19th Parliament · 1st Session
Mr. Speaker (Hon. Archie Cameron) took the chair at 2.30 p.m., and read prayers.
– Has the Prime Minister seen the statement by one of the political commentators in the Sydney press that during re-organization of the Department of Information in which Radio Australia was involved, one of the wave lengths was abandoned? According to the newspaper report that wave length has been taken up by Soviet Russia for propaganda purposes in SouthEast Asia against America particularly, and, indeed, the British Commonwealth. If that is a fact, will the right honorable gentleman say why that wave length was abandoned? Is it not dangerous to increase the propaganda power of the Soviet in South-East Asia at the present time ?
– I have not seen the paragraph to which the honorable member has referred, nor had I heard that suggestion made, but I shall have the matter examined, and shall confer with my relevant colleague so as to ascertain the position, and what may he done about it.
– Have you, Mr. Speaker, seen reports to the effect that to-morrow a Communist-sponsored deputation is likely to be present in Canberra for the purpose, inter alia, of disrupting the proceedings of this House? In view of the close personal and other links that exist between certain Communists and certain members of the Australian Labour party, is there any means available to you to prevent–
– I rise to order. The question is obviously out of order. It is just a propaganda question which attacks the Labour party. There is no justification for the charge that the honorable member has made in his frivolous observation. I am concerned about it not only as a member of the Labour party, but also because I do not like to see you embarrassed as well, Mr. Speaker.
– I think that the question is in order up to the present. The honorable member for Melbourne need not worry about embarrassing me.
– I rise to order also. It appears to me that the question contains not only a statement which gives information but also a very clear imputation.
– What is the imputation ?
– The honorable member for Mackellar might be in order if he were making a statement that could be discussed in the House,but I submit that,as a question, his statement is out of order. The imputation is that Communists have some connexion with members of the Labour party.
– That is a statement of fact.
– The Minister may consider it to be a statement of fact, but, as a question, it clearly is out of order.
– I shall hear the honorable member for Mackellar.
– In view of the close personal and other links that exist between certain Communists and certain members of the Labour party–
– I rise to order. My point of order is that the observation of the honorable member is a reflection upon members of this House. I regard it as a personal insult, and I ask that it be withdrawn.
– The honorable mem ber for Melbourne has objected to the statement as being a reflection upon himself. I ask the honorable member for Mackellar to withdraw it and not to proceed along that line.
– I rise to order.
– Order! I have asked for a withdrawal of the statement by the honorable member for Mackellar.
Mr.WENTWORTH. - May I withdraw the statement insofar as it applies to the honorable member for Melbourne?
– Order ! We are not getting anywhere with this kind of question. If the honorable gentleman wishes to obtain information about some projected event to-morrow, he may ask for it without bringing anybody else into the question.
– I have not yet heard a withdrawal of the statement, Mr. Speaker.
– I understood that the honorable member for Mackellar had withdrawn the statement.
– In deference to you, Mr. Speaker, I withdraw it. In view of certain circumstances, are any means available to you, sir, to prevent members of the Labour party from using their privileges in order to introduce Communist disrupters into the precincts of this House?
– Order ! The latter part of the question is completely out of order. I have no knowledge that members of the Labour >party will do as the question suggests. As to the first part of the question, I assure the honorable gentleman that I shall do anything that I consider to be necessary to uphold the prestige and the privileges of this House. The President of the Senate and I have been in conference, and by now a joint press statement will have been issued on our behalf. Does the Minister for Air still wish to raise a point of order?
– No, not now.
– Can the Minister for Civil Aviation give the House any further information about the progress that has been made in the development of a civil air route across the Indian Ocean, and, consequential on that, th present position in regard to the declaration of the Guildford airport as an international airport?
– The Government is desirous of starting an air service between Australia and .South Africa and explored its possibilities,, last year, but difficulties have arisen regarding landing rights on certain islands in the Indian Ocean. Until those difficulties have been overcome, no further statement on that aspect can be made. The declaration of Guildford as an international airport will consequentially follow if the trans-Indian Ocean service operates. When it is com menced, consideration will be given to making Guildford an international airport.
– Will the Minister for Civil Aviation state whether it is intended to hold a meeting of the South Pacific Air Transport Council prior to the International Civil Aviation Conference which is to be held at Montreal, I understand, in May? If such a meeting is not to precede the holding of the conference can the Minister say why it is not? If it is to be held, can he give the date and location of it?
– The meeting is to be held in Melbourne next Monday, and I shall be taking the chair.
– I address a question to the Minister for External Territories, who stated, earlier in the present parliamentary period, in reply to a question that I had directed to him, that the Government intended to adhere to the decision to abolish the indentured labour system in New Guinea later this year. Following upon the Minister’s recent visit to the territories a statement allegedly made by him appeared in the press, in which it was mentioned that he now favoured an extension of the period of indenture, which would indicate that the Minister had changed his opinion regarding this important subject. If such is the case, will the Minister indicate from what quarter the representations were made that resulted in his making that change of decision and, further, whether the Christian missions, which had previously strongly supported the move for the abolition of the indentured labour system, were consulted in the matter?
– It is quite true that early in the present parliamentary period I indicated that the Government proposed to abolish the indentured labour system in New Guinea. The system, as I understand it, and I think that the honorable member for East Sydney will agree with me as he previously occupied the post that I now hold, is one under which certain penal consequences are imposed for breaches of contract. I do not propose to continue that system, but intend to adhere to the decision that was made previously. I have said, however, that in my view a limitation of one year should not be placed upon a civil contract of service under which a native is employed and has had pointed out to him the exact consequences of his contract. Should any breach of such a contract occur there would be civil consequences only. When I was in New Guinea I had discussions with, I think, nearly every section of the community, including natives who were able to express themselves on the matter, and with some of the missions, but necessarily only a limited number of them, because I could not see all. I am satisfied from what I learned that the limitation of the period of service to one year is in the interests of neither the native nor the economy of the country. Tt is not in the interests of the native, because, as I found, during his employment a native acquires an aptitude that is of great value to him later in life and, in my view, one year is insufficient for him to acquire a reasonable degree of aptitude. I consider therefore that an extension of the period of civil contract should be permitted. I propose to have a system of contract under which the native will be told by the native affairs officer the precise extent of his obligation.
– Is not that an indenture ?
– No. The indenture system I have understood as meaning one under which any breach of contract may have penal rather than civil consequences. I consider, as I have said, that it is against the interests of the economy of the country to have the period of service limited, because I am satisfied that one of the things that have prevented the economy of New Guinea from being advanced has been the impossibility under the system of limiting the period of service to one year of training employees sufficiently and the value of labour is therefore not so great as it should be. I am satisfied, for reasons that I shall state at greater length when T make a statement to the House, that it will be in the interests of the native and of the economy of the country to permit the term of civil contract to extend beyond one year.
– Can the Minister for Supply say whether Australia is receiving any machinery or other equipment by way of reparations from Germany or its allies ? If so, how is such machinery or other equipment being distributed in Australia, and is industry benefiting thereby?
– It is true that Australia is receiving quantities of machinery and other equipment from Europe. I speak from memory when I say that two ships arrived with such cargo recently and that two more ships are due to arrive in the near future. Such material is disposed of by the Department of Supply, some of it being allocated to defence factories and some being distributed to private industry. Speaking again from recollection, I think that approximately over 50 per cent, of the material already received has been disposed of by tender, or under some other form of sale, to private industry. Approximately £2,000,000 worth of this machinery and equipment has arrived in Australia up to date. Should the honorable member require more detailed information on the subject I shall be pleased to give it to him if he will see me personally.
– I address a question to the Minister for National Development. The people of northern Queensland, which I have just visited, want to know, not next Monday, but immediately, whether or not the Government proposes to co-operate on a £1 for £1 basis with the Queensland Government in the proposed Burdekin Valley development scheme. They also want to be told definitely whether the Australian Government proposes to implement the favorable recommendations that were made by the Commonwealth expert committee which investigated the proposal. They do not want airy speeches on what the Government has it in mind to do, but they want to know what it proposes to do at once in relation to that scheme. Will the Minister supply that information to the House?
– The Government is determined to assist to the utmost in the development of northern Queensland as well as of other parts of Australia. As soon as it obtains adequate information, which it does not possess at present, about the proposed Burdekin Valley development scheme as a whole it will detemine its attitude towards the proposal.
– I ask the Minister for National Development whether the McGirr Labour Government of New South Wales has promised to undertake immediately the following projects: - A modern medical centre to cost £325,000; an expenditure of £20,000,000 on new schools and sites; an expenditure of £20,000,000 on the erection of hospital buildings; a vast railway electrification scheme to cost from £15,000,000 to £20,000,000 ; the Sydney Eastern Suburbs railway scheme to cost £44,000,000; the erection of a power station at Lake Macquarie to cost £16,000,000; a power station at the Hume Weir to cost £2,100,000; power stations at Lake Illawarra and Cowra at a cost of £10,000,000; and many other works too numerous to mention at a total estimated cost of £400,000,000? In view of the sorry failure of the deeds of the McGirr Government to keep pace with its promises, is the Minister able to inform the people of New South Wales whether that Government has fully consulted with other governments upon the feasibility of fulfilling its promises? As the main requisites for the fulfilment of those promises, which still remain paper promises, are man-power, finance and materials, can the Minister indicate where the McGirr Government may be able to obtain even a fraction of those requirements? Can the Minister suggest any reason for this succession of lavish, but unfulfilled, promises by the McGirr Government?
– I have not seen the formidable list of public works to which the honorable member has referred.
– I rise to order, Mr. Speaker. As the honorable member’s question relates solely to the McGirr Government and does not concern this Parliament, any Commonwealth Minister or any Commonwealth Department of State, is it in order?
– As the question is somewhat lengthy and involved, I should need to examine it in typescript before I could rule whether or not it is in order.
– It is also irrelevant.
– That would apply to many other questions that are asked without notice. If the honorable member wishes the Chair to enforce strict observance of the Standing Orders relating to questions, without notice, his wish oan be gratified.
– I repeat that I have not seen the formidable list of works to which the honorable member has referred. If they are estimated to cost £400,000,000 I can say immediately that there is not the slightest possibility of carrying out a fraction of such a programme during the next financial year. Any proposals for public works must pass through the Loan Council and, when spread over a number of years, must be considered at a meeting of Commonwealth and State Ministers. It will be impossible to provide finance, labour or materials for even a fraction of those works during the next financial year.
– Should the McGirr Government of New South Wales require financial assistance from the Commonwealth to enable it to proceed with the large-scale development of electricity sources in that State, will the Minister for National Development, as a condition precedent to making such assistance available, stipulate that the honorable member for Bennelong, who was in control of the Sydney County Council at tho initiation of the blackouts that are still being continued in Sydney, shall not have any control over electricity supplies?
Question not answered.
– In view of the statement of the Minister for the Interior that he intends to encourage private enterprise to participate in the development of Canberra, will he use every possible endeavour to make land available to private citizens who wish to build in the capital territory, some of whom have been unsuccessfully attempting to obtain land for three or four years? Will the honorable gentleman consider the substitution of a system of auctions for land for the present system of tendering “key money” above the upset value of properties? In instances in which it is not possible immediately to service building blocks, will he consider selling the leases of the land so that intending builders may proceed with building and may have their homes nearly completed by the time it is possible for the department to service them? Where owners of leases are not proposing to commence building operations, will he consider the reallocation of their blocks to those who are prepared to commence building immediately? Finally, will he consider making government-owned homes available to prospective purchasers under a hire-purchase system?
– The answer to all the honorable member’s questions is “ Yes “.
– Will the Minister for National Development indicate when he will be in a position to make a statement to the House about the Government’s plans for national development? In any such statement will the right honorable gentleman indicate to the House the Government’s proposals for financing its plans and state whether they will be financed wholly by local loans or jointly by local and overseas loans ?
– I am not quite certain that I have gathered the import of the honorable member’s questions. As far as I understand them, I can say that as decisions are made by the Government in regard to developmental projects, or the method of operation of the Ministry of National Development, they will be made known to honorable members. In relation to housing, I have received periodical telegraphic reports, necessarily short, from the mission that was sent overseas to investigate the supply of prefabricated houses. I do not think that I shall have anything of a comprehensive nature to say about that position until some time after the mission has returned, which will be within the next month or two.
– Has the Minister for National Development seen the charge made against him in reports in Sydney newspapers recently that he was guilty of the rather, for him, plebian misdemeanour of poaching? The State Minister for Conservation, Mr. Weir, alleged that the right honorable gentleman had been poaching staff from the State department and had been guilty of the grossest discourtesy in interviewing State officers and offering them positions in his own department without consulting with him upon the matter. Has the right honorable gentleman also seen the statement by the State Minister for Conservation that, under the Constitution, the Australian Government has not the power to undertake any of the proposed works that the right honorable gentleman has announced unless he makes special arrangements to do so with the State government? Will the right honorable gentleman make a statement upon this matter, particularly the allegation that his department is poaching staff from the State department, because that action is of primary concern to the State Public Service ?
– I have not seen any of the reports to which the honorable member has referred.
– How does the right honorable gentleman plead?
– I am not aware that any poaching of staff has taken place. I do not really understand what the charge is. However, to-day, Australia is very short of trained technical and professional personnel, and it is public knowledge that there is a great deal of competition between governments and government instrumentalities to obtain such staff. If the honorable gentleman will show me the report to which he has referred, I may be able to give him a more precise reply.
– Since the International Wheat Agreement concedes to the importing countries the right to take their allocation under the agreement in terms of wheat or flour, will the Minister for Commerce and Agriculture consider an amendment of the agreement to concede the same right to exporting countries with a view to increasing the quantities of bran and pollard available for local consumption and so that flour mills in this country may be kept milling to their maximum capacity?
– It is true that under the provisions of the International Wheat Agreement importing countries may elect to take their quota in the form of either wheat or flour. To give to the exporting countries the same right would appear to be equitable. I am not sure whether it would be either practicable or acceptable to the signatory countries. The advantage- of the agreement to Australia is quite clear. I assure the honorable member that, because I realize the merits of his proposal, I shall have it investigated.
– I address a question to the Minister for Labour and National Service. Is it a fact that retired miners, who are in receipt of pensions from the Miners’ Pension Fund, made application for an increase of their pension rate many months ago, but that up till now the matter has not been finalized? Is it a fact that the contributors to the fund are the Federal Government, the State Government and the miners, that the State Government has approved of tho rate being increased, and that the Federal Government has not replied to the State request for an increase? Will the Minister say when the approval for an increase may be expected?
– The honorable gentleman has asked whether this matter has been finalized. It has not been finalized in one sense, in that no final determination has been made, but it is not correct, as the honorable member has suggested, that the Australian Government has not yet conveyed its views on this subject to the Government of New South Wales. Those views have been conveyed informally and verbally both by myself and by officers of my department. I am not able to say at the moment whether the formal letter from the Prime Minister in reference to this matter has yet been forwarded or received, but I shall examine that position. It is not correct to say that the Federal Government is a contributor to this fund. The contributors to it are the Government of New South Wales, which contributes £80,000 a year, the employers, who pay sevenninths of a contribution that is made, and the miners, who pay two-ninths of it. The matter comes before the Federal Government only under an arrangement with the New South Wales Government that was entered into by the previous Australian Government, whereby any amendments to the miners’ pension scheme legislation in New South Wales has to receive Commonwealth approval. The present Government has stated that pending an examination by it of pension matters generally, any decision on the pension rate applicable to miners should be deferred. That information has been conveyed, if not formally, at least informally, to the New South Wales Government.
– Has the Minister for Supply seen reported in the Sydney press an answer which the Dean of Canterbury, Dr. Hewlett Johnson, gave to a question concerning aborigines in the Woomera Rocket Range area? In that answer Dr. Johnson is reported to have said -
The only thing I know of is the information that comes from a. government source that a great deal of native life has had to be removed from areas dangerous through bomb practice.
Can the Minister inform the House whether there is any truth in this statement that native life has been removed from the Woomera Rocket Range area for the reason stated?
– I saw the report to which the honorable member has referred. What Dr. Johnson is reported to have said is quite untrue. There was no native life in the Woomera Rocket Range area and none has been removed from it.
– Is the Minister for Commerce and Agriculture aware that lamb, a staple meat of the people, has become practically impossible to purchase because of its high price, which, in turn, is due to the fact that supplies are being withheld from the market? If so, will the Minister say what action the Government proposes to take in order to ensure that thi? staple item of diet may be purchased at a reasonable price? In view of the Government’s attitude to those who withhold their labour in order to obtain a higher price for it, will the Minister undertake to deal similarly with those who withhold essential commodities for a like reason 1 )&r. McEWEN.- There is nothing that this Government can do in order to reduce the price of lamb on the domestic market, as I am sure the honorable gentleman knows. I understand that present yardings of lamb9 are small because graziers, having regard to the high price of wool and of sheep meats, are holding lambs back to mature for breeding and shearing purposes. The net result of that will be greater production of wool, the sale of which makes the principal contribution to the welfare of Australia’s economy, and eventually greater production of lamb and sheep meat. Although there is some temporary inconvenience, I believe that the final result will be to the benefit of the country.
– I wish to ask the Prime Minister a question about the cost of living. Has his attention been drawn to a statement published in the Melbourne press over the week-end to the effect that a family of five - man, wife and three children - would have to pay 25s. for a Sunday meal if it included lamb? I wonder whether the Prime Minister-
– Order! The honorable member must not wonder, he must ask a question.
– Very well, Mr. Speaker, I shall not wonder. I ask the Prime Minister whether he has seen the statement, and if he has, whether he has decided to revise his post-election promise to the ‘effect that, ‘as far as his Government is concerned, it can do nothing to put value back into the fi. If he has not so decided, must the people of Australia struggle along as best they can under the present circumstances particularly when, in respect of lamb, further production by the workers has’ nothing to do with the matter because Australian Flocks are now greater than ever before?
– Insofar as the question relates to the price of lamb, it has been put to my colleague* the Minister for Commerce and Agriculture, and has been answered. Insofar as it seeks to distort an alleged statement of mine, I tell the honorable member that he gains nothing by inventing something and then repeating it.
– I am speaking about statements in the press.
– Oh, are you? “For this relief, much thanks”. In this case I should be grateful if the honorable member would take account of what I said and “… nothing extenuate, nor aught set down in malice”.
– Can the Minister for the Interior inform the Housue whether the Government has taken any steps to encourage those State Governments that are acting as agent States under the War ‘Service Land Settlement Agreement, to make provision for the introduction of freehold purchase by ex-servicemen settlers ?
– The question of what tenure shall be given to ex-servicemen settlers in the principal States is ohe for the State governments to decide. The State of Victoria has already given freehold tenure to its settlers. In other States the matter is one for consultation between the agent States and the Commonwealth. The Prime Minister has already written to the State Premiers of the agent States suggesting a conference of the parties, one of the purposes of which will be to discuss the advisability of the Governments of those States granting freehold tenure to exservicemen settlers. A reply has been received from two Premiers agreeing to the conference, but as far as I know the Premier of Tasmania has not yet replied.
– In view of tie fact that the Government on a number of occasions has admitted that the purchasing power of the £1 has greatly depreciated during recent years, will the Prime Minister say whether it i9 true that almost every wage-earner in the Commonwealth will suffer a lose of income to a varying degree every time there is an increase of the basic wage, caused by the Industrial Registrar regularly announcing that increases shall take effect from the first pay period- in whatever month such increases are to commence? Is the right honorable gentleman aware that in May, thousands of public servants and other wageearners whose salaries are to be subject to basic .wage increases will lose either 3s. or 6s. for the pay period, according to the date upon which their first pay period will commence? “Will the Prime Minister examine the matter, and if he finds that I have stated facts, will the Government direct the court to ensure that the present and any future increase of the basic wage shall take effect from the first day of the quarter to which such increase applies?
– I shall treat the honorable member’s question as though it has been placed on the notice-paper, and shall have it examined.
– Can the Minister for Commerce and Agriculture inform me what is the additional amount of money that will be available to wool producers from the profits of the Joint Wool Organization? Will he consider the advisability of making an additional advance to wool-growers, particularly in view of the needs of many of them who sustained losses of stock and damage to property in the recent floods ?
– There is no exact calculation of the amount of money, representing additional profit, that will be available for distribution to wool producers, but it is roughly estimated that there will be not less than the amount that has already been distributed, namely, £25,000,000. The date on which that distribution may be made to wool-growers has not yet been considered, and as it was recently recommended to the member governments by a conference in London that the Joint Wool Organization should operate for another year, another distribution of profits may not and probably will not, be made for some time. The honorable member has referred to the need of wool-growers for an additional advance because they have sustained losses of stock and damage to property as the result of floods. I shall inquire into the measure of that need, and consider it in its relation to the distribution of the full profits.
– Has any approach been made to the Minister for Commerce and Agriculture for a lifting of the embargo on the export of merino rams ? If so, what is his attitude to such a request?
– From time to time applications are made for permission to export merino rams. The policy has been not to grant such export permits, and it is intended to sustain that policy.
– In view of the great damage that is occasioned to the wool industry by blowfly strike, and the serious losses that are caused thereby, in addition to the wastage of man-power involved, can the Minister for National Development advise the House of the progress that has been made by the Commonwealth Scientific and Industrial Research Organization in dealing with this pest?
– The Commonwealth Scientific and Industrial Research Organization has been working on the problem of blowfly strike for many years, mainly on the preventive side. The Mules operation has been successful, and, in the area in which it has been employed, has resulted in a considerable decline in respect of crutch strike. The Commonwealth Scientific and Industrial Research Organization has been addressing itself for some time to body strike, and has had quite promising results up to the present largely by the use of surface spraying of insecticides such as DDT. I shall be glad to obtain more precise information for the honorable gentleman and to let him have it later.
– Has it been brought to the notice of the Minister for Works and Housing that a machine or device has been patented in the United States of America that enables a bricklayer, without further effort, to double or even treble the number of bricks that may be laid in a day? Has the right honorable gentleman any information about that machine, including its cost? Does
Ke know whether the trade union that covers work in the building trades has examined the machine and can he inform me of its attitude to the device? Will he have inquiries made into the possibility of importing such machines for the purpose of speeding up the laying of bricks, and, consequently, house construction and other building projects?
– I have not heard of the machine to which the honorable member has referred, but I shall have inquiries made about it immediately, because its importance to Australia during the present housing shortage would be undoubted if its performance is ae the honorable gentleman has suggested.
– My question to the Acting Minister for Defence follows a series of questions that I have asked about the rates of pay of members of the three services. I direct the honorable gentleman’s attention to the statement by service Ministers that the rate of recruitment for the Royal Australian Navy, the Royal Australian Air Force and the Army i9 unsatisfactory, and also to the fact that civilians employed by those three services received a cost of living increase of £18 per annum last November, and will receive a. cost of living increase of £12 per annum in May. During that period members of the services have not received any increases of pay. Will the Minister inform me whether members of the three services, on reaching the date of retirement, have been applying for their discharges, and when asked by officers to state their reasons for refusing to sign on for additional terms, have almost invariably replied, “ We cannot afford to stay in the services. We must get out in order to earn enough money to keep ourselves”? In view of those circumstances, will the Minister give early consideration to the need for bringing the rates of pay of members of the three services into line with the salaries and wages that are paid to persons in outside employment?
– I am not aware that members of the three services, on reaching the date of retirement, are refusing to reenlist for additional terms, but I shall have inquiries made into the position that the honorable member has described. The rates of pay and conditions of members of the forces are continually under review and when, it is considered desirable, increases are granted.
– My question to the Minister for Commerce and Agriculture concerns two matters that are engaging the attention of producers and market(, on the Darling Downs and in other centres in Queensland at the present time. First, is the Minister aware that owing to the large stocks of poultry foods on hand and the considerable falling off of the demand for them in southern Queensland, a large surplus of such produce has accumulated for which there is no available local market? Is the Minister also aware that a ready market for poultry foods is offering in Great Britain, and that inquiries have already been made from that source for them? If this is a fact, would the Minister consider granting licences for the export of these surplus stocks to Great Britain? Alternatively, if these permits cannot be granted, can information be provided regarding the possibility of disposing of these surplus stocks in the southern markets of Australia? Will the Minister give urgent consideration to this matter, as the produce will deteriorate rapidly if it is held for a long period? The second matter to which I desire to refer relates to this season’s maize crop. Will the Minister indicate whether a decision has yet been reached to grant licences for the export of maize from this season’s h arrest ?
– I assume that when the honorable member refers to stocks of poultry feed in southern Queensland, he has in mind grain sorghum. The harvesting of that crop is proceeding at the present time, and I have already announced that licences will be issued for the export of 60 per cent, of it. The policy is to retain 40 per cent, of the harvest for Australia’s requirements of stock feed, particularly poultry feed. It is not expected that all that quantity will be consumed as quickly as it is harvested, and, therefore, it is inevitable that some stocks will accumulate. It will be possible at any time, not as the result of organization by the Department of Commerce and Agriculture or myself, but because of the natural demand, for some of that grain sorghum to be sent to the southern States to meet the demand there, but we do not intend to issue permits to facilitate the export of the complete grain sorghum crop immediately, because the result would be to produce a heavy demand for wheat for stock feed later in the year. If, on the completion of the harvest, the balance of 40 per cent, proves to be in excess of the expected needs, additional export permits will be issued. The matter is being kept continually under review. The honorable member also asked whether a decision has been reached te grant licences for the export of maize from this season’s crop. I have already issued an export permit to the Atherton Tablelands Maize Pool for a quantity which, speaking from memory, is in excess of 10,000 tons. Export permits will be issued in respect of all the Atherton Tableland’s maize in excess of the quantity which, it is calculated, will be needed to meet the local requirements there. At present, .1 am having discussions with the appropriate interests with a view to deciding the proportion of maize that may be exported from southern Queensland and the southern States, but approximately the same policy will be pursued in respect of the export of maize as has been adopted in regard to the export of grain sorghum, although, of course, the same proportions will not be observed.
– As almost five months have elapsed since the general election on the 10th December last, and as the purchasing power of the fi has diminished so rapidly that it has almost reached vanishing point - as mothers of families of small children, and those unfortunate people receiving age, invalid and widows’ pensions, in fact all members of the community, can testify - will the Prime Minister make to the House a progress report on what efforts the Government has made to carry out the pre-election promises of the Government parties to put more value back into the fi?
– I hope that my friend, tho honorable member for
Watson, will not take offence if I congratulate him on his remarkable memory. He has been repeating the same question ever since he became a member of this Parliament. He will be delighted, I am sure, to know that to-morrow night I shall bring down in this House a bill which, if passed and brought into operation, will do more to arrest inflation than any other measure could do. As I always look at the honorable member with a friendly and inquiring eye I shall be very interested to see whether, in relation to that bill, he votes for the “ comrades “ or against them.
– Will the Prime Minister say what the present position is in relation to the proposal to establish a new system of scholarships for entrance to Australian universities? Is that scheme to be proceeded with? Will the scholarships be granted on studies and examinations conducted during this year ? How many scholarships will be awarded in respect of New South Wales? What are the Government’s proposals in regard to the application of the means test in relation to such scholarships?
– As the honorable member will appreciate, I do not carry in my mind all the details necessary to answer his series of questions, although in a broad way I am, of course, familiar with the character of this very important scholarship scheme that was advanced first of all by the previous Government and was subsequently adopted by the present Government. I shall obtain from the appropriate authorities the details that the honorable gentleman seeks. I shall treat the honorable member’s question as one that is on the notice-paper and shall provide an answer accordingly.
– I ask the Minister for Immigration to say whether he has read an article in the current issue of the Australian Quarterly on the subject of immigration and labour, in which occur the two statements, the first of which reads -
The present rate of immigration should be slowed down as part of a policy for curbing inflation.
The second statement is -
Immigration is certainly only one of the (actors responsible for inflation.
If the Minister has read the article, does he intend to allow such observations to influence the carrying out of the immigration policy of the Chifley Government, which he has publicly declared it to be his intention to maintain ? If he does not propose to be influenced by this academic propaganda against Australia’s immigration policy what steps does he propose to take to dissociate himself and his Government from such mischievous statements ?
– I have not read the article to which the honorable member has referred. The question of whether the introduction of considerable numbers of immigrants to Australia is or i9 not a factor in inflation depends very largely upon the amount of effort put into the productive economy of Australia by the immigrants. So far, I am satisfied that the immigrants who have already come here are doing their best to make their contribution to the production of thi3 country. However, although the immigration programme is announced broadly at the beginning of each year, it is under constant review, and the circumstances mentioned by the honorable member will be kept in mind by the Government.
– Has the Minister for Immigration read the reported statement of Mr. P. Brincourt the escort officer of the International Refugee Organization on the British migrant ship A Amarapoora, that the cream of European migrants have reached Australia and, with few exceptions, only the dregs are left? Will the Minister inquire into Mr. Brincourt’s allegations in order to ascertain whether there is any substance in them ?
– I saw the statement to which the honorable member has referred and I asked immediately for a report upon the matter from the officers of the Department of Immigration. I have given a great deal of thought, since I have been Minister for Immigration, to the maintenance of the standards of the people who are attracted to Australia under our immigration programme and indeed, one of my first acts as Minister was to reduce the number of displaced persons sought to be introduced to Australia this year from 100,000 to 50,000. My predecessor in office had tentatively made arrangements for the introduction of 100,000 displaced persons additional to the 110,000 which it had previously agreed to take but, because of the considerations to which the honorable member has referred, I considered it desirable at that stage to reduce the number to the figure that I have mentioned.
– There was one other consideration.
– There are various considerations but the consideration that I have mentioned- was a very important one. I do not think that it is fair for any body to say that Australia is now receiving the dregs of people from Europe. We are advised by our own officers in Europe that there are still available migrants of suitable types, and, indeed, only today, one of the officers, Mr. Schroeder, the controller of our immigration centres, advised the head of the Department of Immigration that he had personally seen the migrants on the last two ships, General Sturgess and General Stewart, and had formed the opinion that, as far as he could judge, they were equal to the best types that we had had in previous batches from Europe. Last week, I inspected one of those ships, General Black, and came to the conclusion that many of the migrants on board were of admirable types. Indeed, the children who, after all, will represent the best dividend that Australia will receive under its present immigration programme, impressed me as splendid types, and I have no doubt that after they have had Australian food and have enjoyed our sunshine for a few months we shall have every reason to be proud of them. It is not altogether fair to judge migrants coming from the camps of Europe on their appearance and physical condition immediately upon their arrival in Australia. Many of them have gone through years of depressing and unsatisfactory conditions in those camps. But, before embarkation, all of them are medically examined. I repeat that most of them after they have been some months in this country and have enjoyed Australian food anc sunshine, and have had the opportunity to exercise themselves in steady employment, will reveal a physical transformation. I am sure that honorable members who have taken the opportunity to see these new Australians in various parts of the Commonwealth are satisfied that they will prove to be a very valuable acquisition to the community.
– In the absence of the Treasurer, I ask thi Prime Minister whether he is aware that, co-operative building societies in New South Wales are being refused finance by the Commonwealth Bank and private finance companies, despite the fact that the State Government will guarantee them against loss ? Will the right honorable gentleman remedy the position as soon as possible in order to enable those societies vo continue to build homes for the people! Or, is it the policy of all banking interests to withhold further credit pending an increase of the rate of interest?
– The honorable member will understand that I, myself, am not familiar with the matter to which he has referred. I shall refer it to the Treasury and obtain an answer for him.
Motion (by Mr. Menzies) agreed to -
That the House, at its rising, adjourn to to-morrow, at 2.30 p.m.
– Has the Prime Minister given any further consideration to the Government’s proposal to set up a parliamentary committee on foreign affairs? If not, in view of the acuce position that exists in South-East Asia, particularly Malaya, and having regard to the public statements that have been made recently by the Minister for Defence on information that he superficially gleaned while passing through Singapore, dealing with the intervention of Australian troops in Malaya, will the right honorable gentleman set up such a committee and clothe it with power as a fact-finding body to investigate the present situation in South-East Asia and other matters of that kind before Australia is committed to action that would be bound to have far-reaching consequences for the Australian people?
– As the honorable member knows, it is the Government’-* intention to set up a parliamentary committee on foreign affairs. Certain discussions have taken place. I am rather in default myself because the Leader of the Opposition asked me whether he could have a talk with me about the constitution of the proposed committee but it has not been possible for me to do so during the last few weeks. However, I anticipate that the committee will be established before the termination of the current debate on foreign affairs.
In committee: Consideration resumed from the 20th April (vide page 1764.)
Clause 7 - to the end of proposed section 9. (Establishment and functions of Commonwealth Bank Board.)
.- When the debate was adjourned last Thursday night the honorable member for East Sydney (Mr. Ward) had said that during the war the Chifley Government had financed governmental undertakings by drawings from Commonwealth Bank funds to the amount of £350,000,000 and that that amount was secured by treasury bills. He went on to say that if a Labour government wished to follow that course again, it could do so. However, he did not point out that that method of financing undertakings was not followed by the Leader of the Opposition (Mr. Chifley), when the right honorable gentleman was Treasurer, after the end of the recent war. Immediately following the cessation of that conflict he commenced to withdraw treasury bills and to reduce the Government’s indebtedness to the Commonwealth Bank. In other words he believed, and rightly, that the method of financing by means of treasury bills was only a war-time expedient and could not be justified in peace-time. I agree with that view because the financing of undertakings by treasury bills has the effect of reducing the purchasing power of the £1 and for that reason seriously affects the welfare of large sections of the community, including pensioners, women and children and particularly those who draw their incomes, often very meagre, in the form of the interest that is payable on Commonwealth bonds.
During the period when Sir Robert Gibson was chairman of the Commonwealth Bank Board, the Scullin Government requested that central bank finance be provided. That request was refused. The Commonwealth Bank Board stipulated certain conditions. The honorable member for East Sydney contended that the board should have granted that request. He went on to say that had it done so the rigors of the depression at that time would have been mitigated. However, the honorable member did not point out that the Scullin Government had its remedy in its own hands. Had it wanted to do so, it could have ordered the Commonwealth Bank Board to accede to its request as a matter of policy. It could have told the board that its decision was supreme, and that the Government would take full responsibility for any direction that it gave to the board. The proposed section now before the Chair makes provision to meet differences of opinion that may arise between the Government and the Commonwealth Bank Board in matters involving governmental policy. This Government will take full responsibility and will order the Commonwealth Bank Board to carry out its directions. The Labour Government could have done likewise.
– Not at all.
– It did not have the courage to do so because it realized that the people were not in favour of such a move. A short time afterwards it was swept out of office.
– The honorable member does not know his history.
– The honorable member for East Sydney has also said that in 1945 he opposed the Commonwealth Bank Bill because he believed that the then socialist government should have proceeded with the nationalization of banking. In effect, the honorable member for East Sydney said, “I wanted bank nationalization. I advocated it then as I had done in the past and I therefore endeavoured to insist that nationalization be introduced.” He did not think that the people should have been given an opportunity to express their views on such an important matter of principle. We on this side of the chamber believe that, in matters of great national importance, decisions must be made not by a single individual but by the people. During the general election campaign of 1949 the parties on this side of the chamber stated their policy clearly to the people and invited them to express their opinion of it. The present Prime Minister (Mr. Menzies) stated unequivocally that if he were returned to office he would vest control of the Commonwealth Bank in a Commonwealth Bank Board. Opposition members have consistently claimed that the 1945 banking legislation was approved by the people by their vote at the general election of 1946. I point out that during the campaign that preceded that election little, if any, reference was made in the policy speech of the then Prime Minister to this important subject of banking. On the contrary, he made every effort to confuse the issue. The people had no idea that the then government was asking them to confirm its action in placing the Commonwealth Bank Act 1945 on the statutebook. In 1949 the parties on this side of the chamber made it perfectly clear to the people that they favoured the reintroduction of the Commonwealth Bank Board. We did not baulk that issue; we put it plainly to the people. There was no confusion in the minds of the people. Indeed, banking policy was one of the major issues at that election. We received a mandate from the people to proceed with our policy. A great deal of irrelevant debate has taken place on this proposed section. The honorable member for Melbourne (Mr. Calwell) has said that we should profit from the experience of other nations in this matter. Dealing with the system of central banking adopted in other countries, Mr. De Kock, the well-known authority on this subject, had this to say -
With a few exceptions, such as the Reich bank and the Bank of Finland which had only management boards, and the Commonwealth Bank of Australia, every central bank has a board of directors or the equivalent of such a board, -whether called a Council of Administration, as in Belgium, Roumania, Yugoslavia, and Mexico, or a general council as in France, Japan, Poland, Denmark, Spain and Switzerland.
That states clearly that the central hank of almost every country except Russia is controlled by a board of directors. Mr. De Kock also referred to the position in Sweden, which was dealt with by the honorable member for Melbourne. He said that in that country the board of directors of the central bank is appointed by the legislature, with the exception of the chairman, who is appointed by the Xing.
Until recently Opposition members appeared to be very keen about the establishment of boards of all kinds. If they believed that the Commonwealth Bank Board of the past was the pernicious body they have made it out to be in this debate, why did they not abolish it when they came into power in 1941? If they had thought that the Commonwealth Bank Board had impeded the progress of Australia, surely they would have abolished it at that most critical time in our history. Why did they wait until 1945 to abolish the board ? It was at that time that they adopted the Marxist-Lenin theory that people are not capable of governing themselves. Lenin advocated the seizure of power as a means of putting his policy into effect. He advised his followers to seize commanding heights, one of which was the control of the banking system. Wittingly or unwittingly the Chifley Government accepted his advice when it vested control of the Commonwealth Bank in one man.
– Order ! The honorable member’s time has expired.
.- Interesting views have been expressed by some honorable members opposite to justify the re-establishment of the Commonwealth Bank Board. They have relied on history to buttress their arguments. If we are to profit from history we must cite historical facts accurately. Only in that way can we obtain guidance from the events of the past. The honorable member for Forrest (Mr. Freeth) has said that the control of banking was in the hands of the Parliament in 1931. Apparently the honorable member has forgotten the history of those days. In 1931 Australia was in the midst of the financial and economic depression. In order to justify the Government’s proposal to re-constitute the Commonwealth Bank Board honorable members opposite have either wittingly or unwittingly misstated the facts that were associated with the events of 1931. The plain fact is that in 1931, in this very chamber, the State Premiers and the Prime Minister of the Commonwealth met in conference to consider what they could do to ease the effects of the depression. At that time no resources were available in the Treasuries of the Commonwealth or the States and the leaders of this country were forced to turn to the banking institutions for support in order to tide the people over the worst effects of the depression. In order to show just how much control was then exercised over the banking institutions by the Australian Government, or by any Other government in this country, I propose to quote from the official report Of the conference of Commonwealth and State Ministers that was held on the 6th, 7th, 9th, 10th and 13th February, 1931. The report gives a very clear indication of the degree of control then exercised by the Australian Government over the Commonwealth Bank Board.
– The government of the day had power to alter the banking legislation.
– That is not so. Again the honorable member is misstating the position. The government of the day had a minority in the Senate and there was no possibility that the Senate would accept an amendment of the banking legislation. The report states that the following communication was received by the then Treasurer, the late Mr. Theodore, from the chairman of the Commonwealth Bank Board, Sir Robert Gibson : -
With reference to your discussions with the directors of the bank board on the subject of the rehabilitation of the financial and ind 5. trial position of Australia, when it was agreed that some concerted effort must be made to cope with the situation, and so avoid, if possible, the ultimate disaster which will otherwise eventually face the country, I am requested by my board to convey to you a resolution of the board as set forth hereunder -
Subject to adequate and equitable reductions in all wages, salaries and allowances, pensions, social benefits of all kinds, interest and other factors which affect the cost of living, the Commonwealth Bank Board will actively co-operate with the trading banks, and the governments of Australia, in sustaining industry and restoring employment.
That was the price demanded by the Commonwealth Bank Board. Yet some honorable gentlemen have the effrontery to tell us that in that year this Parliament had some control over the bank board. The plain, simple fact is that the representatives of every government in Australia sat round this very table and practically went on their knees to the Commonwealth Bank Board only to receive from the board the reply that I have read. Let me repeat it -
Subject to adequate and equitable reductions in all wages,-
Wages were fixed by arbitration tribunals, yet the Commonwealth Bank Board asked the Government to make “ adequate and equitable reductions in all wages “, as the price of financial assistance from the Commonwealth Bank and the private banks to tide the Government over the depression. Awards of the court had to be broken before the banks would assist in the financial recovery of this country. The reply continued - salaries and allowances, pensions, social benefits of all kinds, . . .
Old-age and invalid pensions and every other social service of the Commonwealth at that time had to be .reduced by 22£ per cent, at the dictation of the Chairman of the Commonwealth Bank Board, acting as the mouthpiece of the private banking institutions of this country. There is no denying those facts. This is an official document that I am quoting from, ft is absolutely ridiculous for any one to say that in the middle of the depression the Commonwealth Bank Board was subject to the dictates of the Government. The Government had no control over the board. If the bank board is reconstituted there will be no effective provision for the Parliament to have further control, ft is true that when there is a dispute between the Government and the proposed bank board it will be settled in this House, but, divided as it is on party lines, how could a judicial decision be obtained from this House on a dispute involving whether the bank board which this Government will have established should do the bidding of the Government or do the right thing by the people? Obviously, whatever action is taken by the bank board will be in accordance with government policy because the board will be the creation and the creature of this Government.
– That is what the honorable gentleman wants.
– It is not the kind of policy I want. I know where the parties stood in 1931 on that matter. Obviously, this talk of Parliament being the final arbiter is all rubbish because it will only become the final arbiter when the government becomes at loggerheads with its own creation, the bank board.
– That is the next subject of discussion.
– I have been misled by previous discussion. I am not saying that you are not generous, Mr. Chairman, but I made some notes from what the Minister for Health (Sir Earle Page), the honorable member for Forrest (Mr. Freeth), and the honorable member for Calare (Mr. Howse) said, and it is in refutation of those comments that I am now speaking. If I am out of order, they were too. However, that is all I have to say on the subject. I wanted to refute the statement of those honorable members by showing that the government in 1931 had not the remotest control over the Commonwealth Bank Board.
.- The honorable member for Dalley (Mr. Rosevear) has pointed out that only when the Government and the Bank Board were at loggerheads would it be necessary for the Government to exercise its prerogative and rights and overrule a decision by the board. That is perfectly clear. Honorable members can all see that point of view. But surely that is all that will be necessary. If both the Government and the Commonwealth Bank Board agree on a common policy, why should the Parliament interfere? It would not want to interfere and it would not do so. The only occasion on which the Government would take action would be when the Commonwealth Bank Board was applying a policy which it considered might not be in the best interests of the Australian people.
– I do not want that subject to be debated. The clause was divided in order that it might come up for separate discussion. We are dealing with the proposed section 9.
– As the honorable member for Calare (Mr. Howse) has pointed out, for many years it has been accepted in English-speaking countries and in foreign countries that the appropriate method of managing any central bank or government-owned bank is by means of a board.
– Would the honorable member say that financial policy has been perfect throughout the world?
– It might not have been, but the great majority of countries throughout the world have adopted the board as the best method of managing hanks. Then, as the honorable member for Calare pointed out, we have learned in English-speaking countries of what is called the Marxist-Leninist philosophy. That philosophy developed first into Stalinism and finally into communism. Under the Communist system, the idea of dictatorship over every section of the economy became an accepted fact. Next, as the honorable member for Calare rightly said, the Socialist party, or the Labour party of the day, imbibed the Communist philosophy and decided to introduce dictatorial control of the banking system. I do not believe for a moment that members of the Opposition, particularly those who describe themselves as social democrats, would accept the idea of that totalitarian philosophy if they knew exactly where it was leading them. Many of them would reject it if they realized that it was not a part of social democrat teaching “but was instead Communist teaching in its entirety. Honorable members should know exactly how the method of single total control of the banking system was evolved and how it came to be accepted as part and parcel of the Labour party philosophy.
Members of the Opposition have argued that the Government wants to appoint a Commonwealth Bank Board so that it may then refuse to accept responsibility for any action taken by the board. That argument was first used by the honorable member for Fremantle (Mr. Beazley), whose case was so well stated as to demand an answer. At first sight, it might appear that the Government of the day is attempting to push its proper responsibilities on to the shoulders of a hoard. But that cannot happen under the measure that we are now considering. If honorable members will study the proposed section carefully, they will see that the Government, far from trying to shelve responsibility, proposes in the final analysis to accept complete responsibility for Commonwealth Bank policy. In effect, it says, “ If we think that any of the board’s decisions are wrong, we shall alter them and accept complete responsibility for what we do “. It will not hide behind the skirts of the board. If it changes any of the board’s decisions it will say to the board, “ Carry out the policy of the Government. We take the entire responsibility”. The main objection to the bill that was raised by the Leader of the Opposition (Mr. Chifley) was based on his assertion that the Government would not be able to find in the community men whose moral standards would be sufficiently high to enable them to place the welfare of their country before their own personal demands while serving as members of the Commonwealth Bank Board. That was a scandalous view to express in this chamber. Many honorable members have given up their entire lives to the service of the community. It is a personal affront to them to suggest that the Government could not find men of the requisite high standard of moral character to serve on the bank board, putting the needs of their country before their own personal gain. There are dozens of men in every walk of life in Australia who would surrender their jobs in order to be of service to the community.
.- When the Treasurer (Mr. Fadden) introduced the bill, he counselled that it should be approached in a strictly nonpartisan spirit. He declared that it wa3 of such great importance that it should not be clouded by party prejudice, personal bias, or any other influence that might tend to disfigure debate. Nevertheless, the speech that the right honorable gentleman made earlier in the committee discussions contained a mass of inaccurate statements and was animated by the keenest partisan spirit with the result that it did a great deal to impede the progress of the committee and certainly reflected no credit upon himself. My understanding of the general principles of parliamentary debate is that, when a suggestion is made to discard some institution, evidence should be submitted to prove that the institution has failed to justify its existence and that a different system would he of advantage. None of the Government’s supporters has shown that the present system of control of the Commonwealth Bank has failed to justify its existence. I shall not attempt to substantiate my statement by reference in detail to all the statistics that support it, because the time available to me is limited. The facts are best summarized in an article entitled Fighting Inflation, 1945 to 1949, issued by the Fabian Society of New South Wales. To my mind, the pamphlet amply justifies the present system of control of the Commonwealth Bank, ft states -
The Commonwealth Emol ument retained its war-time powers over the vol lime nf loans tu industry under tin; hanking legislation of l!)4f). This control of lunik advances has been so smooth and efficient that its immense importance in maintaining economic stability in the past four years is easily overlooked. It is not yet generally realized how grave would have been the consequences of mismanagement of hanking policy. Over-expansion of bank loans is akin to over-expansion of the note issue. When a. govern mont prints notes indiscriminately to pay for its needs, it increases demand indiscriminately and causes a runaway inflation. Exactly the same thing would have happened had the banks been allowed to issue credit indiscriminately.
When F hear Government supporters refer to the present system of control of the Commonwealth Bank as being a continuation of the Marxist-Leninist philosophy as applied to finance by the Labour party, my mind naturally goes back to the time when, the Commonwealth Bank was established. There was no MarxistLeninist philosophy in 1911. The establishment of the Commonwealth Bank at that time, under a system of control very much like that which now operates, met with the same opposition as was rallied against the Labour Government’s banking legislation of 1945. I do not believe that any supporter of the Government will deny that the Commonwealth Bank was of great service to the nation from its establishment in 1911 until 1924, when the system of control was radically changed. It had to survive keen competition as an infant organization, but the results that it achieved were of immense value to Australia. According to one, Amos, who spoke very truly on the subject, this is what the Commonwealth Bank did during that period of its history under a system of control similar to that which operates to-day -
Until 1924, when the bank was effectually strangled, the benefits conferred upon the people of Australia by their bank flowed steadily on. It financed jam and fruit pools to the extent of £1,500.000; it found £ 4,000,000 for Australian homes: while to local government bodies, for construction of roads, tramways, harbors, gasworks, electric power plants, &c”. it lent £0.300,000. It paid to the Common wealth Government between December. HI20, and June. 1023, £3,097,000- the profits of its note issue Department - while by 1924 it had made on ite other business a profit of £4.500.000, available for redemption of debt.
This great progress was achieved when the bank was administered by a governor, and the control was almost identical with that instituted by the Labour Government’s legislation of 1945. The honorable member for Lowe (Mr. McMahon) asked why the Labour Government did not, on its assumption of office in 1941, bring in the .type of legislation that was enacted in 1945. I answer him by saying that there was no need for the legislation at that time. Through the exercise of wartime powers the Labour Government was able to control the bank board in exactly the same way as control was embodied in the legislation of 1945. That being so, there was no need for the legislation at that time. During the period from 1924 to 1941, a change occurred in the composition of the board, and it reverted to a control almost identical with that proposed under this bill. During the time the bank was controlled by a board the financial affairs of this country passed from the hands of the elected representatives of the people to those of the board. During that period a great depression occurred, and no matter what is thought of the factors that influenced the Commonwealth Bank Board in the years of the depression, the fact remains - and it is referred to in the majority report of the Royal Commission on Monetary and Banking systems - that along with other parts of the system the trading banks must bear some responsibility for the depression. Although the term I used was “ trading banks “ the Commonwealth Bank Board of that time, throughout the period of the depression, was identified with the trading banks and their policy. If the Commonwealth Bank Board is established in its proposed form, and a recession occurs overseas with consequential effects in Australia, those who will be the nominees of this Government on the new board will adopt the same attitude towards the economic ills of the nation as was adopted by the bank board during the depression, and which has been referred to by previous speakers.
The cumulative evidence that can be produced against this proposed section proves that the present type of control, that is control by the Governor working in harmony with the Treasurer, is of the greatest advantage to the Commonwealth, whilst the proposed system is fraught with grave disadvantages.
– Order ! The honorable member’s time has expired.
.- Before dealing with tha bank board I want to put on record that it is a matter of history that the foundations of the Commonwealth Bank were laid deep and strong under the system of a single governor long before a bank board was thought of. Under the capable management of Sir Denison Miller, the Commonwealth Bank gave yeoman service to this nation. Because the bank had to bp sabotaged and its effectiveness crushed, and because a board had to be in control to prevent the bank from competing with private banking institutions, the Commonwealth Bank Board was established. There is plenty of evidence of the correct ness of what I say. A particular case concerns a member of this Parliament whose account was refused by the Commonwealth Bank and who was told to apply to a private banking institution. Not until the Commonwealth Bank discovered that he was a member of this Parliament did it allow him to open an account. I believe that this proposed Commonwealth Bank Board, although made to appear innocent by honorable members on the Government side, is mere camouflage to cover up a sinister purpose. As time goes on, the truth of that statement will become apparent.
We are told that monetary policy had nothing to do with the depression. Last week the Minister for Works and Housing (Mr. Casey), gave the Opposition several lectures on monetary policy and economics. Eis economics seem much akin to those of the American professor who told the down-and-out hobo that it was not the province of economics to find him a job; it was its province to tell him why he could not get one. The Minister for Works and Housing told us that the depression was world-wide. That is said continually. Of course it was world-wide. Murder is world-wide; burglary and all the violence of man are world-wide. This depression was universal because the monetary policy that caused it was universal. That was a policy of retraction of credit at the least sign of any recession or evidence of depression in the affairs of the nation.
The depression was caused in this country by the banks calling up overdrafts and refusing advances. At one time, just before the depression began, the private banking institutions of this country were pouring out tens of thousands of pounds to finance the building of palatial picture theatres in Sydney. At the same time they were calling up the advances of manufacturers, all over the country, thus throwing men out of work by the thousands. That was because the Commonwealth Bank Board was supporting the private banking institutions in a direct policy of calling up overdrafts and refusing to allow industry to have the accommodation it needed. One honorable member said that there is no evidence that the monetary policy was responsible for the depression. On many occasions I have quoted evidence to this chamber against that point of view. I could cite authorities for a week if I wanted to do so and had the time to spare. On this occasion it is sufficient to cite only one. It has been said that the depression was world-wide and was something that came out of the blue. Will honorable members on the Government side blaspheme and say that God made the depression? If God did not make it then man did. Man made it by following a monetary policy throughout the world which may be summed up by the saying that a banker is a person who lends an umbrella on a fine day and demands its return when rain falls. Sir Herbert Holden was a director of the London Westminster Bank. I think he still is a director of that institution. For a time he was also a director of the Bank of England. While addressing a meeting of students at Oxford in 1936, he asked the question, “ What caused the depression ? “ and proceeded to supply the following answer : “ The financial institutions throughout the world caused the depression by following the time-honored policy of refusing to grant accommodation and calling up overdrafts “. That policy of deflation was pursued in every country, and was one of the principal reasons why Australia could not escape the economic blizzard. I fervently hope that we shall never experience a repetition of those conditions. In 1929, the Commonwealth Bank Board refused to provide a paltry £20,000,000 as a means of preventing this country from tobogganing into the depression. The honorable member for Dalley (Mr. Rosevear) has read to the committee the letter in which the Commonwealth Bank Board, acting on behalf of the associated banks, refused to make a loan available to the Scullin Government. The board declared that it could not provide the money, because none was available. A loan of £20,000,000 in 1929 for the purpose of countering the first onslaught of the depression would have been equivalent to an expenditure of £150,000,000 in 1932, when Australia was suffering most severely from the depression. The monetary policy alone was responsible for that situation. The Commonwealth Bank Board was able to operate that kind of monetary policy because it had been granted a charter under which it had absolute freedom of action. The Labour party had an overwhelming majority in the House of Representatives in 1929, but had only six members in the Senate, and, therefore, it could not make any headway against the board. References are constantly made to the shortage of housing and essential commodities. If the Commonwealth Bank had not .been hamstrung by the board that was appointed by the Bruce-Page Government to pursue precisely the policy that it did follow, the Scullin Government would have been able to obtain money for a housing and a public works programme, and the workers would have received well-filled pay envelopes instead of dole tickets. Sir Denison Miller, when Governor of the Commonwealth Bank, admitted to a deputation that he had informed the BrucePage Government that if it would grant him a monopoly of banking he would be able to build the national capital in Canberra for nothing. In making that statement, he did not mean that he would be able to erect the buildings at no cost. He did not mean that the Government would be able to erect the buildings at no cost. He meant that the Government would be provided with adequate amounts of money to enable it to build this capital city without having to borrow money and pay interest on it, as is being done at the present time.
– Order ! The honorable member’s time has expired.
– I rise principally to deal with certain statements which were made by the VicePresident of the Executive Council (Dame Enid Lyons) last week about the wisdom of establishing a Commonwealth Bank board. She said that, in her opinion, the appointment of that body was a sound proposition, and she directed the attention of the committee to a submission which 1 had made to the Commonwealth Court of Conciliation and Arbitration in 1937 during an application for an increase of the basic wage. The Vice-President of ihe Executive Council indicated that the policy which had been pursued by the Commonwealth Bank Board and the Government at that time had enabled Australia to make a wonderful recovery from economic adversity. In making those statements, the Vice-President of the Executive Council misunderstood - quite inadvertently, I think - the representations which were placed before the court. It is true that I stated that between 1931 and 1937, Australia had made a remarkable recovery from its adverse economic conditions, and that, as a consequence, the workers were entitled to an improvement in their standard of living. However, my submission was not based upon any action which was taken by the Commonwealth Bank Board or by the then government. The statement was made, and evidence was produced to show, that the recovery had resulted from a policy pursued by private enterprise, and that was entirely different from the policy pursued by the Commonwealth Bank Board. In order that honorable members may understand that the arguments which I previously propounded about the Commonwealth Bank Board’s incapacity to deal with the economic conditions of those times, I inform the committee that I pointed out that between 1930 and 1931, because of Australia’s lack of credits in London, it was necessary for us to restrict our imports. As many honorable members will recollect, the government of the day - the Scullin Government - introduced a number of measures which prohibited the importation into this country of a large number of commodities, and increased the tariff duties on many other items so severely that it was difficult to import goods from Great Britain. The result of that policy was a tremendous expansion of secondary industry in Australia. The manufacture began locally of articles which previously had been made in Canada, the United States of America and Great Britain for export to Australia. The establishment of those industries in this country represented a large amount of capital expansion which was necessary to enable us to recover from the effects of the depression. That expansion was based upon the fiscal policy of the Scullin Government. At the time I made my submission to the Commonwealth Arbitration Court, the final thing was necessary to indicate that prosperity was returning to Australia was the very rapid increase in the prices that were being received overseas for our export commodities. Honorable members will recollect that, at the end of 1936 and the beginning of 1937 wheat prices rose rapidly to 5s. and 6s. a bushel - the values which had ruled between 1922 and 1929 - and our wool cheque also increased enormously. Because of those factors, Australia rapidly recovered from the depression. But it is wrong to suggest that .that recovery resulted from the policy of the Commonwealth Bank Board, which, at that time, continued to be deflationary in tendency.
I now desire to correct a wrong impression which may have been created by the Treasurer (Mr. Fadden) in speaking in support of proposed new section’ 9, when he said that the Scullin Government had been defeated in 1931 because it had advocated a fiduciary note issue, which was opposed by the Commonwealth Bank Board. I say quite frankly to honorable members that if that line of argument is introduced into this debate, it will prove, figuratively speaking, to be a two-edged sword that can smite the Government just as severely as the Opposition. Whilst it is true that the Scullin Government was defeated in 1931, it is equally true that because of the economic conditions the Moore Liberal Government was defeated in Queensland, and the Liberal Government in New Zealand was defeated by the Labour party in the following year. The economic conditions at that time caused the defeat of the Conservative Government in Great Britain, and the formation of the Labour Government under the prime ministership of Mr. Ramsay MacDonald. The government of the day in France fell, and the Radicals came into power. Because of the financial and economic conditions of those times, the Conservative Government of Canada was defeated and a Liberal government replaced it. In the presidential election in the United States in 1932, the Republican party, which had ruled for many years, was defeated by the Democrat party. The obvious conclusion to ba drawn from those changes is that a government which was in office during that period, regardless of its political views, was blamed for the adverse economic conditions, and was defeated.
Conservative, Liberal and Labour governments shared a similar fate.
T should now like to discuss a point which has been made by the honorable member for Calare (Mr. Howse) and several other speakers. They have asked, in effect, “ Why did not the Labour Government, on assuming office in 1941, introduce legislation to amend the Commonwealth Bank Act, and abolish the Commonwealth Bank Board ? “ Those honorable members lose sight of certain factors which were operating at that time. The most important of them was that, by means of an understanding arrived at between the banks and the Treasurer of the day, certain financial policies had been put into operation. In 1941, those policies became subject to regulation, and, in effect, regulations that were promulgated under the National Security Act overrode the decisions of not only the Commonwealth Bank Board, but also the boards of the private trading banks. In other words, all the banks became subject to control by regulation under the National Security Act for defence purposes and for the betterment of the people of Australia. It would have been folly, in view of the existence of those powers, to distract attention from the conduct of the war, which had then reached a critical stage, and, quite rightly, the Labour Government did not disturb the status quo. But in 1945, after the war ended and Commonwealth powers under the National Security Act were beginning to contract, it introduced legislation to place the whole matter on a proper footing. The Commonwealth Bank Act, which was passed in that year, abolished the board.
– Order ! The honorable member has exhausted his time.
– The various arguments advanced by honorable members opposite regarding the proposed Commonwealth Bank Board have confused me considerably. However to set the mind of the honorable member for Grayndler (Mr. Daly) at rest I may say that I am definitely not a starter for appointment to the board. J consider that in discussing the proposed new section at present under debate it is almost impossible to avoid reference by implication to the constitution of the pro posed board. Some honorable members opposite have said that they consider that the five independent members to be appointed to the board will be the nominees of the trading banks and will represent the views of those banks. The honorable member for Darebin (Mr. Andrews), I believe, stated that he considered that the appointees will be purely controlled by the vote of the Secretary to the Treasury who will represent government policy.
– The personnel of the proposed board will be discussed during the debate on clause 10.
– The present clause refers to- the actual purpose of the board, a matter into which the question of the appointees enters. By stating that the independent appointees will voice the opinions of the trading banks honorable members opposite cast a slur on this Government and allege that the Government will act for sectional interests disregarding the needs of Australia as a whole. I believe that everybody would refute such a suggestion. Honorable members opposite state, first, that under the proposed board system the bank may be forced to carry out the wishes of the trading banks; and, secondly, that the proposed board would give effect to the opinions of the Treasurer of the day. If those arguments are correct, and the board could function in that manner, let honorable members opposite consider how the Government could more easily produce these alleged effects by allowing the present position to continue, because it would be easier for the Government to influence bank policy in whatever manner it might desire. Under the present system as established by the previous Government it could exercise the powers that it has through its control of the Treasury and so impose its political views on the bank. Yet the Government proposes to alter the present system. If we are to study this matter properly we should look for the real purpose of the board and the reason for which the Government intends to re-introduce the board system. Honorable members may recall that I have .previously alluded in this House to the fact that when experts alone have run the business of the country they have at times been carried away through relying on their own economic knowledge and disregarding practical knowledge of the world, and have not ensured that some practical working scheme was carried out. I cited the case of the British Pood Corporation in South Africa and a similar case in Australia during the war when restrictions were placed on the growing of wheat. Australia later experienced the greatest drought it has ever had, and as a result of that restriction of wheat acreage we had to huy fodder from overseas. We can avoid such mistakes if we add to the knowledge of experts the practical knowledge of men drawn from various sections of our national life. An honorable member referred to the practicability of introducing to the bank board men who had the interests of this country at heart and who would make themselves available to serve in a national job like this. We would add to both the structure and the strength of the highest financial institution we have in Australia if we adopted that procedure. That is the main reason why we intend to re-introduce the board system.
Honorable members opposite have attempted to show how the board system has broken down in the past. It is easy enough to be critical of events that are past, and during a period of rising prosperity, such as the present, it is difficult actually to pinpoint any particular financial decision that has been faulty or that has not been carried out correctly. One point in particular that has been raised in this chamber on many occasions concerns the present degree of inflation in Australia. I submit that the people who have the control of the fiscal and economic policy of this country must beasome measure of blame for the state of inflation in Australia. I will not say that they are wholly responsible because, as some honorable members opposite have said regarding the economic depression of the 1930’s, the inflationary tendencies that were let loose by the demands of war are world-wide and are not confined to Australia. However, if we were to be absolutely strict in our criticism we might easily say that the degree of inflation to which honorable members opposite have drawn attention at every question time in the House since this Parliament assembled in February might be attributed to some extent to the control of finances through the present structure of the Commonwealth Bank. Another point in connexion with that matter is that the economic policy of this country after World War II. led to the loss of unique opportunities for the capture of overseas markets that were available to U9 for our exports. I am not suggesting that at that time we could have sent more than token exports to the countries that desired our goods, because we were in such serious need of our own production ourselves, but most honorable members will agree that the economic policy that allowed those opportunities to slip through our fingers might be held up as another instance of the failure of our present fiscal policy to benefit the country. I consider that searching for sinister motives in the appointment of this proposed board will not get this country very far and that the arguments advanced by the Opposition will not stand analysis in the light of the facts. A comparison of the proposed board with a board that operated twenty years ago, which had entirely different powers from those of the board envisaged in this measure, will not make a valuable contribution to this debate, nor is it fair to say that the people who control the financial affairs of this country will act in a self-centred and selfish manner if this measure is passed. If we appoint to the proposed board men of wide experience the hoard system will have a leavening influence. Therefore I consider that this measure merits- support.
.– I was a banker and a member of a bank board and by way of preliminary remarks I may say that I consider it somewhat extraordinary that, as an ex-banker and exmember of a bank board, I should have found it so difficult to obtain an opportunity to express my opinions in the best broadcasting time between 8 p.m. and 10 p.m. last Thursday night. Bank boards seem to be a highly desirable subject on which to address the electors, and I was one of those who were crushed in the stampede and the inordinate desire to reach the ears of the listening public on that night. I have no doubt that the listening public which tunes in to the proceedings of this Parliament and hears the old familiar voices and visualizes the old familiar faces, at once twists the radio dial to The 12th Street Rag. However, the exponents of bank policy on the Government side are missing at this comparatively early hour of the afternoon. The Minister for National Development (Mr. Casey), in buttressing his position in favour of the establishment of the proposed board, referred to the unparalleled and extraordinary success of company directorates. He implied that that being so, if you take a man off the street, as I was a man off the street, and place him on a company directorate, he will be able to bring to his task, and therefore, by inference, to bring accumulated wisdom to this proposed board, so that ultimately the government and through to the people, the benefit of his own common sense and wide and varied experience. The honorable member for Wannon (Mr. McKinnon) wanted to know what these people bring to the board. Surely the Minister for National Development is not unaware of the fact, as my honorable friend must be, that what these people bring to a board or to a company directorate or a life assurance corporation, is not any outstanding intellectual, business, economic or other quality, but the power to protect. They bring to a board the power, the will and the desire to protect the investment that they have in the concern. We have seen those mammoths of industry walking up Collins-street, Melbourne, after a lunchhour meeting, their duty cheerfully done, a smile of serene happiness in their faces and cigars in their mouths. Why baulk the fact that their contribution to, and their interest in, the particular company on whose directorate they sit is activated not by any public spirit and not by any desire to serve their fellow-men, but simply by a desire to protect their stake in the community and to develop further that acquisitive instinct that has brought them to the position they occupy.
– Is that why the honorable gentleman is in Parliament ?
– I am in Parliament to protect the interests of the community. My assets in the community are entirely the home that I am living in. Can the honorable member answer likewise?
– I can.
– Very well then, his ends are as innocent and as clear as mine. I have grave doubts about the boasted disinterestedness of certain members sitting on the Government side of the committee. There must be a conflict between their private interests and their public duty. That conflict confronts them from time to time and certainly must be resolved in their consideration of this measure. As an ex-member of a bank board and an ex-banker with some knowledge and experience of the matter, I say that the proposed board can act in two ways. One way is as an alibi for the Treasurer and the other is as a buttress for him. It can serve as an alibi for him when a certain course of action is taken and when he will want to say to this House, as no doubt ultimately he will say, “ The Commonwealth Bank Board decided this. I am compelled to accept its decisions.” I think that that is a reasonable statement of the intentions of this Government in creating the board.
I wish to express my profound disgust and resentment at the remark made in this chamber and over the air last week by the Minister for National Development (Mr. Casey), who unfortunately is not in attendance at the moment.It is all very well for honorable members to prate about the necessity to uphold the dignity of this Parliament. There are people outside who would welcome the abolition of this Parliament and also others and people who will be visiting Canberra to-morrow evening are included among them. The Minister for National Development with an air of intolerable patronage and snobbery said plainly that the Leader of the Opposition (Mr. Chifley) would not know a bank from a public convenience. I am amazed that the Minister should have made such an allusion.
– Why repeat it?
– I could understand the Minister saying that the Leader of the Opposition did not know a bank from a band wagon, or something of that nature ; but as a. comparatively new member I resent his intellectual arrogance, his presumption of knowledge and his contempt of a man who, as all honorable members know, has from his fund of experience and by his sympathetic approach and lifelong study of monetary and banking problems, left his mark on the community. Whilst at times we may indulge in our little frivolities, we should be jealous of the prestige of the Parliament. We do not add to our self-respect or to the people’s esteem of us by indulging in such Rabelaisian stupidity. I do not accept the naive protestations of the Government concerning its proposal to reestablish the Commonwealth Bank Board which of its very nature and because of the intermittency of its meetings and, indeed, of its activities must tend inevitably to become, more or less, an instrument for the implementation of the policy, or desires, of the Minister who happens for the time being to control it. That will be the position in which the proposed board will find itself. Therefore, I oppose the clause.
– Order! The honorable member’s time has expired.
.- The form of control of the Commonwealth Bank is of vital importance to the future of not only the bank but also the country as a whole. The Government is proposing to place the bank, which is now controlled by a governor, under the control of a board. Honorable members on this side of the chamber have dealt with the very fine record of the bank under the control of Sir Denison Miller, Mr. Armitage, and its present Governor, Dr. Coombs. Let them contrast that record with that of the bank when it was previously controlled by a board ! I am intrigued by the rather sneering references some honorable members opposite have made in this debate to Dr. Coombs, whom they described as a doctrinaire socialist. As those remarks have been made by supporters of the Government, and as we know that the Government is opposed to anybody who shows the slightest sympathy with socialist doctrines, one naturally inquires why it intends that Dr. Coombs shall continue in his position as Governor of the Commonwealth Bank. Obviously, the Government intends to hamstring Dr. Coombs, because he will be obliged to administer the bank according to the policy that the board lays down.
The board is to be constituted of appointees whom the Government will select from commerce and industry. There can be no doubt that it can obtain the services of many worthy men in those spheres who will be capable of carrying out their duties as members of the proposed board. However, such men are primarily concerned with the making of profits and, naturally, they will introduce their outlook in private business into the administration of the bank. That fact was evident when the bank was previously controlled by a board that consisted of men chosen from commerce and industry. In the financing of their own concerns such appointees will have associations with private financial institutions and, consequently, they will tend to observe at least the spirit of the policy of the private banks to make profits. I shall now refer to the profits and dividends of the private banks over certain periods. On the 18th November, 1938, the Minister representing the Treasurer in the Senate at that time, was asked by Senator Arthur -
What is the annual average rate of dividend of all private banks in Australia as disclosed on paid-up capital of such ‘banks for the period from the 30th June, 1915, to the 30th June, 1932?
– Order ! I ask the honorable member to confine his remarks to the part of the clause that is now before the Chair. The profits of private banks have no relation to the policy of the Commonwealth Bank Board.
– I am showing that outside appointees to the board will tend, as the result of their association in private business with private financial institutions, to determine the policy of’ the bank in the interests of those institutions. The board will be charged with the responsibility of controlling interest rates, and its policy in that respect will have a vital effect upon the profits of the private banks. Already there is a tendency to uphold the financial policy that was in vogue during the depression, when interest rates and, consequently, the profits of private hanks were unduly high. On the occasion to which I have referred, Senator Arthur was officially informed that the simple average rate of dividend of the private banks in Australia for the period from the 30th June, 1915 to the 30th June, 1932, was 10.42 per cent., and the simple average rate for the period from the 30th June, 1932, to the 30th June, 193S, was 5.52 per cent. Thus, prior to the depression interest rates were high and, in fact, were a contributing factor to the depression itself. Following the depression there was a tendency for those rates to decrease. That tendency was continued during the recent war under controls inaugurated by the Commonwealth Bank, with the result that the profits of private banks were kept at a low level. The rate of interest on overdrafts was fixed at 4£ per cent, and that on advances for home building, including the activities of co-operative building societies operating on government guarantee, was fixed at 3 per cent. An agitation is now taking place to have those rates increased. Therefore, the private banks are vitally concerned about whether the Commonwealth Bank will be maintained under it9 present governor and will continue to carry out the policy that was initiated by Labour or whether it will be controlled by a board consisting of men associated with them in commerce and business and who, therefore, will be inclined to fall in with their wishes. The agitation for higher interest rates has been going on for some time. Honorable members on both sides of the House have referred to the present tendency of financial institutions to withhold finance for home building. It has also been suggested that the Commonwealth Bank has been inclined to fall in with that policy. I do not think that that statement is correct because the bank, under its present control, has been prepared to make finance available to building societies which have not been able to obtain accommodation from private banks. That matter is involved in the problem of the future control of the Commonwealth Bank. For some time past, propaganda has appeared in the press with a view to bringing pressure to bear on the powers that be to agree to an increase of interest rates. The private banks are concerned about the rigid control of interest rates that has been exercised throughout the war period and up to date. On this point, I quote the following report that was published in the financial columns of the Sydney Morning Herald on the 28th October last, which, incidentally, was not long before the recent general election: -
The tendency towards higher interest rates in Britain is likely to continue even if it is not reinforced by direct action to secure them.
I emphasize the words “ by direct action “. Quoting from the London Economist, the article continued -
There has been for several months a solid foundation for the argument that the pull of economic forces is in the direction of higher rates.
The following observations are also significant -
The announcement that there will be no general election this year disposes of the immediate possibility of a new government less wedded to the notion of cheap money which has done so much to feed post-war inflation.
Similar circumstances are in evidence in this country. Obviously, the present Government is not wedded to the notion of cheap money, particularly for financing the rehabilitation of ex-service personnel, primary producers and home-builders. The article continued -
A rise in interest rates is inevitable if the British economy is to be eased of the rigidities which at present bind it. If this spontaneous supply of savings is to be encouraged and if the future rate of capital investment is to be governed by economic considerations than bv ideas of what the Government or the public would like.
Apparently, it is a case not of what the Government or the public are concerned about, but of what those who control the financial resources of the country are concerned about. That is a vital factor, because men who are appointed to the Commonwealth Bank Board, because of their association with private industry, will naturally be inclined to carry out a policy that is favoured by private financial institutions.
– Order! The honorable member’s time has expired.
– I am surprised that no supporter of. the Government has risen at this juncture to support this terrible piece of legislation. It is significant that only two Ministers have spoken in support of it, whilst no Minister replied to the second-reading debate. Even the Prime Minister (Mr. Menzies) did not have the courage to speak on the bill which proposes to re-establish the Commonwealth Bank Board. Government supporters have adopted a similar attitude in committee. One naturally concludes that the Government’s case is so weak that the Ministry has issued instructions to its supporters, particularly new members, to refrain from speaking on the bill, and that Ministers, recalling the disastrous record of the Commonwealth Bank when it was previously controlled by a board, are unable to support the bill wholeheartedly in debate. We have no doubt about the ultimate result of the proposal because Government supporters haveno alternative but to support the bill, regardless of what their consciences may dictate. They will do so because their leaders were pledged before the Government took office to hand back to the private banks the control of the people’s bank. This was to be done through the medium of a reconstituted Commonwealth Bank Board. This is to be the “pay-off”, about which we have heard so much. The board is to be reconstituted solely in order that the private banks may once again control the policy and decisions of the Commonwealth Bank. In order to decide whether the decisions of the ‘Commonwealth Bank should be made by a board or whether they should be left to the Governor of the Bank, who, in turn, is directly answerable to the Treasurer of the day, who is answerable to his party, which, in turn, is answerable to the majority of the electors, let us examine past history. One bitter experience of control by a Commonwealth Bank board will bear relating. I refer to what happened when the Commonwealth Bank was under the control of the Commonwealth Bank Board prior to its dissolution in 1945. As we all know, the Commonwealth BankBoard was originally established by the Bruce-Page
Government in 1924 for the purpose of enabling private banks to have a more direct say in the affairs and policy of the people’s bank. We did not have to wait very long to find out the real intention behind the Bruce-Page Government’s decision to establish the board. Between 1929 and 1931, when a Labour government was in control in this chamber, but not in the Senate, the real purposes for which the board was established became obvious. Faced with a serious economic situation the Labour Government set out to alleviate the effects of the depression which had struck practically every country on the surface of the earth. At that time other countries were governed by a system of bank control just as we were. Against the wishes of the private banks, the Labour government, acting upon the advice of the then Treasurer, the late Mr. Theodore, decided to adopt a plan designed to enable the unemployed of the day to be re-absorbed into industry, and to enable industry once again to flourish as it is flourishing to-day. The plan was designed to achieve the following objectives : -
The establishment of additional bank credit was of the essence of the proposal. Credits were to be made available so that industry, which was then starving for finance, should be enabled to continue in a normal healthy way and to provide employment for those who were then workless. It is well known that had the Labour government, by means of the proposals to which I have just referred, been able to undertake huge construction and developmental works of the kind that are now contemplated by the present Government, but which it will not be able to put in hand for a very considerable period because of the shortage of manpower, it would have established a situation in which every 100 men employed on constructional and developmental works would have provided employment for 200 men in factories which are ancillary to the implementation of large constructional and developmental projects. A further aspect of the proposal was that interest rates were to be reduced. In order to achieve that very laudable objective, the Government proposed to make heavy purchases of government securities on the stock exchanges with a view to the lowering of the average rate of interest to 5 per cent. Those of us who recollect the events of that period remember very clearly that in respect of some loans the securities for which were not good, the rate of interest reached as high as 12 per cent. The action contemplated by the Labour government of the day was expected to have the following threefold effect : -
It was envisaged that future government loans would be issued at a rate not exceeding 5 per cent. The adoption of those proposals would have resulted in a tremendous saving, not only to the Government, but also to the community as a whole. Bond-holders were to be forced to contribute 3s. 6d. in the £1 on the earnings of all such securities as were subject to tax. Collection of such contributions was to be made at the source. In explaining these proposals the late Mr. Theodore said -
As the Commonwealth Bank and the trading banks, in separate and in combined conferences, have clearly indicated their unwillingness to co-operate with the Commonwealth Government in giving effect to the financial proposals outlined; it became necessary for the Government to proceed in a more direct way to give effect to its policy.
He was referring to a further proposal of the Government relating to the issue of fiduciary notes.
– Order ! The honorable member’s time has expired.
made a strong case for the control of the financial institution? of Australia by specialists. The Minister for National Development (Mr. Casey) properly referred to the findings of the Royal Commission on Monetary and Banking Systems which support the Government’s proposal that control of the Commonwealth Bank should be by a board. The royal commission recommended that the limitation of the field of choice of directors in section 11 (2) (b) of the act should be removed and that the members of the board should be selected for the capacity and diversity of experience and contact, and not as representatives of special interests. That ithe point that I wish to emphasize. Economics is a very inexact science. T?> rely entirely on economic experts is to invite disaster. The finances of a country arc greatly affected by its trade. If we had relied entirely on monetary geniuses, how far would we have gone? Are the members of the present advisory council expected to be familiar with all the ramifications of trade as in this modern world? Have they knowledge of all the intricacies of wool production and selling as well as of the manufacture of steel and cement? If they had, they would be supermen. The possession of such a wide knowledge is not humanly possible.
The honorable member for Gellibrand (Mr. Mullens) took exception to a Minister criticizing the Leader of the Opposition, yet the honorable member himself criticizes 7,500,000 Australians. Surely it is possible to select from among the whole of the population of this country five men of honesty and integrity whose specialist knowledge of the particular calling in which they are engaged makes them suitable for appointment to the Commonwealth Bank Board. Can honorable members imagine what would happen if the Commonwealth Bank were controlled solely by adviser? who were monetary experts? In the past economists have made very many mistakes. Why were they not able to forecast the financial crises that have hit us from time to time? To leave the control of the Commonwealth Bank in the hands of a few monetary experts is wholly unwise.
The honorable member for Werriwa (Mr. Lazzarini), who has strongly opposed the Government’s proposal to reconstitute’ the Commonwealth Bank Board, accused the private banks of having caused the financial and- economic depression’ of the> ‘thirties by their decision to contract credit. That was not tho first time that I have heard an Opposition member completely distort the truth for his own- political purposes. The figures relating to- the total amount advanced by the private banks- during the depression period completely answers the statement of the- honorable member for Werriwa- that by the contraction of credit, by foreclosures and, by the calling in of mortgages, the private banks destroyed the economy of Australia during the depression years1, ©wring the period 1929” to 1933- the’ total’ advances’ issued’ by the nine principal trading banks were- as follows : -
Opposition members- may ask. why there was a drop, im 1931.. The amount of advances in that yeas fell, not because funds were withheld by the banks, but because- the demands of borrowers, were reduced. Do these figures indicate that the private banks contracted credit during the depression? Not at all’.. -What value, then, can be placed on the accusations made by Opposition members? They do not like private banks and their whole objection to the Government’s proposal to re-establish the Commonwealth Bank Board stems from their fear that if they lose control of the Commonwealth’ Bank they will not be able to achieve their purposes, if ever again they are- returned’ to office. The truth of the matter is that the private banks did’ much to- solve the problems that resulted from the depression. In 1934, Mr. Lyons, the then Prime Minister, referred to the trading banks as the “sheet anchor for the recovery of Australia “’. But for the- assistance given by the private banks’ during- the depression, Australia would indeed have been in a sorry mess. Whenever the subject of banking is debated the ol’d bogy of the depression is trotted out by Opposition members. The Vice-President of the Executive Council (Dame Enid Lyons) asked’ why Opposition’ members refer tothe depression and not to the losses that Australia sustained in World War I. An Opposition member who followed: her, and was se confused that he did not understand her allusion, departed1 from theparty line and said that World War I. wasthe cause of tha1 depression. The party line is- that the depression was brought about by the- private1 banks-, which is entirely wrong.. I strongly support the proposal to. reconstitute the Commonwealth Bank Board.. Control of the- Commonwealth; Bank will then be vested, in men who have a1 variety of experienceinstead of monetary supermen and economists who-,, in the past,, have madevery grave mistakes.
– I share the astonishment of the honorable member for Hindmarsh- (Mr. Clyde Cameron) sib the silence- of the Government on this, very vital, provision of the bill- It is incredible that since this committee- has- been sitting this afternoon’, the Government has not put forward any speaker, with the exception of the honorable member for Hume- (Mr. Charles- Anderson),, in. defence of what is the very essence of this measure. That is of a piece with the proceedings during, the past week.. To-day,, in the words of the poet, the Opposition has sat mumchance and mute; nodding at the master’s word-.. During the previous day of the debate on this measure it was forced, on me that honorable membersopposite were not quite happy about the’ situation, or that they have two points of view. I can understand newly elected honorable members on the Government side being intoxicated by their own publicity and, having spoken,, sitting down without desiring to jo-hr in the debate. But the old hands should surely have something to say.. Their present behaviour is consistent with the procedure they adopted when this bill was snatched away from- the Government by the inefficiency of the Minister for Air (Mr. White) who allowed the debate to end while the Prime Minister, the Minister at the table and, I understand, theVicePresident of the Executive Council’ had yet to speak on it as it relates toa matter that was so- strongly emphasized before the election. During the- election campaign Government members were raging lions, but in this House they are sucking doves on the same issue. The Treasurer has been at the table infrequently during this vital discussion. That is a different state of affairs from that which obtained when the previous Government had before the Parliament the legislation for the socialization of banking, when the Minister spent twelve or fourteen hours at the table during the stormy sessions and the committee stages. The debate on this measure has become farcical. It would appear that there is a division of opinion amongst those who support the measure. The Sydney Horning Herald referred to the Government having lost control of this bill during the second reading debate when the Treasurer, whom the nation expected to indicate his stand in this House, following on his statement during the election campaign, was not prepared or was unable because of the inaction of the Minister for Air to make a speech in reply to the debate on the second reading. It would appear that he is endeavouring to compensate for that in the committee stages and, perhaps, he will endeavour to do so in other stages of the debate also. The Sydney Morning Herald referred in a chiding way to the Government having lost possession of the House and asserted that this is a weak bill. It is evident that some Liberal party members are also complaining about the weakness of this bill. Although they do not see it as we see it, they feel that the Government is not fighting as vigorously as it might do. It is all very well to wait for the resolution to be carried by the brutal majority which the Government will use in a little while, but the people who have heard Government members ad neuseum on banking reform now find them dumb on this subject. Their own people have already asked them for an explanation. They have perplexed the people who were deluded into thinking that they had a sound banking policy, which incorporated the substitution of a bank board for the Advisory Council. Mr. Jago, one of the officers of the Bank Officers Association, and & vociferous propagandist for the trading banks, has declared that as a .State councillor he must speak out about this bill He said -
Things should be said here and not kept for a whispering campaign.
He said that the Liberal party was on trial.
– I think that the honorable member should refer to the clause.
– With due deference to you, Mr. Chairman, I think you encouraged me to speak along these lines because of the wide scope you occasionally allowed Government members when they were speaking. Probably, you have forgotten about that because they spoke some time ago in this committee.
The honorable member for Hume (Mr. Charles Anderson), it would seem, thinks that five supermen would have to be found in order to constitute the board. He alleged that the Leader of the Opposition advocated the appointment of specialists but said that the country did not have them. I admire the honorable member’s naive approach to the matter and I say, without insult to the 7,500,000 Australians to whom he referred, that it would be difficult to get five, seven or ten supermen. That is not the point at issue. The point at issue is whether, in view of the fact that the previous Commonwealth Bank Board stands condemned in history for having made appalling decisions in the fact of an oncoming depression, the Government should reconstitute another board. If the Commonwealth Bank had been conducted inefficiently during the last few years one could understand that this provision might have some claim to consideration but the only claim that the Government can have for it is the weight of its numbers in this committee. Figures have been quoted relating to the progress of the bank and the tremendous strides it has made. Honorable members of the Opposition are not asserting that the whole .conduct of the Commonwealth Bank by the bank board was bad but they are stating that the principle of control by a board is bad. Honorable members on the Government benches have said that we must get rid of the dictatorship. The difference between a dictator and a democrat who carries heavy and final authority is very wide.
– All dictators have claimed to be democrats in the first place.
– And all Liberals claim to be democrats and they all wield the same stick. There is a difference between strong, responsible men such as the Governor of the Bank taking the strain of responsibility as head of the organization and the dictatorship about which Government members have, been talking in order to frighten old ladies of both sexes.
This clause is the basis of the whole of this measure. With the exception of the clause, the legislation belongs to the Australian Labour party. This clause is the thin end of the wedge, and it has been inserted in order to suggest to the people that the Government is doing what it set out to do. But the volume of its voice outside-
– Order ! The honorable member’s time has expired.
– The honorable member for Hume (Mr. Charles Anderson) appears to be the only honorable member on the Government side of the committee who is prepared to put forward any defence of this ridiculous proposed new section. However, the remarks he made did not seem to ring true. He referred to the depression and the advances made by the private banks as if endeavouring, not so much to justify the institution of a Commonwealth Bank Board, as to justify the action of the private banking institutions during the depression years. Unfortunately for the honorable member for Hume he apparently did not read what the Royal Commission on Monetary and Banking Systems said in regard to the actions of the trading banks during the depression. Paragraph 565 of the commission’s report states -
Along with other parts of the system, the trading banks must bear some responsibility for the extent of the depression. In the more prosperous times preceding the depression, they went with the tide and expanded credit. There was then no central bank to guide their policy but, even in its absence, the banks might have taken concerted action which would have helped to check the boom and thereby have lessened the extent of the depression. At the outset of the depression, the trading banks, in the interests of their depositors and of their own solvency, were forced by the general conditions and by the reduction of their London funds, due to the fall in export values and the cessation of overseas borrowing, to adopt a policy of contraction which intensified the depression.
Table 5 of Appendix “ A “ of the report of the royal commission shows thai between December, 1929, and March, 1932, the trading banks reduced advances by an amount of £44,570,000. That is an effective answer to the honorable member for Hume’s advocacy of a private banking system.
Since this bill has been introduced and particularly since it has come before the committee, Government members, as has already been stated, have made very little attempt to justify this proposition for the re-institution of a bank board. When Government members have been speaking I haveendeavoured by way of interjection to try to learn the reasons behind this move but honorable members who have spoken from the Government side of the chamber have evaded the real issue which is whether a bank board is necessary and whether it could control the bank’s operations in a more effective manner than they are being controlled at present. Not one honorable member on the Government side of the chamber has attempted to submit an argument in justification of the change. The Minister for National Development (Mr. Casey) spoke for twenty minutes but did not at any stage of his two speeches state any sound reason why a bank board should be re-established. He skirted the subject and talked about almost everything else in the world. I also listened attentively to the Treasurer (Mr. Fadden) who, having introduced the bill, ought to be present in committer so as to explain in detail the various proposals contained in it. Unfortunately we have scarcely seen the right honorable gentleman during the committee discussions. He made a lengthy speech last Thursday night, but he failed to explain the purpose of reestablishing the board. The only conclusion that I am able to draw from the attitude of Ministers and their supporters is that they are unhappy about the provisions of the proposed new section. I firmly believe that the Government has propounded the scheme under instructions that it has received from outside the Parliament.
– It has received its marching orders.
– Yes, it has been told what it must do and it is carrying out its instructions. Its bosses are not the electors of Australia, but are the controllers of the private banks, the people who provided the sinews of war that enabled the Government parties to gain a majority in this chamber. Because the controllers of the private banks paid the piper, they are now calling the tune. The theme of the tune is the reestablishment of a bank board, including, notwithstanding the Government’s declarations to the contrary, representatives of private interests who will do the bidding of the private banks and ensure that the Commonwealth Bank shall again become a bankers’ bank. We have already experienced the dire effects of financial domination by the private banks and I believe that, although Australia is a great country, we cannot afford to allow a similar situation to arise again. The Commonwealth Bank has functioned more efficiently during the last few years than it has functioned at any other period of its history. It has maintained continuous progress under the present system of control. In the final analysis, the Government of the day has been able to control banking policy. Therefore, the people, through their elected Government, have been in charge of the bank. There is no dictatorship in that system. A governor has been in direct control of the bank, and has been assisted by an Advisory Council. The Government has been able to ensure that the financial policy of the bank is exercised in the interests of the whole community instead of in the interests of the very small section that is endeavouring to snatch all the profits that can be made and establish a financial dictatorship in the nation.
– Order ! The honorable member’s time has expired.
.- The fact that the honorable member for Wills (Mr. Bryson) had so little to contribute to the debate is indicative of the strength of the opposition, such as it is, to the bill. I was particularly interested in th9 remarks of the honorable member for Parkes (Mr. Haylen), who, on occasions, has made speeches that have commanded attention because they have been generally logical, though mainly misguided. However, I believe that most honorable members will agree that the honorable gentleman, who has considerable ability, failed to submit one argument of any importance on this occasion. The same criticism can be directed in fairness at the speeches of all members of the Opposition. They have’ no definite point to hammer home and no constructive proposals to make in relation to the bill. Their situation reminds me of a criticism that was directed at a ruling family in Europe many years ago. It was said that the members of that dynasty learned nothing and forgot nothing. After hearing members of the Opposition speaking of the financial depression, I am convinced that they have learned nothing and forgotten nothing about banking since 1930. They appear to be looking at the affairs of 1950 through the spectacles of 1930. or at the events of 1930 through the spectacles of 1950. When they criticize those who were responsible for the economic depression, they criticize every section of the community because no section could rightly claim in 1930 that it had not contributed in some measure to the unfortunate and terrible circumstances that prevailed then. By carrying the critical attitude of the Opposition to its logical conclusion, one might charge the doctors, engineers and other professional men of to-day with a complete lack of knowledge of their sciences in 1930. The fact is that knowledge of every phase of human activity has been vastly increased over the intervening years. It is unfair and beside the point to challenge the appointment of a Commonwealth Bank Board in 3950 on the ground of circumstances that existed in 1930. It is also wrong to suggest that the proposed board will be comparable in any way with the Commonwealth Bank Board that existed in 1930. Anybody who has studied the bill and understands it must realize that such criticisms are baseless. It has been suggested that the new board will represent the private banks, but the bill provides that members of the board cannot also be representatives of the private banks. Criticism of that nature is based on imaginary fears.
Members of the Opposition should study the functions of a central bank more closely than they have done, because the subject is of vital importance to the community. Such functions have altered over the years as currency policy throughout the world has altered. The principle of central banking has developed mainly because of the growth of one aspect of modern governmental practice. Central banks to-day have assumed large responsibilities as the inevitable result of the assumption by governments of increasing social responsibilities. Governments have been forced, over the last two decades in particular but since the commencement of “World War I. in general, to undertake more and more responsibility for phases of life with which governments previously had little concern. Out of that increasing responsibility of government developed an increasing obligation on the part of governments to maintain some sort of financial structure. That obligation has been expressed in Australia and in most other countries by the development of central banking systems. I do not think that the Opposition will challenge me when I say that one of the main functions of a central bank is to maintain a stable level of currency because that, as far as it is practicable in these days, is essential to the wellbeing of the community. Currency fluctuations affect every individual in every aspect of his life.
– A stable level of currency cannot be maintained without a monopoly.
– The monopoly to which the honorable member refers is, in fact, a monopoly of the power that now lies in the hands-
– Of the private banks.
– Of the Parliament of the country! During the last few years that monopoly has been exercised by one man, the Treasurer pf the day. However, when this bill becomes law, the monopoly will be vested in the members of this Parliament. If honorable members accept the fact that an important function of central banking is to endeavour to maintain a stable level of currency, they must also accept the further principle that, since that function affects intimately the every-day life of every citizen, the community, as such, should be represented on the board that determines the policy of the central bank in the first place. The functions of the board of a central bank to-day are not concerned only with banking as such. They are also concerned with the economic life of the community. The common practice in other countries is to appoint to the board of the central bank individuals representing various sections that are vital to the maintenance of the economic life of the community. That is fair and logical. It has the advantage that the views of those who are intimately acquainted with the every-day problems of economics can be presented forcefully and clearly, through the board, to the governing body of the country. The governing body has a different approach to economic problems from that of a central banking board. In the event of a conflict of views between the board and the governing body, which is this Parliament in Australia, the governing body has the right and the authority to decide what policy shall be adopted. In other words, under the system that the Government now proposes, this Parliament will be able to become acquainted, through the Treasurer of the day, with the economic considerations that should be weighed equally with political consideration. The honorable member for Parkes (Mr. Haylen) was inclined to question the view put from this side of the chamber that in the past under the present act a financial dictatorship existed in this country. While-
– Order ! The honorable member’s time has expired.
Mr. MORGAN (Reid) [5.461.- It has been said that whoever controls the finance of the nation controls its destiny. That is why the question of the identity of those who are to control the Commonwealth Bank in the future is a very vital one for the people of this country. Whoever will be in charge of the bank, whether it be members of a board or a single governor, will be in virtual control of the future welfare of this nation. It has been the experience of the past that the bank has controlled the destinies of Australia in peace and in war. The private financial institutions may be indirectly represented on this board. If so, they will be vitally associated with the administration of the Commonwealth Bank. Two great matters are involved so far as the private financial institutions are concerned. The first of these is the control of the special deposits of private banks, which at the present time are controlled by the Commonwealth Bank. These deposits total about £460,000,000, upon which sum the banks receive 10s. per cent, per annum. The private banks have been agitating for some time for the .return of those funds or for an increase in the rate paid as interest. I have already referred to that matter at some length. The second matter is the control of interest rates, which is now, and has been for some time past, vested in the Commonwealth Bank. There has been an agitation in the press, inspired by private financial interests, for the alteration of interest rates. The article that I quoted previously pointed out that there were two ways of achieving the desires of the private financial institutions. One of them is by direct action, which means the withdrawal of accommodation when, by the law of supply and demand, interest rates on money loaned to farmers, home buyers and others will be forced up. The other way of achieving the desires of the private financial institutions is through political action. Both those methods are being adopted by the private financial interests of this country. In Australia, such interests are not now handicapped, as they are overseas, by the existence of a Labour government. Overseas in Great Britain they cannot adopt political action for the time being, but their political campaigns are continuing to throw out the Labour Government there. Some of the private financial institutions of this country have their affairs directed from London, and the policy advocated in England is the same as that advocated here. I refer to an article from the finan cial review of the Sydney Morning Herald dated the 21st August, 1949. The article is headed “ Cheap Money Policy Wanes “. Previous articles stated that the days of low interest rates were over, and this article, which was written by an anonymous staff correspondent, reads as follows : -
The slump in the market for British Government securities may mark the end of the cheap money era that was ushered in with the depression in the ‘thirties. It is but a symptom of Britain’s economic malaise and a demonstration of the ineffectiveness of socialist planning techniques.
British Government stocks have fallen chiefly because the authorities have taken no steps to support the market in recent months
The slow-rising interest rates indicates that the Government is allowing the bond market to find its own level.
Investors appear to believe that a further rise in interest rates is inevitable. In this way they may be wise. It is possible that the socialist Government now sees that a fixed rate of interest, like so many other rigidities it has introduced in Britiain’s economy, is not always advantageous.
Dearer money would tend to reduce the level of capital investments and in this way check inflationary pressures . . .
A similar retreat from cheap money could take place in Australia in future years. Interest rates in Australia have declined steadily since the depression, as the accompanying chart shows. The most recent move in the cheap money campaign was the cutting of the Treasury Bill rate from £1 per cent, to 15 per cent.’as from Slay 1. (Treasury Bills are used by the Commonwealth Government to raise temporary finance.)
This reduction brought the Australian rate more into line with overseas rates. For example, the minimum rate on British Treasury Bills is 10s. (stg.) per cent. Here as in Britain, the result of declining interest rates has been the gradual reduction of fixedinterest investment incomes.
It is apparent that private finance and outside interests are vitally concerned in the control of the Commonwealth Bank because it affects their investment policies and private commercial activities. The article continues -
Many people think that this is detrimental to the” interests of only a comparatively few wealthy people. They forget that savings bank depositors and small bond holders come under the same category. They forget too that many key institutions such as banks, insurance companies, and universities depend upon income from lending or investing their funds.
Honorable members will note how universities are brought into the matter, but I suggest that it is the banks and the private insurance companies that are vitally concerned. The article goes on -
Because of the downward course of interest rates, life offices have reduced the rates of reversionary bonuses allotted to policies- Batesof premium charged for the new non-profit policies have been increased by some offices.
Under exsting banking control the trading bank received only 10s. per cent, on their surplus funds lodged with the Central Bank. These funds total almost as much as the trading banks’ loans to the public.
If pushed much further, the chief money policy would ultimately deprive such institutions of their independence. They would become mere Government agents.
A return to higher interest rates would mean some capital loss to investors, but it would enable them to play as important a part in the nation’s development as in earlier years.
And it is remembered that Lord Keynes, who was chiefly responsible for the popularity of the cheap money doctrine, expressed the opinion, before his death in 1946, tha.t the policy had been carried too far.
Honorable members will therefore understand the nature of the agitation by private interests. It is important, in discussing the future control of the Commonwealth Bank, to consider whether it shall be in the hands of a single governor, answerable to no outside interests, or whether it shall be under the control of a board subservient to those outside vested interests as was the previous board in the days of the depression. The board will control not only the interest rates and the advances policy of the private financial institutions, but also matters related to competition. In days gone by we have seen the effect of the policy laid down by bank boards. In those days the Commonwealth Bank and its branches were not allowed to come into competition with the private financial institutions. Upon that point the Opposition differed from the present Government, because if Labour had remained in power the Commonwealth Bank would have entered into healthy competition with the private financial institutions. If the board is reinstated the policy of discouraging competition with the private banks will again be enforced. Therefore, it is vital to the people of this country, particularly home purchasers, returned soldiers, farmers, home-builders and others, that the policy of cheap money for the people should still remain in operation, and instead of there being a tendency for interest rates to rise, that there will be a tendency for them to fall. Therefore, the farmers, returned soldiers, home-builders and other people should get an opportunity of paying off advances within a reasonable time. If interest rates are forced up, as is obviously intended by the agitation of the private banks, then it means that people will have to struggle as they did in the past and they will be shackled again aa they were in the past. If another crisis occurs people will not be able to pay off their homes, but will lose their equities as they did during the depression. Their assets will find their way back into the hands of the private financial institutions. The history of other financial crises shows that that is what takes place. That if quite apparent from the profit and loss accounts and balance-sheets of the private banks. Not only have those institution? weathered the storm but came through stronger than ever while others in the community went to the wall.
– Order! The honorable member’s time has expired.
Sitting suspended from 5.66 to 8 p.m.
.- Members of the Labour party, when speaking in opposition to the formation of a Commonwealth Bank Board, are divided into two different camps. The honorable member for Parkes (Mr. Haylen) has lamented the fact that this is a moderate bill, and has suggested that, on that account, there is no argument into which -he can get his teeth. I should imagine that far from that being a ground for opposition to the proposed section, honorable members opposite would regard it as a cause for gratification. Other Opposition members contend that the previous Commonwealth Bank Board was an iniquitous body that was responsible for practically every crime in the calendar. Even if that were so. they should remember that the new board will be completely different from the body which, they allege, committed so many crimes during the depression.
– How does the honorable member know that?
– Opposition members allege that the Labour Government that was in office during the depression had no control over the Commonwealth Bank
Board. They should be gratified to knowthat the Parliament will have control over the new board, and that the government of the day will be able to impose its financial policy on that body. Therefore, I am astonished when members of the Opposition so frequently drag the history of the depression into the debate, because the conditions that existed in those days will not apply to the new board. The Leader of the Opposition (Mr. Chifley) hit the nail fairly on the head when he suggested that the Commonwealth Bank might be likened to a public utility, bur, he failed to go on from that point and deal with the various public utilities that operate in the spheres of the Commonwealth and the several States. Almost every one of them is controlled by a board. In fact, a public utility must be free, in its day to day operations, from constant political interference, and must be able to carry out its ordinary functions without unnecessary supervision by the Minister to whom it is responsible. However, I agree that a Minister - in this instance it will be the Treasurer - should be responsible for the overall, major policy of a public utility. I have not heard any member of the Opposition explain why, of all the central banks of the world, only those in the countries behind the iron curtain, namely, Russia, Poland, Czechoslovakia and Roumania, and that of Fascist Spain, are not controlled by boards. In other words, the only countries that do not recognize the principle of establishing a board to control a central bank are Communist-dominated countries and Fascist Spain. If honorable members opposite seek to place Australia in the same ranks as those countries, I believe that they are sadly astray. The honorable member for East Sydney (Mr. Ward) suggested to-day, by way of interjection, that in order to obtain financial stability, we must have a banking monopoly.
– I said a government banking monopoly.
– I thank the honorable member for that information. His views on banking are fairly well known throughout the country. I am afraid that he confuses financial policy with the ordinary everyday business of banking. It is fairly well recognized, that as a result of the depression, it is desirable to have a strong central banking system that can control the credit policy of the nation, but that, at the same time, there is no need to interfere with the ordinary everyday business of banking, as apart from overall financial policy, which can be performed effectively by the trading banks, provided they act within the scope of the financial policy that is laid down by the government of the day.
Members of the Opposition have referred extensively to the attitude of the Commonwealth Bank Board during the depression. They appear to think that they alone had the cure for, and all the answers to, the depression. Despite the quotations that were read by the honorable member for Dalley (Mr. Rosevear), I suggest that they were not prevented, by the attitude of the Commonwealth Bank Board, from carrying out their financial policy. If they had been resolutely opposed to the board’s proposals in those days, they could have demanded a double dissolution, with their banking policy as the issue. However, they were well aware at that time that the country would not have supported their policy. The determination of financial policy rested, in the final analysis, with the people, and I remind those Opposition members who harp on the subject of the depression, and complain that the hands of the Labour Government were tied in those days by the bank board, that they were defeated on the floor of this House as the result of the defection of a group that was known as the New South Wales Labour party, and not by Senate obstruction of their financial policy. The people of Australia defeated that Labour Government at the subsequent general election. To-day, we recognize that the overall financial policy of the country must be in the hands of the government, and must be ultimately decided by the people, but that for the more efficient day-to-day administration of banking affairs, it is desirable to establish a board that will introduce some element of stability.
– The honorable member is a banker’s dream.
– I thank the honorable member for Hindmarsh (Mr. Clyde Cameron ) for his observation. A policy that -was dependent solely on & strong-minded Treasurer, regardless of his political views, would lead to dangerous instability. I believe that honorable members opposite, whether they be of the class that suggests that a bank board is completely iniquitous, or whether they be of the class that considers that the bill does not go far enough from our point of view, are speaking with their tongues in their cheeks. They lack-
– Order! The honorable member has exhausted his time.
Mr. E. JAMES HARRISON (Blaxland)
E8.10]. - The honorable member for wrest (Mr. Freeth) has criticized the Opposition’s objections to this proposed section in a manner with which we have become familiar. He took us to task for harking back to the days of the depression, and then proceeded to express his views about the establishment of a Commonwealth Bank Board, but he carefully avoided the challenge that we have extended to Government supporters .to show us one way in which the Advisory Council has failed to answer every banking requirement of Australia. I understood that the honorable member had a knowledge of banking, and had hoped to hear him cite instances of failure, perhaps after the promulgation of the National Security (Economic Organization) Regulations in 1941, or since the Commonwealth Bank Act was passed in 1945. Glib talk about the dangers of one-man control of the Commonwealth Bank is so much “ eye-wash “.
– There has not been a depression since then.
– In the second quarter of 1941, after Australia had been at war for two years, the rate of unemployment was 3 per cent. It is significant that the Commonwealth Bank Board was then in existence. When this Government took office the rate of unemployment was 0.8 per cent. I had hoped that the honorable member for Calare (Mr. Howse) would endeavour to show that the- Advisory Council had failed to meet the banking requirements of Australia, but he merely asked the question, “If the Commonwealth Bank Board had been such an ogre, why did not the Labour government abolish it in 1941? “ The honorable member knows perfectly well that the Curtin Government, on taking office, brought finance within its control under the National Security (Economic Organization) Regulations, and was able to marshal all our man-power and financial resources for the conduct of the war with the result that our effort was second to none in the world. When the National Security (Economic Organization) Regulations were due to expire in 1945, the government introduced the Commonwealth Bank Bill, and established the Advisory Council. My experience as a trade union leader has taught me that one does not destroy something that is rendering good service merely for the purpose of introducing a “perhapser” I agree in some measure with the points made by the honorable member for Lowe (Mr. McMahon). Honorable members will notice that at no stage am I harking back to the depression itself. The honorable member said that the Labour party was wrong when it abolished the board system. I say that the Government is equally wrong in destroying a system that has proved a success. If it is wrong for us to hark back to 1931 it is wrong for this Government to hark back to 1924 to justify the re-introduction of a system that has proved a failure in the past. It is eyewash for the Government to state that it has a mandate for this measure.
– The people of Australia do not think it is eyewash.
– The people of Australia do not know all the implications of this matter.
– How does the honorable member know that?
– I do not think that 10 per cent, of the people understand the difference between the system to be established under the present bill and the system that is now in operation. Any honorable member of the Government who is a businessman would surely recognize that it would be unwise to hand to any board, particularly with conditions as they =are to-day throughout the world and also in view of the time3 that lie ahead, the confidential information that must come to the Treasurer from international financial authorities overseas regarding world finance. The Government is taking an unwise step in handing control of our finance to the proposed board, even if only for the reason that I have mentioned. The board to be established under this measure will make decisions. It will be required to do so under the bill. It is fantastic to say that the government of the day or the Treasurer representing the Government should hand to that board every confidential document and item of information that comes to this country in respect of banking from England, America and other democratic countries, yet the position is that this Government will pass to the board information from America in respect of dollars that must obviously come to the Treasurer so as to place him in a position to analyse correctly the dollar situation. The result will be that the American people, knowing of the existence of the proposed system, will not give te this country the information by means of which we may make financial decisions in our own interests. The fact is that the Government intends to establish a board with the power to make decisions and afterwards to refere its decisions to the Government. Before that board could make decisions on financial matters it would necessarily require to have before it the financial information reaching the Treasurer from overseas. I consider that the Government does not appreciate what it is doing when it asks America, Britain and other democratic nations of the wor 1, to supply it with information that it will pass to a board of this character. Such confidential financial information should rightly come only to the Treasurer and the Government if we are to have a properly controlled financial system. I cannot understand any businessman supporting such a proposition as that which I have outlined. My remarks illustrate the difference between the advisory council system and the board system. Would anbusinessman or section of businessmen hand to any such board confidential information on which the success of their business depended? This country is a greater business undertaking than any other business in the country. The passing of confidential information from overseas to the board would alone jeopardize the future of this country and we should have a recurrence of serious unemployment because other countries would not supply us with the confidential information we required.
– Why would not the American Bank Board trust the Australian board?
– The American Bank Board! The honorable member does not understand much about that either, because if America has a bank board-
– Order! The honorable gentleman’s time has expired,
– The contributions of honorable members opposite have been most illuminating. It has been suggested that honorable members who support this measure have not been vocal in their advocacy of the proposed sections. I wish to leave no uncertainty about my own position in that respect. I endorse fully the proposed appointment of a Commonwealth Bank Board, because I regard it as vitally necessary. The criticism that we have heard regarding this measure has come very strangely from a party that was over fond of appointing boards. As all honorable members know, Labour governments appointed more than 100 boards to handle matters that are not relatively important, but when it came to the vitally important matter of finance they abolished a board.
To-night, we heard the honorable member for Gellibrand (Mr. Mullens), say that he was an ex-member of a board and was also an ex-banker. I do not know what position he held in a bank but I do not think that it could have been a very responsible one. He told us about the members of bank boards who, according to him, did their jobs at the dictates of vested interests and went about smoking cigars and drinking whisky. I submit that such a person did not do his job properly. That is not the sort of person that we propose to appoint to the Commonwealth Bank Board. The honorable member for Gellibrand will have no chance of obtaining a position on the proposed bank board. There are very real reasons why the control of the Commonwealth Bank should cease to be the responsibility of this Parliament. The Labour party has, in its platform, the ideal of controlling wages and hours by act of Parliament, and so it also aims to control the value of money in the same way. We do not agree with such a policy. We believe that wages and hours should be removed altogether from the control of the Parliament and should be the responsibility of the Commonwealth Arbitration Court. We also believe that the matter of fixing the value of money should be removed from the control of the Parliament because otherwise democracy would just devolve into mass bribery. That is the reason why we consider that the proposed board should be made as free as possible of political influence.
Preceding speakers have mentioned banking policy during the depression and have asserted that that policy largely caused the depression. Such statements are merely evidence of a lamentable lack of knowledge of the situation. The depression was caused by financial transactions between France and America which produced a chain-like reaction that made itself felt throughout the whole world and resulted in the depression. What bankers in Australia did had no relation to the events that caused the depression. As a matter of fact, I believe that the ordinary rise and fall of money values is a necessary part of our economic system which makes our democracy function. If a government continues to inflate and never deflates then it must introduce other methods of control in order to make people work, such as the methods in use in totalitarian States, particularly Russia. Under the existing system, if it is allowed to continue, we shall have the money system managed by theorists in economics and political opportunists. Eventually that money system would collapse if it were still managed by such people.
– Some of the statements by the honorable member for Maranoa (Mr. Charles Russell) were rather remarkable. He referred to what another honorable member had said regarding the persons to be appointed to the proposed board, and then said that that was not the sort of man that the Government intended to appoint. What we on this side of the House have been endeavouring to discover is, just who is to be appointed to the proposed board. The honorable member has said that he knows, but I am sure that we on this side of the House have received no official information from the Treasurer (Mr. Fadden) or from the Government about who is to be appointed. That is the fly in the ointment regarding the proposed new sections. The proposed new section 9 states -
There shall be a Commonwealth Bank Board, which shall be constituted in accordance with Part V. of this Act.
It further provides -
Subject to this Part, the Board shall have power to determine the policy of the Bank or nf the Savings Bank in relation to any matter and to take such action as is necessary to ensure that effect is given by the Bank or the Savings Bank to the policy so determined.
The proposed new section, therefore, lays it down very definitely that the board is to have the power to decide policy. That may have no bearing, or at least very little bearing, upon the manager of the bank or upon its clients, but it does have a bearing on the fact that the board will be able to define to the Governor of the Bank just what policy he is to carry out. It is on that point that we have come to grips with the Government. The honorable member for Maranoa said that the control of the bank should be taken right away from political influence. The Treasurer (Mr. Fadden) himself has said, “ This board shall be subject to the control of the Parliament “. If that is the case, how will the board have been taken away from political influence?
– There is a great deal of difference.
– Of course there is, and the difference is that if this board is constituted and is given the power to which I have referred, under a Liberal Government it would do as it liked, because it would be carrying out the policy of the vested interests that the
Government was serving.
– What proof has the honorable member of the correctness of that statement?
– My proof is contained in the experience of 20 years of parliamentary life and in legislation that Liberal party governments have passed.
– Then cite one act in support of that statement.
– The honorable member says, “ Cite one act “. I shall cite one act that was passed by a Liberal government. I have not seen this Liberal Government pass any legislation yet, but I was a member of a State parliament when a Liberal party government passed a law that provided that, whatever the Commonwealth Arbitration Court decided, the school teachers of the State should receive 5 per cent. less. The reason for that action was that that State Government wanted to reduce the incidence of taxation on the people who were then paying taxes under. State law. I admire the enthusiasm of the honorable member and the clarity of his arguments, but I say to him that when the bells are rung for the division on this proposed section he will be on the Government side of the chamber. The honorable member has interjected quite a lot when members on this side of the House have spoken about matters-
– Order ! The honorable member must return to the proposed new section dealing with the establishment and functions of the proposed board.
– The only thing that I fear is the policy of the board. Et is all very well for honorable members opposite to tell members of the Opposition to get away from the depression. They do not object to our references to the depression if they are thus given the opportunity to sling mud at the Labour party. I have no doubt that the policy of the new board will be similar to that of the board that previously controlled the Commonwealth Bank. I do not say that the new board will bring about a depression but I do say that should another depression, or recession, occur the new board will, first and foremost, preserve the interests of the private banks with which its members will be associated. Honorable members opposite say that they wish to establish a system for the control of banking that will be in the interests of the people. Whilst the proposal now before the committee may appear to be all right, I believe that the new board will fail the Parliament and the people when its services are needed most. In times of prosperity, when money is plentiful, it does not matter whether the Commonwealth Bank is controlled by a Governor or by a board. At such times the people as a whole can obtain adequate financial accommodation. What the country requires most is a banking system that will meet the needs of the community when money is not readily available. I do not say that the previous bank board brought about the depression, but I do say that that board’s policy did not help to cushion the effects of the depression on the community as a whole.
There is an old saying that after one has been taken in once, one will be careful not to be taken in a second time in similar circumstances. If a storekeeper “ put it over “ me and I realized that he had done so, I should deserve all I got if I again did business with him. When the Commonwealth Bank was controlled by representatives of private interests it “ put it over “ the country. Therefore, we should not revert to a system of that kind. What necessity is there for the re-establishment of the Commonwealth Bank Board ? Is there anything wrong with the present control of the bank by a Governor? Honorable members opposite have said that the only central banks that are not controlled by boards exist in countries that are behind the Iron Curtain, or in fascist countries. At different periods the Commonwealth Bank has been controlled not by a board, but by a Governor. Is Australia, a fascist, or a Communist, country? Honorable members opposite fail to answer that question. Can they point to any country in which a central bank controlled by a board has weathered periods of financial stress such as the Commonwealth Bank has weathered when it has been under the control of a Governor? Financial authorities overseas have repeatedly proclaimed that during such periods Australia’s national finances -were maintained on a sounder basis than those of any other country.
For a time the Commonwealth Bank was controlled by a board. Subsequently, a Labour government by virtue of the Commonwealth’s war-time powers enacted the Banking Act 1945 and placed the bank under the control of a Governor. When that measure was introduced supporters of the present Government who were then in Opposition condemned it, but the Treasurer now admits that that legislation has proved to be most successful. The proposed board, through the Governor, will be under the direction of the Treasurer of the day.
– I listened attentively to the debate on the motion for the second reading of this measure and have followed closely the debate that has taken place in the committee, but I have not yet heard any supporter of the Government advance a valid reason why the Commonwealth Bank should again be placed under the control of a board. Those honorable gentleman have devoted most of their time to attacks on the Leader of the Opposition (Mr. Chifley) because, apparently, they are envious of his financial ability and of the able way in which he placed the Opposition’s case on this measure before the Parliament. The Treasurer (Mr. Fadden) when introducing the measure said -
The Government has been deeply conscious of its responsibilities to the people and particularly of the fact that these responsibilities require that measures of such great importance should not be approached in a partisan spirit.
However, the fact remains that supporters of the Government have been most partisan in their consideration of this legislation. They have not advanced a valid reason why the present system of control of the Commonwealth Bank should be altered. Some of them have said that members of the Opposition are divided into two camps. The honorable member for Forrest (Mr. Freeth) made that statement a little while ago. My reply is that Government supporters are divided into two camps on this bill. Whilst some of them have said that the present Governor of the Commonwealth Bank is doing an excellent job others have described him as a doctrinaire socialist. Apparently, honorable members opposite are not quite sure whether they want to get rid of the present Governor. I believe that the Treasurer fully realizes Dr. Coombs’s ability and that that is why he wants to retain that gentleman in his position.
– With a board.
– With, or without, a board. The Minister for National Development (Mr. Casey) made what I consider to be one of the most unparliamentary and vicious remarks that could be made about any honorable member. The right honorable gentleman implied that he had taken the Leader of the Opposition (Mr. Chifley) off the street and appointed him as a member of the Royal Commission on Monetary and Banking Systems.
– The Minister did not say that.
– The Hansard report will show that the Minister referred to the Leader of the Opposition as a man who had been taken off the street and appointed as a member of that commission. The Minister also said that the Leader of the Opposition would not know a bank from a public convenience. It ia deplorable that an honorable member who has given such great service to the country a9 the Leader of the Opposition gave to it when he was Prime Minister and Treasurer, should be referred to in such terms. The Minister for National Development contended that private financial institutions have proved successful in all countries during the last 100 years but made no reference whatever to the debacles that have befallen some of those institutions, or to the racketeering and confusion that existed at various times in some of them, including institutions in Sydney and Melbourne which defrauded depositors of large sums of money during the bank crash in the early nineties. Yet the Minister said that private banking institutions have always functioned in the interests of the nation as a whole. That is not correct. They have always functioned primarily in the interests not of their depositors but of their shareholders, who have always reaped the harvest from the high rates of interest charged.
– At 4 per cent.?
– The private banks have charged rates of interest higher than 4 per cent.
– How much higher?
– At various periods they have charged workers interest at rates in excess of 5 per cent. I shall give a specific illustration by citing the case of an ex-serviceman of the first world war. In 1924, he borrowed £800 in order to pay for a War Service Home. Up to the present time he has paid only £374 18s. 9d. off the principal but, because he was not able to meet principal and interest payments as they fell due during the depression, he has now paid £683 5s. 3d. in interest or nearly double the amount that he has paid off the principal. In addition, he has paid £75 14s. 4d. in respect of insurance and £48 10s. Id. in respect of sinking fund. Yet, he finds that he still owes £376 of the principal that he borrowed in 1924. The previous Commonwealth Bank Board must accept its share of responsibility for the depression.
The honorable member for Bennelong (Mr. Cramer) said that he was astonished that no members of the Opposition had advanced any reason why the Commonwealth Bank should not again be placed under the control of a board. Australia’s national debt now amounts to £2,828,000,000 and the annual interest bill on that debt amounts to £83,429,000. The private financial institutions want the Commonwealth Bank to be placed under the control of a board in order to ensure that in the event of another depression they shall receive their pound of flesh and shall continue to receive interest due on money owing to them just as they continued to receive interest during the depression. Consequently, this proposal represents the “ pay-off “ to the private banks in return for the financial assistance that they gave to candidates of the Liberal party and the Australian Country party .at the recent general election. Supporters of the -Government raise their hands in holy horror whenever the statement is made that they received assistance from the private banks during the recent general election campaign. I point out that the Liberal party candidate who contested the Newcastle seat distributed 42,000 personal letters each of which tore a 2/d. stamp. The cost of that postage exceeded £500 and it is common knowledge that the candidate himself had not provided one penny of that sum. Where did the money come from? It came only from the financial institutions of this country. The reestablishment of the Commonwealth Bank Board is the pay-off to the private banks for services rendered and assistance given to the Liberal and Australian Country parties during the recent general election campaign.
.Opposition members have repeatedly said that speakers on the Government side have not advanced a single reason why the Commonwealth Bank Board should be reconstituted. Surely their own dreadful experience must have convinced them that one-man control may be very dangerous. I am certain that if the Labour caucus had been controlled by a board and not by one member, the Leader of the Opposition (Mr. Chifley) would not have been allowed to lead it into the debacle that followed his proposal to nationalize the banks. That decision was made by him alone, and was forced on the Labour party under great pressure. That experience should be sufficient to make Opposition members realize that board control of a great national institution such as the Commonwealth Bank is preferable to control by a single individual. Opposition members have invited us to point out in what respect the Governor of the Commonwealth Bank or the Commonwealth Bank itself has acted wrongly since the bank has been under the control of one man. The matter is one, not of what wrong has been done in the past, but rather of what dangerous act may be done in the future.
– The bogyman will get you if you don’t watch out!
– Opposition members have indulged in most of the talk about bogies. Towards the end of the regime of the Chifley Government they groomed a certain honorable member for the office of Treasurer of the Commonwealth, in which position he would have exercised full control over the Commonwealth Bank. Fortunately for Australia the gentleman concerned is no longer a member of this Parliament. I refer, of course, to the man who killed Father Christmas and who was responsible for the introduction of single-weft material for the making of suits. The same gentleman had a good deal to say after his defeat at the general election which did him no credit.
– He will be here again when the honorable member has gone from our midst.
– I trust that the danger of his return to this Parliament will be realized. I should not like him to occupy the position of Treasurer of the Commonwealth and be in control of the Commonwealth Bank. The preservation of the financial system of this country is of such importance to the people that we should not risk upsetting it by allowing its control to be exercised by one man.
– It has been suggested that men will be picked off the street and appointed to the board.
– Such a suggestion was made by the honorable member for Dalley (Mr. Rosevear).
– Not at all. That statement was made by the Minister for National Development (Mr. Casey).
– The Minister merely used that expression in reply to Opposition members who had spoken of the likelihood that the Government would appoint a man off the street. His words, taken out of their context, have aroused the ire of Opposition members. The right honorable gentleman made it quite clear that in using the term to which objection has been taken he was referring to what had been said by Opposition members. Hansard will bear out the truth of that statement. In the interests of financial stability we should not allow ourselves to be misled by so-called experts, who, in most instances, are one-eyed. Many people, particularly bankers, cannot see the wood for the trees.
– Tell us about the bedstead manufacturer.
– It is no crime to have been a bedstead manufacturer just as it is no crime to be a seller of prawns. If a man does his job honestly and well, he is entitled to the respect of the community. The bedstead manufacturer to whom the honorable member for Watson (Mr. Curtin) has alluded did an excellent job for Australia. The people’s respect for him and for the board of which he was chairman was demonstrated at the general election when the Scullin Government was thrown out of office. The people did not wish to have the financial system of Australia placed under political control, and they rejected the proposal of the then Treasurer, the late Mr. Theodore, to issue fiduciary notes.
Some Opposition members have complained of the absence of the Treasurer (Mr. Fadden) from this chamber during their speeches to-day. I do not think it is necessary for the right honorable gentleman to be present to listen to the speeches of Opposition members, because they are so alike that if he hears one he hears them all. It seems strange that Opposition members should waste their time by sticking so closely to the party line, telling the same old story over and over again. This Government is determined that the Commonwealth Bank Board will be reestablished to protect the Commonwealth Bank, and so secure the financial system of this country. I support the provisions contained in the proposed new section because T believe them to be designed for the benefit of the people as a whole.
.- This proposed new section is the most important of all the provisions in this bill because it provides for the establishment and states the functions of the Commonwealth Bank Board. That proposal is one to which the Opposition is fundamentally opposed. In our own lives we profit by the experience of the past. Surely the Government of this country should do likewise. The honorable member for Gwydir (Mr. Treloar) has said that the proposal for the nationalization of banking was forced ob the Labour party as the result of the decision of one man. That is utter tripe. The nationalization of banking is a basic plank in the platform of the party. The honorable gentleman also said that the Australian people do not want the financial system to be placed under political control. Is there nothing in the adage that finance is government and government is finance? In the seventeenth century, Lord Rothschild said that he did not care what government controlled his country so long as he controlled its finances. We all remember what happened when, in 1923, the tragic Treasurer handed over to the Commonwealth Bank Board, which was not responsible to anybody, complete control of the Commonwealth Bank. That action had tragic consequences for us in later years when we were hit by the financial and economic depression. The bedstead manufacturer to whom reference has been made to-night, who was then virtually financial dictator of this country, defied the Treasurer of the day and the elected representatives of the people who sought to use the credit of the nation for the purpose of assisting primary producers and wage-earners who were suffering from the effects of the depression. This Government has obviously learned nothing from the lessons of the past. Proposed new section 9a (1.) provides that the bank shall, from time to time, inform the government of the monetary and banking policy of the bank. Surely in these enlightened days we can learn something from the lessons of the past. Why should any member of this Parliament wish to take from its hands and pass on to some one else control of the banking policy of this country? We are opposed to the re-establishment of the Commonwealth Bank Board because we know from the hard lessons of the past that such a board will not serve the best interests of Australia. When the Commonwealth Bank was under control of the former board one-third of our working people were unemployed. Changes of policy should be made only when necessitated by circumstances. No circumstances exist at present which would justify the abandonment of the existing method of control of the Commonwealth Bank in favour of its control by a board.
The honorable member for Gwydir has also referred to the necessity for the preservation of financial stability. Today, inflation stalks through the land, and the Prime Minister is at his wits end to know how to honour his promise to the electors to put value back into the £1. The existing control of the Commonwealth Bank has not failed in any respect. Was not the bank controlled by one man until 1923? During the period of World War I., under the able administration of Sir Denison Miller, the Commonwealth Bank raised loans to finance the war effort at a cost of 5s. 7d. per cent, when the rate charged by the private banks was £3 per cent. That, surely, is indicative of the success that attended the operations of the Commonwealth Bank when it was controlled by one man. Yet honorable members opposite clamour for the re-establishment of the Commonwealth Bank Board. Our experiences in the period from 1929 to 1932 convince us that the re-establishment of the board would be a retrograde step. Many Opposition members suffered great hardships because of the failure of the Commonwealth Bank Board to stand by the people in the dark days of the depression. Instead of assisting the people to withstand the onset of the depression the board caused the government of the day to slash social service payments. In every way it hindered the attempts of the Scullin Government to alleviate the distress that then existed among the people. It opposed the proposal of the then Treasurer, the late Mr. Theodore, to issue fiduciary notes as a means of cushioning the effects of the depression, as was done by the Bank of England during the Napoleonic war. Had Mr. Theodore succeeded in giving “effect to his proposal to issue fiduciary notes to the amount of £1,500,000 a month for a period of twelve months, our people would have escaped a good deal of the distress caused by the depression. Profiting by the lessons of the past, and with a full knowledge of the success that attended the efforts of the Advisory Council which was established by the Chifley Government to assist the Governor of the Commonwealth Bank, we are determined to use every means at our disposal to ensure that responsibility for controlling the finances of this country shall be vested in the Government which in turn is responsible to the people.
The honorable member for Maranoa (Mr. Charles Russell) has referred to the appointment to the board of independent men. During the general election campaign the present Prime Minister said on the hustings that if he were returned to office he would appoint a small board to control the Commonwealth Bank. Now he proposes to constitute a board of ten persons. We had some experience in the past of control by a board consisting of independent men. We know something of the kind of control that was exercised by a retired bedstead manufacturer, by directors of the Broken Hill Proprietary Company Limited, and ex-polo players, all of whom were independent men or, should I say, men of independent means. We have not yet been told who will constitute the five independent men and because of that, and because the Labour party is totally opposed to control of the Commonwealth Bank by a board, we shall fight the Government on this issue to the bitter end. We are well aware what control of the Commonwealth Bank by a board in the past has cost the people of this country in misery and want, principally because of its failure to recognize economic trends. The present arrangements should continue and the Government should bear the full responsibility for the financial policy of thi9 country.
.- It has been interesting to hear that honorable members on the Opposition side of the committee consider that Government supporters have no logical reasons to put forward in favour of the bank board. The reason that we have said little on this proposed section is that our reasons for supporting the measure have been very simply and accurately put forward and we do not believe in wasting the time of the committee. Honorable members of the Opposition appear to dislike the idea of a bank board because of what might happen if there should be another depression. Opposition members have argued that Government supporters are in this Parliament more or less on the sufferance of the commercial banks by which they are told what to do and that if a bank board is established it will carry out the policy of the private banks. For the moment I am prepared to allow honorable members of the Opposition to assume that that is correct and to answer them on that ground. I take it that if I can satisfy them that their opinions on this point are not quite right, they will be quite happy about the whole matter. Under the existing act, one man is responsible for the financial policy of the Commonwealth Bank and that man, in the last resort, is the Treasurer. Would honorable members of the Opposition be happy on the occasion of another depression if the present Treasurer (Mr. Fadden) - who, they say. is dictated to by the private banks- were able to dictate the policy of the bank? What would stop him from doing the same thing as they say a bank board would do? Control of the Commonwealth Bank by one man has worked quite satisfactorily up to the present time but the majority of honorable members of the Opposition wilfully blind themselves to the danger of leaving that power in the hands of one man in future.
.- During the course of the second-reading debate on this measure and during the committee stage, honorable members on the Government side of the chamber have repeatedly stated that honorable members of the Opposition have attributed the depression in Australia from 1929 to 1932 and subsequently to the refusal of the Commonwealth Bank Board to apply a suitable policy. Such statements are quite untrue. During this debate honorable members of the Opposition have stated quite clearly that they realize that the depression was caused by factors which originated overseas and over which the Commonwealth Bank Board had no control whatsoever. What honorable members on this side of the chamber have repeatedly affirmed and what our leader affirmed in his speech on the Banking Bill 1947 was that the bank board, consisting of private individuals, did not take those steps which would have substantially alleviated the horrors of that depression between 1929 and 1932.
I do not ask Government supporters to agree with me concerning the lack of appropriate action by the Commonwealth
Bank Board to alleviate the distress that existed during that period. I have here a copy of a statement that was made at that time by the late Honorable P. G. Stewart, who then represented the Wimmera electorate. At that time the wheat-growers of this country were suffering great distress. The Honorable F. M. Forde, who was Minister for Trade and Customs in the Government of the day, had made a statement to this Parliament regarding the economic problem and its impact upon the wheatgrowers of the Commonwealth. Mr. Forde had pointed out that the Commonwealth Bank would not advance money in order to assist primary producers and to alleviate unemployment. Mr. Stewart said -
Amongst other things it indicates that the Commonwealth Bank and other banks are actually dictating not only the financial but the political policy of this country.
The late Mr. Stewart was not a Labour man but a member of the not very long formed Country party of that day and a man who rendered signal service to this country. He said -
When the Commonwealth Parliament, backed by the State Governments, offered to give a guarantee to protect one of our greatest industries and the banks in effect refused, saying that the Government’s credit is worthless, it created, it seems to me, an extraordinary position. It means, in effect, that the banks are dictating the policy and that the Commonwealth and State Governments, however anxious, are unable to help the industry, ls. 6d. per bushel, out of which the farmer must pay 3d. for the bag, gives the grower ls. 3d. per bushel, an absolutely hopeless position . . .
That honorable gentleman, who had been a Cabinet Minister, placed responsibility on the Commonwealth Bank Board, where it rightly belonged, because it had refused to yield to the policy of the government of the day and thereby to help the unfortunate primary producers.
– What did the Labour Government do about it?
– The Labour Government did endeavour to have legislation passed by this Parliament when the Commonwealth Bank Board refused to yield to government policy. It introduced the Fiduciary Notes Bill but a member of the Australian Country party, the late
Senator Johnson, was responsible for its defeat.
During the course of the 1947 nationalization bill, Professor Walter Murdoch in an article in the Melbourne Herald said this -
– Is he a banking expert?
– I suppose he is as good an authority as the honorable member for Forrest. He said -
My conclusion, not come to all of a sudden nor without due thought, is that our money system - the regulation of the issue and the recall of currency and credit on a rational and scientific basis - is far too important, far too vital for the welfare of all of us to be left to private profit making firms.
That is an impartial, factual statement by a gentleman who, as far as I know, has no political affiliations whatsoever. He said -
It is the concern of the nation. We talk of responsible government; if there is one thing a responsible government ought to be responsible for, it is surely this.
He was referring to the monetary and financial systems. Yet, this Government proposes to set up a board on which there will be five members representing outside interests who will dictate very largely, if not entirely, the board’s policy. I distrust and fear this proposal and I am supported in my attitude by the statement of another prominent parliamentarian in this country. During the depression he said -
We can no more force down the rate of interest that will be charged for money than we can sweep the sea back with a broom.
It was a tory politician who said that. During this last war, due to Labour policy, interest rates were substantially reduced in this counrty. Yet this gentleman-
– How were they reduced?
– By arrangement ; and if an arrangement had not been made, as the honorable member knows, under the circumstances that existed during the last war, an instruction would have been issued by the Treasurer of the day and not by the Parliament. The man who made in the Victorian Legislative Assembly, the statement I have just quoted, was the Eight Honorable R. G. Menzies. He said -
We can no more force down the rate of interest that will be charged for money than we can sweep the sea back with a broom.
Under the terms of this bill, power is given to the Commonwealth Bank to fix the rate of interest to be charged for money in this country, either to private individuals or to governments. Yet the Leader of the Government which brings in this bill does not believe that the rate of interest can be forced down any more than the sea can be swept back with a broom. In view of that statement, honorable members are amply justified in looking for the hidden motive in this bill. This Government does not believe that the five private individuals to be appointed to the bank board will not have an antiLabour bias. Those members will see that interest rates shall not be forced down in the interests of the people of this country.
During the 1929-32 depression wheat was sold at ls. 6d. a bushel. Wages were substantially lower than they had been in previous years and many men were on the dole. Approximately one-third of the population was out of work, but still had to pay high interest rates if they were paying off their homes. The rates were 6 per cent., 7 per cent., S per cent, and up to 10 per cent., on second mortgages. Primary producers were in a similar position. Yet. if this Government were successful in establishing this board and a. similar set of circumstances recurred, the Commonwealth Bank would be in the control of a board which had been appointed by a government headed by a Prime Minister who said that we can no more force down the rate of interest than we can sweep the set back with a broom. What will be the tendency of the policy of this board? Even the most just men have unconscious bias and the bias of this board will be in the direction of maintaining interest rates at a high level when, possibly, they should be reduced.
At the time when the present Prime Minister spoke in the Legislative Assembly of Victoria the Victorian Government brought down a bill to reduce wages and salaries and the right honorable gentleman wanted a general 10 per cent, reduction although the Labour Government in the Victorian Legislative Assembly in- sisted that salary and wage deductions should be on a sliding scale, ranging from 21 per cent, in respect of men on the basic wage to 22-£ per cent, in relation to the chairman of the railway commissioners and persons on substantially higher salaries. Through those facts we know their philosophy.
– Order ! The honorable member’s time has expired.
.- We have listened to some very good speeches from both sides of the chamber, but the speeches from the Government side have been very insincere and have lacked the force of argument. In fact, Government supporters have no arguments with which to support the provisions of the bill. They have stated no reasons why a board should be appointed to manage the affairs of the Commonwealth Bank. That bank is the most successful socialized undertaking in Australia. It was begun in 1911 with a few office tables and chairs, and now it has branches all over Australia as well a.c abroad.
Honorable members interjecting,
– Order ! It is the established custom that an honorable member shall be heard in silence when he is making his maiden speech.
– Had the Commonwealth Bank been an unprofitable concern, the situation would have been different. In such circumstances the appointment of a board might have been of some use. But, as the institution has been highly successful, there can be no valid reason for the Government’s proposal. The trouble is that the bank has been too successful and the Government wants to put an end to it. The crux of this business lies in the fact that the private banks entered into an arrangement with the Liberal party prior to the general election last year under which the party agreed that if it were elected to power it would appoint a bank board for the purpose of harnessing the Commonwealth Bank in return for the contribution of thousands of pounds to its funds by the banks. That is the only reason why the hill has been introduced. Had such a deal been made by an individual, he would have been accused of toeing corrupt. Somebody would have demanded an investigation by a royal commission. But the Liberal party is getting away with it. The party’s propaganda during the election campaign was designed to make the people afraid of socialism. The fear that it engendered in their minds was largely responsible for its success. There is not a scrap of doubt about that.
There is nothing to be afraid of in socialism. Every post office in Australia is a part of a socialized system. Whenever we turn on a water tap or press an electric switch, we take advantage of socialized undertakings. The Minister for Air (Mr. White) waved a copy of the Labour party’s platform at us and said, in effect, that the policy expressed in it represented beliefs that we formerly held. The truth is that we still hold those beliefs. We are still socialists, and I should not like to be described as anything else. We are not ashamed of being socialists. The Government’s attempt to establish a board is only a trick designed to cripple the Commonwealth Bank. It is another form of the Liberal party’s old practice of trying to take away the power of the bank and place it in the hands of the private bankers.
– What about the Bank of England?
– That is a nationalized undertaking.
– It is managed by a board of fourteen.
– The board is subject to government control. The board proposed in the bill that we are now considering will not be controlled in that way. This is very much like the trick that was perpetrated by an anti-Labour government in New South Wales. Judge Piddington was appointed by a Labour government in that State to hear claims by industrial organizations, and he began to grant wage increases and improvements of conditions for the workers. When the Bevin Government gained power it did not dismiss Judge Piddington. It had a better way of putting an end to his activities. It appointed two additional judges so that Judge Piddington lost his power. The same process is being resorted to by this Government in order to hamstring the Commonwealth Bank. Such tricks are often practised by anti-Labour governments. The Stevens Government in New South Wales sold all State industrial undertakings as the result of a subterfuge of a similar character, lt disposed of the State brick works, the State metal quarries and the Monier pipe works, all of which had been profitable concerns, because they were interfering with private enterprise. The first step was to cause those undertakings to lose money. The Steven? Government decreed that they should Kell their products only to State instrumentalities and municipalities. They were forbidden to deal with private concerns. The result was that they began to lose money, and the Stevens Government was able to tell the people that they were unprofitable undertakings, notwithstanding the fact that they had previously returned enormous profits. They were forced into the hands of private enterprise. This Government is endeavouring to use the same tactics in dealing with the Commonwealth Bank.
I shall refer to a personal experience in order to illustrate the way in which the Commonwealth Bank was dominated by the private banks under the regime of a former anti-Labour government. T applied for an overdraft to the manager of the Commonwealth Bank in the locality where I lived. He said to me, “It will be all right, Mr. Davies. Your security is good. I shall have to get in touch with Sydney first, but I shall have a reply in about three days “. He telephoned me a few days later and said, “ I am sorry, but your application has been turned down. I suggest that you go to the bank in Sydney and have a chat with the manager there. I am certain that it will be all right then”. I went to the manager of the Commonwealth Bank in Sydney, and he told me that he was not allowed to give me an overdraft because the bank board had decided that such business should go to the private banks. He absolutely forced me into the hands of the private banks. Later, I decided that I should like to transfer my business back to the Commonwealth Bank and I saw the manager in Sydney again. He handed me the form that applicants for new accounts are required to complete and said, “I suppose that you are not with a private bank are you ? “ When I replied, “Yes”, he said, “Well, we cannot take your business “. First, I was forced into the hands of the private banks, and then I was not allowed to bring my business back to the Commonwealth Bank.
– Did that happen under the present system?
– No. Everything is all right now, but it will not remain so if the proposed board is established. If the bill becomes law, people will again be forced into the hands of the private bankers. That is the sole purpose behind the bill. We know that, and therefore we shall fight the measure tooth and nail. I hope that the provision that the committee is now considering will be rejected and, if I can contribute anything towards that end, I shall certainly do so.
.- The honorable member for Lalor (Mr. Pollard) referred to interest rates and stockaded himself behind a barricade of outworn ideas on that subject. When the present Prime Minister (Mr. Menzies) made the statement that the honorable member quoted about interest rates being fixed by market conditions, he referred to what was then considered to be the best available economic advice. Until approximately 1935, everybody thought that interest rates were fixed by market conditions. It was not until Professor Keynes published his General Theory of Interest that people began to think that interest rates could perhaps be manipulated by the government through what are called market operations. Consequently, when the honorable member for Lalor referred to what the Prime Minister said in those days, he referred to something in the dim past that should be quickly forgotten. The contentious proposed new section 9 which is now before the committee provides that -
Subject to this Part, the Board shall have power to determine the policy of the Bank in relation to any matter . . .
What is meant by that provision ? I think that it means that the board shall have power to determine policy in relation to any matter governed by the Commonwealth Bank Act and the Banking Act 1945. In other words, it will have the power to control the central banking functions under section 13 of the principal act and to control the operation of the trading bank under section 20 of that act. Under section 13 the proposed Commonwealth Bank Board will have power to regulate the note issue, to lend money, to buy, sell and discount bills of exchange, to buy and sell securities, to buy and sell and deal in foreign currencies and to do various other things. As the Leader of the Opposition (Mr. Chifley) very properly pointed out, we have not in Australia what is called a mature monetary system. We do not possess a Lombard-street or intermediate bank. Consequently, many of the powers contained in section 13 are innocuous, or practically worthless.
Under section 20 of the principal act, the proposed board will have power to demand that a percentage of the special deposits of the trading banks be paid into the central bank in order to prevent inflationary forces from getting out of hand. That is policy. The board will have power to control central banking activities and, in effect, to control the special deposits of the trading banks. In 1931 and 1932, the period to which honorable members of the Opposition have referred so frequently, the Commonwealth Bank had only a single power which was the power to lend money. When the government of the day went to the bank and asked for a loan of £12,000,000, the bank replied, “No”. The Government could have gone to the trading banks and asked them to lend the money to it on a government guarantee, and in all probability the request would have been granted. However, the point that I wish to emphasize is that in those days the power of the Commonwealth Bank was strictly limited to the lending of money. In 1941, under the genius of a Liberal Government, the then Treasurer, who occupies the same position again to-day, introduced a regulation conferring additional powers upon the Commonwealth Bank. They were genuine central bank functions. Those powers were given to the Commonwealth Bank by a Liberal Government, and the present Leader of the Opposition accepted them and embodied them in the legislation that was enacted by the government that he led in 1945. While the Opposition thinks in terms of the past, when the Commonwealth Bank was engaged only in the business of lending, the Government and its supporters think in terms of the vastly increased powers of the bank, which enable it not only to lend hut also to have special deposits, to demand that the trading banks hand over a percentage of their deposits to it, to buy and sell foreign exchange, to buy and sell government securities, to lend to the Government on treasury-bills and to do 101 other things. Surely it is logical to assume that, if the bank’s functions are so vastly increased, its management should be taken out of the hands of a single individual and put into the hands of a group of men. Is it not logical to say that the more power that is given to an institution the greater should be the number of people who are to exercise it. The power should be spread among a number of people rather than centralized in dictatorial hands. A wide diversity of view, a maturity of thought, independent judgment on various problems that may arise, and an impartial and judicial way of looking at policy may all result from the deliberations of a group of men. It stands to reason that from a pool of knowledge and judicial advice there is more prospect of getting mature judgment and a sensible decision than there is from one man into whose hands has been concentrated supreme power. Moreover, one controlling individual is constantly subject to the will of the Treasurer, to political pressure and to every sort of outside sectional influence. He does not know from day to day whether his bread will be buttered by a socialist government or whether he will be kicked into the gutter and forced to earn his living in some other way. I submit to you, Mr. Chairman, that the proper course to follow now that the functions of the Commonwealth Bank are so tremendously wide-spread - having been extended by the Treasurer in the first place, and then by the Leader of the Opposition (Mr. Chifley) and finally having been embodied in the 1945 act and in this bill - the proper course is to divest the Governor of his powers and invest those powers in a board containing members of mature judgment with a determination to see that the interests of the country shall be promoted.
– I remember other scenes that have occurred in this chamber. In 1930 I watched Sir Robert Gibson walk out of this place. He was then the chairman of the Commonwealth Bank Board, and he walked out of here from a conference with the heads of the various Australian governments. When he went into the lobby he stood there, put his chin up and said, “ I have stood over them to-day with a whip. I have stood over them with a money whip and I have lashed them into submission.” He was the chairman of the Commonwealth Bank Board at a time when that board was free of political influence because of the peculiar circumstances existing at that time.
– What is the honorable member’s evidence to prove the truth of that statement about a dead man ?
– Not only is my evidence correct and clear, but I heard the statement made and I had the authority of Sir Robert Gibson to publish statements of that kind made by him. I published that statement.
– In what newspaper did the honorable gentleman publish it?
– I shall give the Minister the full facts of the matter.
– I should like to know the name of the newspaper in which it was published.
– I shall give the Minister the full facts of the matter although on that subject I do not want to take up more than is necessary of the ten minutes allotted to me. I had the authority of Sir Robert Gibson to publish various statements made by him and various incidents that occurred between him and the government of that time.
– Including that statement too?
– The condition made by Sir Robert was that these statements should not be published until after his death. I kept a careful note of them and immediately after his death I published them. The journal in which I published them was the Edinburgh Scotsman, because I happened to be in England at that time. Many gentlemen who were members of the press gallery of the period are well aware of the accuracy of my statements. However, I do not wish to be diverted from my point. At that time there were over 1,400 unemployed workers in the Australian Capital Territory. The honorable member for the Australian Capital Territory (Dr. Nott) will well remember the conditions of desperate hunger and misery that existed in No. 4 camp and in the Capitol Hill camp. No. 4 camp was within half a mile of this chamber. Those hungry and desperate men used to fill the galleries of this Parliament House night after night, in order to listen to debates on measures by which the government of the day was endeavouring to provide money to give them the useful work that they were capable of doing. That Government was constantly frustrated by the combination of a hostile Senate and a Commonwealth Bank board freed from political control and operating in complete co-operation with the trading banks of that time. I was astonished to hear the honorable member for Lowe (Mr. McMahon) say to-day that the Australian government of that day applied exclusively to the Commonwealth Bank for funds to the amount of £12,000,000 and failed to apply to the trading banks. He indicated that if it had done so it would undoubtedly have obtained the money. The fact is that the Commonwealth Bank and the trading banks were acting in the closest accord. The letter written by Sir Robert Gibson, as chairman of the Commonwealth Bank Board, to Mr. Theodore, as Treasurer, which issued an ultimatum that required a further reduction in all wages, pensions and social service charges in this country, was expressly framed to represent the views of the Commonwealth Bank and of the trading banks. The honorable member for Indi (Mr. Bostock) told us to-day that we should not look back to 1930, and he reproached us for suggesting that blame should be attached to the present members in the Government parties for what was done by their political predecessors at that time. He said that they had learned a great deal in the last twenty years and would not again make the financial mistakes made by those in control of the financial system in 1930. But his own leader, the Prime Minister, only two and a half years ago in this chamber expressed his intense admiration for what had been done by the Commonwealth Bank Board in 1930, and stated clearly that in his own opinion there would be no alternative to those acts if a similar state of affairs again arose. He stated that he was sorry to note that a fashion had grown up of decrying what had been done in the depression by the financial controllers of this country, yet the way the depression had been fought in Australia was still the envy and admiration of other peoples of the world. He expressed his view that there was no alternative if a similar situation arose again, but to take similar steps. I have been very interested to notice how few members of the ministerial parties have taken part in this discussion. “I admire those who have had the courage to do so, because I understand that those who have not risen are obeying an instruction given to them. I do not know whether the instruction applies to all the members of the Government-
– The honorable member does not know much about it at all.
– Or whether selected members on the ministerial side are allowed to speak. What I do know is that many members of the Government who were most vociferous during the election campaign on this issue are extraordinarily silent now although their duty to the chamber requires them to indicate their views. They do not express those views either because they are not prepared to stand by what they said in the election campaign, or they are afraid of the governmental instruction that has been given to them. Not one of them will deny the fact that if he dares to say anything which may injure this bill, or if he expresses any view contrary to the interests of the private banking institutions he will not get one penny of private bank finance for his next election campaign. There is no member on the Government side who will deny that statement.
– It is not worth the while of honorable members on this side of the committee to deny it.
– A great deal of private bank money was poured out on this issue to help honorable members on the Government side of the chamber during the election campaign. There is a document still in existence in the office of the Commercial Banking Company of Sydney which shows that the expenditure by that bank on a few country constituencies in New South Wales alone-
– Did they win them?
– Some of them, and they lost others. That document shows an expenditure of £39,500, the greater part of which was spent in the electorates of Hume and Eden-Monaro.
– The honorable member must keep to the subject of the Commonwealth Bank Board.
– Yes, Mr. Chairman, I. shall deal with the board further. I am trying to say that a board established in the circumstances proposed in this bil! would be under the control of the private banking institutions which have poured out their money to influence the course of this bill.
– Private banking policy has nothing to do with this clause.
– A paramount issue is the question of the future control of financial policy of Australia. On that matter there is a fundamental difference between the views of the Government and those of the Opposition. The views of the Government, as expressed by the honorable member for Maranoa (Mr. Charles Russell), are that control of money should be removed from the Government as far as possible-
– Order! The honorable member’s time has expired.
– I have been induced to rise by challenges made by the honorable member for EdenMonaro (Mr. Fraser). I have no other reason for intervening at this stage of the debate because nothing has been put forward by honorable members opposite that it is necessary to answer. The committee has heard a long series of tedious repetitions from every speaker from the
Opposition. I have been wondering why that is so. I shall endeavour to deal with the one argument raised by all of them. That argument is that the present bil!, and particularly this clause, restores the position that existed in 1930. Every speaker from the Opposition side of this chamber has put that argument forward. I desire to point out why those honorable members have spent so much time on this matter. Either they are all talking with their tongues in their cheeks, or they are unable to read, or they are unable to understand what has been said from this side of the chamber. There are three particular stages in the banking history of this country. The first stage existed in 1930 when the bank board had complete control of the financial policy of this country.
– The honorable member should go back to the bank crashes.
– That is completely irrelevant.
– Tell us the housewives’ point of view.
– In 1930 the bank board had complete authority and control over the financial policy of this country.
– And they made a mess of this country.
– They did, but not a mess that could be compared to the mess tha! the honorable member would have made of it. That situation existed until 1945, when the new banking legislation was introduced by the Chifley Government. That changed the situation. The bank board was swept away, and a one-man board was established in its place under the complete authority of the Treasurer.
– Is it possible to have a one-man board ?
– I describe the present system as control by a one-man board. .1 do not know how a board is defined, but one-man control of the Commonwealth Bank has existed in the person of the Governor and, through him, the Treasurer of the day, without any legal obligation to report his actions and decisions to Cabinet, the Parliament or the people. In other words, he has supreme control over financial policy. I come now to th, third stage, which will be inaugurated when this bill is passed, as it will be passed.
– Will it?
– No, out it goes.
– This bill will not restore the situation which existed in 1930. The Government is keeping, in essence, the situation that was established under the Commonwealth Bank Act 1945, but is improving it by bringing theresponsibility straight home to the Parliament. In addition, the Government is replacing the one-man board with a board consisting of a certain number of members, who will have the advantage of combined wisdom–
– Why ?
– Five or ten heads are better than one head.
– That is not always true.
– I say that it is true for a very simple reason. What is the Government’s object in re-establishing the Commonwealth Bank Board?
– To strangle the Commonwealth Bank.
– The honorable member for Wills knows that that statement is not true. The purpose of the board is to determine financial policy under the control of the Treasurer and, through him, the Parliament.
– The honorable member does not believe that?
– I am speaking in words of one syllable in an endeavour to help the honorable member for Perth (Mr. Tom Burke) to understand the situation. [ cannot express myself in more simple language. We are trying to extend the knowledge and experience of the bank board, and, therefore, the knowledge and experience of the Treasurer and. eventually, of the Parliament, which will have the deciding voice in determining the financial policy of the nation. That is the situation which we propose to establish. Honorable members opposite know that it is not true to say that the Government desires to restore the situation which existed in 1930.
– Of course it is true.
– It is not true. Obviously, the honorable member for Wills does not understand the legislation or my explanation of it, although I have spoken in the simplest possible language for his benefit. Honorable members opposite know perfectly well that the objections which they have expressed to this bill cut. no ice in the country.
– Of course they do.
– They have not the slightest effect on the people. If the Senate rejects this bill–
– It will.
– If the Labour party submits this issue to the people it will discover that the electors have not been convinced by its policy. The objections which have been voiced by Opposition members to this proposed section are without substance,reason or truth, and they know it. I hope that this debate will conclude shortly, because the committee has been considering this proposed section for a considerable time. One Opposition member after another has said exactly the same things about the proposal. The honorable member for Eden-Monaro (Mr. Eraser) repeated the old, stale, untrue argument–
– I agree that it is shocking. The honorable member said that the private banks had financed the election expenses of honorable gentlemen on this side of the chamber. He is not such a fool as he sometimes tries to make himself out to be, and he knows that the statement that he has made is not true. The private banks, in defence of their own interests successfully contested the Chifley Government’s banking legislation in the High Court of Australia and the Privy Council. They did so by their own efforts and not as the result of the financing of any honorable member on this side of the chamber.
– The honorable member for Melbourne knows perfectly well that no honorable member on this side of the chamber received one penny from any of the banks. If some honorable members did receive any money from that source, I have not heard of it.
– The honorable member must have been asleep during the election campaign.
– I must have been, if any money was being distributed. I hope that honorable members opposite will refrain from repeating that statement, because it i9 insulting to us, and is completely devoid of any relation to the real facts of the case.
– Does the honorable member say that the banks did not put up money ?
– They put up a lot of money in their own interests, but so far as I know, not one penny of it was paid to any honorable member on this side of the chamber for his campaign expenses. I certainly did not receive any of it.
.- The answer to the contentions of the honorable member for Flinders (Mr. Ryan) and other honorable members opposite, who have asked us why we oppose the reappointment of the Commonwealth Bank Board, can be found in an article which was published in the Melbourne Herald on the 18th March last. That newspaper cannot be accused of espousing the cause of the Labour party on the banking issue. The headlines of the article are as follows: - “Bank Powers Strong Under 1945 Act. Key Is How Used”. That, of course, is the key to the whole situation. This Government has not been game to revert openly to the state of affairs that existed in 1930, or openly to out the throat of the Commonwealth Bank, and, therefore, it proposes to smother that institution by refraining from using the strong powers which are contained in this bill. Opposition members have been asked why they are suspicious of a bank board. Well, whether or not the private banks put money directly into the hands of honorable members opposite for campaign expenses during the general election, everybody in the community knows that they devoted hundreds of thousands of pounds to a campaign to put the present Government into office. I know that, in my own constituency, every person on the electoral roll received three propaganda letters and, the envelopes in which they were enclosed were typed in the offices of the private banks by bank employees, many of whom had been dragooned into doing that work and who, on some occasions, had been paid substantial amounts in overtime to do so.
– Order! The propaganda matter distributed by the private banks during the last election campaign is not related to the proposed new section under consideration.
– It is related to the proposed new section in this respect, that it explains the reason why members of the Labour party are suspicious of the Government’s proposal to establish a Commonwealth Bank board. We know that the private banking interests played a very large part in securing the election of the present Government, and, naturally, they are asking their price for having rendered that assistance. I do not think that even the honorable member for Flinders will deny that this bill was drafted only after the views of the private banks had been obtained. The key to the whole situation is how the authority that is given in the Commonwealth Bank Act 1945 will be used by the new bank board. It is true that this bill does not alter those powers or remove from the Commonwealth Bank the power, not only to require the private banks to leave their excess funds with that institution, but also to fix interest rates. Those powers and other strong powers, are still vested in the Commonwealth Bank, but the Government has overcome that situation by altering the method of control of the bank, so that those powers will not be used in the interests of the people as a whole, as they have been under the system of control instituted by the Labour Government. The Melbourne Herald, which, I repeat, is not a pro-Labour party newspaper, has published the following comment on this bill: -
Banking and city circles are satisfied in the present circumstances with the new Government’s proposals.
They regard those banking proposals as a step towards less stringent control of private banking interests. The Opposition contends that the new bank board will use its powers in the interests of the private banks, instead of employing them in the interests of the nation as a whole, as they have been employed during the last few years. Indeed, the new bank board, which will represent outside interests, will use those powers as a step towards the less stringent control of the private banking institutions. Yet Government supporters ask us why we oppose the appointment of the representatives of outside interests to the Commonwealth Bank Board. The obvious answer is found in the words of the Prime Minister (Mr. Menzies) who has said, in effect, “If you make a mistake in banking policy, you make a mistake which affects, not only the shareholders of the private banks, but also the whole community”. According to a recent periodical report of the Commonwealth Bank, the private banks have excess funds totalling £364,000,000 lodged with the Commonwealth Bank upon which they receive interest at the rate of one-half of 1 per cent. If that money were in the possession of the private banks, they could lend it at the current overdraft rate of approximately 4 per cent., thereby greatly increasing their profits. I shall put some questions to honorable members opposite and challenge contradiction of the propositions they contain. Is it not a fact that the criterion by which private companies judge the success or otherwise of their efforts is the amount of profit which they make? Is not the yard stick with which the directors of private banking concerns measure the success of their efforts the amor it of profits which they make? Do not the shareholders of private banks decide whether the business is successful or otherwise by the dividends that they receive from their investments in those financial institutions?
– Order! I have already ruled that the honorable member’9 remarks on the policy of the private banks is not relevant to the proposed new section under consideration.
– I am showing the conflict that will take place between the representatives of private interests who will be appointed to the Commonwealth Bank Board, and the interests of the nation as a whole.
– The honorable member may discuss the personnel of the board when clause 10 is under consideration.
– I am endeavouring topoint out that a Commonwealth Bank Board, representing private outsideinterests, will have to decide whether it will require the private banks to continue to leave £364,000,000 with the Commonwealth Bank at interest at the rate of one-half of 1 per cent., or whether, in the interests of the private banks, it will increase the inflationary pressure that now menaces the economy of this country, by allowing them to use some of that money to earn them 4 per cent. A similarposition will arise with general interest rates. Can it be said that the businessmen whom honorable members opposite inform us will be appointed to the boardwill not be personally and directly interested in the rate of interest to be fixed’ by the Commonwealth Bank? Of course, such an assurance cannot be given. Government supporters know that those representatives of private interests will’ not be able to divorce their interests from the effects of decisions of the bank. Under the system of control by a governor who is responsible only to the Government, with statutory safeguardsfor his own particular position and with statutory restrictions upon his outside interests, there will be only one criterionby which to judge the success or otherwise of the system. This Parliament will judge the success or otherwise of the Government’s efforts by the stability of the economy of the country.
Honorable members opposite hold up their hands in horror at our suggestion that one man is able to control such avast institution as the Commonwealth Bank, yet is not the very foundation of our public service system, which has been so successful in preserving the stability of the various members of the British Commonwealth of Nations, fundamentally based upon the proposition that great departments of State shall be controlled by an individual, with statutory safeguards and protections, and withstatutory restrictions upon his outsideinterests? Government supporters claim’ that the task of controlling the Commonwealth Bank is too big for one man. Dothey hold a similar view about the departments which Ministers administer? Do they consider that, the responsibility of administering a department is too big for a permanent head ? Is it not a fundamental proposition that the administration of every government department is based on a permanent head, who is responsible to the Parliament, with statutory safeguards for his protection, and statutory restrictions upon his engaging in private outside interests? Is not that a fundamental consideration in the whole of our administration? All that the Labour party did when it appointed a governor to control the Commonwealth Bank was to extend that Public Service principle into the control of the financial policy of the country and the general policy of the Commonwealth Bank itself. If Government supporters object to the principle of one-man control of the Commonwealth Bank, they should be in favour of dispensing with the system under which the Secretary to the Treasury controls that important Commonwealth department. But, apparently, they consider that it is quite reasonable that one man should control the Department of the Treasury and offer the Government advice on financial policy. But they cannot stomach such a proposition when it applies to what is actually one section of the Treasury, the administration of the Commonwealth Bank. When we look for the reason why, we see it once more in a statement made by the Melbourne Herald that I quoted a few months ago. The reason is that the private banking interests felt that the Government could not repeal the Banking Act 1945 because of public opinion in favour of that act, so that they proposed instead that the Government should smother the provisions of that act by means of the new form of administration to be established under the proposed board. Without making any accusations whatever against private banking institutions I put it to honorable members opposite that they must admit that the criterion of the success of these private interests is the amount of profits -that they make. Quite often policies have to be followed in the interests of the nation that are not productive of profit for private banks. Obviously, the reduction of interest rates is a matter upon which there is a fundamental conflict between the profit-making motive inherent in the private banking system and the interests of the nation as a whole. The same applies to the policy of special deposits. There exists, too, a fundamental conflict between a banking system animated by the profit motive and a banking system conducted for the benefit of the people a3 a whole. If a decision has to be made-
– Order ! The honorable gentleman has exhausted his time.
.- This proposed new section contains two provisions. The first of these is that there shall be a Commonwealth Bank Board. The second proposal concerns the powers of that board. I shall attempt to confine my remarks to these two propositions. Other proposed new sections incorporated in the clause make reference to the membership of the board, the functions that the board is to perform and the way in which it will perform them. Although I shall not discuss those aspects, the committee must necessarily keep them in mind so that we may interpret the first part of the clause correctly. The first point to which I desire to direct the attention of the committee is that sub-section (2.) of the proposed new section 9 states that subject to Part V. of the legislation the board shall have power to do certain things. Giving full meaning to the words “subject to this Part”, it becomes clear that the system of control designed to be established under the proposed new sections involves the Treasurer, this Parliament and the proposed board. Some honorable members opposite have spoken as though the proposition in this bill is simply to create a board that will in itself have complete power. That is not so. The proposed board will act in association with the Parliament and the Treasurer. [Quorum formed.] The core of tho argument appears to lie in the difference between the alternative systems of control. The main feature of the system at present in existence is the absolute authority of the Treasurer in association with the Governor of the bank. Under the system proposed by this measure the Treasurer and this Parliament will act in conjunction with the proposed board. During the course of this debate honorable members opposite have made it clear that they have a decided preference for the system under which control is held by the Treasurer and the Governor of the bank. But although their preference has been indicated with extreme clarity their arguments have been developed rather tenuously. During the second-reading debate we heard some rather vague views on the subject of efficiency, but during the committee stage these arguments have been more or less discarded and the main arguments to which we have been obliged to listen have been based on the historical past. I consider that the fallacy of these arguments is in the fact that honorable members opposite are saying, in effect, that because when a totally different board was acting in totally different circumstances certain things happened, therefore with a new board in control the same things would happen again.
– Why does the honorable member say “ totally different”!
– The .bill itself proposes the establishment of a board to be composed differently and to function differently from the previous board to which honorable members opposite have referred.
– We do not know how the board is to be composed, because we have not been told.
– It appears to me that the whole of the historical argument advanced by honorable members opposite amounts to some illogical proposition such as that because a person is scratched by a cat on Sunday he can expect to be bitten by a dog in the middle of next week Having listened rather carefully and assiduously to the arguments advanced, I find it difficult to discover any substantial point to which a reply might be made. That being so, I shall advance some positive and substantial arguments in favour of the changes that this bill proposes to introduce. It seems to me that the positive arguments, and I accentuate the word “ positive “, in favour of the new system of control by a board in association with the Treasurer and the Parliament, are at least three in number. The first is that the system has proved successful in the United Kingdom, the other dominions and in India. There is substantial evidence that this system of control works efficiently. The second argument is that the system will give continuity. Whether we like it or not, the mortality of politics is such that Treasurers come and go and governments rise and fall. The proposals in this bill in relation to the membership of the proposed board and the tenure of office make it plain that the board will have a continuity that will survive changes of government, and that the financial and economic affairs of the country under the direction and management of the central banking institution itself will not be immediately subject to the chances of the polls. The third argument - and this is perhaps the most substantial and positive merit of the proposal contained in the bill - is that the new system will link the financial and economic policy of the nation, politically determined, with a wealth of experience of administration both within the banking system itself and within the general community. It will link the political determination of policy with the needs and the present circumstances of the community. The alternative system of one-man control certainly does not do that.
– I draw your attention, Mr. Chairman, to the state of the committee.
– I rise to order. The attention of the Chair may not be called to the state of the committee twice within a period of fifteen minutes. Attention was called to the state of the committee only a few minutes ago.
– Some canvassing haE been going on to keep members out of the chamber.
– I object to that statement.
– It is a fact. I saw it going on.
– A quorum will be called. Ring the bells. I remind the honorable member for Grayndler (Mr. Daly) that he may not leave the chamber while the bells are being rung for a quorum.
– I am sorry, Mr. Chairman.
– Order! The honorable member for Curtin (Mr. Hasluck) has exhausted his time.
– The two issues involved in this debate are, first, who shall control the people’s bank; and, secondly, who shall compose the proposed bank board. On the issue of control, the question is whether the members of this Parliament, as the representatives of the people, shall administer the control, or whether it shall be administered by the boards of private banks.We should ask ourselves why the Government is seeking to change the present system. Is it concerned that any hindrance will be offered to the present administration by the bank, or is the bank proving a failure at the present time? A brief glance at the position of the Commonwealth Bank, as shown in its report and balance-sheet for the year ended the 30th June, 1949, will give some idea of the work that it has performed over the past 39 years, since it was established with a small advance of £10,000 from the Commonwealth Treasury. The report discloses that the bank’s assets amount to more than £912,000,000, and that its profits in the last financial year were £7,683,000. We must go a little further to find the reasons for the Government’s desire to change the present control of this great financial instrumentality. The honorable member for Forrest (Mr. Freeth), who has spoken on two occasions on this proposed new section, hit the nail on the head when he said that the Opposition was concerned that if it were returned to office while the proposed board was in existence it could not alter the policy of the board. That is exactly what we are concerned about, because when a Labour government is returned at the next general election, as we confidently believe will happen, it will not be able to control the policy of the Commonwealth Bank. Under this proposal the present Government is seeking to establish a state of affairs that will, in effect, enable the interests that it represents to govern this country in perpetuity. That is the reason why the Opposition is opposed to the measure, and why it will use its majority in the Senate to reject it in that chamber. The argument has been used that past Labour governments established boards, such as the Australian Shipping Board, to control undertakings in various spheres. However, I am reminded of a statement that was made by a world banking authority, that if he controlled the credit of a nation he would not care who made its laws.
I agree that those who control the finances of a nation really control its destiny. Under this proposal that great power will be taken out of the hands of the elected representatives of the people, and for that reason we oppose it. What is the motive behind this proposal that will place the nation in pawn to private interests? I point out that of the £39,500,000 received annually in revenue by the government railways in New South Wales, £7,000,000 represents interest payments. The capital cost of the Sydney Harbour Bridge amounted to £8,000,000, but although toll tax collected since the bridge was opened to traffic in 1930 has totalled approximately £7,000,000, the bridge, according to a recent statement published in the Sydney Morning Herald, will not be paid for until 1985 at the earliest. Let us contrast those financial transactions with the financing of the construction of a section of the Trans-Australian railway which was undertaken in the interests of the defence of the Commonwealth. The cost of that work was £5,300,000 and it was financed from the Australian Note Issue at a rate of interest of 3½ per cent. That rate of interest did not impose any burden upon the community because the payment of interest was simply a matter of government accounting, the interest being payable by one government department to another. There is really no need to provide for the payment of interest in respect of the capital expenditure of that kind. However, in that instance provision for the payment of interest was made as a sort of compromise to financial interests which, at all costs, were anxious to prevent the public from learning by a practical demonstration that there was no sense in a government paying interest on private loans for public works when it could, as a government, through the Commonwealth Bank, provide the requisite finance. This Government has announced a formidable programme of public works and if private enterprise is allowed to finance those undertakings it is clear that such an arrangement will be the pay-off to the interests that support the Government. That is the motive behind this proposal. It represents the Government’s pay-off to the interests that were largely responsible for its election. Such a state of affairs should not be tolerated.
The Commonwealth Bank is one of the greatest and most successful undertakings that have been sponsored by a government in this country. It has proved so successful that one must conclude that the Government is actuated by a sinister motive in making this proposal. It has been suggested that if the Government would intimate the persons whom it intends to appoint to the proposed board much of our opposition to this proposal would subside. However, who were appointed to the old Commonwealth Bank Board ? Let us examine their records. They included Sir John Garvan, who was managing director of the Mutual Life and Citizens Assurance Company Limited, which organization was promoted by his father in 1908 ; Mr. R. S. Drummond, a wheat-grower at Lockhart, New South Wales, who was manager of the compulsory wheat pool in that State ; Sir Samuel Hordern, who was governing director of Anthony Hordern Limited, a director of the Perpetual Trustee Company of New South Wales, and a director of the Sydney Board of Directors of the Royal Insurance Company; Mr. J. Mackenzie Lees, who had been chairman of the Associated Banks in Queensland and general manager of the Bank of Queensland Limited ; Sir Robert Gibson, who was a director of a number of companies; Mr. R. B. W. McComas, who was the proprietor of William Haughton and Company and had been chairman of the Woolbuyers Association in Victoria, South Australia and Tasmania; and Mr. A. S. Ball, who was a director of the Union Trustee Company of Australia Limited. We have no doubt that persons of that character will be appointed to the hoard proposed to be established under this measure and we know that such persons will primarily serve special interests rather than those of the people as a whole. If the Government would inform the Opposition of the names of the people whom it proposes to appoint to the proposed board our hostility to this proposal might be lessened. If Government supporters are serious in their talk about the need for co-operation between all parties in the Parliament, the Government in the first place should state clearly its real purpose in proposing to place the Commonwealth Bank again under the control of a board; and, secondly, it should indicate the five arsons whom it proposes to appoint to constitute the board in conjunction with Government representatives.
.- This proposal to place the Commonwealth Bank again under the control of a board is a radical departure from the existing form of control of that institution that has been proved to bs successful. TheGovernment now seeks to substitute for a governor a system of management thai in the past was found to be wanting when this country was faced with a financial crisis. For that reason the Opposition will not accept the proposed new section. Government supporters have indicated that they will fight this measure. That is a firm and unequivocal statement. We shall fight it in this chamber and in the Senate, and should the Government so decide, we shall fight it also in the country. We say that the Government has not a mandate to introduce this measure. Indeed, some of its leading supporters have indicated that they do not approve of the measure in its present form. For instance, the Sydney Morning Herald in a leading article under the heading “ A Disappointing Banking Reform “, stated on 7th March - . . Sharp disappointment will be felt, however, at the constitution of this body, half of which is to consist of Bank or Government officials.
That is a Commonwealth Bank board constituted on the lines set out in this measure. That article continued -
The composition of the Board, however, conforms neither with the recommendations of the Banking Commission nor with the expectations aroused by the Prime Minister’s policy speech. t emphasize that that opinion was expressed by a newspaper which is one of the leading organs of tory thought in this country. That journal stated thai the measure as drafted does not conform to the mandate that the Government claims that it received from the people at the recent general election. I also point out, particularly to honorable members of the Aust2”alian Country party, that a conference of the Australian Wheatgrowers Federation that was held at Perth a fortnight ago expressed the opinion, without one dissentient voice, that the wheat-growers of Australia are opposed to the establishment of a board to control the Commonwealth Bank which would be similar to the board that previously controlled that institution. I believe that the honorable member for Riverina (Mr. Roberton) attended that conference. At all events, Mr. H. Nock, an ex-member for Riverina, attended it, whilst another delegate was Mr. John Teasdale who is well known to members of the Liberal party and the Australian Country party. I repeat that that conference in no uncertain voice declared that the wheat-growers of Australia are opposed to the establishment of a Commonwealth Bank Board along the lines of the body that previously controlled that institution.
Government supporters say that the board now proposed is entirely different from the board that previously existed and which failed Australia in this country’s hour of need. How does the proposed new board differ from the old board? From the information that has been given to us, it would appear that the only difference will be that the new board will consist of a larger number of members. Members of the old board had to be selected on the basis or representation of special interests, whereas this measure contains no definition of the interests or sections of the community to be represented by appointees to the proposed board. However, the Government will still be able to select appointees on the basis of representation of special interests as was done in the constitution of the old board. We have no guarantee that the Labour movement which represents a major section of public opinion will be represented on the proposed board, and in view of past experience it is not likely that such representation will be provided. Honorable members opposite say that we should not hark back to the past in considering a measure of this kind. By what other te3t can we ascertain the fitness of the new board to control Australia’s banking system ? Surely we must be guided by the history of the Commonwealth Bank. What are the facts? From its inception until 1924 the bank was controlled by a governor, and no one can point to a single act of commission or omission on the part of the bank during that period that reacted to the detriment of the bank or of the community as a whole. From 1924 onwards the bank was controlled by a board which consisted of representatives of special interests in the community. Those men, undoubtedly, possessed knowledge and aptitude in the sphere of finance. Nevertheless, that board failed to serve the needs of this great country when it could have done so. Subsequently, the Commonwealth Bank was again placed under the control of a governor, and no individual can say that while under such “control the bank or the monetary system of this country was not conducted efficiently. That is the crux of the Opposition’s argument on this matter. Why should the Government ask the Parliament to turn its back on a system that has proved itself and has served the nation so well? Why turn back to a system which was discredited at a time when the great power of the banking system of Australia was needed to the utmost for the protection of the economic life of the people ? In his second-reading speech the Treasurer said, in effect, “Mistakes might have been made by the Commonwealth Bank Board in the past, but we learn by our mistakes”. No one in his right senses will deny that the Commonwealth Bank Board made many mistakes. The Treasurer, however, did not admit then, nor would he agree now, that while anti-Labour governments have held the reins of office they made a single mistake.
– What about inflation?
– My friend the honorable member for Gippsland (Mr.
Bowden), who was formerly an archpriest of the Douglas credit philosophy, the greatest inflationary movement in the world, asks, “ What about inflation ? “ Inflation has resulted from the war during which we paid for goods and services and expended the products of such goods and services in the unproductive task of fighting an enemy and repelling an invader. In such circumstances some measure of inflation was inevitable. The existing inflationary situation has nothing whatsoever to do with our opposition to the Government’s proposal to reconstitute the Commonwealth Bank Board. However, ability to handle an inflationary situation in ordinary times, devolves upon the banking system. The Government has decided for its own specific purposes to re-appoint the Commonwealth Bank Board. No matter how innocuous its members may appear to be, such a board, we fear, will give immediate effect to the traditional tory policy of curbing inflation by raising interest rates. No doubt the board will say, “If we raise the interest rate by 1 per cent, or 2 per cent., the willingness of the Australian community to borrow will be lessened “.
– Order ! The honorable member’s time has expired.
.- Two arguments have been presented rather prominently by honorable members opposite. In order to buttress their arguments in favour of board control of the Commonwealth Bank they appear to rely on the fact that the central banking systems of two other countries that have been mentioned are controlled by boards. One of those countries is behind the iron curtain; the other is Spain. In developing such an argument honorable members opposite have fallen into a most obvious trap. I have memories of the time when it was commonly said by anti-Labour supporters that honorable members now sitting on this side of the chamber favoured a government similar to that which is now operating in Spain. In relying on such a weak reed, honorable members opposite have fallen into the trap of accusing us of something of which they themselves are guilty. The other argument so constantly reiterated by them is that the Curtin Government did nothing to abolish the Commonwealth Bank Board in 1941. The answer to that argument, which i3 most obvious, has been stressed by Opposition members over and over again. It was unnecessary to abolish the board at that time because at any time the Parliament could have controlled the board. When it was found necessary and expedient to abolish the board, it was quickly disposed of. The Commonwealth Bank Board of the past had a reputation for pitting its views against those of the elected representatives of the people in this Parliament, and of the people themselves. Leslie C. Jauncey in his book, Modem Banking, which was published in 1949, had this to say about board control of the Commonwealth Bank-
One of the ill effects of the 21 years of the control of the Commonwealth Bank by a board of directors was the restraint placed during the period on the general banking division. This restrictive policy stunted the growth nf general bankers in the government bank. Men interested in developing the general banking division were frustrated, with the result that to-day the Commonwealth Bank has far too few general bankers. To meet this situation it will be necessary for the government bank to enlist the services of the best general bankers of Australia.
Mr. Jauncey has emphasized a most important point. Attempts have been made by Government spokesmen to-day to deal with banking as they would deal with an ordinary business. I agree with the statement made by the Leader of the Opposition some time ago that banking differs from other forms of business because an action taken by the banking system may affect almost every phase of our national life. Banking policy should aim at the provision of a banking service for the general good of the community. The orthodox methods of conducting a business for profit which are adopted by the average business man are not suitable for the business of banking. That point was stressed by the Leader of the Opposition some considerable time ago, and it has also been made by Mr. Jauncey in the book to which I have referred. To my knowledge no one ha? attempted to attack the morality of individuals who have served on the Commonwealth Bank Board in the past. What we have said is that only those whose views are well known to the Government will be selected for appointment to the new board, if it is established. The individual who adheres to his moral concepts cannot be said to act immorally if he acts according to his views. The Government will undoubtedly single out for appointment to the board those whose policies and known views best suit it We fear that the Government will appoint to the board persons who will adopt a laisser-faire attitude towards the promotion of the banking interests of this country or persons who are connected wtih the associated banks. It is said by those who think loosely on this subject that the private banking institutions are in active competition with one another, but the truth is that they adopt a common policy as the result of the decisions of the associated banks. The Government agrees very emphatically with controls exercised by the Commonwealth Bank under legislation introduced by the previous Government in 1945. No one can deny that the provisions of the Commonwealth Bank Act 1945 were endorsed by the community. That legislation was also very well received by the press of tin’s country. Indeed, no one has been game to alter its provision because it gave to the Commonwealth Bank very wide powers to curb the private hanking institutions of this country. There is no move on the part of this Government to impose a curb on the powers of the banks under the 1945 legislation. Bather does it tend to place a further curb on the private banking institutions. Honorable members opposite have sought to give effect to their banking policy by very subtle means. The Government has decided to appoint a board and it will allow the board to appease the private banking interests as best it can for any difficulty that has faced them as a result of the 1945 legislation. If the Government wanted to allay the suspicions of Opposition members about its banking policy it should have disclosed the names of the five independent men who are to be appointed to the board. Indeed, there is no reason why the names of those five appointees should not have been stated in the bill itself. The bill sets out the designations of five of the members who have been nominated for appointment to the board. Why should it not also set out the names of the other five members? What is the reason for the Government’s secrecy in this matter? Why has the Government not given us even the slightest indication of the interests that are to be represented on the “board if this bill should be passed ? There is not the slightest reason why the names of the five selected persons should be kept up the sleeve of the Ministry until this bill has run the gauntlet of this chamber and the Senate. We have been asked to sign what is virtually a blank cheque.
– Order ! The honorable member’s time has expired.
Motion (by Mr. Holt) put -
That the question be now put.
The committee divided. (The Chairman - Mr. C. F. Adermann.)
Question so resolved in theaffirmative.
Question put -
That clause 7 to the end of proposed section 9be agreed to.
The committee divided. (The Chairman - Mr. C. F. Adermann.)
Majority . . . . 11
Question so resolved in the affirmative. Progress reported.
Basic Wage - Canberra - Films - Poultry Foods - Burdekin Valley Development - National Development - Commonwealth Transport Organization - Botany Bay - Queensland General Election : Statement by Mr. A. W. Fadden, M.P.
– I move -
That the House do now adjourn.
I take this opportunity to deal with a matter which was discussed last week by the honorable member for Dalley (Mr. Rosevear). I indicated to that honorable member that I would reply upon the occasionof the motion for the adjournment to the matter which he had raised. The honorable member offered some criticism of the reply which I had given on the 29th March to questions asked by the honorable member for Shortland (Mr. Griffiths) and, subsequently, by himself. In effect, he charged me with having accused the representatives of the trade unions in the present basic wage case of having been responsible for delays which had resulted in the case taking an inordinately long time to hear. That is the substance of the complaint which he made although he dealt with the matter in more detail on the debate on the adjournment on Thursday of last week during which he made this comment -
I rise to make a complaint about the nature of an answer that was given to a question that I asked in this House and which a further answer by the Minister for Labour and National Services completely refutes. Honorable members will recall that on the 29th March the honorable member for Shortland–
– I am afraid that the Minister is quoting from a Hansard “ flat “.
– I am, Mr. Speaker, for the sake of accuracy. If there is any objection, I shall not do so. In fairness to the honorable member I want to quote the precise text of what he said. May I obtain leave of the House to do so, Mr. Speaker?
– I am afraid that the House cannot give leave because the front page of the document bears the statement that it is confidential and must not be quoted from.
– Well, I should like to quote Hansard of the 29th March.
– The Standing Orders state distinctly that the honorable gentleman may not quote from Hansard of the current session.
– Then I shall quote from some notes that were made by officers of my department at the time when this matter arose. It is clear from the statement made by the honorable member for Dalley that he attributed to me, by accident or design, remarks that had been made in fact by the honorable member for Shortland. Those remarks were to the effect that the hearing of the case had lasted for almost a year and that there had been delays which should not continue. Unfortunately, I cannot develop this point as precisely as I should like to do in view of the ruling that you have just given, Mr. Speaker., Therefore, I shall content myself by making a very brief comment. “When I replied to the questions, which were asked without notice, I made no reference to the fact that there had been any delays. In fact, I said that I wanted to make it quite clear - and I repeated this in my answer to the question asked by the honorable member for Dalley - that I made no criticism of the time taken by the representatives of the unions in presenting their case in what was an extremely important matter. I said that I merely sought to refute any suggestion that the delays had been caused either by the court itself or by the representatives of the employers, who had commenced their case only a few days previously.
I told the honorable member for Dalley that I would try to give him a more detailed reply and, some time later in accordance with the practice in such matters, I had a reply prepared by departmental officers and placed before me. I am quite willing to show that draft reply to the honorable member for Dalley and any other honorable members who may be interested in it.
– Read it.
– I should be quite prepared to do so if the House were prepared to listen to me. Unfortunately, only a limited time is at my disposal and I merely say that any honorable member may read the reply that was prepared for me. It was a very short statement. I informed my officers that it was not satisfactory from my point of view, first, because it was not sufficiently detailed, .and, secondly, because it contained two passages which, in my opinion, implied a criticism of the trade union representatives, a criticism that I certainly did not intend and had no wish to make. The first of those passages was as follows: -
The presentation of the unions’ case in the current basic wage hearing covered a period of almost nine months. The preliminary hearing was begun on the 22nd of February, 1949, but the actual presentation did not begin until the 17th May, 1949. Since that date and until 8th November, when the unions’ case was virtually completed, there were 5U effective sitting days. Seine of these sitting days were, of course, devoted to procedural matters and the determination of matters relating to the interpretation of the Act.
I considered that I should give the honorable member for Dalley more detailed information than was contained in that statement. The final paragraph of the draft reply contained these words -
It is true that the court refused an application that it should sit on extra days during the summer law vacation. When announcing this, the Chief Judge pointed out that the suggestions of unnecessary delay which had given rise to the proposal .were quite unfounded because during every adjournment it had either been occupied with general court business or else had utilized the time to consider some of the evidence the unions were placing before it. Moreover, it was stated that all adjournments had either been made at the request of the unions or had been in some way attributable to their unpreparedness and finally he declared that some vacations were necessary if the judges were to maintain sufficient health and strength to perform their duties efficiently.
I lay emphasis upon that passage because the honorable member for Dalley has suggested that in some way I have tried to give the impression, first, that unreasonable delays have occurred-
– I did not say that at all.
– And, secondly, that the delays were attributable to the representatives of the unions.
– That is correct.
– I sought to give the honorable member as much detail as possible in order to show precisely how the time of the court had been taken up. Therefore, I set out at very much greater length than in the draft reply, a diarized account of the proceedings and excluded from the statement that I sent to him the references that I have mentioned because I considered that they implied some criticism of the unions. The departmental officers based their comments upon statements that had been made by the Chief Judge. In order to show that their comments were justified, I quote the following passage from page 3167 of the transcript of the basic wage hearing : -
On no occasion lias the case been protracted to suit the personal convenience of the members of the bench. On every occasion of an adjournment or postponement other than such as the legislation lias made necessary, it has been to meet the request or convenience of the unions or because of the nature or method of presentation of the documentary evidence which they have submitted. No delay has been occasioned by the conduct of the respondent employers or their representatives. On the same day, Mr. Justice Dunphy said -
There has not been any delay on the part of the court. Most of the time taken up to now has been spent by the workers themselves through their representatives. I must quote Mr. Baker on the last day of the union’s presentation to the court when he said to me, “ There has been no attempt to cut short any of the union advocates so far as I know, and certainly no attempt to prevent me from putting anything I desired before the court “. That was Air. Baker’s firm expression. Mr. Souter on the same day thanked the court and expressed the appreciation of himself and of his witnesses for the court’s indulgence to them during the hearing.
I have quoted those passages because they support the statement that appeared in the draft reply. I place the facts before the House in order to refute any suggestion that I have at any time attempted to treat the unions unfairly in my statements. At no stage have I made any critical or unfavorable comment about the time occupied by their representatives in placing their case before the court. I suggest, on the facts now before the Parliament, that any suggestion that there has been any misrepresentation of their position by the Government is completely unfounded.
.- I accepted the hospitality of friends in Canberra during the week-end and I consider, even at this late hour-
– Did the honorable member have a good party?
– Yes, and I remind the Minister that I have just listened in patience to a very verbose statement and also that I was compelled to wait while progress was not being reported. I intend to have my say now. In return for the hospitality that was extended to me, I propose to give some expression to what I consider to be the legitimate grievances that were expounded to me during the week-end. This City of Canberra is a very beautiful place.
– Especially in autumn.
– Yes, especially in autumn. The trees are a delight to the eye. The colour scheme is glorious. It appeals to my aesthetic taste. I can imagine no more desirable place to sit down than at some spot along the banks of the Molonglo River. But, unfortunately, the worker and the public servant in Canberra are interested in much more mundane matters. They rightly submit that man cannot live by trees alone. After listening to the dire and doleful recital of my hosts, it seems to me that, to all intents and purposes, this city below the surface is a glorified gaol. I was for some time in His Majesty’s penal establishment at Pentridge, and I assure the House that the analogy is fair. The comparison is apt. A corporate selfcontained community of 1,000 souls exists at Pentridge, and here there is one rising to about 17,000 souls over which broods an abounding bureaucracy in a haunting atmosphere of funereal gloom. Just as there is one dominating, vital personality at Pentridge, the S.P. bookmaker, so in Canberra there are certain firms that brood over the city like a colossus. One of those firms is Woodgers and Calthorpe Limited. The name occurs everywhere. The firm is the real uncrowned king of this glorious city, now so beautiful under the autumn sun. The same name appears throughout the city. When a vacancy occurs in the shopping block at Civic Centre, does this agency ensure that there shall be an infusion of new blood into the community? Oh no ! The same old familiar firm appears from somewhere else. The same old monopoly continues undisturbed, and the same old absence of competition oppresses the citizens. Consider the butchers’ shops! They are widely scattered. The housewife must go to one of them to buy her meat, and it takes her an hour to get a succulent sausage. It passes my comprehension to understand how the family budget and the family shoes can
Possibly survive under such conditions. I defy contradiction when I say chat there is no real competition in Canberra. One group controls the butchers’ shops. If it does not appear openly as a group, at least there is a solid understanding, and the workers and the public servants have to pay on that account. I have never been one to advocate the establishment of general and departmental stores, but if ever a place and a time demanded the importation of a Myer Emporium, a David Jones’, a Coles’ or a Woolworth’s store, that place is Canberra and the time is now. The situation is iniquitous. Outright brigandage prevails. Prices are atrocious, quality is poor and service is deplorable.
– The honorable member has had a busy week-end.
– A very busy weekend. I could talk on this subject all night. T am delighted to be able to give some sort of articulate expression to the doleful, wailing cry of the people of Canberra. To whom can they put their case in this highly public service atmosphere, this centre of suburban and salaried snobbery, this place of acute and vital class distinction, where it is very difficult to burst into the upper crust? The Minister for the Interior (Mr. McBride) will be doing an excellent job if he brings a staff of trained investigators into this city. Let them have a look at prices, and at the filth and dirt in some of the shops and eating houses. Let them see how inadequately in this capital city, this model of Australian culture and progress, the average man, the common man, is catered for. Canberra should not be judged by the superficial outward show of trees, flowers and lawns, it has many deficiencies and I am trying to bring some of them to the attention of the Government. It is incontestable that there are monopolies here and a sphere of influence which should be investigated. The auctioneering firm that [ referred to in regard to the sale of Hotel Ainslie is one sign of that sphere of influence, and there are other signs everywhere that it is very difficult to break into the charmed circle that may be found here. I am asking now that the Minister, in his wisdom, shall personally investigate what is going on and shall bring to this city men capable of assessing the facts of the situation here. Having done that and having learned all the facts, I ask the Minister to take immediate action to bring peace and happiness and serenity to the harassed housewives of Canberra.
– I am grateful to the honorable member for Gellibrand (Mr. Mullens) for his clear explanation of the conditions in Canberra, because, I remind him, those conditions exist after eight years of Labour administration. Whilst I concede that there are deficiencies in Canberra, I cannot agree with him that they are as dire as he has pictured them. However, the conditions that he has described exist after eight years of Labour rule during at least four of which honorable members opposite criticized the States in season and out of season for the inadequacy of their provision of the amenities and houses that the people of the States required. Yet, after that time in their own territory, in which they have had complete control over the conditions that exist, this doleful story is related. The Government recognizes that the conditions here are not ideal. They are not as they should be, and the Government is taking active steps to remedy them, particularly to remedy the position which obliges an applicant for a house to wait for three years at least to get it: I have noted some of the deficiencies in this territory and the Government hopes that conditions will be much improved in much less than eight years’ time.
.- 1 am sorry that the compliment that I paid to the Minister for Labour and National Service (Mr. Holt) in arranging with him not to mention this matter was repaid to-night by his speaking of it without my knowledge of his intention to do so. In consequence I have mislaid some of the papers connected with .the matter, but have on loan from the Minister the letter from which both he and I quoted. There is not the slightest doubt in the mind of any fair-minded person who heard the Minister’s reply to the honorable member for Shortland (Mr. Griffith) and myself that he placed upon the trade unions the responsibility for nearly thirteen months delay in the basic wage case. He made it quite clear that he did not blame them for that.
– I have never said that there was any delay. I have not myself used the word “ delay “ in this matter. That word was used by the honorable member for Shortland.
– If we are to split straws I shall say that the Minister indicated that the unions were responsible for thirteen months having elapsed during the present hearing of their case. I shall leave out the word “ delay “. If plain English has not lost its meaning, the Minister intended to convey to this House that the responsibility for that thirteen months delay, or whatever it may be called, had to be accepted by the unions. Now I shall bring the facts to the notice of the House. They are disclosed in the letter from which the Minister quoted to-night, and which I am pleased to say he has offered to me during the temporary loss of my own copy. Those facts are that there were 87 sittings of the court in thirteen months. Now let us see to what those sittings were devoted. Fourteen days were occupied in procedural matters for which I hope the Minister does not blame the unions entirely. Eight days were occupied in hearing counsel for the Commonwealth, and I hope that he does not blame the unions for that. Sixteen days of the sittings were devoted to interveners, whoever they were - I do not know, because they were not specified - and ten days were occupied by the employers. Therefore, out of a total of 87 days, 48 days were taken up in the way I have detailed. That means that out of 87 days ten days were utilized in the employers’ case and 38 days out of the 87 were taken up by the unions. I challenge any honorable member in this House, regardless of his political affiliations, to deny that when the Minister replied to the honorable member for Shortland and myself as he did he intended to convey to this House and to the public that the thirteen months’ hearing of this case had been entirely due to the -unions putting up their side of it. He said, “I repeat. T don’t blame them”. He totally exonerated the unions from any blame for taking up, as he suggested, thirteen months, but the plain fact is, as he should have told the country, because the debate was being broadcast at the time, that out of 87 sitting days of the Commonwealth Arbitration Court the unions had taken up only 38 days. I put it to you, Mr. Speaker, is that a fair presentation of a reply? I know that no honorable member is entitled to insist on a reply - he is out of order if he does - but if the Minister ventures to make a reply, as he did to a question by the honorable member for’ Shortland, and to my supplementary question, then there can be no interpretation put on what he said other than thai the unions had taken thirteen or fourteen months to present their case. That being so, the plain fact is that he misled thisHouse and misled the country, because the unions took only 38 days to present their case, out of the 87 days upon which the court sat. I leave the matter at th.at.
.- On the 28th March, I asked the Treasurer (Mr. Fadden) a question in relation to the frozen dollar assets of film’ companies in the United States, with particular reference to the use of those funds for the purchase by those film companies of theatres in Australia for the purpose of exhibiting films. The point that I desired to raise in the question was the possibility of the interested parties using their frozen funds to acquire chains of theatres which would exhibit only their own particular films. That would lead to the exclusion of Australian films and would prevent the possibility of the further progress of Australian films made in Australia by Australian companies. In a portion of his reply, the Treasurer said -
The conditions under which “ blocked “ funds of the film companies are held provide that these funds shall not, except with the approval of the Commonwealth Bank, be used for the acquisition of additional theatres unless an acquisition of a theatre was proceeding at the time the restriction on film remittances was imposed.
The reply went on to state that no approval had been given for the use of those funds for the acquisition of additional theatres. I direct the attention of the Government to a report that appeared in last Friday’s Melbourne Argus headed “ Theatre chain plan by M.G.M.” It stated-
A suburban chain of theatres probably will be establishd in Melbourne by MetroGoldwynMayer for screening of M.G.M. films.
Recently the Embassy Theatre, Malvern, was acquired by M.G.M., and now negotiations are proceeding to obtain a theatre in Moonee Ponds and another in Carlton.
These and other suburban houses which it is believed are being sought would provide an outlet for the company’s assets “ frozen “ in Australia by dollar restrictions.
The Regal Theatre, Buckley St., Essendon, was reported last week to have been sold privately for £23,000, but it is understood that the present lessee, Mr. Bill Howard, has acquired the theatre for “a company to be formed “.
In Sydney, M.G.M. has taken over the legitimate theatre, the Minerva, for its films.
That report, if correct, is in direct contradiction of the Treasurer’s statement, unless the Government has recently reversed the previous Government’s policy on the use of “ blocked “ funds for the purchase of theatres by these American companies. The implications of this matter are serious for those who are hoping to make a living in Australia through literature, music, or drama. Once these companies acquire chains of theatres, they will have even greater monopolistic control than they have at present over the exhibition of films in this country and it will be even more difficult than it is to-day for any Australian company producing films to have them exhibited throughout the Commonwealth. At present, because of the booking system enforced by the American companies, it is almost impossible for the Australian film industry to function successfully. If we believe - and I take it that this House does believe - that the development of Australian culture, including literature, music and drama, should be encouraged, steps will have to be taken sooner or later to ensure that Australian films shall be exhibited throughout the Commonwealth on a profitable basis. At present, the American companies are deliberately preventing the successful exhibition of Australian films, and if they are permitted to utilize the large sums that they have accumulated in this country since dollars were “ blocked “ they will eventually secure a complete stranglehold on the Australian film industry, and the people of this country will he forced to depend for their motion picture entertainment upon the products of dope addicts and ladies of easy virtue that swamp this country at present. The time is long overdue for the establishment in Australia of a sound film industry producing, not only documentaries, but also entertainment films generally, and giving widespread employment to Australian people as well as encouragement to those engaged in the production of Australian literature, music, and drama. Such an industry will not be established until Australian films can be successfully exhibited in picture theatres throughout the Commonwealth, and that will not be possible if the Government is to permit these “ blocked “ funds to be used to extend the monopolistic control of American companies. I hope that this matter will be examined, and that, if the reply given by the Treasurer is found to be incorrect in tha light of the newspaper report to which I have referred, steps will be taken to prevent
B.ny further use of the funds in tha manner that I have mentioned.
– Replying to a question that I asked about the granting of export licences for poultry foods, the Minister for Commerce and Agriculture (Mr. McEwen) assumed that I was referring to grain sorghum, whereas, in fact, I was referring to prepared poultry foods which contain quite a number of ingredients. The position in southern Queensland at present is that the poultry industry is not taking the quantity of poultry foods that it usually accepts, and that there is in stock a considerable surplus of those foods. I ask the Minister to give urgent consideration to the granting of permits for the export of those prepared foods which are deteriorating in storage. If such permits cannot be granted, I should like to have some information about the possibilities of southern markets.
.- At question time to-day, I asked the Minister for National Development (Mr. Casey) a question about Commonwealth participation in the building of the Burdekin dam. I raised that matter because I have just returned from north Queensland. While I was there, I read press reports about -what was happening in that area. I also read certain statements that had been made by the Treasurer (Mr. Fadden). To-day I asked the Minister for National Development a question couched in the tersest possible terms’. I wanted a definite “ Yes “ or “ No without any equivocation. I asked whether the’ Government would participate in the construction of the Burdekin dam. Again I wa3 put off by the Minister for National Development. He was not prepared to give me a definite answer. The Treasurer has always been a carping critic of this major project which would mean much to Australia’s defence and . development. Where is he to-day? He is in Queensland.’ The State elections are to be held on Saturday next and the right honorable gentle”man, because of his criticism of the Burdekin project, has placed the Australian Country party in that State in a rather bad light. All that the people of north Queensland ask from this Government is a decision on whether or not it will join the Queensland Government in carrying out this work on a £l-for-fl basis. The Treasurer has been saying, “ Mr. Chifley this and Mr. Chifley that”.
– Order ! The honorable member must not refer to “ Mr. Chifley “.
– I am referring to the Leader of the Opposition, who, of course, has no voice in this matter now. Recently, the Treasurer tabled a report that was made by a Commonwealth committee of experts on the 10th November, 1949. This Government was elected on the 10th December; yet he says that he wants further time to consider the matter. The committee recommended that the Commonwealth should participate in the construction of the Burdekin dam. It made certain reservations and pointed out that the project would take a considerable time to complete. It also stated that certain investigations should be made in the course of construction. Members of the committee conferred with Queensland experts who had recommended to their government that the construction of the dam be undertaken.
The Treasurer pulls the leg of the people of north Queensland by pretending to be a great north Queenslander; but when there is a prospect of doing something of national importance, he runs away, criticizes the proposal, and tries to push the baby on to some one else’s lap. Queensland people want to know where he stands on this issue. The Minister for National Development visited Queensland at the week-end. He flew there, and he is still in the air so far a3 the Commonwealth’s attitude to this project is concerned.. The Hanlon Government, which will be returned to office next Saturday, will build the dam, but I believe that the Commonwealth, because of its greater financial resources, should assist the 1,000,000 Queenslanders in the important work of developing their State. Commonwealth assistance in the construction of the Burdekin dam should be provided on a £l-for-£l basis. The Minister for National Development flew round Queensland. I have my feet firmly on the ground, and I know full well what the people of Queensland think about Commonwealth Ministers who fly round investigating projects of great national importance. The right honorable gentleman talked about a grid. He may have a grid on his property, or he may have seen a grid-iron football game in the United States of America. This project fits in to the grid about which he has spoken so much. When the Leader of the Opposition was making a personal explanation last week, he informed the House that the previous government had intended to assist the Queensland Government with that work of major national importance and the people of north Queensland are aware of that fact. The attitude of the present Government towards the project is consistent with the announcement by the Prime Minister (Mr. Menzies) of his intention to introduce an “ antiCommunist” bill to-morrow night. The Government is shilly-shallying in an endeavour to avoid publishing its decision regarding the Burdekin dam until after next Saturday, and, then, most likely, it will “ scrub “ the project. Honorable members will be interested in a statement by Mr. J. C. N. Ferguson, who is the president of the Ayr Chamber of Commerce, published in the Townsville Bulletin on the 20th April last. I do not know that gentleman, and I am not aware of his political views, the colour of his tie or even his religion. “What I am concerned about is his criticism of the attitude of Mr. Fadden towards the Burdekin Valley development scheme.
– Order ! The honorable member may not refer to another honorable member by his name.
– I should have said the Treasurer. Mr. Ferguson’s statement was as follows: -
I desire to reply, through your paper, to the statement by Mr. Fadden on the Burdekin dam, headed, “Election Bait”, which was given such prominence in your issue .of Friday last.
Mr. Fadden’s attack on the Queensland Premier on this issue was a carefully worded, and well timed, but an entirely misleading piece of political propaganda, which, in his own words, “will deceive no discerning person “, and must cause bitter resentment among north Queenslanders, casting, as it does, a slur on one of the major plans for northern development.
The Townsville Chamber of Commerce, the -Ayr Chamber of Commerce, and other responsible northern bodies have continually urged that the Burdekin dam and other major northern projects should not be allowed to become the subject of political controversy, ft is disconcerting to see the Federal Leader of the Country party now coming out in a bitter attack; and doing the very thing of which he accuses the Queensland Premier, by himself calling, and thus making, the dam a political issue.
– How much did he get to write that?
– The honorable member for Griffith (Mr. Berry) would not understand if 1 were to tell him. The policy of this Government still reflects the Sydney-Melbourne attitude. Its vision, from the standpoint of national development and defence, is limited by the Sydney Harbour Bridge to the north and the river Yarra to the south. The Burdekin Valley development scheme, as I have often stated, is of the utmost importance from the standpoint of national development and defence. The people of the whole of north Queensland are interested in it because it is the first real step in the development of the northern part of Australia. We hear many references to the empty north, and the Minister for National Development has stated that people must be settled ir northern Australia as quickly as possible yet he refuses to give a definite answer to my question about the Burdekin Valley scheme. In other words, this Government is not prepared to co-operate with the States in undertaking national developmental works. Why does not the Minister make a definite decision on whether the Commonwealth will cooperate with the Queensland Government in undertaking the Burdekin Valley project, so that the people of north Queensland may know the policy of this Government on that matter?
– Order ! The honorable member has exhausted his time.
.- Not all the whinings of the honorablemember for Kennedy (Mr. Riordan) can restore the lost prestige of the Labour party of Queensland. For 32 out of the fast 35 years, the Labour party has been in office in that State, and has failed to take any progressive step to conserve water. The Chifley Labour Government was in office for eight years, and for three years of that period the honorable member for Kennedy was Minister for the Navy. Why did he not make representations to the previous Treasurer (Mr. Chifley) to devote a part of the Commonwealth revenue, amounting to approximately £30,000,000 per annum, to progressive works in north Queensland? The Labour party has split in Queensland. There is a Northern Labour party, which is distinct from the official Labour party, and the reason for the breakaway is dissatisfaction with the stagnation policy of the Queensland Labour party. Why has not the Hanlon Labour Government investigated water conservation schemes for Queensland and submitted its plans to the Commonwealth? Did not the former Prime Minister (Mr. Chifley) make the rule that before the Treasury would advance money for State developmental works, the State government concerned would have to complete its investigations and recommend its proposals to the Commonwealth? All honorable members will agree with that policy. Why did not the Hanlon Labour Government complete its investigations of the
Burdekin Valley development scheme, submit them to the Chifley Government, and obtain an allocation of money from the Commonwealth for that work?
– The Queensland Government was promised Commonwealth assistance for that project.
– The Leader of the Opposition, in a personal explanation last week, admitted that there was no recommendation to that effect on the files of the Prime Minister’s Department. The only promise that he made to the Queensland Government was a verbal one to the effect that he would consider the proposal. The honorable member for Kennedy must admit that the committee of investigation reported that the whole proposition was too vague to warrant an advance of money by the Commonwealth. Is the Treasurer (Mr. Fadden) to be so irresponsible as to make a substantial advance on a work in respect of which a complete- report has not been made? Before the Australian £1 was devalued, the amount of money involved was £29,000,000, and the present estimate is approximately £4-0,000,000.
Let us examine the record of the Queensland Labour party, ‘ which stands for stagnation, which has been in office for 32 years and which has not undertaken any really constructive works. North Queensland is empty because the Labour Government has not done anything to induce people to settle there. What is the record of the Labour Government in respect of water conservation? Blow much money has it expended on such works in the 32 years during which it has been in office ? Why has Queensland no water conservation scheme? The answer is that the Queensland Labour Government has not been so progressive in outlook as the Governments of New South Wales and Victoria have been. Those governments have made arrangements with the Commonwealth to obtain assistance for important water conservation projects. They conducted their investigations, and submitted their findings and recommendations to the Commonwealth, and, consequently, water conservation schemes are now in operation in those States. The Snowy Mountains hydro-electric scheme has been com menced, and will be completed. The honorable member for Kennedy has asked, why the Government has not announced its decision upon the Burdekin Valley development scheme and other schemes for developing north Queensland. I inform him that when a practical proposition is submitted and recommended by a Queensland government that is prepared to honour its part in the undertaking, the Commonwealth will certainly participate in the work. We believe in doing this in a businesslike way. The whole story is that every three years at State elections we are given promises by the Labour party about water conservation schemes, but those promises are forgotten when Labour is returned to office. However, the Queensland people have got the measure of Labour now, and they know what they can expect from that party. Although Labour was in office in the Commonwealth Parliament for eight yearsand in Queensland for 32 years, it has always failed to implement its promises.
– The honorable member for Fisher (Mr. Adermann) talked about whining. He has just given us the best exhibition of whining to which I have listened for a long time–
– Order ! The Chair will not tolerate comment like that on another member’s speech.
– The honorable member for Fisher commented like that on the speech of the honorable member for Kennedy (Mr. Riordan).
– Order ! The Chair did not notice that.
– In my view the honorable member for Fisher put up a miserable exhibition.
– Order! The honorable member must not comment in that fashion on the remarks of another honorable member.
– Very well. He failed dismally, sir - I said “dismally” - in his attempt to defend the act of repudiation of the Treasurer (Mr. Fadden) on behalf of the Liberal and Australian Country parties to the Labour Government of Queensland. The previous Treasurer, after taking the matter to his Cabinet, decided that the Government was prepared to help to finance the Burdekin Valley scheme on a £l-for-£l basis. We did that after we had decided to expend £200,000,000 of Commonwealth money on the Snowy Mountains scheme. That expenditure did not involve the Governments of New South Wales and Victoria in the expenditure of a single penny. We undertook that work because it was a defence work of tremendous importance. So important was it that no honorable member opposite voted against it. We acted under the defence power because we believed that it was right to harness the waters of the Snowy River and to make it possible for the valley of the Murray River to provide a livelihood for 1,000,000 people, or perhaps 1,500,000 people. We offered assistance to the Government of Queensland and to the Government of Western Australia. In the whole history of federation our administration has been the only one to make such an offer to State governments. Of course, there has been a lot of talk about development. The BrucePage Government made many investigations. It appointed a gentleman named Buchannan to report upon the ports and harbours of Australia. He presented two magnificent reports. The right honorable member for Cowper (Sir Earle Page) told me about them, and, in fact, I got the last copy of the two volumes of those reports, and I have them in my possession now. But the government of the day did not do anything to assist the development of the outer ports. During the last 32 years the Government of Queensland has developed 68S,Q00 square miles in a way that is the envy of all the States of Australia. The State of Victoria, in which my electorate is situated, is the most closely settled State in Australia. It has a population density of more than 20 persons to the square mile, which means that a population of approximately 2,000,000 people inhabits 88,000 square miles. Whatever Victoria has done is as nothing compared with what has been achieved in Queensland, where development has proceeded continuously. In Victoria, the dead hand of the past still impedes our efforts. The Legislative Council - the legislative abattoirs - destroys every piece of progressive legislation that is brought forward. The people of Queensland are not burdened with a house of reactionaries, consequently progress has been made. I wish the Hanlon Government every success on Saturday, and so does every democratic Australian; but the Treasurer (Mr. Fadden), who ought to be in his place here to-night, is away in Queensland now trying to square off to the people there for the shortcomings of the anti-Labour forces in the Parliaments of that State and the Commonwealth, and to restore the prestige of the Australian Country party and the other party that is allied with it. My colleague from East Sydney (Mr. Ward) will have something to say about this activities later.
I turn now to another matter that affects the administration of the Department of Supply. The Minister for Supply (Mr. Beale) announced in the press that he had appointed three person who are leading executives of taxi-cab and haulage companies to investigate the activities of the transport pool which was first established by an anti-Labour administration that the Government has maintained ever since the beginning of the recent war for the conveyance of Ministers and departmental officers and the haulage of Commonwealth-owned he had appointed three persons who are who have been appointed are to destroy this competitor with their own interests. Honorable members opposite talk about competition, yet they want to destroy Commonwealth competition to that all the profits will reach their political supporters. I am reminded that this business is comparable with the disposal of Hotel Ainslie. It looks like another sell-out of the Commonwealth ships in a minor way. I think the Minister has been most discourteous to the House in not having made a statement informing it who have been appointed to make the inquiries and the terms of reference on which they are working.
– And how much they have put into the Liberal party funds.
– They are probably big donors to Liberal party funds.
They are. competing with a Commonwealth instrumentality. I protest against the appointment of such persons, and also against the- Minister’s lack of courtesy in having, informed the press and while keeping, the House in ignorance of his action. I have been a member of this House for neary ten years, and during, that period the invariable rule has been that Ministers make important statements in the Parliament and not to the press. I informed the Minister this, afternoon that I intended to raise this matter to-night, and I hope that he has come prepared to deal with it.
– ^ am prepared to deal with, the matter at once-. I am obliged to the honorable member for Melbourne (Mr. Calwell) because, although I am sure that he did not intend that things should work out in such a way, he has given me an opportunity .to explain that the present Administration is determined that every major phase of governmental expenditure shall be the subject of proper investigation, in contrast with the administration of the previous government.
– Those remarks are neither proper nor impartial.
– That remains to be seen. I think that I shall be able to persuade the House, if mot the honorable member for Melbourne - who is probably unpersuadable im amy event - that quite the proper persons have been appointed to do this job. The honorable member first said that the Government’s action represents- some sort of sell-out to big interests - I think that is the impression that he sought to convey - and that, in some way, those who have been appointed to make the investigation will aCt in a way that is inimical- to the interests of Australia. I thank the honorable member, for having, told me this afternoon that he intended to raise the matter to-night, because that gave me an opportunity to collate the facts. It is a matter of history that when we took office at the end of last year we found that there was in the Department of Supply a huge transport organization which had been built up over the years.
At one stage, it was under, the control of the former Department of Munitions, and at another stage it was scattered about amongst various government departments, which were operating their own. transport. However, the previous Labour Government, by an administrative act not very long- ago, transferred the whole of the transport pool to the Department of Supply,, with the exception of the pool that is operated by the Department of the Interior in Canberra The Department of Sup.ply has a very large fleet of vehicles. There are- no- fewer thani 3;,0Q9- of them, including 900 passenger vehicles;, and it employs approximately 2,Q00> mem.. It is- probably the largest transport organization in Australia, and it operates vehicles not only for the Department of Supply but also for nearly every governmental authority, ineluding Commonwealth! and State instrumentalities,, governments of overseas countries and, in addition, in some instances,, for primary audi secondary industries. If trucks for the haulage, of wheat were short at harvest time the Australian Wheat. Board would apply to us for transport and we might, as we have dene in the past, supply it with a sufficient number of vehicles to get the wheat into the silos. I am trying to show that this- is a large organization which is spread right throughout Australia and which involves a great deal of expenditure. Although responsibility for the vehicles and their use still remains with the. Department of Supply, one somewhat unusual feature of tha position is that a large number of them are hired out to many other departments, the Department of Supply, in fact, retaining very little control over them. It is consequently involved in an enormous volume of clerical work and in all States has maintenance workshops which, in their turn, occupy a large number of buildings, and involve a huge expenditure on plant. If honorable members will regard this obese and bulging tome that I hold in my hand and realize that it is only a digest of the activities of the department in relation to this transport, they will have some idea of the enormous extent of those activities.
– Has the Minister read it?
– I hare read a good deal of it. Some idea of the magnitude of the department’s activities may be gained from figures that were supplied to me today. The annual cost of repairs and maintenance is £193,000 and of salaries, 520,000. Other expenditure totals £556,000 per annum. The annual revenue received is £1,041,000. But the catch about the revenue is that that figure is what my department charges its client departments that it serves with transport. That merely means that the amount is debited against an allocation for which provision has been made by the Treasury, with the result that there is a danger that the department that had the hirings will have very litle interest in the matter of economy and the prudent use of these vehicles, although I do not desire to prejudge any department in that connexion. The organization was so large and involved such a huge expenditure of public funds that directly we came into office we considered that we had a responsibility to the people to ensure that the position was justified and that the system was efficient and economical. Indeed, we wondered why the previous administration had not found it necessary to make a similar investigation itself in view of the large amount of money involved and of the extravagances and abuses that have been repeatedly referred to both inside and ouside this House. I do not desire to pre-judge in that matter either, but everybody knows that frequent charges were made about abuses in connexion with the use of these vehicles. However, as the previous Government had not taken any action we considered that it was bur duty to do so immediately, and therefore we established a committee. The Cabinet decision on that matter is embodied in these words -
That the Minister for Supply should establish a small body of three persons to investigate the organization and cost of transport in the department and agreed that the committee should include a man experienced in the management of commercial motor vehicles, and an accountant. ‘
That was the charter given on the recommendation of the Minister for Supply. I think it was given on the recommendation of my predecessor (Mr. Casey) but as it is a recommendation that I entirely endorse I am willing to take the responsi bility for it. We did not seek in any way to pre-judge the Commonwealth transport organization itself. In fact, I have had the utmost assistance from the officers who administer it and I have no criticism of them to offer at this moment. However, we considered that the matter ought to be investigated. I consider that in many respects the officers were doing their job conscientiously and efficiently, but after ali we are only the trustees of the public funds, and the nature of this matter was so widespread that it had to be examined. We considered it our duty to ensure that the people should get 20s. value for each £1 expended.
– Did the Minister have any trouble with the Transport Workers Union about uniforms?
– I had no trouble with the union about uniforms. If honorable members will give me time I shall reveal a very encouraging state of affairs in relation to the unions. I have had no trouble whatever with the unions. On the contrary, I have had co-operation from the men. I appointed a committee to investigate this matter.
– Who are its members ?
– I am about to tell the House. The first question considered was whether the committee should be composed of departmental officers or of outside persons. I myself felt that my officers should not be overlooked in the matter but on the other hand, if I remember aright, the departmental officers suggested that the committee had better be an outside body, and it has to be said in favour of the officers concerned that there was a good deal to be said for having an outside committee to ensure detachment in the character of the investigation. [Extension of time granted.] This is a burning public question, and I considered that I owed it to the House to give a full explanation of it. I chose Mr. L. Schumer, the general manager and director of Yellow Express Limited, of Melbourne, Mr. F. Moate, of Mason and Moate, cartage contractors of Sydney, and Mr. W. J. Dyer, the general manager of City
Motor Services Limited, Melbourne. Mr.. Schumer, in addition to having a comprehensive knowledge of transport operations, is uniquely qualified on the transport costing side. He is the publisher of books on accounting, especially in regard to transport accounting. He was chairman of the Country Industries Freight Enquiry Board that was established by the Victorian Government to further its policy of decentralization of industry. Mr. Moate needs no introduction as he is generally recognized throughout Australia as one of the most competent and successful men in the heavy transport industry. During the war he was chairman of the Sydney “War Transport Pool, and was also a member of the Commonwealth Handling Equipment Pool established by the previous Government in which the honorable member for Melbourne (Mr. Calwell) was a Minister. Mr. Dyer has been the manager of City Motor Services Limited in Melbourne, one of Australia’s premier hire services, and is a qualified accountant. All these gentlemen are highly competent in their fields of endeavour and have generously given their time in a voluntary capacity. They cannot readily afford to give up their time, but they have done so at the request of the Government in an honorary capacity. They have been asked not only to investigate the actual cost of this organization, but also to approach the problem in a constructive way with a view to suggesting any improvements or economies that could be effected. Their function is purely advisory. Such a nonsensical suggestion by members of the Labour party as that there is to be a sellout to private enterprise makes me tired, and emanates from the maudlin fancy of some one who really knows nothing about the matter.
Opposition members interjecting,
-Order! There is a barrage of interjections from my left. It must cease. I have known persons to be hurt in barrages.
– These men have been asked to give advice so that we may have a more economical and efficient system, if that is possible. It is obvious that a transport pool of some kind and of substantial dimensions must continue to be conducted by the Commonwealth. I see no escape from that. If we can effect economies and save the money of the Australian taxpayers, let us do so. These men are competent to give us good advice and I have no doubt that in the long run the taxpayers of this country will be grateful for the objective and impartial advice that they give.
There is no trouble about uniforms. I gave a direction that the drivers of passenger vehicles in Sydney, Melbourne and elsewhere should be in uniform, as their award provides. There was some query as to the shape of the hat or something of that kind, but I have been informed that all drivers - I am speaking now of Sydney, because there was no demur from Melbourne - are happy under the new arrangement. I hope that all honorable members who have the privilege of travelling in Commonwealth cars will come to the conclusion that the drivers of those cars do much more credit to the Commonwealth of Australia now than they did under the previous Administration.
.- I have heard to-night the beauties of Canberra extolled. It is rather late for me to begin to extol some of the beauty spots in my electorate. The beauty spot that I have in mind is called La Perouse. It is on the shores of Botany Bay, which, as some honorable members may know, has been very prominent in Australian history. Anzac-parade leads to La Perouse. Off Anzac-parade there is a road to a place called Henry’s Head. At Henry’s Head there is a fort. On the road leading to the fort, there is a. gate. I am very intrigued with that gate. I want to know who gave orders for it to be placed across the road. I want to know whether this Government was responsible for the gate being placed a.cross the road at the behest of a very “tony” organization called the New South Wales Golf Club, which is notorious for its efforts to remove anything that prints its members from having a good view of Botany Bay. Why was the gate placed there? Was it placed there at the behest of the committee of the New South “Wales Golf Club? I want an assurance that the gate will be removed, because it serves no purpose other than to stop families in cars going along the road to view the sights of Botany Bay. It is a beautiful road and very good for traffic. Many local people like to go along the foreshores of La, Perouse, as also do many visitors, but this gate prevents them from going to the top of the cliff, from which there is a good view of Botany Bay.
.- I support the remarks that were made by the honorable member for Yarra (Mr. Keon) regarding the acquisition of cinemas in Australia by certain American film interests. Recently there has been an increase of the activities of the Metro-Goldwyn-Mayer organization and other companies in purchasing cinemas in this country. It would be most unfortunate if American film interests took over all or a very large proportion of the suburban and metropolitan theatres in which films are screened. That would be unfortunate for our own film industry as well as for Australian film exhibitors. The honorable member for Yarra referred to a report that was published in the Melbourne Argus. I have not seen that report, but I know some of the details of the purchase by the MetroGoldwynMayer organization of the Embassy Theatre in Malvern. I brought the case to the notice of the Treasurer (Mr. Fadden). I understand that some Australian film interests wished to purchase the theatre and that they made several bids, which were accepted tentatively. No finality was reached. On each occasion they were out-bid by an American company, which finally offered to pay £63,000 for the theatre. The contrast qf sale, although not yet signed, is due for completion in June. The sum of £63,000 was more than the Australian interests could offer. It appeared, as was suggested by the honorable member for Yarra, that the American company was making use of the so-called “blocked” credits which it has derived from the fees paid to it for the exhibition of its films in this country. An investigation was made by the Treasury and I understand from a report, of which I have seen a copy, that the sum involved in the purchase of the Embassy Theatre comes not from “blocked” credits but from other sources over which the Treasury has no control.” There the matter rests at present. If American film companies can use money from sources other than “ blocked credits “, it is certain that before very long a large proportion of the cinemas in this country will be under their control. I believe that that would be most undesirable. In the United States of America there is a law that prohibits companies that make films from acting as film exhibitors. If the tendency of American film interests to purchase theatres in this country continues, a similar step may well have to be taken in this country to protect our film industry and our film exhibitors.
– I had intended last night to raise the matter to which I now intend to refer but, owing to my failure to catch your eye, Mr. Speaker, I am obliged to raise it this morning. I refer to a statement which I regard as both filthy and ridiculous that was made by the Treasurer (Mr. Fadden) in Queensland last night when he was taking part, as the Leader of the Australian Country party, in the current election campaign in that State. Honorable members opposite devote much time to the threat of communism, but they do so in order to cloak the real threat that faces this country and that is the possible establishment of a fascist state. I do not propose to read the whole of the statement that was made by the right honorable gentleman, although, perhaps, I shall do so, should time permit, on another occasion. He said -
A fact which is not generally realized is the way in which the platform of the Labour party provides for paving the way for the Communist regime.
I am pleased to hear the “ Hear, hears ! “ of honorable members opposite to that statement, because they indicate that the intention they have expressed to outlaw the Communists will eventually, if they get their way, be extended to outlawing the Australian Labour party. That is the importance of their attitude on this matter, because they admit that they cannot see any difference between the two parties. Indeed, the Prime Minister (Mr. Menzies) said in reply to a question in this’ House that he could not see any difference between the objective of the Communist party and that of the Labour party. He said that both objectives were identical, though the method proposed by each of those parties to achieve its objective was different. Does the Government suggest that it would approve of a Labour party introducing a socialist state if a majority of the people voted for the establishment of such a state ? Surely, it would not do so. It knows that it will fight to the bitter end a Labour government determined to give effect to its objective. Therefore, die legislation that the Government proposes to introduce to ban the Communist party is merely the thin end of the wedge. It now selects the Communist party with the intention, ultimately, of outlawing the Labour party, particularly a Labour party that has expressed its determination to give effect to its policy. The private financial institutions, which back the present Government, got such a terrific fright during the regime of the last Labour government that they are determined that never again will a Labour government have an opportunity to implement its policy. In the past, certain members of the Government joined with a rebel band that set out to overthrow constitutional government in this country because they believed at that time that that was the only way they could prevent the implementation of Labour’s policy. However, I shall proceed to deal with the statement that was made by the Treasurer. Incidentally, I deplore the fact that the Treasurer is not in his place in the House this evening, because it seems to me to be disgraceful that while a measure affecting banking, in which the Treasurer should be vitally interested-
-Order ! That matter is still before the House and the honorable gentleman is not in order in referring to it on the motion for the adjournment.
– I was referring, not to the legislation itself, but to the absence of the right honorable gentleman while it was under consideration. The right honorable gentleman said -
The first step would be to sever all ties of imperially appointed governors.
Many people believe that GovernorsGeneral and State Governors should be selected from Australian citizens and that outsiders should not be appointed to such positions. Those who advocate such a policy are not necessarily Communists; but, according to the Treasurer, such an attitude is evidence that the Government of Queensland is a Communist government. It is ridiculous to suggest that the Hanlon Government, of all governments in Australia, would pave the way for a Communist regime, because the history of that Government proves the contrary. The Treasurer continued -
Bear in mind that the Chief Justice is. are all members of the judiciary, chosen by Cabinet.
Does not the cabinet in every government in this country, Commonwealth or State, make appointments to their respective judiciaries? The right honorable gentleman raises objection to the Queensland Cabinet advising the State Governor in matters affecting that State. That has been the constitutional set-up in all States since constitutional government was established in Australia, and it is arrant humbug to talk in that way; but, of course, the right honorable gentleman made that statement in an endeavour to influence the Queensland people in the current general election in that State. He continued -
Parliament, with Labour in a majority, would likewise become a rubber-stamp for whatever legislation the socialist junta chose to )1 are before it. And amongst such legislation then1 could be, as we have already seen last year, measures designed to so arrange the electorates that a Labour majority could be assured.
Fancy the Treasurer objecting to a distribution of seats which he claims favour? the Labour party! Is it not a fact that in South Australia on many occasions a majority of the electors have often recorded a vote in favour of the Labour party, but, because of the gerrymandering of electorates, that party has never had the opportunity to form a majority government in that State? Supporters of anti-Labour parties do not hesitate, when they get the opportunity, to distribute electorates in order to favour their candidates. The electorates in Queensland are just as fairly distributed as are the electorates in any other State. But listen to this arrant humbug from the Treasurer, who continued -
The platform provides that there shall be no Legislative Council.
Every honorable member should know that the Legislative Council in Queensland was abolished in 1922. Yet, despite the lapse of years, the Treasurer parades that fact as further evidence of the intention of the Labour Government of Queensland to destroy democratic government. The Treasurer continued -
The Queensland Constitution, unlike that of the Commonwealth, confers an absolute power of law-making on the Queensland Parliament, except in those few cases in which exclusive powers of legislation have been conferred by the Commonwealth Constitution on the Parliament of the Commonwealth.
I cannot see why any body of people who claim to believe in democratic government should raise any objection to this practice. The Treasurer continued -
Conditions would then be ripe for the Communists, who would find everything ready-made for them - a small group able to wield absolute power in the State afterall constitutional impediments had been so thoughtfully removed by their socialist partners carrying out the platform of the Queensland State Labour party.
I point out that the rules of the Labour party prohibit the admission of Communists to its membership, and I believe chat it is the only political party in this country whose rules make that provision. Therefore, by no stretch of the imagination could any one, after examining the facts, regard the Labour party and the Communist party as partners. But the mere fact that the Treasurer designated the Labour party as a partner with the Communist party should be sufficient proof to supporters of the Labour movement that the real danger, should this Government succeed in giving effect to its legislation to ban the Communist party–
– Order! The honorable member’s time has expired.
Motion (by Mr. Pollard) put -
That the honorable member for East Sydney (Mr. Ward) he granted an extension of time.
The House divided. (Me. Speaker - Hon. Archie Cameron.)
Question so resolved in the negative.
– Earlier in this debate the honorable member for Kennedy (Mr. Riordan) made a desperate attempt to offset the failure of the present Queensland Government to provide properly for the development of North Queensland. That attempt was on all-fours with the action of the Premier of Queensland in connexion with the Burdekin Valley development scheme. I shall inform the House of the real facts of this controversy, in order that all fair-minded honorable members with a capacity for judgment may judge for themselves where the fault lies. Towards the end of last year, when introducing legislation in the State Parliament providing for the construction of the Burdekin Valley development scheme, the Premier of Queensland, Mr. Hanlon, stated that an agreement had been reached whereby the Commonwealth and the State would provide the capital required on a fifty-fifty basis. “When the Treasurer (Mr. Fadden) took office he investigated the matter and found that such an agreement between the two governments did not, in fact, exist. Therefore, it is apparent that the Premier of Queensland did not state a fact when he said that such an agreement had been reached. My information could be verified by reference to the report of the committee that was appointed by the former Prime Minister (Mr. Chifley), in which it is stated that no actual agreement between the two governments existed, although it is apparent that when the State Government passed its legislation it assumed that Commonwealth assistance would he forthcoming. The Treasurer’s statement that such an agreement did not exist was confirmed last week by the Leader of the Opposition, who stated, however, that the announcement of the Premier of Queensland was technically correct. He went on to qualify it by saying that he had had a telephone conversation with the Premier of Queensland in the course of which he said that the Federal Government would support the scheme. However, there was no justification for the Premier of Queensland, when introducing the legislation, saying that the Commonwealth had agreed to support the scheme.
The last government appointed a committee to investigate the proposal. The committee spent five days in that area, and its preliminary report was unfavourable. It has been tabled in this Parliament, and is available for examination. No government worthy of the name could commit the Commonwealth to the expenditure of £14,000,000 to £20,000,000 of public money on the strength of that report, which states that the Commonwealth would not be justified in supporting the scheme as it was put forward. The committee added that if other considerations were taken into account a favorable scheme might ultimately be developed. Our attitude is that we are committed to developmental schemes such as that on the Burdekin River, and we propose to go on with them, but we shall not commit ourselves to a scheme that is not economically sound merely for the sake of making a big splash just before an election, as was done by the previous government.
I propose to prove my statement that the committee reported that the scheme as presented was unsound. It is estimated that the cost would be £28,700,000. The Premier of Queensland, in submitting the scheme, tried to justify the expenditure by showing how much it would earn when completed. He said that the total agricultural production that would be made possible was estimated to bo worth about £6,000,000. This included the production of 10,000 acres under tobacco, estimated to produce 1,000 lb. an acre, valued at is. per lb., making a total of £2,500,000. 1 1 was also estimated that 25,000 acres of land would be devoted to sugar growing, chat the yield would be 25 tons of cane to the acre, making a total of 625,000 tons if cane valued at £1,500,000. That :.’ mount is 25 per cent, of the estimated annual return from the whole scheme, but there is at present in Australia no market for the extra sugar nor is there likely to be a market for it for many years to come. The scheme as submitted by the Premier of Queensland makes no provision for the building of three mills which would be needed to produce the sugar, and those mills would cost £2,000,000 each. Therefore, at least £6,000,000 of the capital cost has been left out of account. All honorable members of this House realize that there is a limited market for Australian sugar. As the result of recent negotiations, the amount that can be marketed has been fixed at 1,100,000 tons a year, of which 500,000 tons is for home consumption. That market has already been completely allocated among sugar producers in New South Wales and Queensland. The remaining 600,000 tons represents an increased allocation on the export market, and the quantity cannot be increased within a generation. Therefore, in his references to sugar production, the Premier of Queensland was submitting a fallacious proposal. The action taken by the Treasurer merits him the congratulations of every thinking person for two reasons. He has refused to commit the Government to expenditure on a scheme that has been unfavorably reported on; and be has protected the in- terest of those persons in New South Wales and Queensland who’ are engaged in the production of sugar.
– I think that honorable members have had a reasonable opportunity for discussion on the motion for the Adjournment on the first sitting night of the week. Therefore, I move -
That the question be now put.
Question resolved in the affirmative.
Original question resolved in the affirmative.
The following papers were pre- sented : -
Commonwealth Public Service Act - Appointment - Department ‘ of Supply - K. H. Bradshaw.
Lands Acquisition Act- Land acquired for -
Commonwealth Scientific and Industrial Research Organization purposes -NorthRyde, New South Wales.
Department of Civil Aviation purposes -
Derby, Western Australia.
South Perth, Western Australia.
Postal purposes - Bur.wood, New South Wales.
House adjourned at 12.43 a.m. (Thursday).
Th following answers to questions were circulated : -
l asked the Minister repre senting the Minister for Fuel, Shipping and Transport, upon notice -
In connexion with the tests of the Renco retort recently ordered by the Minister -
y. - The Minister for Fuel, Shipping and Transport has supplied the following information : -
Yes. 3. (a) The Pilot Renco retort is at present being tested at Glen Davis, New South Wales. The test will be conducted over an extended period and under conditions which it is hoped will enable its efficiency or otherwise to be accurately determined.
Cite as: Australia, House of Representatives, Debates, 26 April 1950, viewed 22 October 2017, <http://historichansard.net/hofreps/1950/19500426_reps_19_207/>.