes “. In case there is any misapprehension about this matter, I point out that those words do not imply that anybody who wants notes can go to the Commonwealth Bank and get them. People who want notes from the Commonwealth Bank have to lodge assets for them. I do not know of anything in the political arena in Australia to-day about winch there is so much misunderstanding, loose talk, loose thought, and false apprehension, as the note issue.

Clause agreed to.

Clause 42 (Notes to be legal tender).

Mr FADDEN:
Darling DownsLeader of the Australian Country party

– This clause is couched in unequivocal terms. It states -

Australian notes shall be a legal tender throughout Australia.

The clause has to be read in conjunction with clause 41 which provides that the term “ Australian notes “ includes notes in denominations of 5s., 10s., £1, £5, £10, and any multiple of £10.I ask honorable members to examine suibregulation 1 of National Security (Supplementary) Regulation 135 contained in Statutory Rules 1945, No.80. issued on the 30th May, 1945, which states - (1.) After the thirty-first day of August, 1945, Australian notes of a denomination exceeding Ten pounds shall not be a legal tender.

I am informed that under the ordinary rules for the interpretation of statutes, every affirmative statute is a repeal by implication of a precedent affirmative statute so far as it is inconsistent or repugnant thereto. Consequently, clause 42 of this bill would automatically render inoperative the statutory rules from which I have quoted, except for section 18 of the National Security Act, which states -

A regulation made under this Act shall subject to the Acts Interpretation Act 1901- 1937 have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument having effect by virtue of any enactment other than this Act.

An important principle of interpretation is involved, namely, whether a prior National Security Regulation automatically prevents this Parliament from enacting by statute whatever legislation it wishes. It is my view that the National Securityregulation to which I have referred will become inoperative should clause 42 of this measure become law. The importance of the result can well be imagined. It will still be legal for black-marketeers and others to use notes of high denominations, and thus circumvent the very necessary reasons for the introduction of such a regulation. There are two points upon which Statutory Rules 1945 No.80 can be attacked. First, is it a valid exercise of the defence power under the Constitution? Secondly, as I have stated in the press, sub-regulation 2 places upon the Commonwealth Bank an obligation to give notes of small denomination in exchange for the larger notes, at any time, even after the 31st August. There is no compulsion upon the holder to give his name and address, and he need not necessarily exchange his notes of a high denomination at any particular time. Also the exchange of such notes between individuals will not be curtailed as the bank will not be able to ascertain whether or not they are being cashed by the original holders.

The CHAIRMAN:

– Order ! The honorable member is not permitted to read his speech.

Mr FADDEN:

– I am speaking from notes. The subject is of such a technical nature that in my opinion the use of full notes should he permitted. It is not my intention to move for the disallowance of regulation 135, as under section 10a of the Acts Interpretation Act 1904-1934, after the disallowance of a regulation, no regulation which is the same in substance can be made for six months. It would be far more preferable for the Government to repeal this regulation and submit a more carefully prepared one carrying out the Government’s real intention. If it is the intention of the Government to force holders of bank notes . of high denominations to relinquish them, that object is not being achieved, and the matter is one which should he carefully considered.

Mr LAZZARINI:
Minister for Home Security and Minister for Works · Werriwa · ALP

.- The Grown Law authorities are examining the question that has been raised by the Leader of the Australian Country party (Mr. Fadden), and the Government will take whatever action may be necessary.

Mr MENZIES:
Leader of the Opposition · Kooyong

– I am glad to note that the Crown Law authorities propose to examine the matter which has been raised by the Leader of the Australian Country party (Mr. Fadden). It is quite true that section 18 of the National Security Act gives effect to National Security Regulations notwithstanding anything inconsistent therewith contained in any enactment other than the National Security Act; but it would bo a most unusual principle if an act of Parliament passed this year were to fetter the hands of the Parliament a year or perhaps two years hence. The normal rule of course is that where there is a provision in an act of Parliament inconsistent with a provision in an earlier measure, the earlier one is repealed to that extent. No doubt the Crown Law authorities will come to the conclusion that if the Government wants the effect of National Security (Supplementary) Regulation 135 to be maintained this clause should be altered. The alteration would he quite simple. I suggest to the Minister (Mr. Lazzarini) and through him to the legal authorities, that all that need be done is to add at the beginning of clause 42 the words, “Subject to any regulation made under the National Security Act “. Then, if it is desired to preserve any exclusion under the National Security Regulations, that can be done.

Mr HUGHES:
North Sydney

– I cannot support the argument advanced by the Leader of the Opposition (Mr. Menzies). It goes further than he intended. The Leader of the Australian Country party (Mr. Fadden) pointed out that the regulation was intended to deal with a certain condition of affairs in which people held notes of high denominations, and provides that those notes shall be returned to the Commonwealth Bank before the 31st August, after which date they will not be legal tender. It is possible that the Government may desire to make a regulation going far beyond that. The amendment should state definitely at what regulation it is aiming.

Mr ARCHIE CAMERON:
Barker · ALP

– I am opposed to the suggestion made by the Leader of the Opposition (Mr. Menzies) which, in effect, would make a statute subject to a regulation.

My understanding of the passage of legislation is that a statute is always superior to a regulation. If an amendment is to he made, it should be made by a clause in the bill, and not by making a bill of this kind - one of the most important and farreaching pieces of legislation that has ever come before this Parliament - subject to what may be done under the National Security Act. I have had some experience in the making of regulations under the National Security Act,, and I know that a regulation can be issued by three Ministers, I am not prepared to hand over that power.

Mr Lazzarini:

– It is not proposed that ‘that should be done in this bill.

Mr ARCHIE CAMERON:

– No, but sooner or later the Government may accept a recommendation from this side of the chamber, and I am a little afraid that it may be this one.

Honorable members opposite have challenged my views in regard to the stability and acceptability of the currency. I contend that confidence in the stability of the currency could not be harmed more than by the issuing of regulations such as that relating to the surrender of notes of high denomination. When a note is issued by the Commonwealth Bank it should be acceptable by that bank, and should be legal tender within the Commonwealth as is stated on the face of it, without hindrance. The actual fact is that only a very small percentage of the note issue is represented by notes in denominations of £20 or more. The two things which the Government must watch are hoarding and black marketing. I do not know much about black-marketing, and I certainly know nothing about hoarding, because I have never had anything to hoard ; but black marketing will not be. stopped by reducing the denominations of bank notes. If people are foolish enough to accumulate Commonwealth currency and keep it behind the chimney or in a safe deposit, thereby losing interest on it, that is their fault. In no circumstances would I interfere with that practice. If people are foolish enough to deprive themselves of their right to interest income, that is their business. Therefore, for those two reasons I consider that the regulation to which the Leader of the Country party (Mr. Fadden) has referred is undesirable. “

Mr SPENDER:
Warringah

.- This matter can be dealt with quite simply by issuing a new regulation. If the matter is purely an exigency of war dealing with black marketing, and arises out of the circumstances of war, all that is required is for this clause to stand, and a new regulation to be issued when the bill is passed.

Clause agreed to.

Clauses 43 to 45 agreed to.

Clause 46 (Disposal of profits).

Mr ABBOTT:
New England

.- This clause provides for the allocation of profits from the note issue in the manner provided for under the ‘Commonwealth Bank Act at the present time. I direct the attention of the committee to the dissent by the Honorable J. B. Chifley, Professor R. C. Mills and myself, which appears at page 259 of the report of the Royal Commission on Monetary and Banking Systems. It reads -

If it is desired that the present allocation of profits should not be disturbed, we are of opinion that the profits of the General Banking Department after it has absorbed the Note Issue Department should be divided between the National Debt ‘Sinking Fund and the reserves of the Bank in some such proportion as two-thirds and one-third respectively.

We envisaged the abolition of the Note Issue Department and its incorporation in the central bank, and the allocation of its profits in the manner stated. There is much to be said for a large allocation of the profits from the note issue being made to the National Debt Sinking Fund, because an increase of the amount available for investment in Commonwealth loans by the National Debt Sinking Fund Trust must improve the prospects of loans being raised in the future at lower rates of interest than have had to be paid in the past, and give to the central bank much greater control over the whole of the interest rates throughout the community, in addition to imbuing the people with a far stronger belief in the stability of such loans, by reason of the knowledge that a maximum amount is being diverted in each year to a sinking fund for their redemption. During the Napoleonic wars, the first sinking fund legislation in the British Empire was brought down ;by the younger Pitt. Actually, the government of the day had to borrow for the exigencies of the Napoleonic wars much more than could he redeemed by means of the sinking fund, but the existence of that first sinking fund that had been introduced by any government in the world enabled loans to be raised at a much lower rate of interest than otherwise would have operated. That has been the position from the days of the younger Pitt up to the present time. The Government ought to consider the matter further, before the bill goes to the Senate. The Treasurer (Mr. Chifley) should make provision for the allocation of a fairly large proportion of the profits from the note issue to the National Debt Sinking Fund.

Mr ANTHONY:
Richmond

.- I dissent from the provision that no payment out of the profits from the note issue shall have the effect of increasing the capital of the Mortgage Bank Department to more, than £4,000,000; because, if the Mortgage Bank Department is to be in a position to make loans to farmers at the lowest rate of interest, its capital must to the greatest degree be interest free. Under other provisions in thi9 measure, the Mortgage Bank Department will be enabled to obtain funds from the Savings Bank independently of the capital of £4,000,000. In my opinion, that method of obtaining funds is inferior to the indefinite continuance of profits from the note issue. I suggest the removal of that limitation; otherwise, the Mortgage Bank Department will cease to obtain free money when its capital has reached £4,000,000, and any subsequent advances by it will have to be made from funds carrying interest which it receives from the Savings Bank. That will necessitate the charging of a higher rate of interest to the farmer than would have to be charged if advances were made from funds derived from profits from the note issue.

Mr FADDEN:
Darling Downs Leader of the Australian Country party

– I support the suggestions of the honorable members for New England (Mr. Abbott) and Richmond (Mr. Anthony). One is impressed with the recommendation of Mr. Chifley, Mr. Abbott, and Professor Mills, quoted by the honorable member for New England. Whatever argument could be advanced in favour of it when made, has been greatly reinforced since, because the royal commission recommended among other things the continuance of a backing for the note issue up to a specified limit. Under this legislation, there is to be no such limit; consequently, the recommendation of the commission in that regard has been totally ignored. Surely some degree of confidence must be instilled in the minds of the investing public particularly. Having special regard to the fact that the note issue is not to be backed by a reserve, a greater proportion of the profits from it should be allocated to the National Debt Sinking Fund. The’ advantages of strengthening that fund are obvious. They include the greater confidence which the investing public will have, the possibility of the ‘Commonwealth Government raising loans at lower rates of interest and on more favorable terms, and the provision of greater facilities whereby the Government may acquire securities on the open market as and when desired in order to stabilize the loan position as well as the security position generally.

The honorable member for Richmond (Mr. Anthony) has advanced very strong arguments in regard to the Mortgage Bank Department. As the Government will not accept amendments, it should at least study closely the observations and arguments in. relation to the clause before the bill goes to the Senate.

Sir EARLE PAGE:
Cowper

.- The limitation of £4,000,000 on the capital that may he raised by the Mortgage Bank Department should be removed. When the royal commission recommended the establishment of that department, the suggestion was that it should be able to raise additional capital by the issue of debentures. It wa3 proposed that £250,000 a year should be provided interest free from the profits from the note issue. That has “ gone by the board”. At a later stage, the provision was made that the total capital of £4,000,000 should be provided, first by a portion of the profits from the note issue, and then Ivy other moneys which could be made available. That capital is not nearly sufficient to finance this undertaking. Rural mortgages; in Australia must amount to approximately between £400,000,000 and £500,000,000. The £150,000 per annum obtained from the profits from the note issue is only about one-fifteenth or one-sixteenth of the total profit made from the note issue, which exceeds £2,000,000. That contribution should be made permanent, in order that the interest-free money available in the Mortgage Bank Department may be as large as possible, and ultimately have the effect of reducing the rate 0B interest on long-term mortgages. When T instituted the Rural Credits Department in 1925, I attached a similar stipulation to the provision in relation to its capital, until £2,000,000 interest-free capital had been provided. The effect has been that that department has been able to charge a lower rate of interest than any other institution in Australia that lends money. It deals with commodities in process of being marketed; therefore, the loans that it makes are redeemed practically within a year and a smaller total may suffice for a revolving captial fund. On the other hand many of the loans made by the Mortgage Bank Department are outstanding for from 30 to 40 years: therefore, it must have very large capital funds at its disposal. I hope that the Minister assisting the Treasurer (Mr. Lazzarini) will place before that gentleman the necessity for making this contribution in perpetuity.

Mr LAZZARINI:
Minister for Home Security and Minister for Works · Werriwa · ALP

– I promise to bring to the notice of tuc Treasurer (Mr. Chifley) the representations of the honorable members for New England (Mr. Abbott) and Richmond (Mr. Anthony), and the right honorable members for Darling Downs (Mr. Fadden) and Cowper (Sir Earle Page) . I am confident that he will at least consider them.

Mr ARCHIE CAMERON:
Barker · ALP

– I recall to the minds of, honorable members opposite, especially those who represent agricultural constituencies, the fuss that was made when the legislation providing for a Mortgage Bank Department was passed. We were then told that the farmer and the landholder generally could expect to receive enormous benefits from the measure at a very early date; the millennium was to be dropped by parachute very quickly.

Mr Calwell:

– The Commonwealth Bank Board prevented that object from being attained;

Mr ARCHIE CAMERON:

– That i* a most specific charge, which ought to be either substantiated or withdrawn. 1 forget the amount of capital which waa voted by the Parliament to the Mortgage Bank Department upon its establishment. If it were to depend upon an annual contribution of £150,000, it would need 27§ years to accumulate £4,000,000. Apparently, the Government does not pay that close attention to the activities of theMortgage Bank Department which one was led to expect from its statementswhen the bill was passed, viewing those statements in the light of the provisions of clause 46 of this bill. The Minister assisting the Treasurer (Mr. Lazzarini) has ample justification for consulting with the Treasurer (Mr. Chifley) on this important matter.

Clause agreed to.

Clause 47 - (I.) As soon as practicable after the lastMonday in each month, an officer appointed’ for the purpose by the Governor shall prepareand sign a statement showing, as at the close of business ou that day, .the number and amount of Australian notes on issue.

Mr HUTCHINSON:
Deakin

.- I move -

That, at the end of sub-clause (1.), the following words be added: - “distinguishingbetween those held by other Banks and those held by the .public “.

We have now reached the 47th clause in a bill which contains 1S9 clauses, and it is now possible to give a summary as to what has transpired in the consideration of the measure. Most of the major amendments have already been moved. The Commonwealth Bank Board, which has been the means of preventing the adoption of hasty and ill-conceived methods of finance has been abolished. The place of the board is to be taken by an official who is termed the Governor. It is true that he will have the assistance of1 an advisory council, but it if equally true that the Governor will please himself whether he accepts its advice or not. The Governor, in turn, will be subservient to the Treasurer of the day, and if any conflict of opinion arises between the Governor and the Treasurer, the hatter’s view will prevail. The committee ha3 already decided not to require a minute to be drawn up on the matter, which means that nothing about it will appear in writing. The central bank, which for many years has acted in the interests of economic and financial stability, may well become a mere tool of the government of the day. Amendments by the Leader of the Australian Country party (Mr. Fadden) and the Leader of the Opposition (Mr. Menzies) with regard to the note issue have been rejected, and, therefore, one of the last barriers which prevented the exercise of political pressure behind the scenes has been removed. Under this clause, the note issue could to some degree be concealed, because it merely provides that the number and amount of notes at issue shall be made public, but there is a wide difference between the amount of notes held by the public and the amount issued, [n his second-reading speech, the Treasurer (Mr. Chifley) drew attention to the fact that the note issue is merely a “ reflection of credit policy “, and in his speech before the suspension of the sitting he used these words, “ The note issue is an effect of something else that has been done “. It is true that the potential source of inflationary finance is central bank inflation, but that cannot take place unless it is reflected in the note issue, particularly the note issue in the hands of the public.

From the days preceding the war until recently, the note issue, which was once £4S,000,000, has been increased to £196,000,000. That, of course, is an indication of the inflationary tactics which in many respects had to be adopted because of the exigencies of war. We were told in January last that the central bank inflation amounted to about £340,000,000 ; to-day it is possibly about £400,000,000. This credit expansion has been associated with the many controls which have been imposed on the public, and if those controls had not been screwed down we should have witnessed a much greater deprecia tion of the Australian £1 than has occurred. At present, the value of the £1 has depreciated by about 25 per cent. This has to be considered in conjunction with the present high taxation rates which are having a marked effect on the present production and output of the individual. The note issue is a reflection of credit policy and shows the effect of what has been done. Under this clause the indications are that the real extent of any inflationary policy could be concealed by the mere issue of a statement giving the amount- of notes on issue, but the number of notes in the vaults of the banks may have little bearing on the economic position. The notes in the hands of the public are those which count, because they imply purchasing power. From 15’ per cent, to 20 per cent, of all payments are made by means of notes. As the note issue is split into notes in the hands of the public and notes in the hands of the banks, it gives an indication to the public of the financial policy being carried out by the Government. Under this bill it would be possible, by a verbal arrangement, for the economic policy of the country to be influenced by the Government, and that could lead to further inflation; but if the amount of notes in the hands of the public were made known we should have an accurate picture of what is happening. That picture should always be apparent to the Parliament and to the country. I hope that the Minister for Home Security (Mr. Lazzarini) will not merely ask the Treasurer to consider my amendment, but that he will realize the logic of my argument and accept the amendment.

Mr LAZZARINI:
Minister for Home Security and Minister for Works · Werriwa · ALP

.- Since 1920 the Commonwealth Bank has published each week the amount of notes in the hands of the public and of the banks, and as it will continue that practice the amendment is unnecessary. That information appears not only in weekly and monthly returns, but also in the quarterly statistics issued by the bank.

Mr Menzies:

– Then what is the necessity for sub-clause 1?

Mr LAZZARINI:

– I repeat that as the Commonwealth Bank now does exactly what the proposal submitted by the honorable member for Deakin (Mr. Hutchinson) would do, his amendment is redundant.

Mr MENZIES:
Leader of the Opposition · Kooyong

.- The Minister is an absolute marvel.

Mr Dedman:

– According to the right honorable gentleman, every Minister is that.

Mr MENZIES:

– No. When the Minister for Post-war Reconstruction (Mr. Dedman) is in charge of a bill he is a marvel in his own opinion. Subclause 1 provides that as soon as practicable after the last Monday in each month, an officer appointed for the purpose by the Governor shall prepare and sign a statement showing, as at the close of business on that day, the number and amount of Australian notes on issue. The Minister tells the committee that is what the Commonwealth Bank has been doing for years, and that is why the Government is putting it in the bill. He agrees that for years the bank has been doing it, yet he wants to put it in the bill. The honorable member for Deakin (Mr. Hutchinson) proposes, as an amendment, to distinguish between those notes held by the banks and those held by the public, but the Minister then says, “ For twenty years the Commonwealth Bank has been doing that and therefore we will not put it in the bill “.

Mr Lazzarini:

– That is so.

Mr MENZIES:

– All that I can say is that the Minister is an absolute marvel.

Mr BURKE:
Perth

.- Subsection 1 of section 110 of the Commonwealth Bank Act 1911-1943 provides -

On the last Monday of each month, an officer appointed for the purpose by the Board shall prepare and sign a statement, showing at the close of business on that date -

The number and amounts of Australian notes issued and not redeemed;

Particulars of the reserve held by the Note Issue Department for the purpose of this Act.

The reserve will not now exist, and so the amendment would be redundant. The clauses under consideration is couched in similar terms to those contained in the principal act. The procedure provided for under the act is that the allocation of the notes as between the public and the banks shall be shown. This information is merely a record of banking procedure. It has been the practice to prepare and publish the information, and there is no need to insert a provision to that effect in this bill.

Mr ABBOTT:
New England

– It is very important that statistics regarding the disposition of notes on issue should be published from time to time. The Royal Commission on Monetary and Banking Systems stated in paragraph 619 of its report -

The Commonwealth Bank should publish a monthly bulletin containing such statistics as the board thinks fit, together with explanatory comment, and other information and advice which may be of value to the public.

Section 110 of the present act provides that on the last day of each month an officer appointed by the board shall prepare and sign a statement setting forth the position in regard to the note issue. Surely there can be no objection to including a similar provision in this bill, and such a safeguard is now all the more necessary since the Commonwealth Bank Board is to be abolished. The Treasurer (Mr. Chifley) said that it was a good thing to keep banking transactions, particularly those of the central bank, as quiet as possible, the suggestion being that the public should not be allowed to know what was going on. The Treasurer of the day may believe that the public should not be given particulars about the way in which notes are held. He might justify the withholding of this information on the ground that, at a time of rising prices, it would have a disturbing effect on the public, and he might send the Secretary to the Treasury to the Governor of the bank with an instruction that the information should not be published.

Mr Lazzarini:

– The information is being published now, and it will be published in the future.

Mr ABBOTT:

– Up to the present, there has always been a reserve behind the note issue, but that provision is to be abolished. It is the practice under Fascist governments to concentrate power in the hands of one man : much of the same tendency is apparent in this bill. The Government is reluctant to trust the people.

Mr ARCHIE CAMERON:
Barker · ALP

– Now that the reserve behind the note issue is to be abolished, it is all the more important that particulars regarding the note issue should be published from time to time. Unless the amendment of the honorable member for Deakin (Mr. Hutchinson) is accepted, the Government will not be under any obligation to make such information available. Evidently, the Government wishes to obtain full control over the currency, and does not want to tell the public what it is doing.

Mr FADDEN:
Darling DownsLeader of the Australian Country party

– I cannot understand why the Government will not accept the amendment, unless its purpose is to keep the public in ignorance of what is happening to the note issue. Up to the present, statistics have been published regularly showing the proportion of notes held by the public and by the banks, and these figures have been included in the Budget each year in the form of an annexure. This has always been regarded by the Commonwealth Bank Board as a financial barometer. Now that the safeguard of a reserve behind the note issue is to be removed, the Government does not propose to let the public know the position of the note issue. The Government should have nothing to hide, and there is no reason why it should not accept the amendment, but trying to got the Government to accept an amendment is like trying to push an elephant up hill. However,we shall go on trying to defend the interests of the public.

Sir EARLE PAGE:
Cowper

.- The argument of the honorable member for Perth (Mr. Burke) falls to the ground because the whole structure of the Commonwealth Bank Act 1911-43 is being altered by this legislation, as is shown by the fact that many parts of that measure are being re-enacted. The Minister (Mr. Lazzarini) says that it has been the practice to publish statistics about the note issue, but there is no assurance that the practice will be followed in future.Control of the Commonwealth Bank will be in the hands of the Governor, and the Governor will be under the direction of the Treasurer. Now that there is to be no reserve behind the note issue, and no limit above which it shall not go, it is more than ever necessary that the public should be informed from time to time just what is going on. For many years past, these periodical analyses of the position of the note issue have been a feature of budget statements, and they show how and in what way the note issue has expanded since 1939. In that year, the public held notes to the value of £34,000,000, while the banks held notes to the value of £14,600,000. In 1944, the figures were £170,000,000 in the hands of the public, and £16,100,000 in the hands of the banks respectively. In practice, a large part of the holdings of the banks was in £1,000 notes. These did not circulate, and therefore did not represent part of the spending power of the community, nor did they affect the speed of currency circulation. By January, 1945, the value of notes held by the banks had increased from only £14,600,000 to £17,700,000, but the value of notes held by the public had increased from £34,000,000 , to £179,000,000. It is important that information of this kind should be available to the public, and its publication should not depend on the goodwill of the Treasurer of the day.

Mr ANTHONY:
Richmond

.- The refusal of the Government to accept this amendment makes one wonder what is the value of committee work in the Parliament. The purpose of the amendment is to provide for doing something which the Minister (Mr. Lazzarini) agrees ought to be done, yet for some reason not explained he refuses to accept the amendment. He says that these particulars about the note issue are already being published.Why then should he object to the amendment which merely places it beyond doubt that they shall continue to be published ? Now that there is no longer a fixed limit to the note issue, it becomes psychologically necessary that some assurance of stability should be given to the public, some means provided by which they may gauge the value of the currency.

Mr HUTCHINSON:
Deakin

– I ask the Minister to accept the amendment. If he cannot do so, only one interpretation can be placed on his action. He has told us that since 1921 it has been the practice of the Commonwealth Bank to publish the figures in the way that I have indicated they should he published. In that year, the Commonwealth Bank was under the control of a governor - a system of one-man control, to which the Government proposes to revert. Since 1924 the bank has been under the control of a board, but under both forms of control the central banking functions have at all times been paramount. Under this bill, the control of the Commonwealth Bank is to be completely altered ; the Governor will be told to go out after the business of the trading banks. In another measure which is to come before us there are provisions which, with those in this bill, will sound the death-knell of the private banks. Obviously, the Government wishes to conceal its intentions, but I have no- doubt that its policy will be one of increased inflation. So long as the published figures distinguish between notes held by the public and notes held by the banks, there will be an indication of the financial policy that is being followed. If the Government intends to follow the custom which has been in operation for many years it should embody a provision to that effect in the bill. If it does not do so, we must form our own conclusion as to its reasons.

Question put -

That the words proposed to be added (Mr. Hutchinson’s amendment) be so added.

The committee divided. (The Chairman- Mr. W. J. F. Riordan.)

AYES: 17

NOES: 30

Majority…… 13

AYES

NOES

Question so resolved in the negative.

Mr HARRISON:
Wentworth

– I should like an explanation of subclause 2, which reads -

In preparing any such statement, notes of a denomination not exceeding £1 which have been on issue for more than 20 years, and notes of a denomination exceeding £1 which have been on issue for more than 40 years, shall not be included.

That sub-clause may mean that the published figures would indicate a note issue smaller than it really is, because nothing will be known of the volume of the notes which will not be included. There cannot be two correct sets of figures setting out the total amount of the note issue. To my mind this is to cover the actual notes in circulation, but it seems to me that the points that I have raised may be well read into this clause, and I do not think that it should be allowed to pass without an explanation of the meaning of these involved terms.

Mr LAZZARINI:
Minister for Home Security and Minister for Works · Werriwa · ALP

– For the purposes of calculating the note issue reserve to be held in terms of section 109 of the existing act, notes of a denomination not exceeding £1 that have not been presented for payment within twenty years from the date of issue and notes of a denomination exceeding £1 that have not been presented for payment within 40 years from the date of issue are deemed to have been redeemed under section 109 (3). It is necessary for statistical purposes at least to put a limit upon the period of circulation of a note.

Clause agreed to.

Clauses 48 to 54 agreed to.

Clause 55 (Making, &c., of false forms).

Mr FADDEN:
Leader of the Australian Country party · Darling Downs

– This clause reads -

A person shall not, without the authority of the Bank,make or have in his possession -

any instrument or thing which may he used in making any form of any Australian note.

Penalty: Imprisonment for four years.

I consider that an example of loose drafting. Many instruments or things used for a legitimate purpose could come into that category. The instruments used in the lithography departments of newspapers might be so described. I think the Crown Law officers would agree that there should be some provision that such instruments or things should be knowingly held for illegal purposes before a person could be liable.

Mr SPENDER:
Warringah

– The Minister (Mr. Lazzarini) has made no attempt to answer the proposition made by the Leader of the Australian Country party (Mr. Fadden) that a person shall knowingly, without just excuse, have such things or instruments in his possession before rendering himself liable for the prescribed penalty. Is it the intention of the Government that a lithography department, which is used for legitimate purposes but could be used to make “ any form of any Australian note”, shall render the proprietors liable for the penalty unless they have first obtained the authority of the Commonwealth Bank to possess it.

Mr Lazzarini:

– Of course it is not.

Mr SPENDER:

– In those circumstances it is a matter, not of policy but of drafting. I shall be satisfied if the Miinister says that before this bill is read a third time this matter will be given consideration. I suggest that the clause be postponed to enable the Minister to consider it.

Mr LAZZARINI:
Minister for Home Security and Minister for Works · Werriwa · ALP

.- Clause 55 is taken wholly from the existing act.

Mr Fadden:

– That does not matter;it is still ambiguous.

Mr LAZZARINI:

– The honorable member for Warringah (Mr. Spender) is a lawyer and ought to know that no person can be convicted in an Australian court unless guilty intent is proved. At least I hope so.

Mr Spender:

– That is exactly what can be done.

Mr LAZZARINI:

– The clause is a repetition of the existing section of the Commonwealth Bank Act which has persisted through the years. The Leader of the Australian Country party (Mr. Fadden) is only hair-splitting. The Government will not amend the clause.

Clause agreed to.

Clauses 56 and 57 agreed to.

Clause 58 (Defacing, &c., of notes).

Mr ANTHONY:
Richmond

– This clause reads-

A person shall not -

design, make, issue or circulate any advertisement which is in the form of, resembles, or is apparently intended to resemble any Australian note or part of any Australian note.

Innumerable advertisements have used an Australian note in some form or other and I fail to see the reason for this provision. They cannot be regarded as counterfeit. They are merely reproductions of Australian notes in newspapers. If that is to be made an offence I should like to know why. Is it because we are ashamed of the Australian note and therefore cannot bear to see it reproduced, or is it because its prestige is so great that it calls for such respect that it cannot be used in an advertisement?

Mr Lazzarini:

– This clause is taken in its entirety from the existing act.

Clause agreed to.

Clauses 59 to 61 agreed to.

Clause 62 (Establishment of Department).

Sir EARLE PAGE:
Cowper

– The bulk of the clauses dealing with the Rural Credits Department are identical with the sections of the Commonwealth Bank Act 1911-1943 dealing with rural credits, but alterations have been made in others. The Minister (Mr. Lazzarini) should explain why these alterations have been made because, whatever can be said about other departments of the Commonwealth Bank, the Rural Credits Department has been one of the most successful in Australia. I understand that up to the outbreak of the war no less than £125,000,000 had been advanced by the Rural Credits Department, and that since the outbreak of war a total of more than £^00,000,000 has been advanced by the bank against, primary production. Therefore, there must be some reason for those alterations, but none has yet been given. The Treasurer (Mr. Chifley), in his secondreading speech did not give any reason for these alterations. I point out that at present, under the Commonwealth Bank (Rural Credits) Act the department may make advances to “ other banks “, whereas under this measure “ other banks “ are omitted from the bodies to whom the department may make advances. One complaint against the department has been that it has not used as fully as it might its opportunities to handle these particular advances by issuing short-term debentures, because these advances, which are made against primary produce in the course of being sold, aro the safest that can possibly be made. For instance, wheat is sold against delivery in London. A farmer wants to be paid immediately he delivers his wheat and under the existing arrangement he can obtain an advance and thereby obviate waiting until actual payment is made by the purchaser of his produce. That payment it collected by the bank. Under this measure, the department will not be able to effect such transactions through other banks as it is able to do at present. I can see no reason for this limitation, particularly when clause 66 provides that the department may make advances to “ such bodies, whether corporate or unincorporate, formed under the law of the Commonwealth or of a State or territory of the Commonwealth as are specified by proclamation “. As most trading banks are corporate bodies under State laws they could be brought within this provision by proclamation. Therefore, I fail to understand why they should be fir Earle Page eliminated under the measure itself because such a provision deprives the primary producer of the advantage of being able to obtain finance at the very low rate of interest provided. No explanation has been given why the words “ other banks “ have been deleted.

My second point is that the provision in the original rural credits legislation for the issue, if necessary, of debentures or trading bills has been eliminated. That provision enabled advances totalling from £16,000,000 to £20,000,000 to be made at a very cheap rate of interest. When I discussed this matter with some of the members of the Commonwealth Bank Board, I discovered that it was only recently that they had come to realize the extraordinary value of this provision in helping to provide an Australian market.

For instance, our wheat crop in any one year may be valued at from £25,000,000 to £30,000,000 The crop is harvested in from two to three months. The farmer desires to be paid as soon as he has harvested his crop because he has been waiting a long time for his money while the crop is growing. However, the crop may not be disposed of throughout the markets of the world until twelve months later. .In these circumstances, some system of finance must be provided to enable the farmer to be paid as soon as he has harvested his crop. That is one aspect of the matter. On the other hand, organizations such as the Sydney City Council or the Melbourne City Council collect the whole of their rates practically within one month, but spread the expenditure of that revenue over a period of twelve months. We should utilize an institution like the Commonwealth Bank to provide a link between the producer who requires ready finance, to pay for his crop, and. organizations such as I have mentioned, who have surplus funds to invest. Such a system . would promote orderly marketing of primary produce and, at the same time, enable such organizations to invest surplus funds. This facility is to be eliminated under the measure, and it is not being deleted because it has proved useless. I believe that it is being deleted simply because the original provision used the word “debenture”. I recall a debate in this Parliament about three or four years ago when, to the amazement of members of the Labour party they discovered that the original authors of the Commonwealth Bank Bill used the word “ debenture “ in the original act. To-day, however, members of the Labour party are frightened of that word and through sheer fear have eliminated it in. the way I have indicated.

I was also hoping that the Rural Credits Development Fund, derived from the profits of the department, would be applied not merely by the Rural Credits Department, but that that body would be empowered to call into consultation the Department of Commerce and Agriculture in order that the fund, which amounts to from £30,000 to £40,000 a year, might be used to the greatest advantage to stimulate research in urgent matters of concern to primary industry, the need for which is pronounced at present.

Clause agreed to.

Clause 63 agreed to.

Clause 64 (Loans by Treasurer).

Mi-. ABBOTT (New England) [10.30]. - I assume that the rate of interest which will be charged by the Rural Credits Department will be approximately the same as it is to-day, namely, 3$ per cent. I do not know whether honorable members realize that the rate of interest is extremely high for firstclass self-liquidating securities such as primary products that are moving towards their ultimate markets of consumption. The trading banks, which have been maligned in this chamber during this discussion as grasping organizations that always seize everything they can for their own selfish interests and let their customers down, charge for this kind of advance a rate of interest of 1 per cent, or less per annum for 90 days’ accommodation on shipments of goods overseas. “Within 48 hour3 of wool being put into the ships’ holds at Newcastle or Sydney, before the war, bills of lading were discounted by the trading banks, and an advance paid into the customers account at a rate of interest, on Bank of England discount rates, of 1 per cent, or less per annum for 90 days’ accommodation. [Ml

This clause will impose a high rate of interest on that class of accommodation.

The CHAIRMAN:

– Order ! This clause does not mention interest rates.

Mr ABBOTT:

– The clause reads-

The Treasurer may, from time to time, out of moneys legally available, lend to the Bank, for the purpose of the Rural Credits Department, such amounts, and subject to such terms and conditions as are agreed upon between the Treasurer and the Bank, but the total of the sums so lent and not repaid shall not at any time exceed Three milium pounds.

If the Treasurer borrows money on long terms from the Commonwealth Bank at high rates of. interest he will not be able to lend it at the shortterm rates that the Bank of England does on the rediscount rate. The Commonwealth Bank might well consider, in connexion with the Rural Credits Department, establishing a bill market on the lines of the bill market operated by the Bank of England for the handling and financing of primary products in Australia on first-class paper. The Commonwealth Bank should be prepared to discount that first-class paper at the same rate as the Bank of England will discount it overseas. Private enterprise is not popular with the Government, but when it shows the way in which, to assist primary producers with extremely low rates of interest, the Government should not be so pig-headed as to refuse to follow its example.

Mr ADERMANN:
Maranoa

– I have been very interested in the Rural Credits Department of the Commonwealth Bank, and in my secondreading speech I eulogized its work, in assisting primary producers and cooperative organizations. Since the establishment of the department, primary producers, through organized industries, have been able to obtain, to my knowledge, the lowest rate of interest operating in Australia. I was interested to hear the contention of the honorable member for New England (Mr. Abbott) in reference to accommodation from another source for 90 days, at the rate of 1 per cent, per annum, but that term would not be sufficient. Under the Rural Credits Department, as we shall see in another clause, advances are made for one year only. However, an interest rate of 3^ per cent, is still somewhat high. After all, the primary producers have to wait for payment for their crops during the period of growth, and until realization. Sometimes twelve months elapse before the final payments are made. Payments up to a maximum of 80 per cent, of the value of the produce are made as a first advance, and from, that amount is deducted the estimated expenses of the crop. Therefore, in effect, the growers at first receive about 50 per cent, of the net return ‘from their crops, and. on the balance they have to pay interest from their own income. I suggest to the Government, in all seriousness, that the interest rate, when fixed by the Commonwealth Bank, should be only a nominal amount and not necessarily one that would make large profits.

Clause agreed to.

Clause 65 (Advances to Department by Bank).

Mr HARRISON:
Wentworth

– This clause is another example of the kind of matter about which members of the Opposition have complained in their second-reading speeches and in committee. The Government has stated repeatedly that various clauses of the bill have been taken from the existing act, and has suggested that the committee should accept them without criticism or amendment. This clause, which has been taken from the existing act, reads -

The bank may make advances to the Sural Credits- Department of such amounts, and subject to such terms and conditions, as the Governor determines.

I detect a vital difference between the clause in this bill and the comparable section of the act. Under the existing act, control by the Commonwealth Bank Board, an independent body, guarantees that political interference shall not be exercised in connexion with the Rural Credits Department. But when this clause becomes operative, the Governor of the bank will be under the direction of the Treasurer of the day, and the guarantee against the exercise of political interference will not operate. This provision re-opens the whole subject of political interference. On the surface the clause may be all that it purports to be, but the fact remains that, as long as the Rural Credits Department is likely to be sub ject to political interference, some safeguard should be inserted in the bill for the purpose of removing that danger.

I also direct attention to the words “ such amounts, and subject to such terms and conditions, as the Governor determines “. I ask : “ What amounts, and how much? “ The amount that may be determined by a particular Treasurer for the necessary development of rural industries, may well interfere with the central banking fund, and destroy one of its functions. The central banking fund will be held for the purpose of meeting a possible crisis in the banking system, and if such amounts that may be determined are not specified, the central banking funds may be seriously interfered with. This clause has possibilities entirely different from those of the section of the existing act. Independent control of banking has been removed by vesting full powers in the Treasurer of the day, through the Governor of the bank, and a safeguard should be included in the bill against political interference.

Clause agreed to.

Clause 66 (Advances by Department).

Mr ADERMANN:
Maranoa

– This clause is self-explanatory, but I should like some information in regard to the financial accommodation that is to be made available to organizations such as co-operative marketing boards which desire to enter the realm of manufacture. Probably these organizations will be provided for by the Industrial Finance Department, but I should like to know where ,the line of demarcation is to be drawn. Some marketing boards which to-day are engaged solely in marketing activities may wish to engage in secondary production. Butter factories, of course, may be regarded as being in that category now, and they are provided for under the rural credit portion of this legislation. Expansion of the activities of co-operative marketing boards may be most desirable, and provision should be made for financial accommodation.

Mr LAZZARINI:
Minister for Home Security and Minister for Works · Werriwa · ALP

.- Speaking off-hand, I should say that the organizations to which the honorable member refers are more likely to come within the scope of the Industrial Finance Department. I shall ask the Treasurer (Mr. Chifley) to examine the matter.

Mr. ABBOTT (New England) [10.43 J. - The point that has been raised by the honorable member for Maranoa (Mr. Adermann) is one of great importance. I believe that the Government could overcome the difficulty envisaged by the honorable member by adding the words “ and products “ to each item in the second schedule. For instance the word “ wool “ would be followed by the words “ and wool products “. According to the bill products such as scoured wool, carbonized wool or woollen yarns would not be covered at all.

Mr Menzies:

– The addition of the words “ and metal products “ would create some difficulty.

Mr ABBOTT:

– No. Metals are primary products, but they are also partially manufactured products. It would not be possible to go through the whole list of metal-manufactured products, although in bill marketing overseas that, in effect, is what is done. Timber cut in the forests of Sweden is covered by bill marketing until it goes through the joinery mills in Great Britain.

Mr MENZIES:
Leader of the Opposition · Kooyong

– I had hoped that when the Minister (Mr. Lazzarini) spoke he would have said something about the point referred to by the right honorable member for Cowper (Sir Earle Page) - a point which I had in mind to raise on clause 6’6. If honorable members will examine section 138 of the existing Commonwealth Bank Act they will see that advances may be made by the Rural Credits Department, upon the security of primary produce placed under the legal control of the bank, to the bank or other banks, co-operative associations. Aic.; and such corporations or lin incorporate bodies as are specified by proclamation. Under clause 66, which to some degree is modelled on the existing provision, all reference to “ the bank “ or “ other banks “ has been omitted. I can understand quite clearly the reason for omitting the reference to “ the bank “, because under clause 66, it is the bank that is making the advances.; but I cannot understand the omission of the reference to “ other banks “. Has the Government decided as a matter of policy that the organizations of the other banks are not to be available as instru-ments that can be used by the Rural Credits Department? They can be used under the existing law, but not under thislegislation. I did think for a moment that somebody had reached the conclusion that there was no occasion to refer to the other banks because they would come under sub-paragraph b, and be bodies corporate, but, of course, that will not do, because under that sub-paragraph certain of the banks would be included, and others would not. For example the National Bank of Australia Limited, has a Victorian incorporation. Therefore it could be proclaimed under sub-paragraph b; but the Bank of Australasia has an English incorporation, as has the Union Bank, and therefore neither of these could be proclaimed. I draw the attention of the Treasurer (Mr. Chifley) to the fact that the reconstruction of the existing section omits - evidently deliberately and with some point - “the banks “ from the description of the bodies to whom advances may be made under the rural credits scheme. I raise the matter merely in an inquisitive way. There may be a good reason for this action, but if so, it is one that should be placed clearly before the committee by the Minister.

Mr ARCHIE CAMERON:
Barker · ALP

– There are many things which have been overlooked in the Second Schedule. Canary seed, is mentioned specifically, yet it is definitely a grain, provision for which is made further on. Also, I cannot find any reference to grass seeds, the collection of which is a very important industry in many parts of Australia. These cannot be called grain in any circumstances. Take, for instance, clover and. rye grass seed, to mention only two. Some clover seed is not even grain in the ordinary sense of the word. We have only to look at two or three varieties to see that. Then there is sunflower seed. I? that a grain or not? The collection of sunflower seed is becoming an increasingly important industry in certain parts of Australia. Liquorice, which is grown in some parts of South Australia, is not included, whereas chicory is.

Mr Abbott:

– What about rubber?

Mr ARCHIE CAMERON:

– Rubber is not included. Certain plants for the production of drugs are being grown only as the result of this war, but the cultivation of them may assume important dimensions before long. They are grown under supervision in parts of Victoria, chiefly in the Flinders electorate.

An important distinction is drawn between fish, and meat and milk. The reference to fish is “ either canned or preserved “, whereas the other references are “ meat and meat products “, and “ milk and milk products “. I speak from personal knowledge when I say that theDirectorate of War Organization of Industry is investigating at present in my electorate the future of the shark fishing industry. Shark flesh will not be either canned or preserved. The shark skin will be used in the manufacture of leather, the livers in the manufacture of certain drugs which are badly needed at present for war purposes, and the bones, hides and flesh in the manufacture of manures.

Mr Spender:

– “Would not that come under the Industrial Finance Department?

Mr ARCHIE CAMERON:

– I doubt very much whether it would, on account of its being purely a fishing industry. A portion of the shark will be used in works on the spot, but the livers will have to be sent to Melbourne.

I do not know exactly what the Government means by the term “ metals “. Does it include radium? That is not a metal, but it is precious. Does it include such things as rutile and zircon? Zircon is not a metal, but it is a mineral of some sort and certainly is precious. I have seen crystals of it as big as my first. Feldspar is being mined in certain places, and out of it false teeth are made. Does the term “metals” include feldspar? A gem in the rough state that is very much sought after to-day is beryl, out of which the important mineral beryllium, used in the manufacture of very light alloys for aircraft production, is made. Is beryllium included? The Treasurer (Mr. Chifley) has heard a good deal from me in the last twelve months about mica, and wrote to me to-day concerning it. I do not think that it can be classed as a metal.

Mr Haylen:

– What is it?

Mr ARCHIE CAMERON:

– Not being an encyclopaedia, I cannot say. I know that in many cases it is transparent, and in some cases is green. It certainly is fairly precious. I saw some in a government depot in Melbourne which I inspected recently, priced at no less than £15 per lb., which is practically £1 per oz. It must be considered fairly precious. But I do not know whether it is a metal, and this bill does not enlighten me.

In some States, there is a gem industry. Do gems come under the classification of “metals”? The more I look at the schedule, the more firmly convinced I become that very little attention has been paid to its preparation. I have not completed my dissection of it.

Mr CHIFLEY:
Acting Prime Minister and Treasurer · Macquarie · ALP

– The impression seems to be growing in the minds ofl the Opposition that the Government is seeking to restrain the Commonwealth Bank. The earlier impression was that the attempt was being made to expand it too widely.

The Parliamentary Draftsman and the bank authorities are confident that the definition of “ primary produce “ in clause 5 covers not only the primary produce mentioned in the second schedule but also such other primary produce as is prescribed. I understand that from time to time in the history of the bank goods associated with the production of primary produce have been prescribed.

The honorable member for Barker (Mr. Archie Cameron) is always propounding conundrums for the Government to answer. I should imagine that the metals mentioned by him are covered.

In regard to the point raised by the Leader of the Opposition (Mr. Menzies) it is possible that the Government had in mind that these facilities should not be utilized by other banks. The right honorable gentleman has rather a suspicious mind, and rather suggested that.

Mr Menzies:

– The Treasurer seems to confirm it.

Mr CHIFLEY:

– I cannot remember all the details, but I imagine that that consideration may have had some influence on the clause being drafted in its present form. It. has not been the practice for advances of the character mentioned by the right honorable gentleman to be made. Those two considerations combined would certainly tilt the scales in favour of the exclusion to which he has referred. I am not able to make a more precise explanation.

Mr ADERMANN:
Maranoa

– I should like to have the assurance that secondary industries pertaining to primary produce are definitely covered by either the Rural Credits Department or the Industrial Finance Department.

Mr Chifley:

– I shall not attempt to answer the honorable member fully, but I shall have the point noted.

Mr ADERMANN:

– Orderly marketing needs to expand, and its expansion would be in the interests of primary production.

Clause agreed to.

Progress reported.

page 2893

ADJOURNMENT

Housing: Alice Springs - Volunteer Defence Corps - LethalWeapons.

Motion (by Mr. Chifley) proposed -

That the House do now adjourn.

Mr LAZZARINI:
Minister for Home Security and Minister for Works · Werriwa · ALP

.- On the 27th April the honorable member for Barker (Mr. Archie Cameron) stated in the House that my department was attempting to turn a widower and his three children out of their home at Alice Springs. That is not correct. The children of the officer concerned are not at Alice Springs and are not living with their father. They returned to Adelaide approximately last November with the officer’s mother. After the departure of the children, the officer took another officer to share the house, and they have continued to occupy it. The housing shortage at Alice Springs is very acute, and it is not considered desirable that a house should be occupied by men who have not their families living with them, particularly when there are other families waiting accommodation. As this officer has sent his children to Adelaide, where they are living with his mother, it is rightly considered by my department that he should live at the men’s hostel at Alice Springs, and allow his house to be occupied by another man who has a wife and family.

Mr ARCHIE CAMERON:
Barker · ALP

– I am pleased to hear the remarks of the Minister for Works (Mr. Lazzarini). This man’s wife died a couple of years ago, and as he was unable to get anybody at Alice Springs to look after his children he was forced to send them to Adelaide. I have a copy of a letter which he addressed to me on the 22nd May, in which he said that he had arranged to be married on the 9th June. This fact is known to the authorities at Alice Springs. He desired them to bring his children back on his second marriage, but, notwithstanding that fact, and my protest in the House, he has been turned out of his home.

Mr Lazzarini:

– No; he is still in the house.

Mr ARCHIE CAMERON:

– Then I should like the Minister to reconsider the matter, in view of a letter received from the Department of Works at Alice Springs. I advised this man by telegram to remain in the house. I could mention other cases in which men. have been informed that they must vacate their premises in order to make way for senior men. This Government claims to be the chosen representative of the proletariat, but its policy seems to favour the “ tail poppies”. In a letter signed “W. H. Coop, for the Director-General of Works, Department of Works”, the following appears : -

I refer to your request of this morning that you should receive some written indication that it is not proposed to proceed with the notice given to you on the 18th April last, which required you to vacate by the 18th May the governmental cottage at present occupied by you. It would appear that you misunderstood the correct position. The notice already served on you stands and it is still the desire of the Deputy DirectorGeneral that the cottage be vacated.

However, as you or some one on your behalf has seen fit to place the facts before the Minister for Works, it is my duty to inform you that until receipt of instructions from the Minister, no further action will be taken by the Deputy Director-General in connexion with the tenancy of the cottage.

It is nearly time the Curtin Government examined its eviction policy, otherwise it will assemble at a Cabinet meeting one of these days and will read on the door a notice to this effect, “ Evictions at the shortest notice and carried out in the most haphazard way”. This is a case in which the tenant has shown what he is prepared to do, but another man who is senior to him wants his house. If there is one place in the Territory which has buildings to burn it is Alice Springs.

Mr Lazzarini:

– That is nonsense.

Mr ARCHIE CAMERON:

– I have been there and have seen them. I know of certain other orders that were cancelled. Protests were made against people having to vacate their houses in order to make way for senior officers. When through the loss of his wife, a man has been forced to send bis children away, but is now prepared to bring them back, the least that should be done is to enable him to retain possession of his home. If this man does not get. the deal to which I think he is entitled I shall have occasion to refer to it, again.

Mr HAYLEN:
Parkes

.- Something should be done to recognize the services of the forgotten men of this war, the members of the Volunteer Defence Corps. During the dark and early days of the war, the. Volunteer Defence Corps was our first line of defence. It was composed mostly of men of middle ago and young men who were unfit for strenuous military service. The members of the corps prepared for action round the coastline of Australia, and did very good work without much publicity. They were mostly employed in essential industries, or in jobs of an important nature. Their training involved leaving their jobs on Friday evenings and spending their week-ends relieving garrisons on the coast, and returning to their normal duties on Monday mornings. The people were consoled by their presence during the early period of the Japanese thrust southwards, but as the war effort increased in volume, the importance of the Volunteer Defence Corps diminished. Yet the people owe their home guard the same measure of appreciation as the Government of Great Britain has decided to give to the home guard in the Old Country. A service ribbon should be awarded to the Volunteer Defence Corps for its efforts in the war. Here is an opportunity for this Parliament to reassert its Australianism, and do something for the men who were prepared to defend the mainland of Australia. J suggest that a Southern Cross star could be provided in recognition of services rendered on the mainland. A wards in the past have been conditioned by British awards, but surely it would be competent for the Commonwealth Government to provide an award for those who defended the mainland, and who were prepared to undertake the last ditch fighting if the war actually came to this country. Veterans of the last war, and others who were not called up, formed the Volunteer Defence Corps whose training was comparable with some of the toughest jungle training that is given to Australian troops to-day. Members of the corps were submitted to a gruelling test, because it was not known in those days whether they would not have to face the enemy on our own shores. To adapt the phrase of Mr. Churchill, they might have had to face the enemy on the beaches and in the streets of Australia. Now we have forgotten these men. It would be a gracious thing for the Commonwealth to provide some specific decoration to commemorate their services. I commend the suggestion to the Minister for consideration in the right quarter.

Mr ANTHONY:
Richmond

– The Minister for Munitions (Mr. Makin), when replying to a question this morning, flagrantly misrepresented what I had said on Friday afternoon last. This is what I said, as recorded in Hansard -

Although the Minister stated that such weapons in the hands of the police in Sydney had been examined, he had not yet satisfied himself that they were of Army issue. He mentioned only four weapons. In th.e press to-day, there is a report by a high police officer that there are 24 sub-machine guns in the hands of the police. I do not know the types of these weapons, but it is evident that they are from Army sources, munitions factories, or some other government source.

I repeat that these weapons must lie coming from the Army authorities, munitions factories, or from some other government source. They are not privately manufactured weapons so far as we know. They have been manufactured for the Army. Every weapon so produced bears a serial number, and it should not be a difficult task to trace the channels through which the weapons now in the hands of the police have passed.

The Minister for Munitions completely avoided my point that it was possible to trace these weapons by the serial numbers. I do not know whether he is a protector of the underworld, but no effort has been made to put into effect the suggestion I made.

Mr Ward:

– The honorable member said that the weapons came from Lithgow.

Mr ANTHONY:

– I did not. I produced the Hansard record of what I did say, and this shows that, far from it being I who made false statements, it is the Minister who has been making lying statements in this chamber, statements in which he has distorted what was said by honorable members on this side of the House in order to serve his own ends. The Minister made a scurrilous attack on me based on a lie. It is possible to find out where the weapons were obtained. Some of them, I presume, were used for illegal purposes against citizens. If they are of Australian manufacture it can be discovered where they came from. There is a serial number on each machine gun, sub-machine gun, rifle and pistol by which it is possible to trace where the weapon came from, and even the very man to whom it was issued. By co-operation between the Department of the Army, the Department of Munitions and the police it should be possible to curb this growing danger. I strongly resent the distortion of my statement by the Minister, whose duty it should be to uphold the law and to assist the police to trace criminals, instead of trying to shield them.

Question resolved in the affirmative.

page 2895

PAPERS

The following papers were pre sented : -

Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. - 1945 -

No. 31 - Commonwealth Public Service Clerical Association.

No. 32 - Professional Officers’ Association. Commonwealth Public Service.

Customs Act - Customs Proclamations - Nos. 626.627.

Defence Act -Regulations - Statutory Rules 1945, Nos.68 (substitute copy), 81.

Income Tax Assessment Act - Regulations - Statutory Rules 1945, No. 85.

National Security Act-

National Security (General) Regulations -Orders - Taking possession of land, &c. (24).

National Security (Internment Camps) Regulations - Order - Internment camp (No. 11 ).

National Security (Prisoners of War) Regulations - Order - Prisoners of war camp (No. 14).

Regulations - Statutory Rules 1945, Nos. 80, 82, 83, 84.

House adjourned at 11.15 p.m.

page 2895

ANSWERS TO QUESTIONS

The following answersto questionswere circulated : -

Wheat and Oats.

Mr Scully:
ALP

– The answers to the honorable member’s questions are as follows : -

  1. Yes.
  2. Yes.
  3. Seed oats are in very short supply because of the drought. I do not object to farmers making a profit from supplying seed which is badly needed, and using wheat for feed in its place. In fact, I would be glad if enough seed oats came in to supply the needs of the honorable member’s State.
  4. The action suggested is not necessary.

Sulpha Drug Tablets

Mr Francis:

s asked the Minister repre senting the Minister for Trade and Customs, upon notice -

  1. Has his attention been drawn to a statement in a recent issue of a Sydney weekly newspaper that “ with the full approval of the Prices Commissioner, some chemists are making a big profit out of the sale of sulpha drug tablets”?
  2. If so, is it a fact, as claimed, that the retail price ofsulphadiazine tablets is 36s. per 100 and of sulphaguanidine tablets 32s.6d. per 100?
  3. Is it a fact that some chemists are selling these tablets in lots of 25 for11s. 9d. and 14s. 3d., respectively, which equals 47s. and 57s. per 100?
  4. Does the Prices Commissioner exercise any control over the sale of these tablets in quantities of less than 100?
  5. If not, will the Minister ensure that action is taken to fix a price for these tablets at so much each or in such a way that persons purchasing less than 100 will not be called upon to pay a price higher than that fixed for 100?
Mr Beasley:
ALP

– The Minister for Trade and Customs has supplied the following answers : -

  1. Yes.
  2. The price varies with different manufacturers. The approved retail prices per 100 for sulphadiazine are 35s. 9d. and 36s. and for sulphaguanidine tablets 32s. 6d. and 33s. 3d. per 100.
  3. Yes.
  4. Yes.
  5. The additional charge for smaller quantities is at a rate approved by the Prices Commissioner and is in accordance with established practice by which charges for small quantities are higher than charges for larger quantities.

Pharmaceutical Benefits Act

Mr Fadden:

n asked the Minister repre senting the Minister for Health, upon notice -

  1. Isit the Government’s intention that the Pharmaceutical Benefits Act shall take effect from the 1st July?
  2. Does the Government intend to amend the act during the current sittings of Parliament ?
  3. Has the Commonwealth pharmaceutical formulary been completed?
  4. If so, when will copies be made available?
  5. What is the average drug cost of the prescriptions in the formulary, excluding penicillin, the sulpha drugs and insulin?
  6. What will be the average price per prescription paid by the Commonwealth to the chemist or dispensary?
  7. What percentage of the wholesale cost of drugs dispensed does the Government intend to allow to the chemist or dispensary?
  8. Is it a fact that the Prices Commissioner now authorizes chemists to add 50 per cent. to the wholesale cost price of tablets and pills dispensed?
  9. In costing a prescription, will the Treasury pricing officers assume that 1 lb. is the equivalent of 12 oz., or how many ounces will be regarded as being the equivalent of 1 lb.?
  10. In arriving at the price of each drug for use in dispensing, will the following factors be taken into consideration before passing on the “mark up” to the wholesale price: - (a) sales tax (where applicable) ; (b) wastage; (c) turnover; (d) viscosity; (e) evaporation; (f) deterioration; and (g) specific gravity?
  11. Is it a fact that the Prices Commissioner now authorizes chemists to add 45 per cent. to the wholesale price of “wet” and “dry” drugs in costing a prescription and that 1 lb. is regarded as being the equivalent of 12 oz. ?
Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936

– The Minister for Health has supplied the following answers : -

  1. As most of the technical officers appointed to administer the act have not yet taken up their appointments, owing to the fact that it has not yet been possible to arrange for their release from the defence forces, some delay in the anticipated date of commencement seems inevitable.
  2. Yes.
  3. Yes.
  4. This month.
  5. This information is not yet available, as the work of pricing the formulary has not yet been completed.
  6. See 5.
  7. The percentage varies.
  8. Yes.
  9. No. 10. (a) yes; (b) yes; (c) yes; (d) yes: (e) yes; (f) yes;(g) yes.
  10. No, the percentage varies. One lb. is regarded as being equivalent to 12 oz.
Mr Fadden:

n asked the Minister representing the Minister for Health, upon notice -

  1. Is it a fact that under the Pharmaceutical Benefits Act, what are known as “ closed “ friendly societies’ dispensaries, both in Victoria and Western Australia, will not be eligible to dispense pharmaceutical benefits for their own members or the general public, unless the law in such States is amended to provide open trading rights for such dispensaries?
  2. During negotiations between the Government and the Federated Pharmaceutical Service Guild of Australia, did the chemists’ representatives inform the Treasurer that chemists would not co-operate with the Government in implementing the scheme of free medicine if the Government requested the States to alter their laws to provide such open trading rights?
  3. Did the Treasurer promise the chemists’ representatives that the Government would not approach the State governments to amend their laws to give the open trading rights?
  4. Did the Government approach the States with the result that the law in Tasmania and New South Wales has already been amended?
  5. Has a communication been received from the Federated Pharmaceutical Service Guild wherein the chemists’ representatives complain that the Government has committed a breach of faith?
  6. Has the guild agreed to recommend its members to dispose pharmaceutical benefits on the terms and conditions proposed by the Government?
  7. If so, what date did the chemists’ representatives give such undertaking?
  8. Did the Federal Council of the British Medical Association at a recent meeting reaffirm its opposition to the act and has it recommended its members not to co-operate with the Government in any way in implementing the act?
  9. Is it a fact that few, if any,prescription proprietaries extensively prescribed to-day are included in the formulary, with the result that patients will have to pay the chemists or dispensaries ordinary prices for these, thereby gaining no benefit from the act?
  10. Will he table the correspondence between the Government and the British Medical Association and the correspondence between the Government and the Federated Pharmaceutical Service Guild of Australia?
Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936

– The Minister for Health has supplied the following answers : -

  1. The Government is of the opinion that unless the law in the States mentioned is amended, “ closed “ friendly societies’ dispensaries can dispense for their members only.
  2. No. The Government informed the Federated Pharmaceutical Service Guild that it was desirable that all existing agencies for the distribution of pharmaceutical benefits should be maintained and to that end it would ask State authorities to amend their legislation where necessary to allow friendly societies’ dispensaries to provide pharmaeutical benefits under the act.
  3. No. See 2.
  4. Yes.
  5. No.
  6. Yes.
  7. 22nd January. 1944.
  8. Yes.
  9. No.
  10. As the Government is still negotiating with the British Medical Association and the guild, the Government is not prepared to table the correspondence.

Arbitration Court: Employment or Women; Alleged Ministerial Interference with Judiciary.

Mr Beasley:
ALP

y. - On the 24th May, the honorable member for Fawkner (Mr. Holt) drew my attention to a short paragraph in the Century of the 10th May regarding a statement alleged to have been made by the Minister for Labour and National Service at an Australasian Council of Trade Unions conference, and asked whether I was aware of any action being instituted by the court against that newspaper. I then informed the honorable member that the Solicitor-General might forward the article to the court and, if the court decided to take action, the Attorney-General’s Department would make available legal aid.

I am now in a position to inform the honorable member that, as the Century is published on Friday of each week, and the conference was held on the 12th and 13th May, there was no issue of the paper on the 10th May, and, if there was, no report of a conference which had not taken place could possibly have appeared therein. A report of the conference, however, appeared in the Century of the 18th May and, on the assumption that this was the article referred to by the honorable member, the Solicitor-General forwarded it to the Industrial Registrar for consideration of the Arbitration Court. Advice has now been received from the Industrial Registrar that the judges of the court do not consider that it is a case in which the court should act ex mero motu or a case which calls for the summary power of the court to prosecute for contempt. In the view of the judges the article falls far short of the publications for which the proprietor and editor of the Sydney Morning Herald were fined £500 and £.1.15, respectively, with costs.

Prices Control: Artificial Teeth.

Mr Beasley:
ALP

y. - On the 5th June, the honorable member for Cook (Mr. Sheehan) asked me whether artificial teeth could be included in Prices Orders.

I desire to inform the honorable member that artificial teeth, in common with almost all other commodities, are subject to price control. If the honorable member can provide me with any information concerning charges which are considered to be excessive an immediate inquiry will be made.

Com mon wealth Disposals Commission.

Mr Beasley:
ALP

– On the 7th June, the honorable member for Barker (Mr. Archie Cameron) asked me whether arrangements could he made for the Commonwealth Disposals Commission to sell surplus stores at present located in the Northern Territory direct to residents of the Territory. I referred the honorable member’s representations to the Minister for Supply and Shipping, who has supplied the following information: -

It is the policy of the Disposals Commission to sell goods declared surplus in the Northern Territory direct to residents of the Territory if there is a local demand for the goods. The Commission has a representative, Mr. W. Hughes, at Alice Springs, who has full authority to sell direct to residents any surplus stocks in the Northern Territory, and sales are proceeding. Any person in the Territory who is interested in making a purchase should contact Mr. Hughes. The commission has no authority to sell any stores until they have been declared surplus by the holding department.

The deputy Chairman and general manager will he visiting the Northern Territory within the next two or three weeks, and’ will be pleased to discuss local problems with any residents of the Territory.

Fodder: Dairying and Poultry Industries

Mr Mountjoy:
SWAN, WESTERN AUSTRALIA

y asked the Minister for Commerce and Agriculture, upon notice -

  1. Has his attention been drawn to a statement by Mr. A. W. Crooks, secretary, Whole Milk Producers Association of Perth, in a Western Australian newspaper of the 4th June, suggesting that crushed wheat is being made available to dairymen instead of brail and pollard ?
  2. Is the provision of crushed wheat instead of bran andpollard designed to provide greater supplies of feed for the dairying and poultry industries?
  3. if so, can he outline the Government’s policy for the information of Western Australian dairymen and poultry men?
Mr Scully:
ALP

– Theanswers to the honorable member’s questions are as follows : -

  1. Yes.
  2. Additional wheat is being supplied to offset the reduction in mill offals.
  3. The present basis of milling reduces the quantity of bran and pollard available for feed. Extra wheat lias been made available so that the quantity of concentrated feed is not reduced.

Couponrating for Woollen Goods

Mr Guy:

y asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. Are rayon goods now being made available to thepublic coupon-free, while woollen goods arc still subject to coupon values?
  2. If so, is this action in the best interests of the woollen industry of- Australia?
  3. Will the Government consider the request recently submitted to it for the removalof woolen goods from coupon values?
Mr Beasley:
ALP

– The Minister for Trade and Customs has supplied the following answers : -

  1. No, with the exception temporarily of women’s circular rayon hose which is’ in’ over-supply.
  2. The preference of women for rayon instead of woollen stockings is not on account of coupons.
  3. Yes, when the production of woollen textiles and the factory production of garments justify such a course.

Port Kembla : May Day Holiday

Mr Abbott:

t asked the Acting AttorneyGeneral, upon notice-

  1. Is it a fact that, immediately after the taking of the May Day holiday by certain employees in the heavy industries at Port

Kembla,officersoftheCommonwealthin- vestigationBranchvisitedtheindustriescon- cernedwiththeobjectofobtainingnamesof men against whom prosecutions might be launched for an illegal stoppage of work?

  1. If so,onwhose instructions were these officers sent to PortKembla?
  2. Is ita fact that names and evidence were obtained and that approximately 100 prosecutions were recommended by the officers of the Commonwealth Investigation Branch ?
  3. Is it a fact that no prosecutionshave taken place ?
  4. If so, were instructions issued that no prosecutions were to be made, and, if so, what Ministerwas responsible for such instructions?
Mr Beasley:
ALP

– The answers to the honorable member’s questions are as follows: - 1 and 2. I refer the honorable member to the answer given by me to him on 7th June in reply to a question without notice. V have nothing to add to the answer then given 3 and 4. Following the usual practice, the Investigation officers reported the facts surrounding the stoppage and mentioned certain names but they did not recommend any prosecutions.

  1. Instructions were issued by the Minister for Labour and National Service thatno prosecutions were to be instituted. royalaustralianairforce:air-crew Training.
Mr Harrison:

n asked the Minister for Air,uponnotice-

  1. How many airmen have completed initial training school instruction and are awaiting acceptance into flying training schools?
  2. What is the longest period of time men inthis “ off course “ classification have been awaiting flying instruction?
  3. Is it intended they will all be accepted for flying training?Ifnot,whatactionisbeing taken to transfer them to more urgent employment?

Mr.Drakeford.-The answers to the honorable member’s questions are as follows:-

  1. Eight months’, during which period they have been gainfully employed on temporary ground duties.
  2. Mainly in view of the large numbers of fully trained Royal Australian Air Force aircrew personnel now becoming available from overseas for service in theSouth-West Pacific Area as the result of termination of hostilities in the European and Middle East theatres of war, the Government has decided to terminate basic air-crew training in Australia;further, that those undergoing such training be given the option of remuster to ground staff in musterings inwhich there are vacancies or releaseto civil life.

Cite as: Australia, House of Representatives, Debates, 12 June 1945, viewed 22 October 2017, <http://historichansard.net/hofreps/1945/19450612_reps_17_182/>.