23rd Parliament · 1st Session
Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.
– I desire to ask the Treasurer a question without notice. In view of the fact that the two loans floated by Australia in London yesterday were undersubscribed by 46 per cent, and 72 per cent, respectively, which is the worst result in overseas borrowing since 1929 when the last two loans of the Bruce-Page Government in London failed equally catastrophically, will he now admit that it is highly desirable that the Australian people should be told the truth about Australia’s worsening economic plight and the Government’s inability to do anything about it?
– It sounds, Mr. Speaker, almost as if the honorable gentleman were trying to aggravate Australia’s economic position rather than assist it. 1 cannot accept the comment he makes about the result of the recent overseas loan. It is true that it was undersubscribed. It was a loan underwritten by our financial representatives in London after discussion.
– “Who were they?
– The same firm.
– The same firm which got Australia back on the London market so successfully for the first loan we raised for very many years. The honorable gentleman apparently overlooked the fact that access to the London market - to which we could not gain access for several years - cannot be obtained at any point of time, because there are many borrowers on the London market, and we must take such opportunity of access as the United Kingdom authorities indicate to be available to us. He has also apparently overlooked the fact that the terms of this latest loan were more favorable from Australia’s point of view than were those for the two previous loans. The terms are 51 per cent, at £99 compared with 6 per cent, at £99 10s. for the cash and conversion loan in February, 1958; and 5i per cent, at £98 for the cash loan raised in London last October. I gather that even at the small discount at which the loan has opened the terms are nevertheless more favorable from the point of view of the Government than was the case with the two earlier loans. The full amount sought has been underwritten for us on terms which had been agreed upon.
As a consequence of this loan raising, Mr. Speaker, we have avoided the necessity of refinancing £20,000,000 sterling of the outstanding debt of £20,700,000 sterling, which means a saving to Australia’s international reserves of £25,000,000 Australian. Less than £1,000,000 Australian of the debt will now have to be met from the National Debt Sinking Fund when the existing securities reach their maturity date next June. So, Sir, I say to the honorable gentleman that, far from Australia’s credit appearing poor in the eyes of other countries, we have been able to have our loan underwritten on terms more favorable, I believe, than those on which any other government outside the United Kingdom has been able to raise loans there. I am quite certain that, while it was unfortunate that the time of the loan coincided with political troubles in Europe, Africa and the Middle East, which have given rise to some uncertainty in the London market, Australia’s credit remains sufficiently strong for its loans to be well supported for a long time to come.
– I direct to the Prime Minister a question which relates to the Commonwealth scholarship scheme which was introduced in 1951. I should like to point out that since then there has been an increase, in each successive year, in the number of applications for these scholarships. As many students attain the required standard but are unable to receive the benefits of a scholarship, owing to insufficient numbers being available, will the Prime Minister review this situation and endeavour to increase the number provided?
– I think I pointed out once or twice that the Murray committee investigated this problem of Commonwealth scholarships. One of the great problems is, of course, accommodation at the universities, because these scholarships are very numerous, as the honorable member knows. On the whole, it was thought that at this stage it would be unwise to increase the number of scholarships, because to do so would be to place an intolerable burden on the universities which, in fact, notwithstanding the existence of the scholarship scheme, or perhaps because of it, lose money on students. One of the tasks of the new Universities Commission will be to examine this very problem. In the meantime, I have recently announced the creation of a number of post-graduate scholarships. That itself is in line with the recommendation of the Murray committee, but when the new commission is operating, the problem raised so properly by the honorable member will be one of those to which it will direct attention.
– In view of the fact that the Department of Immigration has paid about £71 8s. 6d. each towards the fares of several hundred adult Finnish migrants who have arrived in Australia recently, will the Minister for Immigration now agree to pay £71 8s. 6d. towards the fare of any Irishman or Irishwoman wishing to emigrate to Australia?
– I know that the honorable gentleman is always very interested in the affairs of Eire and of people who come from that very pretty country, bearing in mind, of course, his own origin and the fact that so many of our own ancestors, too, have had the good sense to come here from Ireland. I should like to tell the honorable member that the problem to which he alludes has been settled, because only comparatively recently - two or three weeks ago - I arranged that there should be extended to immigrants from Eire the payment of £71 9s. by way of assisted passage. This provision now applies to immigrants from all of those countries under our general assisted passage scheme. Therefore, for some little time now the matter of the honorable gentleman’s complaint has, I hope, been satisfactorily resolved.
– I ask the Minister for Immigration whether the Department of Immigration has arranged to charter any overseas vessels during the next year in order to bring immigrants to Australia. As the Minister probably knows, two Australian ships that have been running on the Australian coast are about to cease their operations, and I should like to know whether it would be possible for the department to engage those ships in preference to overseas vessels.
– Our present arrangements for the transport of migrants from overseas are these: We have chartered for a period of four years from the Sitmar line two fine air-conditioned ships of between 13,000 and 14,000 tons - “ Fairsea “ and “ Fair Sky “ - for the exclusive carriage of British migrants between the United Kingdom and this country. These ships make several voyages a year and bring from the United Kingdom to Australia, in round figures, 14,000 migrants. The passage of migrants from the continent of Europe is arranged by the Intergovernmental Committee for European Migration, which has a rather elaborate system for securing passages on non-British vessels trading between Europe and Australia - a system not necessarily for the chartering of ships, although sometimes the committee does charter them.
The honorable member may be interested to know that, in addition to the two vessels that the Australian Government has chartered from the Sitmar line, the Peninsular and Oriental Steam Navigation Company, the Orient Steam Navigation Company Limited and the other main British shipping companies allot each year a large number of berths for the carriage of British migrants between the United Kingdom and Australia. As well as this, of course, there is the scheme which I announced in the New Year, by which a certain number of British migrants is brought here by air.
In view of these arrangements which have been made, and which are functioning very well, I do not think that I can hold out any reasonable hope at this stage for the chartering of the two Australian vessels to which the honorable gentleman has directed my attention, but if an occasion arises when they could be usefully employed, I will, of course, bear very carefully in mind what my honorable friend has suggested.
– I desire to ask the Prime Minister a question. Recently, I asked the right honorable gentleman about delays in the hearing by the Commonwealth Conciliation and Arbitration Commission of claims by Public Service unions for increased wages and also for increased penalty rates for Saturday work. I again remind the Prime Minister of these important matters, and ask whether he looked into them, and with what result. Is the right honorable gentleman aware that postal workers are holding mass meetings throughout the Commonwealth with a view to taking strike action as a protest?
– I will be glad to look into the matter raised by the honorable member.
– I direct my question to the Postmaster-General. I preface it by saying that several of my constituents have expressed to me their concern at a recent decision by the Postmaster-General’s Department to close country post offices on public holidays. I therefore ask the Minister, first, whether he will inform me what were the considerations that led to the new policy. Secondly, in view of the absolute dependency of country dwellers, in their isolation, on post office services for their communications, will he agree to review the decision and restore the former services?
– This is a matter that has been referred to me recently by several honorable members, and I am therefore in a position to give the honorable member for Indi some information about the practice of closing post offices - not all of them, and not on all holidays - under an arrangement that is an alteration of the system which has prevailed until recently. Under the procedure formerly followed, post offices were closed on Christmas Day and Good Friday, and on some other holidays no mail services were provided. Experience showed, particularly in recent years, that there was very little demand for the great majority of services provided on holidays, with the result that extra costs were involved in the running of the department which were not, apparently, warranted. In addition, many employees were brought in to work on jobs which obviously were not required. These employees were thereby deprived of the opportunity of enjoying holidays granted to their fellow workers in other employment. It was, therefore, decided to review the position thoroughly. This resulted in the practice recently adopted, whereby each case is looked at individually. By that I mean that when a holiday is approaching, the requirements of particular areas, especially country areas, are considered. In many cases it has been found that services are not required, and they are not, therefore, provided. But I can assure the honorable member that each case is looked at individually, and if from time to time it is found that any reduction of services such as I have just outlined bears harshly on a particular area, the department will be prepared to review the position.
– Would the Minister for Health inform the House what steps have been taken by the Department of Health to meet a possible outbreak of virus influenza, which has recently been raging in the United Kingdom? Have we sufficient vaccine available in Australia for inoculations, should the necessity for them arise?
– Much attention has been given to this question, and quite large stocks of vaccine are held in the Commonwealth Serum Laboratories in Melbourne.
– Can the Treasurer inform the House whether it is a fact that from 1949 until the present time a total amount of slightly more than £163,000.000 has been paid to New South Wales, Victoria, South Australia, Western Australia and Tasmania for capital works and services, out of the Commonwealth Consolidated Revenue Fund, and that in the same period Queensland has received nothing in this way for these purposes?
– I think the figure mentioned by the honorable member has been conservatively stated, and that, in point of fact, it is much too small. I would like to obtain precise details for the honorable member. I should have thought that the representatives of Queensland would have had some very strong remarks to make about the matter if they felt that their State had been discriminated against to the extent indicated by the honorable gentleman. I shall endeavour to get a detailed story for him.
– Has the Prime Minister received any application or request from the Premier of Queensland, Mr. Nicklin, for the creation of a new State within the present State of Queensland? If so, has he taken any legislative action to bring this about?
- Sir, I do not recall any application about a new State, but I will look it up. Certainly, if there is such a proposal, it is not in a very advanced stage.
– My question is directed to the Prime Minister in the absence of the Minister for External Affairs. Will the right honorable gentleman make a statement to the House confirming or denying the report that diplomatic relations with the Soviet Union have been resumed by this country?
– The newspaper report of the communique that was issued is quite correct. Diplomatic relations were never severed. As I told the House recently, the Soviet Union withdrew its ambassador and his staff and asked our representatives in Moscow to leave. It has now been arranged that this physical representation will be resumed on terms under which the privileges extended to the Australian representatives in Moscow will approximate to the privileges extended to the Soviet representatives in Canberra, in relation to both movements and numbers.
– The Prime Minister will probably have learned that in mid- 1956, Sir Arthur Fadden, while acting in his stead, told the House that the right honorable gentleman had given consideration to bringing down legislation to declare parliamentary privilege and to revise the procedure for dealing with breaches of privilege, and that Sir Arthur promised to bring the matter to the right honorable gentleman’s notice when he returned. The Prime Minister will also recall that he was asked a year ago, upon notice, whether he had given further consideration to the question and that he replied in April, 1958, “Not yet”. I now ask him whether he has yet given this further consideration to matters which the Constitution leaves to the Parliament and which are once more before this House.
– Quite frankly, I have not, but I think that it is a matter to which our attention should be directed quite soon. I am indebted to the honorable member for giving me a reminder on that point.
– 1 wish to ask the Minister for Supply questions relative to the closing of the main road between Nhill and Gymbowen for artillery firing. First, why was this site selected? Secondly, what arrangements has the department made for traffic between Nhill and Gymbowen on the dates 16th to 27th March inclusive? Thirdly, is this a forerunner of other firings that are likely to take place?
– I cannot answer the honorable gentleman immediately. However, I will have inquiries made and let him have an answer.
– I ask the PostmasterGeneral whether the Government is considering recommendations that the Victorian country area be divided into regions in each of which a television station will be located. In view of the Government’s action in overruling the board on the allocation of television licences in Adelaide and Brisbane and of the law which provides that no person shall exercise control of more than two television stations, will the Minister give an assurance that with the Victorian regional stations the Government will observe the law and ensure that no person shall be in a position to exercise control of more than two stations anywhere in Victoria?
– The honorable member for Gellibrand first asks me whether the Government is considering some television proposal for country areas in Victoria. The position is that the Government is not at present considering any proposal, because I have not yet submitted a proposal to it. As I have told this House several times lately, it is my intention to do so shortly, but we have not yet moved to that point. The honorable member asks also whether the Government will, when consideration is given to the issue of licences for further television stations, observe the requirements of the Broadcasting and Television Act. At least, that is how I interpret his question. The reply is that the Government will continue to observe the provisions of the Broadcasting and Television Act in this and in all other matters, as it has done since the legislation was passed.
– I direct a question to the Postmaster-General. Has he the power to cancel the licence of a television station if it consistently fails to carry out the terms of its charter as laid down by this Parliament? If not, are the penalty provisions of the Broadcasting and Television Act only so much meaningless windowdressing, proving that this creation of the Parliament is more powerful than its creator?
– I am rather surprised at the honorable gentleman asking such a question. I thought that he knew something of the recent legislation that was passed by this House. If he did, he would know very well that there are definite provisions in the Broadcasting and Television Act to provide that the Minister may either suspend or finally revoke the licence of a broadcasting or television station if it fails to observe the requirements of the act, or does something which is against the provisions of the licence under which it is operating.
– I direct a question to the Treasurer about a recent Government statement concerning the Snowy Mountains Hydro-electric Authority to the effect that, because of the very notable achievements of the major civil engineering contractors in expediting their work, the appropria tion of £19,500,000 for the authority in this financial year would be increased by £4,000,000, or more than 20 per cent. First, has a similar request been made by the Snowy Mountains Hydro-electric Authority in any previous year? Secondly, are the Treasurer and the Minister for National Development fully satisfied that the calculations upon which the Estimates presented to Parliament were based were genuinely mistaken, and that this exercise is not being used as a lever to force the Government and the Parliament to inflate the pace and scale upon which this very expensive work is being undertaken? Thirdly, since most of the less glamorous public works, which in many cases are of more immediate economic and social importance, are carried out by the States largely from the same financial source - the Australian taxpayer - has any device been considered by which the Australian Loan Council could similarly increase the annual vote for these works in the rare eventuality of their also being completed ahead of engineering schedule?
– This is not the first occasion in the life of this very important and substantial project that it has been found necessary by the Minister in charge of the project to seek from Cabinet authorization for an increase in the amount to be made available in a particular financial year in order to avoid interruption to the work of the project which might result in increased cost, some unemployment or some degree of inefficiency in the conduct of the contract. I gather that this has happened on at least four other occasions. My own experience is limited so far as an analysis of the Estimates and the manner of their preparation for the Snowy Mountains project are concerned, but to the best of my knowledge, the Estimates are carefully compiled. There was consultation between the Ministry of National Development and the Treasury in the compilation of these Estimates, and my officers are satisfied that they are compiled as accurately as the circumstances of the day permit.
What must not be lost sight of is that once contracts have been let, the speed with which they are fulfilled is very largely in the hands of the contractors themselves.
– Sometimes physical factors are involved.
– Of course, as the Prime Minister reminds me, the rate of progress on an undertaking is not always within the control of the contractors. Physical circumstances must often be taken into consideration, and in a project of this magnitude they cannot always be determined in advance. The geological structure of the terrain cannot always be determined with accuracy. Problems may be encountered in tunnelling and other operations. Without going too much into technicalities I think I have made that point sufficiently clear to honorable members.
Certainly it does not give any pleasure to a Treasurer to find that in a financial year an additional £4,000,000 has to be added to the Budget provision, no matter how worthy the project may be. However, all the circumstances associated with the latest request were carefully analysed not only by the Treasury, but also by the Cabinet. One of the brighter aspects of the story is that although the request caused some embarrassment to the Government, it arose from the rapid and very efficient progress made by the main contractors for the work, including an Australian contractor, who had been entrusted with the task of carrying out one of the major aspects of the work. This was the first time since the project began that an Australian contractor had undertaken work on such a scale.
As to the relative treatment of State governments, the Commonwealth Government has at different times in the course of the year reviewed the works programmes of the States and, on occasion, when it has felt that the economic circumstances of the country made it desirable, has supplemented the works provision. Earlier this year, for example, we increased capacity to borrow for local government purposes, which was a variation on the arrangements worked out at the normal Loan Council meeting. Of course, within their own programmes the State governments have some flexibility according to the way in which various works projects under their control are proceeding.
I believe that on this occasion the wise decision - to enable the work to proceed without interruption - was taken. I am quite certain that had all the facts been known to them, our colleagues in the State governments, had it been necessary, would have endorsed the action that we took.
– 1 ask the
Minister for Labour and National Service whether he has any information concerning the action now being taken by the receiver representing the Bank of New South Wales to close down the business of Lustre Hosiery Limited in Sydney and Newcastle, thereby throwing 700 employees in the textile industry out of work. If the Minister has no such information at the moment, will he inquire into the proposed action of the Bank of New South Wales through its receiver, with a view to safeguarding annual leave rights, &c, accruing to the employees who are about to be dismissed? At the same time, will the Minister arrange for his officers to assist in providing alternative employment for those people who are now being thrown out of work as a result of the bank’s action?
– As a general problem this question of the appointment of a receiver to administer the affairs of Lustre Hosiery Limited would be outside my jurisdiction as Minister, and, for that matter, beyond the jurisdiction of the Commonwealth. But some aspects of the matter do fall within the jurisdiction of the Department of Labour and National Service. First, as to safeguarding leave rights, I shall discuss the matter with my officers and see that the interests of the trade unionists are safeguarded as far as is practicable. Secondly, I shall ask the officers of my department what is being done to ensure that alternative employment is found for these 700-odd employees who may lose their jobs.
– My question is directed to the Postmaster-General. Is the honorable gentleman aware that the present telephone number of the Police Department in Adelaide is such that in the dark it could only be dialled by a cat or somebody who could see in the dark? In view of the prevailing view in South Australia that what appears to be a simple matter of changing the number to a more suitable one is beyond the technical resources of his department, will the Postmaster-General personally investigate the whole important matter?
– Yes. 1 shall certainly look into the matter which has been brought up by the honorable member for Barker. I can assure him that the capacities of officers of the Engineering Branch of the department are such that they will be able to overcome any difficulties that are disclosed.
– Will the Prime Minister give a detailed statement to the House concerning parliamentary secretaries? Will he state, particularly, how many appointments have been approved; the names of the present secretaries; and the salaries, allowances, privileges, office and secretarial assistance that are made available to them? What is the purpose of their appointment? Is it to assist Ministers? If so, what qualifications, if any, are required and what authority, executive or otherwise, have they to act for the Minister? Does the system exist for the purpose of training members for ministerial office? If so, is it correct to say that since the system was instituted by the Government, no parliamentary secretary has ever been appointed to the Ministry? If this is a fact, does it signify that the secretaries so far appointed are incapable of meeting the limited requirements for election to the ministry, or have failed to complete, to the Prime Minister’s satisfaction, what is evidently a very lengthy and expensive course in pre-ministerial training?
– I congratulate my honorable friend on the singular energy which has enabled him to produce this question after nine years of experience of parliamentary secretaries. If he is interested in the contemporary picture, of course, he knows perfectly well that a parliamentary secretary cannot receive salary; otherwise, under the Constitution, he would cease to be a member of Parliament.
– That might not be a bad idea.
– If I thought that that was regarded as a right idea by the honorable member for East Sydney I would appoint him as a parliamentary secretary to-morrow and give him a salary of £20,000 a year. The present position is that the honorable member for Darling Downs, who has been the parliamentary secretary to the Minister for Trade, will continue in that post. The honorable member for Calare will continue with the Minister for Territories, and the honorable member for Canning becomes the parliamentary secretary to the Postmaster-General. If the honorable member for Grayndler is really interested in the other particulars which he sought, I might have them looked up for him, because I do not know them myself. But I will find out, if he likes, and I will make my answer, as I said at the beginning, retrospective by nine years.
– My question is addressed to the Prime Minister. In view of the disturbing nature of some of the reports emanating from the international conference at Broadbeach, Queensland, where the Minister for External Affairs and Mr. Firubin, the Soviet representative, are in almost constant consultation, will the Prime Minister issue an urgent warning to the Minister advising him that it was on the Gold Coast, some little time ago, that the Prime Minister’s great friend, Mr. Vladimir Petrov, lost his trousers?
– I did not think that that was a question. I do not mind the honorable member having his bit of fun, particularly on the subject of trousers.
– Will the Treasurer, when dealing with Budget and taxation proposals, give express consideration to a substantial increase in the education allowance as most parents to-day are subject to far higher costs than the present allowance of £100 per child?
– The honorable gentleman will appreciate that that is a matter of policy, but I can assure him that it will be considered in association with a variety of other matters brought under my notice for that kind of examination at the time the Budget is considered.
– Has the AttorneyGeneral noticed from the record of yesterday’s proceedings that he did not answer in full the question that I asked him? Will he now say whether the counsel who appeared in the case in which perjury was alleged to have occurred, had appeared in another case in Tasmania in which a similar allegation was made? In answer to my question yesterday, the Attorney-General said that Mr. Justice Ashburner had concluded, as a matter of reasoning, that Mrs. Hursey had told lies on oath. I ask him whether it would be possible, even probable, in view of the distinction as a reasoner of Mr. Justice Ashburner, that other judges or members of a jury would similarly conclude, as a matter of reasoning, that Mrs. Hursey had told lies on oath. If this is so could the Minister now think of some other reason for allowing action in this matter to drop?
– When answering the honorable member yesterday, I did not trouble either the honorable member or the House with the legal considerations which led me to say that no prosecution could succeed; but if the honorable member and the House would like to know, I shall state the short reason. Perjury as an offence has a very long historical background. Wisdom of the past has taught us that you never convict a person of perjury on the uncorroborated evidence of a single witness. The only evidence which would be available in a case against Hursey would be that of the witness whom the judge believed, but that evidence was uncorroborated. There would be no possibility at all of succeeding in a prosecution for perjury in such a case. I did mention yesterday, and I say again, that His Honour reached his conclusion that he did not believe the Hurseys not from anything that was intrinsic to themselves but by a process ‘ of reasoning which was quite open to His Honour. It was a process of reasoning which, if I had to put it to a jury on an indictment for perjury I would not expect them to be so ready to receive because the issues would be so different.
As for counsel, I do not know anything as to the identity of the counsel whom the honorable member mentions. I simply say that it would be a very poor business if counsel were affected by the belief or disbelief accorded to the witnesses or to the clients for whom they appear.
– Is the PostmasterGeneral aware that automation and amalgamation of telephone exchanges in the United Kingdom has reduced the cost of many telephone calls from as high as ls. 6d. to a standard charge of 3d.? Could he say when we are likely to reach the same stage in Australia?
– The question directed to me by the honorable member relates to a subject concerning which I have given some information already to the House. The Postal Department is exploring this matter and is preparing to put a similar service into operation in Australia. Briefly, it is referred to as S.T.D. - that is, subscriber trunk dialling. The honorable member points out that as a result of the initiation of automation in Great Britain the cost of trunk-line calls has been considerably reduced. Although this is so, it is not generally known that this benefit is very limited in Great Britain. For example, it has been stated that the cost of a call from Bristol to London has been reduced from 2s. 6d. to 3d., but it was not pointed out that a call from London to Bristol still costs 2s. 6d. or 3s.
I am not saying this in any derogatory way against the British Post Office, but that was the example given of reductions which can be made, and which are being made, in the cost of long-distance calls. It must not be assumed that because of one such example, the development of Australian postal and telephone services is a long way behind that of Great Britain. Britain is to some extent ahead of us, but we are going along the same road, and when one takes into account the great difference in the distances which have to be covered by the Australian Post Office in comparison with those that have to be covered by the British Post Office I think that we are doing a fairly good job.
Charge against Member.
Debate resumed from 17th March (vide page 644), on motion by Mr. Pearce -
That the matter be referred to the Committee of Privileges.
– Since I spoke on this matter to the House yesterday I have had an opportunity to give further consideration to it, and I have also had the advantage of some discussion with the Prime Minister (Mr. Menzies). Without purporting in any way to prejudge the question of whether or not a breach of privilege has been committed, we feel that the proper course in the circumstances is to have this matter referred to the Committee of Privileges of this House. I am quite certain that if this is done all members of the House - and no one more than the honorable member for Capricornia (Mr. Pearce) himself - would wish that committee to investigate all those aspects of the matter which they believed1 to be necessary to be investigated, in order to enable the committee to bring in a proper finding on the facts and also on the question of whether or not a breach of privilege has occurred.
I therefore recommend to the House, Mr. Speaker, that this matter be referred to the Committee of Privileges of this House.
– Broadly speaking, 1 agree with what the Leader of the House (Mr. Harold Holt) has said; but I wish to make one thing clear which, I think, ought to be clear. In saying what I am about to say I am not taking part in any imputations against anybody, I just want the matter to get to the Committee of Privileges in the fullest possible way. The honorable member for Capricornia (Mr. Pearce) brought this matter up yesterday mainly by referring to a lettergram which had been sent to the Leader of the House, a number of copies of which had been sent to members of both Houses. So, to that extent, we have come into possession of that document.
– Sent by Mr. Somerville Smith.
– Sent by him, certainly. Sent by him to quite a number of persons on our side of the House and, I think, in both Houses. Last evening, following upon the suggestion of the Leader of the House, the honorable member for Capricornia was good enough to furnish another document for the inspection of my colleague, the Deputy Leader of the Opposition (Mr.
Calwell), and myself. It was a letter, or a draft of a letter, which I think he had sent to either the Leader of the House or the Prime Minister (Mr. Menzies). We looked at that quickly and returned it. It, again, put the point of view of the honorable member for Capricornia and, so far as that is concerned, the gist of it is contained in the speech made by the honorable member for Capricornia yesterday. But, in addition, there is contained in that speech the substance of the lettergram which itself contained the charges or imputations - let us call them - of Mr. Somerville Smith in relation to the honorable member, because that lettergram is referred to in the very first part of his description of his complaint. I think that that statement and that document, which the honorable member knows was sent to himself, and other documents - for instance I have received during the morning several telegrams in the name of Mr. Somerville Smith on matters that I am not going to read out now because they are simply reiterations in one form or another of what is contained in the lettergram - should go before the committee. I shall hand them to the Clerk so that they may go before the appropriate body and there be assessed. So, on the footing that the honorable member for Capricornia puts his case and has his opportunity, and the nonmember of the House, Mr. Somerville Smith, has a chance to put his case, I think that, without committing ourselves to any view as to the occurrence of a breach of privilege in this case, the facts of this matter can be investigated by a committee representing all sides of the House and conclusions arrived at. I think that is the spirit of what the right honorable gentleman says. Our party meeting this morning, showing the same spirit, has authorized me to make this statement, which expresses the view of all of us.
Question resolved in the affirmative.
Motion (by Mr. Harold Holt) - by leave - agreed to -
That in accordance with the provisions of the Parliamentary Retiring Allowances Act 1948-1955, Mr. Crean and Mr. Opperman be appointed trustees to serve on the Parliamentary Retiring Allowances Trust.
– by leave - I move -
That so much of the Standing Orders be suspended as would prevent -
In relation to the proceedings on the Re serve Bank Bill, the Commonwealth Banks Bill, the Banking Bill and the Banking (Transitional Provisions) Bill, respectively, the consideration of each Bill as a whole in a Committee of the Whole, and the moving without delay of the motions in regard to the Committee’s report stage, and the third reading, and
In relation to the proceedings on the following Bills, viz., Audit, Christmas Island, Commonwealth Employees’ Furlough, Crimes, Income Tax and Social Services Contribution Assessment, National Debt Sinking Fund, Northern Territory (Lessees’ Loans Guarantee), Officers’ Rights Declaration, Reestablishment and Employment, Sales Tax (Exemptions and Classifications), the consideration of all the Bills as a whole together in a Committee of the Whole, and one motion being moved without delay and one question being put in regard to, respectively, the committee’s report stage, and the third readings, of all the bills together.
I have no doubt that that sounds a quite complicated order of business, but I think that honorable members will not only be familiar with the contents of the legislation, but will also realize the desirability of our proceeding along the lines I have indicated. I point out that the substance of these bills is now before the Parliament for the third time in the last two or three years, and that consequently honorable members will not be seeing these proposals for the first time. The proposals have lost any charm of novelty which they might otherwise have possessed for honorable members.
– But you have made important changes in them since last time.
– Well, not very important changes. There will be scope, of course, to discuss any changes which have occurred since the bills were last before us. I think, Mr. Speaker, that it will be more convenient to proceed in the fashion I have indicated, because we have fourteen bills all linked as part of the one general scheme, as has been explained on earlier occasions.
I do not propose to put the question in relation to any one of the four main bills without allowing a reasonable time for discussion of them. It may be found that there are advantages in proceeding in the way I have suggested rather than in having some set time limits which, in the result, might mean rather more time being given to one or more of the measures, and rather less time to others than the Committee of the House might deem to be necessary. We can assess, as the discussion proceeds, the amount of time which might reasonably be allocated to each of the four main bills, but the Government’s desire is to have not only the committee stage, but also all subsequent stages of the legislation concluded by to-morrow night, so that the measures can proceed in another place after the Easter recess.
– We oppose this proposal, and I want to explain to the House, by giving one illustration only, why we oppose it. It is quite contrary to principle. Take, for instance, the name of the bank. Although at this moment we refer to the central bank, its name is the Commonwealth Bank of Australia, and it has done the work of a reserve bank for a very considerable period. Because of that association and the very name and identity, it is well known in all parts of the world, and in Australia, of course, it occupies a very special place because of its name and treasured associations. Suppose the committee of the House, when that stage is reached, objects to the title “ Reserve Bank Bill “ and asks why it is used. No such name has been associated with the bank before. It will cause confusion, and probably loss in some respects. The Commonwealth Bank of Australia is the central bank. Why should it be called merely the Reserve Bank of Australia, and separated as though there is some tremendous law - no doubt it is a tremendous law to the private banking institutions - that not only should the family of Commonwealth banks be dismembered but also that the name should be altered in every case? The result will be that the name, “ Commonwealth Bank of Australia “, under which the institution was founded before World War I., will disappear. That will be bad for business. It would be bad for any bank. It is against the sentiment of the people, and the Government should remember this deeply felt sentiment of a great number - I think the majority - of the people of this country.
How could we make an amendment of the name? In the committee stage, which is the most appropriate stage, we could not make an amendment like that. It would not be permissible. The proposal is that there should be consideration of each bill as a whole in the committee of the whole. That illustrates what I mean. I cannot understand why the trustees of the Commonwealth Bank of Australia to-day - the Commonwealth Bank Board and the governor of the bank - have not themselves pointed out to the Government that the name, Commonwealth Bank of Australia, should remain, no matter what other changes are made. It is not being retained, and if the House wants to retain it, this machinery that we are asked to adopt will prevent that being done.
That is simply one illustration, and I could multiply it 50 times. There is no effective way of dealing with the position. I admit that the change in name is not as important as the changes in the institution and its powers, but still it is important. I think it can have an importance in banking as well as in other business. For that reason, we oppose this proposal of the Government.
– I am rather concerned, not so much with paragraph (a) of the motion, with which the Leader of the Opposition (Dr. Evatt) has dealt, as with the other ten bills mentioned in paragraph (b), and I want to be sure what the Treasurer (Mr. Harold Holt) means by the words “ one motion “. Does he mean that the third reading of all ten bills will be approved in one resolution, or will there be a separate vote on each bill, as was the case last night when the House approved the second readings of the bills?
– These are purely machinery measures and are consequential on the changes made earlier. There will be only one question.
– According to the Minister’s reply, I think I am correct in saying that, at all stages, approval for the ten bills will be sought in one motion. If I am correct in that assumption, the procedure is definitely wrong, whether or not we have dealt with the measures before. In all of my experience in both State and Federal parliaments, the practice has been to put each bill through all its stages - first reading, second reading, committee, and, finally, third reading - individually. If the Minister desired merely that all the bills be considered together, I would not object. But I am concerned that we should agree to a proposal that ten bills, amending existing legislation, should be passed in one resolution. We know that sometimes a bill containing, say, ten clauses will be agreed to in its entirety by one motion at the committee stage, but in this instance we have on the notice-paper ten bills, apart from the four main measures and I contend that each item on that notice-paper must be dealt with individually. Had the Minister wanted to adopt the procedure which he now proposes, he should have considered it in the first place and not had ten separate items placed on the notice-paper. Each bill being separate and having a title, it would be entirely out of order to lump them together and pass them all in one resolution. I say to the Minister that in proposing this procedure he is getting very close to a totalitarian manner of legislating.
It is true that we have had these measures before us on two previous occasions, but the Treasurer has admitted that some alterations have been made in certain bills. There may not be very much alteration in the ten bills about which I am speaking, but I say that they should be dealt with in the way in which we have always dealt with legislation. Under our parliamentary system, every bill should be the subject of a decision of Parliament and not grouped with a number of others.
– If that argument were carried to its logical conclusion, we would never consider a bill as a whole in committee.
– I do not agree with that at all. Even if there are ten clauses in a bill, it is still only one bill. It would be introduced and would go through in the usual way. However, if the Government is determined to adopt this procedure, it has the numbers to do so. As I have stated time and again in this House, the Government has the numbers and it makes the decisions. But I urge it to look a bit further ahead than to the saving of perhaps half an hour in the passage of these bills.
– This procedure will not save time. It will make more time available for discussion on the merits of the legislation.
– Whether or not the merits will be discussed, I tell the Minister that, in my opinion, at any rate, he is making a definite mistake in forcing measures like this through. If the Government wants discussion on the lot, I do not worry about that. But if we are to pass a bill, let us pass it definitely under its own title and not just by means of a motion that groups ten bills together and pushes them all through in one hit.
.- Mr. Speaker, the Government brought forward last year a proposal which was similar to this one, except that it was worse than this one is. This year, we at least are to have a separate vote on each of the first four bills, but the ten machinery bills are to be taken together and one vote only is to be taken on those ten bills in respect of the committee and the third-reading stages respectively. What the Government is doing is simply this: It is tearing up the Standing Orders for the time being, and saying that no Standing Orders apply and that there is no protection for the rights of members in respect of this legislation. It is saying that it wants these bills through this chamber by to-morrow night and that the House should agree to that procedure. Well, we do not see any particular reason why the bills should be passed by tomorrow night. We do not see any reason why they should be passed this year. In fact, we see every reason why they should not be passed at all. We are not going to help to make a bankers’ feast. We are certainly not going to help the private banks to get their legislation through and Sir Arthur Fadden to get his job as chairman of the Banking Corporation at £5,000 a year for a term of seven years. We think the legislation is bad, and we want to exercise all our rights to reveal its deficiencies.
The Government has the reserve power always, under the Standing Orders, to move that the question be put, but. in order to obviate the necessity of making a messy job of it, as it were, by moving a series of motions of that kind and making an already bad record even worse with regard to the gagging of legislation through the Parliament, it now proposes to do the thing cleanly and to do it in one or two motions with tremendous effect. We never did that. We never did anything like that when we were in office, not even in the worse stagesof the war.
– Oh, no!
– The Minister was not here; he would not know. He has been here nine years now, and he still does not know very much. No government, except a totalitarian-minded regime such as this, would ever think of stifling the rights and” taking away the privileges of members in the fashion proposed. We shall put our proposals, as far as we can, not by way of amendment. We shall do as the honorable member for Port Adelaide (Mr. Thompson) has suggested, and indicate the clauses to which we offer the strongest objection.
I notice that the honorable member for Mackellar (Mr. Wentworth) has already circulated an amendment in his name. I do not know how he is going to get it in.
– It will never be put.
– Perhaps it will never be put. But, of course, that would not interfere with the honorable member’s desire for a little notoriety, which he hopes to get by proving to the private banks that he at least is faithful to their cause, whereas the members of the Government to which he gives such unreliable support are really running away from the major issue. What is the major issue to him and to all the rest of those who think like him? The honorable member for Macarthur (Mr. Jeff Bate), beside whom the honorable member for Mackellar dozes, and the honorable member for Mitchell (Mr. Wheeler) really want to smash the Commonwealth Bank of Australia. They want to destroy it as a competitor with the private banks. That is why they want the title “ Reserve Bank “. They want the Reserve Bank to be a bankers’ bank. We want it to be a people’s hank.
We will take this proposal to a division, as we did the proposal made last year, and we shall thus strike another blow for democracy.
.- Mr. Speaker, there is a little more than banking involved in this proposal. As the
Deputy Leader of the Opposition (Mr. Calwell) has pointed out, the Government, by this proposal for the suspension of the Standing Orders, seeks to tear up procedures that have been developed over a long period of time in order to make parliamentary practice work. I consider that the argument of the Treasurer (Mr. Harold Holt) that because this is the third time that these measures have been before us it is unnecessary to discuss them again, is quite irrelevant. This is a new Parliament. We have on this side of the House at least half a dozen new members who have had no opportunity to consider this very important legislation in committee.
I regard the Government’s proposal simply as being symptomatic of the Treasurer’s attitude to the Parliament as the Leader of the House. In 1956, we met for 27 weeks. In 1957, we met for 21 weeks. In 1958, we met for seventeen weeks - or something very close to that. Procedures such as “Grievance Day “ have been almost completely dropped from the proceedings of this House. When the Treasurer became Leader of the House, I thought that we were to have a new order. His predecessor was noted for his wielding of the axe. But the Treasurer has produced a refinement: He completely steamrollers measures through forthwith in order not to get a bad reputation as guillotine and gag mover in chief.
This legislation is very important, and the procedure proposed will allow no possibility for proper consideration in committee, clause by clause, of bills with 89 clauses or more, so that an individual member can discuss one clause, and, say, twenty clauses later, discuss another provision. You cannot get a completely rational and analytical consideration of this legislation by putting it through in one piece. I believe that the purpose of the committee procedure is to permit such rational and analytical consideration. By submitting this proposal, the Treasurer, of course, is doing his cause as the upholder of the Parliament a serious disservice. I suggest that he would do well to study the statistics relative to the hours of sitting and the like since he became Leader of the House,
– in reply - Mr. Speaker, having said that the procedure proposed would make available more time for the discussion of the merits of the legislation in committee, I do not want to detain the House now, but I cannot let pass without some brief comment the humbug that we have heard from the Opposition.
– That is unparliamentary.
– The honorable member may choose his own term to describe the performance that we have seen. I remind him that, when we had these bills before the Parliament earlier, we were told by honorable members opposite that the legislation was so bad that they did not want to discuss it at all in committee. By the time the bills got to another place, where the representatives of the same caucus were engaged on their parliamentary duties, the Opposition would not even allow them to be read a second time. It would not even examine them superficially. So this protest, Mr. Speaker, can be regarded only as a bogus demonstration.
It is said that some of my colleagues are making a bid for the favour of the private banks. I do not know whom honorable gentlemen opposite are trying to placate, but it is certainly not the people of Australia, who emphatically endorsed the Government’s programme at the most recent general election.
Question put -
That the motion (vide page 726) be agreed to.
The House divided. (Mr. Speaker - Hon. John McLeay.)
Majority . . . . 14
– Honorable members will be in order in exercising their franchise.
– I ask a further question. Would an honorable member who is a director of a private banking institution be allowed to vote on this question?
– I think the honorable member would be quite in order in voting.
Question so resolved in the affirmative.
In committee: Consideration resumed from 17th March (vide page 697).
.- It need hardly be said, of course, that the Opposition opposes this measure root and branch. We propose finally, when the measure is put as a whole, to oppose it as a whole, but we would direct attention at present to clause 26 (c) of the bill, and later to a further clause, dealing with the separate carrying on of the central bank, as distinct from other banking business. Clause 26 (c) reads -
The Reserve Bank, subject to this Act and to the Banking Act 19S9, shall not carry on business otherwise than as a central bank.
This, in a sense, is the provision which,, perhaps, makes the whole of this bill and the other bills necessary. It arises out of a dogma that is held, but not supported by any authorities other than the private banking concerns in Australia, to the effect that, a central bank should not in any circumstances carry on trading activities or activities competitive with private banking institutions.
Honorable members on this side adduced’ considerable evidence, some of it going: back quite a number of years, some quiterecent. We referred to authorities such as the 1937 Royal Commission on Banking and the present Governor of the Commonwealth Bank, Dr. Coombs, as well asto opinions expressed by the Prime Minister (Mr. Menzies) in 1953 or 1954 or thereabouts, to show that the central bank as it exists in Australia is a better central bank because of its association with the trading section of the Commonwealth Bank. No good argument has been brought forward to show that the opinions expressed by these authorities were ill-founded, and the only substantial reason given by the Goverment for the introduction of this legislation is that the private trading banks do not regard the central bank, in the present situation, as a true central bank.
No attempt has been made by Government supporters to define a true central bank. In fact, in one sense it can be said that an exact definition of a true central bank cannot be given. A central bank operating in one country may differ from a central bank in another country, according to the particular circumstances, economic and social, of the countries concerned. We believe that, because of the very nature of the Australian economy, and because of the relatively great strength of the private trading banking system, the central bank as it operates in this country, as a branch of a single unit, the Commonwealth Bank, is the most satisfactory form of central bank for Australia. Perhaps it could be said that the principles of central banking are very largely written in sand, that they change from day to day according to circumstances, and that what is suitable in Great Britain or the United States of America is not necessarily suitable in Australia.
The central bank is charged with very important responsibilities. It must look after the monetary circumstances of the country. It must endeavour to keep value in the £1. Honorable gentlemen opposite, who once made the political claim that they would keep value in the £1, have not been very successful in doing so. Nevertheless, this is something that the central bank should be straining to do. It should try to ensure that the £1 in 1945 is not very much different in terms of purchasing power from the £1 that we knew in 1958 or 1957 or in earlier years. That has not been true in Australia, unfortunately, and it has meant a good deal of economic maladjustment.
However, we agree with the opinion of the Royal Commission on Banking, the opinion of the governor of the bank and the opinion expressed even by the Prime Minister some years ago that the central bank in Australia was a better institution because of its association with the trading activities of the Commonwealth Bank. Therefore, we will move later that clause 26 (c) be deleted. That amendment, of course, is aimed at the very heart of the Government’s intention in this legislation, which is to sever the central banking functions from the other activities of the Commonwealth Bank as we have known it.
Later in the bill is another clause which makes the separation absurdly apparent. This clause provides that the central bank shall not be even in the same building as the trading section of the Commonwealth Bank, despite the fact that if any consultation between the two organizations were necessary - and it will be necessary from time to time - it could be carried on, even if they did not occupy the same building, by meeting in a board room or by talking with individuals on the telephone. But so stupid is the dogma of Government supporters that they will involve the Commonwealth in an expenditure of some millions of pounds to provide a separate building suitable to the status of a central bank. They feel that either there must be a separate building or the management of the trading bank section would so influence the central bank that it would be dangerous to their political dogma.
During discussions on this legislation, it has been suggested that the dismembering of the Commonwealth banking structure, as we have known it, may involve the expenditure of millions of pounds. I understand that a site for the new central hank has already been set aside. The Treasurer (Mr. Harold Holt) may perhaps say whether that is so, and give some indication of the cost of this new institution. As Australia expands as an economic unit in the future, I have no doubt that it will be necessary, as it has been necessary in the United States of America, to have branches of the central bank in various parts of the country, whether the head office is in Sydney, in Canberra or somewhere else. Again, this will involve additional expenditure either in the purchase of buildings or in the payment of rent. At the moment, the central bank officials can simply be given a room or a floor in one of the many branches of the Commonwealth Bank of Australia. As the system operates at present, the central bank functions are in fact separated from other banking functions and are dealt with by a separate staff known as the central bank staff, but this staff can work under the same roof as the staff dealing with other banking functions.
We propose also to oppose clause 74. This measure goes to the absurd length of saying that, after a reasonable period of time, the central bank activities cannot be conducted in premises in which other banking activities are conducted. I shall read clause 74 (2).
Order! The honorable member’s time has expired.
.- Unfortunately, the honorable member for Melbourne Ports (Mr. Crean) will keep harping back over twenty years to the Royal Commission on Banking. There must come a day and age when the findings of that body of men - findings based on circumstances existing well over a generation ago and made before the vast changes brought abou by the war and the post-war immigration programme - become out of date. The findings of the royal commission are particularly out of date in one respect. I refer to the recommendation that the central bank and trading bank be kept under the same roof. The real test of the success of i central bank is its relationship to other banks. If that relationship is smooth, it can build up trade. The essence of a proper central banking system is the confidence and trust of the rest of the banking system in the judgment and impartiality of the central bank. It has been proved not only in Australia but also in nearly every other country that the mixture of commercial and central bank functions does not work and gradually, in almost all cases, commercial banking functions on any sizeable scale have been divorced from central banking.
The honorable member for Melbourne Ports referred to the value of the £1. He suggested that this should be one of the main criteria of central bank actions at all times, but unfortunately it is subject to many influences outside central banking, and even well outside the sphere of the Commonwealth Government. The decisions of the Arbitration Court and the actions of State governments in legislating on hours and wages, with a consequent influence on costs, distort the value of the £1 and affect every economic activity in a way that is quite beyond the control of any central authority. The State governments having by irresponsible actions inflated costs in many respects, the central bank and the central government are expected to expand credit to prevent the unemployment that would otherwise exist. So, the wonderful engine of inflation is continually stoked by the irresponsible actions of State governments, particularly the New South Wales Government.
The honorable member for Melbourne Ports referred to the separation of the central bank from the trading bank section. Of course, those sections may live on different floors of the one building. In some State offices, a trading bank officer conducts ordinary trading bank operations in the morning in competition with the private trading banks. In the afternoon, he puts on his central banker’s hat, looks at the accounts of the private trading banks and endeavours to behave as a central banker. The fact is that the banking system will never settle down until this measure is passed. Apparently, the head office of the central bank will be in Sydney. The head office of the Bank of Canada is, of course, in Ottawa, away from the commercial centres but in touch with the Government. In Pretoria, a similar arrangement prevails. It is perhaps as well that the head office should be in the real centre, of banking, and that is the capital city of the mother State.
The honorable member for Melbourne Ports said that the new site for the central bank would no doubt be very expensive and a much cheaper site could perhaps be madeavailable in Canberra. However, the Government has been wise in this matter, and it is delightful to any one from Sydney to learn that the head office of the central bank will continue to be in Sydney.
– Why not put it in Dubbo?
– Dubbo, I presume, would be equally suitable for some activities.
I should like to refer particularly to several clauses and specifically to clause 11 of the Reserve Bank Bill dealing with differences of opinion between the Government and the Bank Board on questions of policy. There is one respect in which this committee should be quite clear. Although the provision is written into the bill that if there is a division of opinion between the Reserve Bank Board and the government of the day, the Treasurer and the board shall endeavour to reach agreement, the result will eventually appear before this Parliament. But if we look at the practical aspects of this matter, they are that the Governor and the Deputy Governor of the Commonwealth Bank are servants of the Government appointed by the Government, and their livelihood and that of their families eventually is subject to the will of the Government. The Governor and Deputy Governor are also chairman and deputy chairman of the board. They are, therefore, in a key position, from every angle, to influence the board and there is no focal point in the board where effective opposition can be taken to the course proposed by the Governor. I would not suggest. Mr. Chairman, that any amendment should be made in this respect because nowadays it is essential that the government of the day must take responsibility for the broad credit policy pursued by the central bank, but I think we should be quite aware of the fact that clause 1 1 of this bill must remain almost inevitably a dead letter.
.- There are two points to which I should like to refer. The first matter that has been discussed by the honorable member for Melbourne Ports <Mr. Crean) and answered by the honorable member for Wentworth (Mr. Bury) is the separation of the Commonwealth Trading Bank from the central bank, and secondly, I wish to refer to the continued recreation of the Reserve Bank Board which is contained an part Jil. In relation to the first matter, the honorable member for Wentworth, with a lack of accuracy and care which one finds surprising in an honorable member who professes to be a keen student of banking, accuses the honorable member for Melbourne Ports of harking back to the 1930’s to find an argument that the central bank in Australia should have trading activities associated with it. Of course, the honorable member for Wentworth, if he knows anything, knows that the honorable member for Melbourne Ports did not do that. Likewise the Treasurer (Mr. Harold Holt) and particularly the Minister for Labour and “National Service (Mr. McMahon) know that the honorable member for Melbourne Ports did not do that.
The honorable member for Melbourne Ports put forward a carefully reasoned case that central banking is not uniform all over the world. Central banks have grown in every country in a different way to meet the particular circumstances of particular countries. Central banking in Australia has grown to meet Australian conditions. The honorable member for Melbourne Ports did not hark back to the 1930’s. He quoted the report of the Royal Commission on Banking and Monetary Systems in 1936. He also quoted Professor Sayers who is recognized in the British world, if not more widely, as an authority on central banking. The honorable member showed, as also did the honorable member for Werriwa (Mr. Whitlam) last week, the position that was taken by Professor Sayers. I can say, as a person who studied this question academically for ten years, that that is the position taken in all orthodox views of central banking. Professor Sayers’s ‘views are generally accepted. It is not a matter of harking back to the 1930’s. Does the honorable member for Wentworth know that or not?
The honorable member for Melbourne Ports also quoted, for what it is worth, the opinion expressed by the Prime Minister (Mr. Menzies) in 1953 that, in the Australian situation, trading bank activities were an essential part of the structure of the central bank and should be retained. The honorable member also quoted - if it is necessary to re-emphasize it - the opinion of the Governor of the Commonwealth Bank, Dr. Coombs, as late as 1955, when he specifically said that because of the Australian situation, trading bank activities were an essential and valuable part of the central bank’s activities.
– After a debate extending over twelve months, the honorable member for Barker asks why. The reason is that in Australia we are in a specially difficult situation regarding our export income. The trading bank section of the Commonwealth Bank fulfils an important role in connexion with export income which should be closely co-ordinated with centra] bank policy and decision. The honorable member for Barker should know, becauses he also professes to read this sort of thing, that Dr. Coombs pointed out in his lecture in 1955 that in times of fluctuating unemployment, it is necessary to have trading bank activities closely co-ordinated with government and central bank policy in order to put money in the right places to remove that unemployment. That is very clear and has been put forward on many occasions.
– Why do not other countries do that?
– Other countries do. The Bank of England has been doing the same thing and is still doing it.
– To a negligible amount.
– No, an important amount. Nearly £100,000,000 of money is handled by the Bank of England in this way each month. Mr. Chairman, these concessions which the honorable member for Wentworth is prepared to make differ a little from his suggestions of last week on the Bank of England. It is pretty clear, I think, that the case made out for trading bank activities in association with central banking by the Opposition, members of which quoted the Prime Minister and Dr. Coombs and explained the situation of central banks throughout the world, has not been answered by the Government.
Moreover, none of the supporters of the Government has made any attempt to answer the Opposition’s case.
On the other hand, they have stated that this situation must be changed to create a position of trust in the private trading banks. Mr. Chairman, there is no allegation that the private trading banks do not trust at present, and have not over recent years trusted, the Commonwealth Bank Board. Have the trading banks a lack of trust at present? Has there been any suggestion over the last six or seven years that they have not trusted the board? Nobody has suggested it or has even had any suspicion of it. If this situation is brought about, will there be any real difference between the relations of the trading banks and the central bank? Over recent years we have seen that the central bank has endeavoured to establish a convention - the 25 per cent, cash reserve ratio. We also have evidence that the trading banks have resisted this. Dr. Coombs himself has said that, despite central bank pressure, the trading banks carried on in a certain way. Is it not likely that that sort of issue will arise again? Will this change remove the possibility of that issue? Of course not. It is quite likely that there will be need for central bank pressure again. Will it make the slightest difference to the situation? Obviously not. If the central bank has to exert pressure on the trading banks, the trading banks will not like it. It is not a question of its being different from a central bank separated from one that has trading bank activities and one which does conduct trading bank activities. There is no real ground for this submission at all. Honorable members who pride themselves on their business sense are obviously only speaking propaganda. They must be quite clear in their own mind.
To bolster his case, the honorable member for Wentworth turned to the States and said they had been stoking up inflation by their irresponsible State government actions. He especially picked out the New South Wales Government. That reference was not accidental, bearing in mind that elections will be held in that State next Saturday. The honorable member for Wentworth, who appears to take a professional and academic role in this chamber, is one of the first to turn to a political suggestion of that sort. I think it is time this business of State responsibility wasmore carefully examined. The State governments have responsible functions tofulfil, such as the provision of money for education, public works and hospitals. None of these things has been carried to extremes anywhere in Australia. Each of the State governments endeavouring to fulfil its functions has been cramped and restricted by the policies and practices of this Government. The argument that State governments have been irresponsible in providing houses and hospitals and in trying toprovide public works, which are most necessary to the community, is a political one put forward by somebody such as the honorable member for Wentworth, whoadopts an academic and professional role in this House. Such an argument exposes the narrow basis of the honorable member’s political submissions in this House.
I want to refer to the board in Part III. of the bill. This part provides for the appointment of a board consisting of the Governor of the bank, the Deputy Governor, the Secretary of the Department of the Treasury, and seven other members. Clause 17 provides that persons connected with banking shall not be appointed to the board. I point out to the Government the narrowmeaning of banking that is likely to be applied in this case. Presumably banking is only that kind of activity which is carried’ on by the seven trading hanks. The otheractivity, which is most important financially” and economically, is apparently not included.
– Order! The honorable member’s time has expired.
– The basic difference between the approach of the Opposition to this legislation and’ the approach of the Government is that the Opposition believes in centralized control of banking, whereas we on this side of the House believe in decentralized control, with a reserve bank standing apart from the member banks of the system, which by themselves constitute that decentralized control. Under this bill, in spite of the things that have been said by honorablemembers opposite, there are ample means whereby the central bank - the Reserve Bank - may retain proper control of the financial system. Indeed, under this bill there will be better opportunities to preserve full employment, rising standards of living, and stable costs than under the past system.
If honorable members look at clause 26 of the bill they will see that the Reserve Bank is to have central banking powers. If honorable members look at Division 3, clause 17 of the Banking Bill, they will see that it is proposed that the bank should have powers over the statutory reserve deposits of the member banks, which gives it adequate control to enable it to carry out its central banking functions. It is not necessary that the bank should have trading functions. Indeed, trading functions would impede the proper carrying out of its reserve bank functions unless one adopted the Opposition principle of having a centralized, single, unified system instead of the decentralized system which the Government prefers in banking and other things.
It is important and vital that there should be trust between the Reserve Bank and the various member banks. The only other way in which the system can work satisfactorily would be to bring everything into the one bank, to create the one financial colossus, and make banking into a system of socialized credit control. That is something which honorable members on this side of the House do not think would be a good thing for the people of Australia.
I refer to clause 80, which reads - (1.) The Auditor-General shall inspect and audit the accounts and records of financial transactions of the Bank, and shall forthwith draw the Treasurer’s attention to any irregularity revealed by the inspection and audit that, in the opinion of the Auditor-General, is of sufficient importance to justify his so doing. and move -
Omit sub-clause (1.), insert the following subclause: - “ (1.) The Auditor-General shall inspect and audit the accounts and records of financial transactions of the Bank, and shall forthwith report in writing to the Treasurer any breach of this Act or other irregularity coming to his notice which, in the opinion of the Auditor-General, is of sufficient importance to justify his so doing, and the Treasurer shall, as soon as practicable after receipt of such a report, cause a copy of the report to be laid before each House of the Parliament.”.
I hope later to move a corresponding amendment to the Commonwealth Banks Bill. Clause 80 of the Reserve Bank Bill does not go far enough. Perhaps this is due to unintentional looseness in the drafting of the bill. The clause does not accord with clause 11 of the bill, which prescribes that when there is a difference of opinion between the board and the Government, and the Government resolves that difference of opinion, it shall be reported to this House. I think that it is important that when the Auditor-General finds an irregularity of sufficient importance to justify his reporting it to the Treasurer, it should also be reported to this House so that there would be the sanction of public opinion in regard to it.
The operations of the Reserve Bank are secret, and must necessarily so remain. That is of the nature of reserve banking. But, because that is so, it is impossible for anybody who has no access to the accounts to be able to detect any breach of the act, even a major breach. There is, then, nosanction of law behind the provisions of this bill, because there is no machinery whereby those provisions can be effectively questioned. As all honorable members will agree, the market operations of the central bank must remain secret. They are big operations and it is important that they should be conducted in accordance with the provisions of the act, whatever it may be, that governs the constitution of the Reserve Bank. It therefore seems to me that since the Auditor-General is the only person whocan have access to those secret accounts, when he finds a breach of significance he should report it to the Treasurer, and it should be the Treasurer’s statutory duty totable that report in the House so that it may be made known to the public, because there is no other sanction that the AuditorGeneral or anybody else can place effectively on the Reserve Bank. It is true that hisreport at some later stage - twelve or eighteen months later - may be laid on the table of the House under clause 81, but that is by no means an effective sanction.
It is important that Parliament maintain its authority, because no other effectiveauthority can be maintained. It is not possible for any breach to be known outside the charmed circles of the bank, the Auditor-General, and perhaps the Treasurer. But we must always think of the possibility that a Treasurer - I speak, of course, not of the present Treasurer, nor of this Government, but of a future Treasurer - may have a vested interest in covering up a breach that has been made.
What I have been saying does not in any way affect the position if there is no substantial breach. If there is no substantial breach then my proposed amendment would cover the position equally as well as the present sub-clause. The difference only appears if there is a substantial breach of the act.
I think honorable members on both sides of the House will agree that, if there should be a substantial breach, this should not be covered up but that there should be a statutory duty on the Treasurer, when he received the report from the AuditorGeneral, to lay that report on the table of the House so that the sanction of public opinion - the only possible sanction - may be brought to bear to see that the breach is remedied in some way or other.
We are giving, and we must give, great powers to this Reserve Bank. It is the bank that is entrusted with the maintenance of full employment in Australia. It is the bank that is entrusted with the maintenance of the stability of our country. It is the most important economic instrument in Australia outside the Commonwealth Treasury itself. If there is no breach, then the change that I have suggested will have no effect. It only differs in its effect from what is in the bill at present if there is a substantial breach. It will depend on the Auditor-General’s opinion, but, in all things, we are dependent upon the opinion of the Auditor-General. There is no getting away from that.
– Order! The honorable member’s time has expired.
– I will not devote very much of my time to a consideration of the amendment of the honorable member for Mackellar (Mr. Wentworth). As a member of a Government party, he knows too well that, as the Treasurer (Mr. Harold Holt) has already indicated, the Government will not accept any amendments to this legislation. If the Opposition did find any merit in his proposal and decide to vote for it, he would disappear from this House or vote with the
Government. Consequently, his amendment is only wasting the time of the committee.
The honorable member for Wentworth (Mr. Bury) has developed a new argument in favour of the establishment of a central bank, divorced from all other banking activities. As a matter of fact, he used a different term. He said “ separated from commercial activities “. If he were consistent and wanted a central bank completely removed and divorced from commercial activity, he could not possibly support the broad control provided in this legislation. What the Government proposes is to have a government central bank under the control of private financial interests. The bank board is to be dominated by interests apart from the Government and connected actively with big business.
The honorable member for Yarra (Mr. Cairns) directed attention to the fact that the clause providing for the establishment of the board says - . . a director, officer or employee of a corporation (other than the Bank) the business of which is wholly or mainly that of banking, is not capable of appointment, or of continuing to act as a member of the Board.
No definition of banking is given in the bill. One has to use one’s own imagination as to what constitutes banking. Banking now extends into the field of hire purchase. One bank - the English, Scottish and Australian Bank Limited - owns entirely a hirepurchase organization. Banks are also becoming interested in unit trusts. Are we to regard these activities as associated with banking?
What would be the position if a gentleman appointed to the reserve bank board had as one of his colleagues on the directorate of some commercial organization a person who was also a director of a private bank? This illustrates the possibility of a link-up through interlocking directorates.
Let us look for a moment at the amendment of the honorable member for Mackellar. The Government does not want a central bank to control private banks. If Government members spoke truthfully they would admit that they do not believe in the private banks being restricted or controlled at all. They want a central government bank from which a private bank, which gets into difficulty, will be able to draw funds in order to re-establish its position. That is all that honorable members opposite want. They have in mind the great banking crash at the turn of the century when a number of private banks were compelled to close their doors. There was no central bank at that time. Government supporters want a central bank to protect the private banks, but they do not want the private banks to be controlled.
Let us examine the peculiar argument of the honorable member for Mackellar. He favoured the Government’s action in establishing a separate central bank, but he wants decentralized control. What does that mean? The idea of having a central bank, in the minds of most people, is to get uniformity in banking operations. It is not a question of decentralized control at all. This proves that the honorable member for Mackellar and those who support him want no control at all.
As I have said, the Government has not attempted to define what constitutes banking, and already the private banks are in the field of hire purchase and unit trusts. If the Government wanted to compel the private banks to engage only in banking operations why did it remove the restrictions on investments which were imposed on the private banks by the Labour government under its legislation of 1945? To-day, the Government says that it cannot control hire purchase, but in 1953, at least, it could have controlled hire purchase as it affected the private banks. If the Government had allowed the restrictions on the investments of the private banks to remain, they could not have invested in hire-purchase companies or unit trusts.
We argued the question of a separate Reserve Bank fully during the secondreading debate. I propose to direct attention to one or two other matters which affect the employees of the Reserve Bank. It appears to me rather strange that although during the whole of the second-reading debate, we heard honorable member after honorable member on the Government side talking about these devoted workers in the Commonwealth Bank who had done an excellent job during their period of service with the bank, there is very little in the Reserve Bank Bill - the first of the major bills with which we are dealing - to protect the employees who are to be transferred from the Commonwealth Bank to the Reserve Bank.
The Treasurer did his best to argue for the separation of the staffs - for a separate staff to be provided for the Reserve Bank. The private banks, stupidly in my opinion, have argued that there could be unfair competition affecting the private banks if the employees of the Commonwealth Bank, including the central bank staffs, were regarded as one for the purposes of recruitment. Let us look at what the Government is doing now. The Treasurer stated that all the employees of the Reserve Bank will be specialist officers. I went to the trouble of ascertaining how many of these men will be specialists. A small proportion of them could be regarded as being specialists in their own field of activity. Of approximately 1 1 ,000 employees of the Commonwealth Bank, between 1,500 and 2,000, I am given to understand, will be transferred to the Reserve Bank. Of these, the great majority will be employees of the same kind as those who will be engaged in the other banking activities, whether in the Savings Bank, the Trading Bank or the Development Bank. Of the 1,500 to 2,000 people who will constitute the Reserve Bank staff, only about 150 will be what might be regarded as specialists. Where else could one expect to recruit the people with the essential qualifications required for the Reserve Bank than in the Commonwealth Bank organization itself?
Let us examine what the Government proposes to do in regard to bringing in outside staff. This is creating a good deal of disquiet among Commonwealth Bank officers to-day. Many of them will hesitate to transfer to the Reserve Bank because under this legislation the Government can recruit officers from outside and flood its staff. In this way men who would normally be entitled to promotion because of their length of service with the Commonwealth Bank could be superseded. Qualified officers who desired to be transferred could be prevented from being appointed to the staff of the Reserve Bank. Commonwealth Bank employees are to be allowed three months in which to decide whether they are interested in transferring to the Reserve Bank or wish to remain with the Commonwealth Bank.
Why is there any need for haste? The Treasurer has admitted that this legislation will not become operative immediately but as from a date to be proclaimed. That could be any time in the future because of the difficulties of making the new arrangements. Yet Commonwealth Bank officers who have had twenty, 30 or 40 years’ service with the bank will be obliged to make up their minds within three months whether they want to transfer. They should be given a longer period of six months, or twelve months if that were deemed to be practical. They should certainly be allowed not less than six months to make their decision.
I now wish to deal with one or two other aspects of the question of the employment of bank officers. If the Government wants the best men to be engaged in the work of the Reserve Bank, since it has decided to separate the staffs, what is wrong with giving Commonwealth Bank officers a preference of appointment in the event of any vacancy occurring in the Reserve Bank? Surely, they are entitled to such a preference if they are deserving of all the compliments which have been paid to them during the second-reading debate on these bills. The other thing I want to mention is the conditions of employment. One of the things that has retarded the Commonwealth Bank in the sense-
– Order! The honorable member’s time has expired.
.- I rise to direct attention, briefly, to the strange reasoning of the honorable member for East Sydney (Mr. Ward) and his new found sympathy for Commonwealth Bank officers in respect of their employment. Honorable members who were in the Parliament when the Labour government made a bid to nationalize the banks will recall that the Australian Labour party had no real thought for the employees of the private banks. When I raised this matter at the time the present Leader of the Opposition (Dr. Evatt) said that full provision would be made, for the officers of the private banks under the nationalization scheme. We should remember that Mr. Chifley said that all the private banks were to go out of business and that under Labour’s nationalization scheme the Commonwealth Bank would be given a com plete monopoly. By gathering all the banks into one monopoly it would naturally not be possible to employ as many people as were employed in the number of banks that were then operative.
– The Commonwealth Bank has a number of branches in every large town.
– The honorable membier for Port Adelaide says that the Commonwealth Bank has a number of branches in the big towns. That is true, but in every big town there are also branches of each of the private banks. If one banking monopoly were created and an attempt were made to bring in all employees of the private banks it would be a physical impossibility to find employment for them all. The honorable member for East. Sydney, the honorable member for Port Adelaide (Mr. Thompson) and everybody else must realize that.
Under this legislation the Commonwealth Bank will be divided into several branches and this will provide the opportunity for more employment rather than less. The honorable member for East Sydney referred to the experts in the private banks which were operative at the time of the nationalization bid. Would all those experts be able to be absorbed into the Commonwealth Bank to use their knowledge and training on the same basis of employment as they did in the private concerns? Of course not. The honorable member has a knack of fitting his debating arguments to what is happening at the moment. This afternoon he set out to make people believe that he is sympathetic towards the employees of the Commonwealth Bank. He has suggested that their careers will be disrupted as a result of the bills now before the Parliament. I have already drawn attention to his strange reasoning, and in the light of things he has said in the past and what has happened, it is logical to conclude that he speaks as he does for the sake of political expediency. I give the honorable member credit for being fairly intelligent but he cannot expect to have much notice taken of his remarks this afternoon if they are completely opposed to the opinion he expressed a few years ago. But that is exactly what has happened.
The honorable member criticized the honorable member for Mackellar (Mr. Wentworth) in regard to decentralized control. There is no doubt that control will be decentralized. If the Governor of the Commonwealth Bank gives a directive, the Commonwealth Trading Bank will receive it in the same manner as the private banks. By way of a homely illustration, if there were six persons on six properties in a country district and one of them knew when it would rain and when it would be dry he would soon reach a financial position that would enable him to buy all the other farms. The Governor of the Commonwealth Bank knowing what directives will be given and what is their purpose is able to cushion the Commonwealth Trading Bank against the effect of those directives. It may be a case of lending more money or it may be the opposite, but because the Governor knows what is being done the trading bank has an advantage over the other banks.
It is not so under this legislation. Government members have said that its main object is to make it more difficult for a Labour government to implement its nationalization policy. The honorable member for Port Adelaide said that it would not be possible for the Labour party to implement its policy because the High Court of Australia and the Commonwealth Constitution would prevent it from doing so. That is equal to saying that if a dog is tied on a chain he cannot bite any one, but if he ever gets off the chain people will have to look out. That is what the people of Australia should remember. The only way to keep banking safe in this country is to keep the Labour party off the treasury bench. As soon as a Labour government takes office it will carry out its nationalization policy, and if it cannot do so constitutionally it will find some other way. Recently it was said in this House that if Labour was returned to the treasury bench it would rescind this legislation and restore the legislation of 1945. Then, through the agency of the Reserve Bank and the Commonwealth Trading Bank it would make things so hard for the private banks that they would probably be forced out of business. It is a good thing for the people of this great Commonwealth to be well aware of what they can expect from a Labour government.
I have noticed that members of the Opposition have begun very early in this session to say what they will do with regard to socialization. I have pointed out here on numerous occasions that the Labour party is very vocal about socialization in the early part of the three-year period of each Parliament. But when election time is drawing near they say less about it. Every day during this debate honorable members opposite have spoken freely about nationalization of banking, but just before the recent election we heard nothing from them on this subject or about socialization. I challenged the Leader of the Labour party that if he spoke during the election campaign in an approving way of the Labour party’s policy of socialization I would come into this House immediately after the election and apologize for saying that the Labour party did not mention socialization in an approving manner during the election campaign. I listened to his speeches and read those of his colleagues, but they contained no mention of the nationalization of banking or of socialization. Although we have heard a good deal about these things from members of the Opposition during this debate, further mention of them will die away as the life of the Parliament goes on.
It must not be forgotten, however, that Labour’s policy of nationalizing the banks and of the socialization of the means of production, distribution and exchange will be implemented if the Labour party is returned to office. Little regard will be paid to the way in which it is done, whether it be democratic or otherwise. Labour members say that they are all for democracy and for having a mandate from the people for their actions. What mandate from the people did the Leader of the Labour party have in 1947 when he walked into this House and said that he had decided to nationalize banking? Even the Labour men who supported him were stunned, because although they wanted banking nationalized they did not think that nationalization was so close. It is a great thing that in the long run it is the people who decide these questions.
It is only to be expected that the private banks will see to it that their banking operations run smoothly, and that the people get the very best deal that can be given to them. If the trading banks were treating people in the way stated by members of the Opposition, the people would turn against them, which would mean that a Labour government would be put into office to apply Labour’s real policy and nationalize the banking institutions of Australia.
Mr. MAKIN (Bonython) [4.45J.- The honorable member for Mallee (Mr. Turnbull), with glibness of tongue as well as of reasoning, sought to set up a case and then answer it. I point out to the honorable gentleman that had there been no political organization known as the Labour party, with a policy as expressed from time to time by its leader, the honorable gentleman would be without a text. The honorable gentleman’s reasoning is, I am afraid, very unconvincing, as usual. It is characteristic of the honorable gentleman - and I do not say this with any desire to be unfriendly towards him - to be superficial in his reasoning on such matters as that with which we are now dealing.
As far as I can recall - and I invite any honorable gentleman opposite to correct me - no member on the Government side has been able to cite a case in which there has been any abuse, by any section of the Commonwealth Bank, of its responsibilities in respect of the whole banking system. No honorable member opposite has told us of any instance in which the Commonwealth Trading Bank has been given an advantage over the private trading banks through having made available to it information from the central bank which was not made available to the private banks.
Members on the Government side claim that the private trading banks have reason to fear possibility of the central bank’s passing on to the Commonwealth Trading Bank information which has come to the central bank’s knowledge in the course of its dealings with the private trading banks. Surely if there was an instance of the central bank’s having failed to observe the highest degree of integrity honorable gentlemen opposite would have cited that instance to us; but they have not been able to cite one single instance of an abuse by the central bank of its power to the prejudice of the interests of the private trading banks. It is hardly fair of honorable members opposite to seek to establish a case, on behalf of the private trading banks, for the divorcing of the Commonwealth Bank’s central banking activities and reserve banking activities from its trading banking activi ties, on the ground that the private banks might not otherwise get the fair treatment that they consider to be their due.
I turn now to the question of the future of the staff of the Commonwealth Bank, with which other honorable members have dealt at this stage of the debate. As has been rightly claimed by members on this side of the House, it is unfair to members of the Commonwealth Bank’s staff, particuarly senior members in the Commonwealth Trading Bank or the Commonwealth Savings Bank, to have their opportunities of promotion, as well as their opportunities for gaining experience, limited by these measures. It seems to me that there is a very definite purpose lying behind the actions of the Government and those who are really the sponsors of this legislation. I think their purpose is that some of the experienced officers of the private banking institutions will ultimately become identified with the staff of the Reserve Bank; that, in fact, the private banks will be given the opportunity to get members of their staff into the Reserve Bank with, no doubt, a view to some advantage, and would also make possible a greater stranglehold by the private banking institutions of this country on our highest and most authoritative financial body, the Reserve Bank.
The Reserve Bank has a very important part to play in our economy generally, and in the well-being of the community, because it is identified with financial policy which has a real bearing on everyday life. That being so, I feel that Australia is being done the greatest disservice in this proposal to divorce the various sections of the Commonwealth Bank’s activities. As the honorable member for Melbourne Ports (Mr. Crean) has pointed out, the central bank is to operate in complete isolation from other parts of the present Commonwealth Bank. It is to occupy separate premises and have a completely separate staff. That shows how extreme and how impossible is the attitude adopted by the Government in regard to the operations of that great institution, the Commonwealth Bank.
Formerly the private banks undertook central bank business, and I have no doubt that they have resented the fact that over the years they have become not quite the same masters as they were of Australia’s overall banking activities.
– Order! The honorable member’s time has expired. I suspend the sitting till 8 p.m. to enable honorable members to accompany Mr. Speaker when he delivers the Address-in-Reply to His Excellency the Governor-General.
Sitting suspended from 4.55 to 8 p.m.
.-l desire to support the amendment proposed earlier by the honorable member for Mackellar (Mr. Wentworth). The amendment is designed merely to act as a safeguard in the event of a serious breach of the conditions of the bill. It is conceivable, I think, that in certain circumstances there could be collusion between a Treasurer and the Governor of the Commonwealth Bank of the day. The amendment merely seeks to ensure that any serious breach or irregularity will be reported to the Parliament. Otherwise, any connivance between the Treasurer and the governor of the bank would go undetected. Elsewhere, provisions are made for supervision by Parliament. Clause 1 1 (7.) provides -
The Treasurer shall cause to be laid before each House of the Parliament, within fifteen sitting days of that House after the Treasurer has informed the Board of the policy determined under subsection (4.) of this section . . .
All that the amendment seeks is the provision of a similar precaution in respect of a breach of the regulations and the reporting of such a breach to the Parliament.
The committee will be pleased to hear that I do not propose to canvass any further the clauses of this bill. Over a period of nine years it has been a long haul, and much has been said on each side. A rehash of all those arguments would be a waste of the time of the committee. I support the amendment, not only because of its intrinsic worth but as a means of expressing my own feelings and of defending my conscience against authority. I believe that at all stages we should, as a matter of course, place before the committee all the information we can possibly get. The Government should welcome this action, instead of feeling petulant because of the insistence of private members on exercising their undoubted right to express their views. I feel that it is useless to propose any substantial amendments to this bill, because there is apparently a tacit understanding between the Government and the Opposi tion that the bill shall go through without alteration. I know of more profitable avenues of using my time than in producing further arguments which will be of no avail in this committee stage. Accordingly, my main concern in supporting this amendment is to assert my right to protest. This action will be recognized by any believer in the parliamentary system as being in keeping with a member’s duty to his constituents.
– As no other honorable member has risen, I call the honorable member for Yarra, who has already spoken once in this debate.
.- The claim of the honorable member for Mitchell (Mr. Wheeler) that there is some tacit understanding between the Government and the Opposition that this bill will pass without any substantial amendments, suggests a position which is the very opposite from that which exists in fact. We have opposed every line of these bills. We have used the full force of argument that is available to us, and we have used the full force of our numbers here and in another place in order to stop this legislation. The only reason why the honorable member for Mitchell does not propose any substantial amendments to further tie up the public banking system in the interests of the private banks is that the Prime Minister (Mr. Menzies) has said, “ Boys, we have had enough of it. We have given you considerable scope for your own interests and designs over the last few years, but there must be no more amendments, and if any of you tries anything in the next few days he will be in for trouble.” We all know how the Prime Minister effectively dominates the members of the Liberal party at party meetings and elsewhere, and we can all see very clearly the reason why the honorable member for Mitchell is retiring from the chamber with nothing further to contribute on this matter.
This afternoon I was discussing Part III. and, in particular, clause 17, which relates to the board to be appointed to control the Reserve Bank. Clause 17(d) provides - . . a director, officer or employee of a corporation (other than the Bank) the business of which is wholly or mainly that of banking, is not capable of appointment, or of continuing to act, as a member of the Board.
This, presumably, is to exclude people whose associations with other banks might render inevitable a conflict of interest and duty if they were to serve on the Reserve Bank board.It is easy to understand why this provision appears in the bill, but as I commenced to point out this afternoon, the word “ banking “ here will have a very narrow meaning, indeed. It will mean the banking activity of the private trading bank corporations and similar bodies. In view of the Government’s attitude to hire-purchase companies and the short-term money market, I should not think that it would include a corporation operating on the shortterm money market or a hire-purchase company. Perhaps the Treasurer (Mr. Harold Holt) can enlighten us on that point. If directors, officers and employees of private banking corporations only are to be excluded, the directors of hire-purchase companies, or the directors of share-broking firms on the short-term money market will be eligible to serve on the Reserve Bank board.
The Government, having recognized the existence of a conflict of interest, and desiring to avoid it, logically ought to exclude from the board the directors of sharebroking firms operating on the short-term money market and directors of hirepurchase companies, because in England last year, on the occasion of an increase in the bank rate, there was a great deal of reason to believe that some people associated with the board of the Bank of England had made use of the knowledge gained in that capacity by advising the share-broking firms with which they were associated in the financial centres of London. Eventually, an inquiry was held, and the directors of those firms gave evidence. They said that they had recognized1 the conflict of interests but had done nothing wrong. It was a pure coincidence that a number of those firms had sold an extensive volume of Government and other securities since the suspicion that the bank rate was to be adjusted had arisen. A pure coincidence! I think that if the Government is to endeavour to protect the Reserve Bank Board by clause 17 (d), its provisions should be extended to exclude from the board the directors of sharebroking and other financial companies who may be put in a similar situation here in Australia. I should like to have the views of the Treasurer on whether or not that matter will be considered by the Government.
I wish to mention one other point in relation to this matter. We were discussing this afternoon the significance of the relations of ordinary trading banks with the central bank, and I directed the attention of the committee at that stage to some general remarks made by the Governor of the Commonwealth Bank, Dr. H. C. Coombs. I should like to direct the attention of the committee now to those remarks in detail. In his lecture, “ The Development of Monetary Policy in Australia “, Dr. Coombs had this to say -
It is important to realize that, by the direct influence which the Commonwealth Bank exercises over the family of banks of which it is the head, it is able, within limits imposed by their commercial (and, in the case of the Commonwealth Trading Bank, competitive) character, to influence their policy so that they contribute directly to the achievement of the objectives of central bank policy -
the stability of the currency:
the maintenance of full employment.
There can be little doubt that this direct link gives to the Commonwealth Bank a source of strength which can be of particular value in times when the economy is threatened with declining activity and employment.
This afternoon, certain Government supporters wanted to know why Dr. Coombs had taken that view. I think the reason can be understood if you think of the significance of the Commonwealth Development Bank as seen by Government supporters, who - particularly those in the Australian Country party - see it as a bank which will make finance available for rural activities in which there is a considerable amount of risk. As put, again, by Dr. Coombs, in his lecture “ Rural Credit Developments in Australia “, which was delivered in January of this year - . . the justification for . . . extensive capital modification of the farm appears problematical, except to the expert or the enthusiast. I believe there is, therefore, need for a specialized institution or institutions designed to satisfy this need.
We shall have a look later to see just how much the Development Bank is likely to satisfy this need. But that is the need - for experimental loans for rural activity.
There is, in other parts of the economy, exactly the same situation. In secondary industry, there are cases in which it is extremely difficult to get assistance from the ordinary banking institutions for, say, an invention or a new technical development. perhaps on a small scale. There are occasions when, owing to the need for capital for development, a considerable amount of unemployment may arise in any one particular case. It is those cases, I think, that the Governor of the Commonwealth Bank had in mind - cases in which the trading bank activities of the Commonwealth Bank, prior to this legislation, were able effectively to meet such a need. They were able to do so because the Commonwealth Bank, prior to this legislation, did not always have to conduct those operations with profit in mind. After the enactment of this legislation, which requires it to pay half its profits in taxation, it will have to adopt a different attitude to those profits, and it will not be able to finance projects of this sort in the way that it was able to finance them before.
So, what is needed - and what is being taken away by this legislation - is a bank for secondary and tertiary industrial operations, and for operations such as those of local councils, which can be used for a social purpose and in which there is no certainty of a return of the capital and no certainly - far from it - of a satisfactory level of profit. If the Development Bank will serve that purpose, it will serve a good purpose, but the point which we must, I think, leave undecided is whether the bank will serve that purpose. What you recognize as necessary for the country interests is necessary for other parts of the economy also, and what you are doing by means of this legislation is taking away pretty substantially the possibilities of the ordinary trading banks playing that role, because, from now on, the Commonwealth Trading Bank is going to have more of the characteristics of a profit-making bank. Quite clearly, it will apply more of the ordinary standards that a profit-making bank applies and it will not be able to fulfil the role that Dr. Coombs saw that it was fulfilling when he was appointed to the central bank.
– Order! The honorable member’s time has expired.
– Mr. Chairman, I have deferred intervening in this discussion at the committee stage for some time in view of the procedure which the committee has adopted, because I thought it would be useful to hear what were the main points being presented at this stage and to attempt, instead of trying to deal with each point as it arose clause by clause, to deal with them at the one time in a rather more general way and perhaps to preserve an opportunity later in the committee discussion to deal with further points of detail as they may arise. Having regard to the manner in which the committee debate has proceeded, I think it is useful in the circumstances, Sir, to offer one or two general comments before I deal with the particular amendment which is immediately before us.
First, Sir, I can assure my friend, the honorable member for Mitchell (Mr. Wheeler), that his statement about some tacit understanding between the Government and the Opposition is so palpably false that I am sure he uttered it only in a facetious spirit. Indeed, I can go a great deal further than that, Mr. Chairman. I can assure the committee that there is no tacit understanding between the Government and the Opposition, between the Government and the private banks, or between the Government and the Commonwealth Bank of Australia. There may be a very full understanding between the Government and its parliamentary supporters, but I am quite certain that those of them who have participated in our discussions in recent weeks will agree with me that it has not been a tacit understanding. Our understanding has been reached after full discussions together and after we have had the benefit of hearing one another’s views. In other words, Mr. Chairman, the Government, in its approach to this problem, has not bowed to any sectional pressure or interest, but has ever been mindful of the interests of the Australian people as a whole. Even more importantly, Sir - and this takes us right back to the origin of the contest on this issue - we have been mindful of the freedom of the individual in this democracy of ours.
I think that we have tended to forget, over the nine years of the long haul to which the honorable member for Mitchell referred, that there was a fundamental difference of attitude and approach in this matter between those who sit on the Opposition side of the Parliament to-day, but who were in government previously, and those of us who, largely because of the attitude adopted by the government that was in office in 1947, have, for the last nine years, been in authority in this country.
– What is wrong with that?
– I find nothing wrong with the result. 1 am not very happy about the circumstances which produced the result, but if the extravagant, hazardous and intemperate approach of members of the Australian Labour party to the problem of banking in 1947 has had the result of keeping a stable and progressive government from our side of politics in office ever since that time, it was not an unmixed evil. It did have some blessing flowing from it.
But, Sir, the long haul that is now nearing its end - at least, I hope that it is coming close to its end - has proceeded in certain stages, and the big issue of 1949, when the people of Australia for the first time were able to vote on the decision of the Labour Government in 1947 to nationalize the banking system, was the freedom of the individual and the opportunities to be open to Australian citizens in relation to their own affairs. I am quite certain that even those members of the Australian Labour party who had always pursued - at least, since 1921 - this objective of the socialization of banking, had themselves not clearly and fully understood the effect of that process upon the freedom and opportunity of the Australian citizen. But, as the issue unfolded itself, that became more readily apparent, and the people sensed that if ever they were to commit the banking system of this country to a government monopoly, with all the dangers associated with the system of party politics in this country, they would be sacrificing a great measure of the freedom which they were entitled to enjoy in a democratic community. We saw freedom sacrificed in various parts of the world in the troubled years which led up to that time.
So the issue was fought, and the first task we set ourselves when we came back from the election of 1949 was to see that political control of banking was minimized, by the establishment of a bank board which would be able to bring some independent exercise of judgment to the problems of banking, and which would do much to ensure that the rights of indivi duals were preserved from either a predatory government or a government willing to curtail the opportunities of our citizens.
So the outcome of our legislation of 1951 - and I mention only the particular matters we are concerned with at this time - was the creation of the Commonwealth Bank Board. Then as the system progressed under our administration, we felt that there was a substantial weakness in having the Commonwealth Bank functioning as a central bank and a trading bank at the same time. Legislation was therefore introduced in 1953, and in some ways it could be regarded as the terminal point of the processes that had gone on since 1949. That legislation brought about the separation of the Commonwealth Trading Bank from the central bank.
It was hoped that this would be the end of the story so far as substantial change was concerned, but as time went on it became evident that, far from repenting their policies of 1947, the members of the Labour party were just as firmly attached as ever to the policy of nationalization of banking.
– Hear, hear!
– Not only the “ Hear, hears! “ that I hear around the chamber to-night, but also the speeches that we have heard over recent weeks have made it abundantly clear that there is a significant number of honorable members of the Opposition, perhaps all of them - and, indeed, all of them have given their pledge to this effect - who adhere to the objective of the nationalization of our banking system. In those circumstances it is not surprising that various elements in the community, and not only the private banks which might feel that their very existence was threatened by a continuance of that policy objective, but also other thoughtful people in all ranks of the community who would see in bank nationalization a threat to their own opportunities and indeed a retrograde development in the life of the country, have sought some further safeguards against the kind of process that they might expect to be initiated by a government composed of honorable members opposite.
I confess that in the first instance the Government did not move readily in the direction in which we have now taken steps because we thought we had made considerable progress towards introducing the kind of safeguards that we considered necessary, by the creation of the Commonwealth Bank Board and the separation of the Commonwealth Trading Bank from the central bank. We felt that the real protection against extremism was a vigilant Parliament and an educated public opinion, ready to act effectively if intrusion into the liberties of the individual developed as a result of the activities of some subsequent government. But as time went on we came to believe that as matters stood, and as long as a significant section of the community, including those who conduct the private banking system, felt that there could never be full co-operation between those banks and a central bank which was directing the policy of their active competitor, some further change was desirable. This legislation is the outcome of that belief.
I know that suggestions have been made in various quarters, some by the private banks themselves, some from the . Commonwealth Bank, some from honorable members in the Government ranks, to say nothing of the criticisms which have come from honorable gentlemen opposite, which indicate that in the eyes of those critics this legislation is not yet perfect. But perhaps it will never be perfect in the eyes of everybody, because people do not always look at things in the same way. Quite obviously there have been different viewpoints among the elements that I have mentioned. But the Government believes not only that this scheme is inherently sound, and that it will achieve the objectives desired, but also that it represents the largest measure of agreement on the question of banking likely to be found throughout Australia at this time.
– Between whom?
– Amongst all sections of the community - the highest common denominator of agreement that we feel could be reached on this question, while, at the same time, embodying an inherently sound scheme.
Now I want to give the committee just three illustrations of the way in which the necessity to preserve freedom persists. These matters have all become evident in the course of the discussion of this legislation, both in this committee and in the House. The Deputy Leader of the Opposition (Mr. Calwell) provided us with one of the most telling examples that any one could wish to hear. He was out to score a political point, and in the process of doing so he purported to divulge details of a banking account. He gave chapter and verse, as he put it to us, of what had appeared in that banking account. It is not for us at this time to debate whether or not there should have been such an account, the purpose for which it was intended or any matter of that sort. That is an argument, perhaps, for another day. But what is vitally relevant to the consideration by this Parliament and this country of the attitude of certain people in the country towards the banking system is thai there was a willingness to disclose the details of a banking account in one of the private banks. You do not need to carry your imagination very far, Mr. Chairman, to visualize the kind of situation which developed in Europe in the years before the second world war, when there were dictatorial governments, fascist governments, Communist governments, socialist governments, all with control of the banking systems in their particular countries. In those countries no citizen was free from intrusion into his private affairs, because the Government, by virtue of its control of the banks, was able to pry into a person’s affairs and use the information so obtained as a weapon against him. I do not want to elaborate the point because I think the inference is quite clear. The second point is this.
– Oh, you have a second point!
– I would need many more to penetrate the thick hide and dumb skull of the honorable member for Wills. These second and third illustrations that I shall give concern matters brought forward by people who, I am quite certain, had no intention of violating the freedom or the opportunities of individuals. This, however, I believe, would have been the result of the adoption of the suggestions made. I refer first to a matter concerning the Development Bank, and this is an illustration of the importance of having the Reserve Bank system such as is proposed in this legislation. It was suggested that before the Development Bank should accept any proposition from an applicant it should require him to produce evidence from at least one other bank to the effect that an application to that bank had been refused. What was in the mind of the person who made this suggestion is quite apparent. It was to ensure that the Development Bank did not go outside its charter and lend on propositions which the banking system itself would have been willing to accept. But in the result it would have compelled a person seeking a loan from the Development Bank to disclose that fact and the circumstances associated with it to his own bank. It is not everybody in every circumstance who would want to do that or should be compelled to do it. What a man does in relation to his own affairs is his own business. It may be that, although he already has commitments to his own bank, for which he has given security, he has a proposition which he thinks is worthy of consideration by the Development Bank and which would fall outside normal bank lending policy.
– Who suggested this amendment?
– This was a suggestion from one of the private banks. I do not think it is necessary to the point that I am making to say which bank made the suggestion.
– It did not come from anybody here?
– No, but the suggestion was made in good faith and, I am sure, with the best of intentions. I merely point out that that is the sort of effect it could have.
Let me come to the third proposition, which is the matter immediately before us - the amendment proposed by my friend, the honorable member for Mackellar (Mr. Wentworth). He has taken a very active and intelligent interest in the legislation from the outset, and I readily acknowledge his most constructive comments. He brought forward what, on the face of it, seemed and what may still to him seem to be an admirable suggestion that the report of the Auditor-General to the Treasurer on some irregularity should, as quickly as possible after the report is made to the
Treasurer, be tabled in this House. When the proposal was first put to me I was attracted to it, and I discussed it with my colleagues in the Cabinet, including the Attorney-General (Sir Garfield Barwick). We at first thought, “ Yes, the Parliament should be the last authority on these matters and if there is an irregularity which it is felt should be conveyed to the Treasurer, then in due course it should properly come to the attention of the Parliament “.
But when I went into the proposal, I discovered that virtually identical provisions exist in a number of other Commonwealth statutes, such as the Atomic Energy Act, the Australian Coastal Shipping Commission Act, the Australian Wool Testing Authority Act, the Export Payments Insurance Corporation Act, the National Capital Development Commission Act, the Snowy Mountains Hydro-electric Power Act and the Stevedoring Industry Act. That may not be an exhaustive list. I have sought only since the matter was discussed by me with my colleagues this morning to get some further detail on it. However, it will be seen even from that list that the provision appears in a number of other statutes of the Commonwealth.
I think a moment’s reflection will convince the honorable gentleman that the result he set out to achieve may go well beyond what the Parliament would wish to have occur in matters of this sort. Most of us are familiar with the activities of an auditor in a commercial organization, a club or some other body with which we have had connexion at one time or another. I think we are all familiar with the situation in which the auditor, having gone through the accounts, directs the attention of the president of the club, the chairman of directors of the company or whoever the responsible person may be, to what appears to the auditor to be irregularities in the accounts. Nine times out of ten, when the matter is explored with the parties directly concerned it is found that, although on the face of it there may have appeared to be some irregularity, in fact when the explanations are received the irregularity is shown not to have existed or to be capable of an explanation which shows that it is entirely harmless.
The honorable gentleman will, I am sure, agree that, in a situation such as I have outlined, great mischief and injustice could have been done had the seeming irregularity been given publicity before the explanation was received. I am sure that sort of thing occurs now in relation to the statutes that I mentioned. The Auditor-General, going through matters as he does, but with the somewhat imperfect knowledge inevitable in a man who has not been directly concerned with the item or who has not the full story before him, brings to notice what seems to him to be an irregularity. By the time the Treasurer or the Minister concerned has received a full statement of the facts from the appropriate officers, most often it is found that the irregularity can be cleared up. I am quite certain that none of us would want a situation in which public advertisement is given in this Parliament to what appeared to the Auditor-General to be an irregularity before an opportunity was afforded for the irregularity to be explained.
That is the real flaw I see in the proposal of the honorable gentleman. A further weakness about it occurred to me, although what I have already said appeals to me as an over-riding consideration. The further weakness is that the Auditor-General should feel free to speak quite frankly and fully, and declare himself in those terms to the Minister concerned. If he were to know that his reference to some irregularity would forthwith, or as soon as practicable, be tabled in the Parliament, I am quite certain that his reports to the Minister would lack the comprehensiveness, detail, and frankness that we are accustomed to expect from him in the present situation. In the one case the reference is to an Executive Councillor, under summons, bound by his oath of secrecy and therefore able to deal with the matter before him with judgment and discretion. But in the other case, there would be a public advertisement of the alleged irregularity.
I have heard statements in the course of the debate, particularly from this side of the House, about what an irresponsible or conniving Treasurer could do with a pliant Reserve Bank Board or Savings Bank Board. Quite frankly, I do not think that that realistically states the kind of future we can expect in this country. It is possible that men of extreme views will come into office; they may even lead governments of the future. But I believe that we shall be able, through the authorities and boards that we have mentioned, through senior Ministers who take their oaths as Executive Councillors, and through the vigilance of the Parliament and of the press combined as it was in 1949, to avoid the worst of the evils which some honorable gentlemen see as dangers inherent in this legislation.
For our part, quoting the terms of clause 10 of the bill, we sincerely believe that this legislation will best contribute to the stability of the currency of Australia, to the maintenance of full employment in Australia and to the economic prosperity and welfare of the people of Australia. But, above all, we believe that although it is not enshrined in specific terms in the legislation, that the system we shall have of a strong government central hank, and strong private trading banks in active competition with each other and with the government trading bank, will not only contribute to the highly desirable objectives that I have mentioned, but will also be a valuable safeguard of the freedoms and opportunities of the Australian people.
.- The Treasurer (Mr. Harold Holt) appears to have confused the rights, powers and benefits of the banking system with the benefits of all the citizens in the community. There is a good deal of evidence from the past to show that those who are running the banking system do not necessarily look at the public welfare as does the citizen at the far end of the line. We have plenty of evidence of that. If it were not for this sort of thing, there would be no need for banking legislation whatever. There would be no need for provisions for a central bank to control the banking system, and no need for the provision that eventually the central bank would be answerable to the Parliament. I repeat that there would be no need for these things if these great and wonderful people were so dedicated to the national interest. Therefore, the banking bills themselves are a denial of the Treasurer’s faith in the integrity of the banking system when it comes to the national welfare.
We do not need to be very old to recall the 1930’s when a good deal more consideration was given to the profits of the banks than to the national welfare. These things leave us cold. The right honorable gentleman used the phrase, “ freedom of the individual “ very freely. Fancy a member of the Liberal party talking so selfrighteously about the freedom of the individual! Consider some of the actions of the Liberal party itself. Seven or eight years ago, its endeavours to disband a political party were completely rejected by the Australian people. We have only to recall the actions of the present Treasurer when he was in charge of the Department of Labour and National Service. We have only to consider the provisions he has advocated for the banking system and its rights, and the sort of rights that he was prepared to give to the trade union movement. I refer the committee to the sections of the Arbitration Act which he supported and compare them with the laws of fascism which will be found in Mussolini’s hook. But let us consider the sections of the Reserve Bank Bill. Clause 26 (c) provides that the Reserve Bank - subject to this Act and the Banking Act 1959, shall not carry on business otherwise than a central bank.
Yet where, in this whole galaxy of sections, does the Government define what a central bank should be? This is an important aspect of the matter under discussion. It appears to me that, broadly, the Government has simply adopted some banking dogma from overseas and accepted that as the way banking should be run in Australia. But Australia is different from other nations. There is no reason why we should base our practices and formulae- on overseas principles. It is time for us to carry out our own experiments in developing social control of banking. It is generally recognized that the Government itself has finally accepted the Australian. Labour party’s viewpoint that the banking system ought ultimately to be controlled by the Parliament. But of course, the Government must accept also the attitude that there should be some checks on Parliament against it having absolute control. I have looked in vain for some definition of central banking in the bill, but I find this provision in clause 8 -
The Bank has such powers as are necessary for the purposes of this Act and, in particular, and in addition to any other powers conferred on it by this Act, has power -
to receive money on deposit;
to borrow money;
to lend money;
to buy, sell, discount and re-discount bills of exchange, promissory notes and treasury bills;
And so it goes on to list all the things that one expects a bank of any sort to do. Yet in a later section, the bill provides that the Reserve Bank must confine itself solely to central banking as such. This is an attempt to prevent the Commonwealth Bank from exercising full power over the rest of the banking system. We have only to consider the position of the Commonwealth Bank at present. The central bank has under its direct control about one-eighth or one-ninth of the financial structure of the country in its own Commonwealth Bank. The removal of the Commonwealth Trading Bank from this control is simply making its chances of controlling the whole financial structure of the country that much less. This is fragmentation of the banking system and of the power of the central bank; so, in effect, the term “ central bank “ does not mean absolute control over the whole system.
I direct the attention of the committee now to the idea of the Reserve Bank Board itself. The bill provides that the board shall consist of the governor, the deputy governor, the Secretary to the Department of the Treasury and seven other members. What is the reason for this dedication to the idea of boards? What is the reason for this superimposed board inside the structure which can only prevent adequate control over it? In a way, this is an abdication of the rights of the Parliament. It is an attempt to put a barrier between Parliament and the institution of banking - something which will prevent the Parliament from exercising full control. We on the Opposition side believe that social control of the banking system is absolutely essential. There is no gainsaying that that is so. In fact, the Liberal party itself accepts that principle. We on this side of the chamber have fought for that principle for many vears and the Treasurer has left us absolutely unconvinced by his arguments. His speech to-night was an attempt to define in general terms the differences between us. By sheer verbiage, he attempted to avoid any clear definition of what he means exactly. He has suggested that there is no tacit understanding between himself and the Opposition, but the fact is that he suggested that there was no understanding between the Government and the Commonwealth
Bank. It is the duty of the Government, however, to control the Commonwealth Bank. It is the system by which social and financial policies can be put into effect. If there is no understanding with the Commonwealth Bank, and no real consideration of the bank as anything else but a member of the private banking structure, the Government is betraying its duty and the trust of the people who have returned it to power.
We say that the Commonwealth Bank is an essential piece of the Government’s machinery for the development of the nation. The fragmentation of the banking structure can only preclude the central bank from having complete control over it. The creation of more boards can only prevent effective control, and therefore we oppose the proposal completely.
.- This bill provides for the separation of the central banking functions and the trading functions of the Commonwealth Bank. Before the sitting was suspended, I was not surprised to hear the honorable member for Bonython (Mr. Makin) advance the line of argument which has been inherent in most arguments from the Opposition that the members of the staff of the Commonwealth Trading Bank who came from the central bank would not apply their thoughts, views, experience and information that they might have obtained to the benefit of the Commonwealth Trading Bank. They offered that argument in rebuttal of the claims of the Government that the banks should be separated. I was not surprised. Members of the Opposition have advanced that argument before.
I was not surprised either when the honorable member for Yarra (Mr. Cairns) advanced the argument, which was offered in the second-reading debate by the honorable member for Hindmarsh (Mr. Clyde Cameron), to the effect that members of a bank board could use - and I think he said possibly they had used - the information which they obtained from their position on the bank board in their commercial enterprises. But I was astonished when the honorable member for East Sydney (Mr. Ward) advanced both those arguments in the one speech. On the one hand, he says that the employees of the Commonwealth Bank, whether they be senior, junior, or inter mediate employees, are of such a calibre that when they are transferred to the Reserve Bank they will continue to work as they did previously, but a man with the qualifications to be on the board of the bank is to be doubted. I submit that honorable members opposite have confounded their arguments completely, particularly the honorable member for East Sydney when he advanced both arguments on the one subject.
I should like to refer to the amendment proposed by the honorable member for Mackellar (Mr. Wentworth).
– Do not worry about it.
– I am not worrying about it. I merely wish to say this, and I have a perfect right to say it: The amendment provides that the Auditor-General shall report certain things to the Treasurer, and not merely direct his attention to them as is provided by the clause as it now stands. In my opinion another advantage in the amendment is that, instead of waiting for twelve months or more for a report from the Auditor-General, a report shall be tabled as soon as practicable. None of those provisions is enforceable at law, and the last resort is the scrutiny of Parliament. The Treasurer (Mr. Harold Holt) has said that those provisions apply in other statutes, but not those in the amendment. If the amendment is carried and the reports are tabled as soon as practicable, it does not of necessity follow that the additional provisions of the amendment will need to be applied to other statutes. An argument advanced by the Treasurer was that such malpractices as might occur could, in the light-
– They are not necessarily malpractices.
– Not necessarily. Let me call them irregularities.
– Seeming irregularities.
– Seeming irregularities. These seeming irregularities could quite conceivably be settled by a certain amount of research and investigation. Is it not thought that the Auditor-General goes into things of that kind before he reports to the Treasurer? The time factor must be taken into consideration. The Treasurer has time to check these matters prior to placing the report before Parliament. The amendment provides that the report shall be tabled as soon as practicable. I am not prepared to accept the arguments that have been put forward by the Treasurer. I can see no objection to the amendment. It would bring any seeming irregularity before the scrutiny of Parliament which, after all, is the manifest intention throughout this legislation.
.- Honorable members on this side of the House are strongly opposed to clause 10 of the bill, which deals with the function of the board of the bank. That clause states -
The Opposition has always held the view that the officers who are appointed to administer the operations of the bank should be trusted officers whose only responsibility is the welfare of the bank and the nation. If these people can be trusted they should be hired. If not, they should be fired. We have had experience of a governor of the bank and we have had experience of a board, and because of the constitution of the board honorable members on this side of the House are opposed to the board laying down the policy of the bank. Clause 14 of the bill provides for the appointment of the chief executive officers of the bank to the board, and further provides that seven other members shall be appointed by the Governor-General. Sub-clause (2.) of clause 14 states -
Of the seven members appointed … at least-
I emphasize the words “ at least “ - five shall be persons who are not officers of the Bank or of the Public Service of the Commonwealth.
That clause clearly provides that at least five of the seven other members of the board shall be outsiders who are appointed by the Government. Those men would have grave responsibilities to the nation, and could dictate the policy to be followed by the bank. By putting the control of the bank in the hands of such a board the authority of Parliament is being undermined. As other honorable members from this side of the House have pointed out, the seven other members of the board could exercise authority for their own financial benefit. The bill specifies that only five of the seven shall be persons outside the bank and the Public Service. The Government could appoint all seven. That is the way I interpret the clause. If that were done the Government could lose complete control of the board.
Another important part of the measure is the clause that deals with the functions of the bank and specifies the persons to whom credit shall be extended. Clause 57 (4.) states -
For the purposes of this section, “primary produce “ means goods specified in the Second Schedule to this Act. . . .
The bank itself is not permitted to decide what primary industries should be assisted financially by the Reserve Bank. Although the second schedule to the bill contains a substantial list of primary produce that may be financed by the bank, I notice that minerals are not included. Minerals are one of Australia’s chief exports. They are one of our major dollar-earning exports, and do much towards maintaining our overseas balances. I believe that minerals can play an important part in the development of this country. Over recent years, uranium and iron ore have been discovered in large quantities in Australia, in addition to other minerals.
The shipment of live-stock from the Northern Territory is an industry that is developing rapidly, and in my opinion it will become a big industry in the future. This legislation makes no provision for financial assistance to bodies, organizations or individuals engaged in the export of live-stock. The two industries that I have mentioned - mining and the export of livestock - are very important to this country, but are not provided for in the legislation, and there may be other industries similarly neglected. I do not think that there is any need for the second schedule at all. It should be eliminated from the bill and the term “ primary produce “ where it appears in the clause shall be all-embracing. By the mention of specific items the clause is limited to those particular items and the activities of the board are restricted.
With regard to the amendment proposed by the honorable member for Mackellar (Mr. Wentworth), I do not think that it will be carried because the Government is opposed to it. The Labour party is also opposed to it. In fact, we on this side of the House are opposed to any proposal to restrict or limit the ramifications of the Commonwealth Bank. The amendment states that the Auditor-General shall inspect and audit the accounts and records of financial transactions of the board. The Auditor-General could not do that himself. No one individual could do it. To go through the whole of the accounts and records of the establishment would involve a substantial staff, and in my opinion such a staff is unnecessary. If there were breaches or irregularities, they could only be brought about by collusion between the board and the governor and management of the bank. I am sure that the management of the bank would not be a party to any irregularity or an, evasion of the intention of the act. The proposal is unnecessary and1 irrelevant. It would add considerable staff to the bank and therefore to the cost. It will serve no essential purpose.
The main point that I would like the Treasurer to look at concerns the second schedule of the bill which does not cover all primary industries. It does not cover minerals and livestock, which are very important industries. I do not think it is necessary to specify any industries at all. The bill should merely refer to primary produce and leave it to the bank to decide what primary produce is. I think that the limitation of the scope is very foolish because other industries may crop up from time to time which would1 not be covered in the schedule.
.- I rise to speak for a few minutes, mainly as a result of some remarks which were made by the honorable member for Yarra (Mr. Cairns) earlier to-day. I hasten to add that the point that he made had been made by other honorable members opposite, but perhaps he made it more sharply and more virulently. I think that this point is well worth discussing because it concerns the question which has most worried me in relation to this legislation. The honorable member for Yarra and the honorable member for Melbourne Ports (Mr. Crean) both made the point that it is necessary, under Australian conditions, for the central bank to have under its control, a trading bank if it is to perform its vital function of controlling the general level of economic activity in this country.
I do not think that anybody on this side of the House, despite what has been said by the Opposition, has disputed the overriding importance of that factor. But the honorable member for Yarra went on to say that we on this side of the chamber had not attempted to answer that argument. He deduced from that the conclusion that our motives were suspect - that we were giving in to the private banks, and that in our heart of hearts we had abandoned the whole idea that the Government and the Parliament, through the central bank, should be able to influence the general level of economic activity. He accused my colleague, the honorable member for Wentworth (Mr. Bury) of intellectual dishonesty because of his attitude on this point. For some reason or other, although I had not spoken in this debate, he read to me one of his sarcastic, arrogant, little lectures for which he is becoming well known in this House. What can we say of the honorable member’s intellectual probity in suggesting that we on this side of the chamber have not at any stage tried to answer that particular argument? I have heard the Treasurer (Mr. Harold Holt) and many other members on this side of the chamber, answer that point on many occasions. The honorable member for Yarra knows that, but in order to make his party point he suggested that we had not tried to answer it.
The answer is that we believe very strongly that the action that we are taking in this respect will make the central bank a stronger instrument of control over the general level of economic activity in this country than it is at the present moment, even though it will not leave the Commonwealth Trading Bank under the same direct control as it is at present. As the honorable member for Bonython (Mr. Makin), who is much more intellectually honest than his colleague, admitted that the reason for this was that, under the present system, because the central bank controls the Trading Bank, the private banks have not that confidence which they should have in the central bank if they are to play their part in assisting the central bank to exercise its control over the general level of credit and, therefore, over the general level of economic activity. lt does not matter, as I see it, one little bit that one cannot cite actual instances of the Commonwealth Bank or the Governor of the bank using information which they had obtained to enable the Trading Bank to compete unfairly against the private banks. The important thing is that the private banks, which are an essential instrument in this process - and nobody on the other side has denied that - have not that confidence. I must say that, in similar circumstances, I would not have it. Whether or not the Commonwealth Bank actually used the opportunity that it had to do me in the eye, I would always feel that it had the opportunity to do me in the eye, and I would try to protect myself against that possibility. That statement is no reflection on those who control the Commonwealth Bank. Such action could easily be taken by an over-enthusiastic officer, low down the scale. Nevertheless, in the present circumstances, that situation exists. The private banks have not the confidence that they should have in the central bank.
The honorable member for Yarra quoted from Professor Arndt as from the bible. But Professor Arndt, who has remained in his academic sphere, is more attached to the ideal of academic honesty than his colleague and has admitted that the private banks have not as much confidence as they should have in the central bank. It is precisely because the private banks have not had that confidence in the central bank and have, therefore, not co-operated, I think reasonably, to the extent that they have been expected to co-operate in relation to directives of the central bank, that the central bank has needed a trading bank to enforce its policy.
If that confidence had existed, as we believe it will exist after this complete separation is made, we would not have needed to do something which is unique in the world, and have a fully fledged trading bank directly under the direction of the governor of the central bank in order to impose its policy. This is a vicious circle. It is precisely because we have not the situation that we are trying to bring about in this legislation that the governor has needed the Commonwealth Bank up to this point, to enable him to achieve a central banking objective. We on this side of the House believe that sincerely.
The private banks have said that they have not the necessary confidence in the Commonwealth Bank. That is the important thing - that they have said it. It is quite true, as honorable gentlemen opposite have often said, that the directives of the central bank have not been effective. But we believe that that has occurred for a good reason. As Professor Arndt admitted, it is necessary for the trading banks to have confidence in the central bank. Until they have that confidence, a trading bank is required, under the hand of the governor of the central bank, to enforce central bank policy. When this legislation comes into force the present state of affairs will no longer exist. The confidence which should exist between the trading banks and the central hank will be attained and there will be no need for this country to act in a way contrary to the practice in every other country and use the trading bank to implement its central banking policy.
.- First of all I wish to comment upon the long rigmarole just delivered by the honorable member for Barker (Mr. Forbes) in an effort to justify the separation of the trading bank functions and central bank functions of the Commonwealth Bank. His main ground is that the private banks feel that they have been done out of something during the last few months or years; the honorable member did not say for how long. What amazes me about that argument is the fact that the trading banks have suddenly decided that the system which has been operating most successfully in the economy for years is wrong. It is the private banks which have broken the regulations of the central bank. They have ignored its instructions to restrict credit in times of inflationary tendency in the country. ‘They have broken the rules, but because they want to do exactly what they like when they like and how they like, they have put pressure on this LiberalAustralian Country party Government to separate the Commonwealth Bank’s tracing bank functions from its central bank functions, and even to give the bank a new name.
But will the private banks behave themselves economically just because the central bank is given a new name? I guarantee that they will do nothing of the kind. This is just an aunt sally put up by the Government in an effort to justify the shabby, underhand way in which the two kinds of functions of the bank are being separated; and I prophesy right now that this new setup will give the green light to the trading banks to do just what they like. If the Government thinks it is going to stop inflation from now on by writing a nice letter to the Governor of the reserve bank asking him to get the private banks into line because they are lending too much, what will the private banks reply? They will simply say, “ We have organized the separation, we will now carry out the policy which we think is right for the Commonwealth and the new reserve bank, and you can jump in the lake.”
That is the crux of the whole thing, but the honorable member for Barker trie:! to cover it up with the long rigmarole he just delivered. The Government knows that it. has to try to justify this proposal, but down deep it knows that the reason for the separation of these functions is that the private banks have said, in effect, to this Government, “We have supported you for nine years. We helped you to kick out the Labour government in 1949. When are we going to get some kind of rake-off or reward for what we did for you? This is the time to do something.”
This country has been served very well under present banking arrangements. It has done as well as any other country. We have heard Liberal party spokesmen in this Parliament boasting about the state of our economy. They say that it is the strongest in the world. During the last few years 1 have listened to that sort of talk many times in this place. If that is so, why do they want to alter the banking system? Will the proposed alteration make it any stronger? My argument is that the Government’s proposals, instead of making it stronger, will result in weakening the economic structure of this country.
– You just said we have done a wonderful job over the las’: few years.
– The honorable member has said that; we have not. What his Government has done is no recommendation at all. I said that spokesmen for the
Liberal party have boasted in this chamber about the economy of the country being the best in the world under the present system. Now, they want to change it; and that makes their arguments appear to have been not true. There must be a basic reason for this change. The economy cannot be sound, if the Government now wants to strengthen it. lt cannot have it both ways, and it is about time the people knew what was really behind the Government’s move.
The Government proposes to change even the name of the bank. It wants to take the word “ Commonwealth “ out of the title of the central bank and give it the new name, “ Reserve Bank “. Why not call it the Commonwealth Central Bank? It seems that Australia is becoming more Americanized every week, with television films, all kinds of American literature and capital coming from the United States of America. The fiftieth state of the United States of America has just been established during the last 24 hours. This country will be the fifty-first if present trends continue. lt will become an outer territory - the Antarctic of America. The Americanized title of “ Reserve Bank “ will sound very pleasant in American ears.
This proposal is a further deliberate attempt to split the Commonwealth Bank into fragments. The Government wants to change even the name which the bank has carried for more than the last 40 years. That is a shabby way to treat an organization which has done so much for this country under both Labour and anti-Labour governments. After all. every government has …ie right, through its Treasury, to give directions to the central bank on how it shall conduct its affairs.
Who are the five persons to be selected by the Government to constitute the Reserve Bank Board? They are not to be bankers. That is a peculiar thing. They are going to have the important job. mark you. of shaping the financial policy of this country for the future. I prophesy that these five gentlemen will be some of the moguls of private enterprise in Australia.
– Quite right.
– Of course, it is quite right. They will further whittle away the social control of credit. This new bank is only a facade. The private banks of Aus- tralia will be the real dictators of the country’s financial policy. The Government proposes to set up the new bank in a new building in Martin-place, Sydney. It will have to obtain funds to pay for it. Who will provide those funds? I have made inquiries and find that so far the Government has not decided how this proposal will be carried out.
This is simply a facade to trick the people of Australia into believing that there will be far more Government control over finance than previously. The Government will say, “ Look at the Reserve Bank. Look at the board we have selected.” But it is purely a show to mislead the people as to who will really run the financial affairs of the country. That should be the job of this Parliament. We are the elected representatives of 5,000,000 people. Members on this side of the House say that bank boards are “ out “. It is absolutely against our policy to have them. The platform and policy of the Australian Labour party lays down that no board shall control the Commonwealth Bank. We abolished such a board in 1947, but this Government restored it in 1953. Now, it proposes to appoint another board to control the Reserve Bank.
My colleague, the honorable member for Wills (Mr. Bryant), rightly pointed out that the more bank boards there are, the further away from the people will be taken the control of the finances of Australia, and this Parliament will become merely a rubber stamp obeying the dictates of people outside Parliament. The administrators of this bank are to be selected from outside Parliament. They will comprise a board among whom there will be five members who are not even bankers or connected with the Commonwealth Bank or trading banks; and they will not be connected with this Parliament. These are the people who will run the Reserve Bank. This is a kind of inverted form of decentralized control of credit, but it is a bad thing for credit control to be spread in widening circles into the hands of people who are not responsible to the electors of Australia. We are responsible to the electors. It is the Parliament which should have sovereign control and we are opposed absolutely and completely to the establishment of this proposed bank board to control the Reserve Bank.
– Order! The honorable gentleman’s time has expired.
.- The amendment which the honorable member for Mackellar (Mr. Wentworth) has moved seeks to add to clause 80 of the bill the words -
The Treasurer shall cause a copy of the report to be laid before each House of the Parliament.
The honorable member for Darling (Mr. Clark) said he thought that this would be a costly procedure, because it would be necessary to have inspectors to examine the accounts. The honorable gentleman obviously did not bother to read clause 80, because had he done so he would have seen that that clause already provides that the Auditor-General shall inspect and audit the accounts and records - and, of course, the Auditor-General’s report would be in the hands of the Treasurer. It is this report which the honorable member for Mackellar asks to be placed on the table.
The honorable member for Wilmot (Mr. Duthie) said he did not want to see Parliament used as a rubber stamp. This provision is aimed at preventing Parliament from being a rubber stamp. That is to say, when the Treasurer receives the report from the Auditor-General he will not keep it in his files, but will bring it here for the House to see. No damage has ever been done by fully publicizing the acts of public servants and letting the full light of day into them, thus permitting public discussion of what is happening.
I suggest that when we discuss the correctness of having a separate central bank and a separate trading bank honorable members recall that in New Zealand the two similar institutions are separate and their respective heads have grown apart. That is one of the things that are implicit in this. The heads of the institutions in New Zealand are noted for the fact that they come out in public discussion of the credit policy of the New Zealand Government. I give that instance to show that the report by the Auditor-General will not be put away in the Treasury pigeon-holes and forgotten, but will be brought out into the public view by being produced to this Parliament. The names of the two bank heads in New Zealand to whom I have referred are Fussell and Moore, and they took part in quite vigorous public discussion on this question when it arose in New Zealand. There ought to be public discussion.
The adoption of the honorable member for Mackellars amendment will not lead to any more cost, because the Treasurer will have the Auditor-General’s report and will produce it to the House so that, in effect, it will be made public. In other words, the public will know what is happening in the inside among the bureaucrats and the public servants. The Parliament will see the report, and the people will be told what is happening. So I strongly support the amendment moved by the honorable member for Mackellar.
The honorable member for Yarra (Mr. Cairns) said that nobody had justified the separation of the two divisions of the bank. As a matter of fact, the Treasurer (Mr. Harold Holt) passed that over in his speech by referring to the second-reading speech made by the then Treasurer, Sir Arthur Fadden, who introduced the Reserve Bank Bill 1957. Reference to that speech two years ago shows clearly why the two banking functions had to be separated, but obviously some honorable members on the other side of the House have not bothered to look at it. The honorable member for Darling showed that he had not even looked at the clause of the present bill which he was discussing. Sir Arthur Fadden said in his speech -
There is one main reason why the Government has decided to separate the central bank from the rest of the Commonwealth Bank group - and it is entirely a practical reason. Experience has shown that there cannot be full harmony within the Australian banking system, nor that close co-operation which ought to subsist between the central bank and the trading banks, unless and until this separation is effected.
The present Treasurer relied on that statement as an explanation of the reason for the separation, but did not include these reasons specifically in his speech. I think they ought to be given in the debate now. Honorable members opposite say that what is wanted is a banking system suitable for Australian conditions. The proposed system is suitable, because it is aimed at getting harmony and maintaining trust and confidence between the private trading banks and the central bank. This legislation is bringing the banking system up to meet Australian requirements.
Sir Arthur Fadden continued, in his speech on the 1957 measure -
The question whether a central bank ought to engage, directly or indirectly, in trading bank activities has been a matter of active controversy, here and elsewhere, for very many years; and there has never been anything like a consensus of opinion on it.
The electors have decided on that matter over and over again, by giving us a mandate for our policies. We are acting in accordance with a mandate given to us by the electors, which is quite different from what happened in 1947 when the great man, Mr. Chifley, already given a position of dictatorship because the Labour party had allowed him to do evening around the place, and beginning to become arrogant as a result of that feeling of dictatorship, decided, without a mandate, to nationalize the banks. It was that action which brought about the present situation. It was the action of the Labour party’s leader in seeking to nationalize the banks without having a mandate from the people to do so which made the present legislation important and necessary. I do not believe that this legislation would have been introduced had it not been for that action on Mr. Chifley’s part.
If honorable members opposite claim they had a mandate to do what they tried to do in 1947, let them tell us what mandate they had. A secret, or under-cover pledge, is signed by every member of the Labour party, which is a pledge to work, with the Labour party, for the nationalization of the means of production, distribution and exchange. All mention of this aim of the Labour party is watered down, and never before any election did the Labour party have the guts to say, straight-out, that it would nationalize the banks. It sought to carry out that policy stealthily. That is the reason for this legislation - the fact that in 1947 the Labour Government played a confidence trick on the people, who have never trusted Labour since. That is why action is being taken now for the separation of the bank’s activities, and so that there shall be fair competition in banking.
Sir Arthur Fadden went on to say in his 1957 speech -
We should perhaps remember that many past judgments and beliefs on the subject were formed in contexts very different from that of to-day and often on the basis of abstract principle rather than of experience.
He went on to say -
We believe - as indeed most people believe nowadays - that there must be a strong central bank to regulate trends in monetary and banking conditions. But we also believe that the private trading banks have a vital part to play in the Australian banking system and the Australian economy;
May I say here that everybody who knows Australian conditions has great respect for the wisdom and experience of bank managers and bank officers, who have made a great contribution to the business world, the commercial world and the primary industry world, and for the social status of these men and the wise advice they are able to give. These are the men that you of the Labour party took on when you said, “ We will nationalize the banks “. You were going to take their jobs away from them and reduce their status, and you have been sorry ever since that you took them on and tried to trick them.
– We will win the last fight, you know.
– Yes, but you will not live to see it. Sir Arthur Fadden continued -
But we also believe that the private trading banks have a vital part to play in the Australian banking system and the Australian economy; and there can be no doubt either that the great majority of Australian people believe this too. They have believed it all the more strongly since, for a period in 1947 and 1948, they faced the prospect of a totally nationalized banking system.
I heard an honorable member opposite interject. “ They must have paid you well “. There has been a string of filthy imputations made ever since this debate started. They are grossly disorderly under Standing Order 78, which provides that all such imputations are disorderly. I am not a shareholder of a private bank. I have no relations with a private bank except that, like other honorable members, I have an overdraft. I have never received any election funds from a private bank, and I am not aware of any private bank money coming to the party at any point. I know the reason why these imputations are made. It is because the Prime Minister said in his policy speech in 1949 that there would be fair competition in banking, and that we would do all we could to get fair competition in banking.
Because I believe in honesty that ought to be carried out, I have tried to get reform in the banking system in order to block the sinister and rotten things the other side want to do to the banking system. That is why these things have been going on. Since this legislation was introduced, the honorable member for Hindmarsh (Mr. Clyde Cameron) said that he would state what my association with the private banks were, if standing orders allowed him to do so. That is the first time I have ever known the Standing Orders to stop him from saying anything, and 1 shall move for the suspension of standing orders to allow him to tell what he knows. Of course, he knows nothing. He made that filthy, improper imputation because he was beaten at every point. He was beaten in South Australia, here, and everywhere else in Australia, because the Labour party cannot be trusted. If the Labour party proposes to interfere with banking, everybody in Australia gets frightened, because the Labour party is discredited, it is associated with communism and its funds come from the Communist party. The Communist party infiltrated into the staff of the Leader of the Opposition.
Order! The honorable member’s time has expired.
.- Whilst the Labour party has not sufficient votes to amend this legislation, at least the debate is serving some useful purpose because it is beginning to become apparent to any reasonable member of the Australian community that this Government is a private bankers’ government. It can be most important electorally to prove that fact to the Australian community. Let me first deal with the repeated charge of the honorable member for Macarthur (Mr. Jeff Bate) that this Government has a mandate from the people to pass this legislation. The facts are that the Prime Minister (Mr. Menzies) did mention in his policy speech that his Government proposed, if returned, to reintroduce the legislation which had been defeated in the preceding Parliament. As a result, we expected that when the legislation was produced it would be identical with that which was defeated in the last Parliament. Instead of that, there are some important changes. It is rather interesting to note that, as far as I can recollect - and I have checked with a number of members of my own party - never on any other occasion during the election campaign was any reference made by the Prime Minister or any other member of the Government to the reintroduction of this banking legislation.
But let us examine whether or not they did get a mandate, as they term it. I should imagine that if “ mandate “ means anything at all it means the support of at least half of the people entitled to vote. When we have the number of electors enrolled, we can work this out for ourselves. Let us take the total vote recorded for the Liberal and Country parties. They polled only a little over 38 per cent, of the votes of the people who were entitled to vote, and therefore 62 per cent, of the people of Australia expressed no approval at all of what the Government intended to do.
The honorable member for Macarthur, in trying to answer the very effective speeches made by my colleagues, the honorable member for Yarra (Mr. Cairns) and the honorable member for Wills (Mr. Bryant), said that there were authorities to say that the separation of the functions of the Commonwealth Bank was a good thing and necessary in this country. But one of the authorities that he failed to cite was the Prime Minister himself, who has not taken any part in this debate, significantly enough. The Prime Minister himself on an occasion in 1953, when answering the criticism of the then general manager of the Bank of New South Wales, Mr. Gannon, who was asking for separation, put up a most effective case to show that separation was not warranted or in the interests of the Australian community. That was only a few years ago. He is not one of the authorities cited by the honorable member for Macarthur. Dr. Coombs said the same thing in the English, Scottish and Australian Bank Limited Research Lecture which he delivered in 1954. I would prefer those two authorities to those that have been cited by Government supporters, in support of my contention that separation of the bank’s functions is unnecessary.
Why this change of front? I can imagine the great pressure that has been put upon the Prime Minister and Goverment upporters by their financial backers to get them to go on with this legislation. One of the most extraordinary contributions to this debate was made by the Treasurer (Mr. Harold Holt) himself. 1 was in the chamber when the Deputy Leader of the Opposition (Mr. Calwell) made a most disturbing statement. He said that in the head office of the Bank of New South Wales in Sydney there was, from 1948 to 1956, an account known as the “ B.D.C. Account “, which was known officially in the bank as the “ Banks’ Defence Committee Account “. But it was always referred to in the bank as the “ Banks’ Defeating Chifley Account “. He said that 72 deposits made up a total contribution of £176,000 to this account between 1948 and 1956, and over the same period of eight years there were 32 withdrawals.
Anybody would imagine that after that statement was made some responsible member on the Government side would, if he were able, get up and deny it, but there has not been any denial. So can there be any answer to the charge made by Labour members that this is a government which is representative of the private banking interests of this country? The Treasurer, instead of denying the accuracy of the Deputy Leader of the Opposition’s statement, said, “ This is an extraordinary situation. It shows you what could happen if the Labour party nationalized the banks and was able to disclose the details of the accounts of one of the private banks”. What the Treasurer failed to point out was that this was not a case of the transactions in the personal account of an individual being divulged. What was being divulged was the existence of what is commonly referred to in this country as a slush fund, and that out of that slush fund this Government was being paid to introduce and pass legislation of this particular type. That is the only inference that can be drawn from what the Deputy Leader of the Opposition said.
The honorable member for Capricornia (Mr. Pearce) is to go before the Committee of Privileges, because it is suggested in correspondence that has been received that he is one of the professional parliamentary lobbyists for a private firm. Of what is the Government comprised? Are Government supporters not professional parliamentary lobbyists for private banks, because they are being paid for their service? Let us look at the matter fairly. Anybody would imagine that the private banks had been labouring under great difficulties, and that they had been handicapped because there was a Government central bank in existence. Is it not a fact that since 1953, when this Government re-established the Commonwealth Bank Board, the Government hank has been under the control of private financial interests? How could it be argued that that was detrimental to the interests of the private banks and that they lacked confidence in the central bank?
The honorable member for Balaclava (Mr. Joske), in his contribution to the debate, castigated the Commonwealth Bank Board because, he said, it was leaning over in favour of the private banks to the detriment of the Commonwealth Bank. So this privately-controlled board of the Government bank, instead of hampering the private banks, was actually assisting them! What they want to-day, as I said earlier in this debate, is a central bank for the purpose not of controlling or directing the operations of the private banks, because they do not believe in any control of the private banks, but of guaranteeing the security of the private banks if they overreach themselves and find themselves in difficulty. That is the only reason that they want a central bank at all.
Let me refer just briefly to one of the baits that were included in this legislation to get the support of the Australian Country party. The Government included provision for a so-called Development Bank, which will start off with a capital of £5,000,000. A figure of £20,000,000 is certainly stated as the capital in the legislation, but £15,000,000 is already committed, and only £5,000,000 of new capital will go into the Development Bank. But in order that, in the event of the return of a Labour government, the Development Bank would be prevented from functioning in active competition with the private banks, the Government decided to include in the legislation a provision that the private banks act as agents of the Development Bank. Acting as agents does not mean merely receiving and transmitting all the applications, because, as those who have read the secondreading speech made by the Treasurer will have seen, the private banks - not the
Development Bank - will also consider the applications. The only ones that go on to the Development Bank will be the ones that the private banks declare are of such a nature that they are not interested - those from the bad risk element in the community. The private banks will consider that that kind of business should go to the government organization.
In actual fact, we have not had active competition with the private banks in this country for many years. If the Commonwealth Bank were permitted by the private banks to enter into active competition with them, they would not last six months, and everybody knows that. We have heard talk about the people being afraid of what the Australian Labour party might do in respect of banking if a Labour government had a monopoly of banking in this country, and if the Commonwealth Bank were functioning as Labour intends it to function, but does any honorable member think that the chap out in the country who wants new farm machinery would be worried if he could get his financial accommodation at a cheaper rate of interest from a government bank than from the hire-purchase section of a private bank to which he would pay an exhorbitant rate of interest? The same thing applies to the home builder and the home purchaser.
Order! The honorable member’s time has expired.
.- Mr. Chairman, the honorable member for East Sydney (Mr. Ward) keeps harping on the election results, but, whatever peculiar percentage of distribution of the voting he presented, when he had his second wind, as it were, one thing is clear to the people of Australia, if not to the Opposition - that is, that there was an overwhelming vote against the Australian Labour party and all its ideas on banking at the last general election. The honorable member complains, of course, about some bank’s defence account, but the establishment of such an account would seem to me to be a very elementary precaution for any organization to take if its life was threatened.
The honorable member for East Sydney, like many other Opposition members, including my noble constituent, the honorable member for Darling (Mr. Clark), whom I represent in this chamber, and the honorable member for Wilmot (Mr. Duthie), touched on the question of bank directors. Apparently, the one thing which no director of the Commonwealth Bank should possess, in the words of the Opposition, is any knowledge or experience of what goes on in commercial life in Sydney or Melbourne. If we exclude all those who control or have anything to do with the main commercial and industrial enterprises of Australia, who would be left who could contribute anything useful to the direction of this bank?
The honorable member for Yarra (Mr. Cairns) once more brought up this question of central bank trading activities, along with his very spurious story about the Bank of England. In fact, the Bank of England does carry a limited number of accounts outside those of other banks. This is well known, and is a carry-over from the past. But the crucial point is that no new depositor could go to the Bank of England and open an account with it. There is no competition for new accounts between that bank and the commercial banks. The honorable member knows this perfectly well; yet he keeps on reiterating his spurious argument. It is about time it was disposed of once and for all.
The honorable member for Yarra also indicated that back-benchers on this side of the chamber would be in trouble if they uttered a few words in disagreement with leading members of the Government. The honorable member’s understanding of the Liberal party of Australia and the attitude of its governors on this side of the chamber seems to be grossly at fault. I would remind him that the British traditions that we observe in this place are those of parliamentary government. Countries in other parts of the world have accepted government by dictators, and other forms of government, at various times, but they have not produced parliamentary government and accepted the sovereignty of parliament. The real threat to the sovereignty of this Parliament is shown most clearly in the Australian Labour party. The members of that party belong to this caucus which is well-drilled outside the Parliament, and they come in here and vote like a series of automatons.
Having said that, I shall make a few comments, if I may, on the amendment which has been proposed by the honorable member for Mackellar (Mr. Wentworth). What he envisages, broadly, is this: If there is a breach of this measure, there will, for a very long time, be no way of finding out except through the report of the AuditorGeneral - the only outside authority who knows what is going on - and the honorable member’s proposal is that if the Auditor-General reports a breach the Treasurer shall be obliged not to keep it to himself, and to report it to the Parliament. This is the essence of it. One may quarrel with words and play about with them, and perhaps the drafting of the amendment is not perfect, but I must confess that, as I listened to the Treasurer (Mr. Harold Holt) referring to precedents in other legislation, the thought immediately occurred to me that there may be some other things which might be looked at more carefully. If this is a precedent, it may be an extremely good and valuable one. It is true, as the Treasurer has said, that the AuditorGeneral has first flush when he inquires into the activities of departments, which may be misled or which may make mistakes. In that case, like the auditor of a private company, he inquires, asks questions, and gets an explanation. If he is satisfied, he passes over it. If the AuditorGeneral is not satisfied by this process after a while, it is the Parliament which ultimately should be informed.
– The Auditor-General ultimately reports to the Parliament.
– He ultimately reports to the Parliament, but sometimes after a delay of about two years. In this sort of exercise, a great deal could happen in the meantime. If the Auditor-General made flippant comments, which came before the Parliament and were rejected, he would rapidly be discredited. If the AuditorGeneral in fact reports lightly on mistakes after a very small inquiry, his functions will need more careful examination.
I would urge, Sir, that the amendment be agreed to. There may be strong legal or other arguments against it, but all I can say is that if that is so we have not yet heard them.
.- Mr. Chairman, this legislation is a further step in the course that the Government has taken, and is taking, in order to satisfy its financial supporters. Following upon step after step, the Prime Minister (Mr. Menzies) has solemnly declared to the Parliament and to the nation that each alteration of the structure of the Commonwealth Bank is the last step the Government will take, that no further legislation is contemplated, that our banking system is working smoothly, efficiently and well, and that nothing further requires to be done to preserve the economy and to provide for full employment and the building of this great “ Australia Unlimited “. Just as the right honorable gentleman makes those profound statements from time to time, we witness attacks such as we have witnessed in this committee by the honorable member for Mitchell (Mr. Wheeler), the honorable member for Wentworth (Mr. Bury), the honorable member for Mackellar (Mr. Wentworth) and others - the advance guard of vested interests in this place - who demand further steps. I think back on other days when another right honorable gentleman - Mr. Bruce as he then was - was Prime Minister of this country. He proposed to abolish the federal system of arbitration, and he had to be reminded1 at the time by the late Right Honorable William Morris Hughes that, step by step, he was “ going to the Gap “, and that his last step would be the final one for him as Prime Minister of this country. And so it was that the BrucePage Administration was thrown into political oblivion.
Whether this legislation will achieve what the back-benchers require, I am doubtful. We have seen a vainglorious performance by the honorable member for Mitchell in this chamber this evening. He made an exhibition of his profound knowledge and his great affection for the private trading banks, and doubtless this will give great satisfaction to those banks and to many of their starry-eyed supporters when reports of his performance are read in to-morrow’s edition of the “ Sydney Morning Herald “. The honorable member said that there is some understanding between the Government and the Opposition. What an absurdity, Mr. Chairman! We have heard the charges and counter-charges made in this chamber during the present debate, and we know the fundamental difference of opinion which exists in relation to banking.
We on this side declare without any equivocation that the banking system should be so organized that it will serve the nation, help it to expand its productivity, and so ensure a fuller, better and happier life for the people of the country. While we make these statements, we find all the time that one thought is exercising the minds of Government supporters. Perhaps it is more pronounced among the backbenchers than the frontbenchers. They are asking the question all the time, “ Are we satisfying the private banking interests? Are we doing the job they would like us to do? Are we giving them a type of free and fair competition? “ In plain language, “ Are we giving them the licence that they require to control the whole of the financial affairs of this nation? “
My mind, of course, goes back to the allegations made by the Deputy Leader of the Opposition (Mr. Calwell), who stated here in this Parliament that a slush fund existed and that contributions to it were made by certain banks and others, with the object of bringing this Government into office so that it would perform in a certain way, and would produce a certain result. It is not surprising, therefore, that we are now witnessing this present development. It is clear that the Commonwealth Government to-day, aided and abetted by its advance guard, which sits, paradoxically enough, behind it, would like to put the Commonwealth Bank in a straitjacket. It wants to control the Commonwealth Bank. Government supporters come before this committee and are not reluctant to proclaim to the people of Australia that it is good for the Commonwealth Bank to be divided. They say that it must be so divided, because this will make it strong. But when they come to a consideration of the private banks, they say that those banks must be united in order to be strong. They must have their hire purchase organizations, their savings bank organizations and their trading bank organizations all under the one head, in one monolithic structure, because this is the correct thing for private banks. It is different, however, with the Commonwealth Bank.
The Prime Minister, the Treasurer (Mr. Harold Holt), every senior and junior Cabinet Minister, every backbencher and every hack of the anti-Labour parties have said at election time that our present banking system is the type of system that we require. It is the kind that is necessary for the people of Australia. They say, “ You must vote for us, because this banking system that we have sponsored has produced full employment and has developed Australia Unlimited “. We are all aware of the amazing performances and the great success of the Commonwealth Bank. It has served the nation well in peace and war. It has helped to develop this country in a wonderful fashion, even under a government that would seek to restrict its operations. After having given all this service, and having served as a bulwark for the present Government by preserving economic equilibrium in the country, the bank is to be dismembered and destroyed, if this can be achieved by legislation. Mr. Chairman, I do not think that end will be accomplished.
Let me say further that I believe the new Development Bank to be no more than a political gimmick to be used to sell out the Commonwealth Bank. It has been paraded before us as the ideal instrument for providing money. We have been shown a vision of a new bank with abundant funds to set in motion development schemes. What a glittering promise to make to the people of Australia! We are told that there will be a supply of money for farms and rural development generally, for houses, factories and new industries. What a glorious picture! But is it a reality, or is it a political mirage? I am inclined to think that it is the latter, and that the Government is in fact a political mirage.
I say to the members of the Australian Country party, who see this Development Bank as the solution of all their problems, that they will be doomed to disappointment, because this new bank will not achieve the ends that they believe it will. In the future when unemployment mounts and there is insufficient money for farm development, as is the case at present, when there is no money for water conservation, pasture improvement, fencing and other activities, then, I say to you, look to your Development Bank if you will. You will find that it is unable to deliver the goods.
The honorable member for Darling (Mr. Clark) has referred to the Second Schedule to the Reserve Bank Bill. Quite rightly he has directed attention to the fact that no mention is made in that schedule of minerals or of cattle. If we want to crystallize this vision of Australia Unlimited, two of the matters to which we should give particular attention are mining and cattle production. These are necessary to our national development, especially in the Northern Territory, where vast quantities of minerals are waiting to be extracted. But no mention is made in the schedule of mineral production. The same remarks apply with regard to cattle production.
– Order! The honorable member’s time has expired.
– I was not very much impressed, Mr. Chairman, by the speech of the honorable member for Macquarie (Mr. Luchetti). He asked, “ Why should we discard a banking system which has worked well under the present Government? “ Of course, under the present Government the banking system has worked and will work well, because this is a wise and reasonable Government. But it does not follow that the same banking system would work well if we had another kind of government in power.
I wish now, however, to address myself to the amendment before the committee, which was proposed by me. I particularly wish to refer to the arguments of the Treasurer (Mr. Harold Holt) in regard to it. I feel that when he reconsiders the arguments a little more carefully, he may change his view. I appeal to him to do so, because I do not believe he has put forward any coherent argument against the amendment, and, indeed, that he has in no way invalidated the arguments that I put forward. Let me traverse the ground covered by the Treasurer in his speech. He referred to other acts, and my friend, the honorable member for Wentworth (Mr. Bury), was right, I think, in reminding the House that the Treasurer’s remarks in this connexion had no more to do with the case than the flowers that bloom in the spring. It does not matter what is contained in other acts when we consider the present legislation. Indeed, this measure may well serve either as an example to other acts, as my friend, the honorable member for Wentworth, suggested, or, indeed, it may stand on its own feet, because, by nature of the secrecy which necessarily surrounds the operations of the
Reserve Bank, that bank will be different from other departments with which the Auditor-General is concerned.
I felt that the Treasurer, was, perhaps, not entirely familiar with the provisions of the Audit Act when he made his comments regarding the possible incompleteness of the report of the Auditor-General. He had forgotten, perhaps, the powers with which the Auditor-General is armed and which he is by statute required to use. His position is different from that of any other auditor. His powers are contained in the act, but particularly in section 14 which enables him to examine any person on oath and requires him to obtain possession of any document belonging to the Commonwealth or to any person, which will assist him in his inquiries. The Auditor-General is quite rightly armed with these exceptional powers under the Audit Act. There is no reason, therefore, why he, like another auditor, should be in the position of bringing forward an incomplete report. He has the powers and the duty to get a complete report, but other auditors do not have those powers.
The Treasurer was rather off the mark when he referred to the possible violation of secrecy and other injustices. He did not, perhaps, remember that in this bill we are concerned with the Reserve Bank acting as a central bank, and not having individual transactions. Once again, perhaps, he did not look at the Audit Act, particularly at sections 51 to 53, which require the AuditorGeneral, after a lapse of time, it is true, to report -
Under section 53, the Treasurer is required to publish the report as a public document. That is a requirement now made on the Auditor-General, and I do not think that the Treasurer would have made the comments that he did if he had been familiar with the contents of the Audit Act, which he administers.
Although the lapse of time may make this ineffectual as a means of checking any misconduct in regard to the banking system, nevertheless the injustices which the Treasurer referred to are still inherent in the system as it exists, if we take the position that the Auditor-General is an irresponsible officer. Again I remind the Treasurer that the report of the Commissioner of Taxation is annually brought before the Parliament under the authority of his department. This report names taxpayers who have not been brought before the courts but whose actions are thought to be questionable. These matters are necessary; I do not criticize what has been done. But the Treasurer cannot make flesh of one and fish of the other. It is no use bringing before this chamber fantastic fears which do not apply to other acts that he administers and which apply in point of fact a fortiori to those both in theory and in practice because this, as I say, refers to the Reserve Bank and not to a bank which has transactions with individuals.
The Treasurer also spoke of the possibility of this provision, if it were adopted in the amended form, preventing the AuditorGeneral from being frank with the Treasurer. Nothing in the amendment prevents the Auditor-General from having with the Treasurer the kind of conversation on the frankest possible terms that is envisaged by the bill as it stands. What is suggested does not in any way take away any of the power of the Auditor-General to have any personal contact with the Treasurer that he may think right. It simply gives him an added duty, and it is a very proper duty to confer upon him. It is not an unnecessary duty because, as I said before, the operations of the Reserve Bank must of necessity be shrouded in secrecy. They cannot see the light of day, but the Auditor-General under the existing provisions traverses them and sees the details. It is not suggested that he reveal any detail that is proper; all that is suggested is that he has a statutory duty to reveal a breach - not a trivial breach but a serious breach. The amendment that I have proposed puts the duty upon him to bring to the Parliament only a serious breach. There is no other mechanism whereby any serious breach can be made known, much less corrected. Against this, there is only the sanction of public opinion which can be mobilized only through the forms of this Parliament. There is no way in which a court can even know what the Reserve Bank is doing. If any serious misconduct has been committed, there is no way in which a court or any other person could correct it, it we had a conniving Treasurer.
I do not for one moment suggest - indeed I would repudiate any such suggestion - that the present Treasurer or his successor in this Government or any government formed from honorable members on this side of the chamber, would be a conniving Treasurer. But surely we have heard enough from Opposition members in this debate to know that they, ingenious men as they style themselves, are looking for ways and means surreptitiously to destroy the decentralized banking system and put in its place a monolithic socialist banking system. That is their creed. We know that they resorted to treachery in the past; that is on open public record. Why should the Treasurer assume that this kind of thing would not happen in the future? This amendment is quite nugatory if a serious breach has not been committed. The fears expressed by the Treasurer that there may be some .error or something of that kind are quite unnatural fears. They are at variance with the principles behind every other act of this Parliament.
– Order! The honorable member’s time has expired.
– I want to comment very briefly on what the honorable member for Mackellar (Mr. Wentworth) has put before the committee. I recognize that there is plenty of scope for differences of viewpoint and differing conclusions, but, if I have interpreted the honorable gentleman’s arguments correctly, far from destroying what I put earlier, he has fortified my observations. First, he dismissed as being almost irrelevant the fact that a provision comparable with that in clause 80 occurs in quite a number of other Commonwealth statutes. I instanced at least half a dozen when I gave examples earlier. I have been long enough in this place to be wary of taking a proposal for an amendment to what has become a standard provision, without close and careful examination, and without conducting the necessary research into why that standard provision exists, and indeed persists, in so many Commonwealth statutes. I offered my explanations as to why the provision exists in its current form.
That may not be the end of the reasons, but to me the reasons I gave, from my experience of how these matters operate inside government departments, seemed sufficiently compelling for me to be extremely cautious about adopting the amendment proposed by the honorable gentleman.
I conceded to him that at first sight his proposal looked not unattractive. It seemed to give to the Parliament the opportunity for the exercise of vigilance in relation to irregularities brought to the notice of the Treasurer under this legislation. When one finds that this seemingly logical step has not been followed either in this bill or in the many other acts of the Parliament to which I have referred, then one has grounds for asking why this has not been so. I gave my own assumption which, I repeat, has been based on some practical experience of how these things work out.
The honorable member for Mackellar twitted me with not being closely familiar with the contents of the Audit Act, and I confess that I have not looked at the act in detail in recent times, but I am not unfamiliar with the practices as they occur inside government departments when, from time to time, the Auditor-General going about his proper tasks, brings to the notice of the Minister in charge of a department or, in the present case, of the Treasurer some matter which appears to him to call for explanation. When I spoke earlier, I likened that practice - perhaps it is not a precise parallel but it is close enough to have some realism - to the normal auditing processes in which an auditor, going through the accounts of a business, comes to something which he feels either indicates an irregularity or calls for some further explanation. In most cases, when the facts have been fully explained to him and he has the explanations surrounding them, he finds that his own suspicion that some irregularity might have occurred has been dissipated. That happens time and time again. I have had experience of it - as I am sure other members of the Parliament have also - in relation to private commercial affairs, sporting clubs or any gathering of human beings you like to mention. We have had our own experience here too, in company with some of my more senior colleagues in the Government at various times, of having the
Auditor-General raise some matter which, in the result, has proved to be capable of an entirely reasonable and innocent explanation, dissipating any misgivings there might have been about the matter. Whether it be in relation to the matters before the committee or these other bills, publication to the Parliament of that suspected irregularity could have created grave embarrassment and, indeed, caused mischief and harm to individuals concerned.
The Parliament is not without remedy in this matter, although it might not work either as expeditiously or as satisfactorily as the honorable member for Mackellar might desire. But surely the short answer to what he is putting is that if an AuditorGeneral brought to the notice, in this instance, of the Treasurer, an irregularity which on presentation to the Treasurer was not satisfactorily resolved, then the AuditorGeneral, if he was performing his duty, would take the opportunity which is given him in the act of bringing that irregularity to the attention of the Parliament. Maybe, as the honorable gentleman has said, that would not happen for a period of months. But is it seriously suggested that a Treasurer who knew that the Auditor-General had that power and was proposing to bring that irregularity to public notice, would not himself have moved in the matter earlier if he felt that an irregularity actually existed? If he did not move, then the opportunity would still remain for the Auditor-General to act in the way I have indicated. So, I believe that the safeguard is there.
I suspect - and I do not say this uncharitably - that the honorable gentleman and those who have supported him in this matter, have been not so much concerned with the mending of irregularities in any general sense, but have sought to provide some safeguard against loans being made through the Development Bank contrary to the provisions which are part of the charter of that bank. The fact is that the Development Bank is not to lend in circumstances where the private banking system would ordinarily lend. They feel that if there have been irregularities of that sort which have come to the attention of the AuditorGeneral and he has brought them to the notice of the Treasurer, who has not acted because he is conniving in this process, the Parliament should have the opportunity to know the facts and deal with them. In the grave abuse of the charter of the bank which would be involved in a matter of that kind, the Auditor-General would certainly be failing in his duty if he did not take the first opportunity in his report to the Parliament to bring those facts to its notice.
What I am putting to the committee, in short, is this: I am not prepared, on the limited examination I have been able to bring to this matter since the honorable member for Mackellar first mentioned it to me yesterday morning, to support it. 1 had inquiries made through the Treasury to see what was involved in the amendment if it were adopted because, as I said, at first sight it looked not unattractive and a proposal which the Government might accept. The more I have looked into it, the more reluctant I have been to take the steps the honorable member has recommended until the matter has been fully analysed. That is as far as I am prepared to take it on behalf of the Government at this stage. I feel that the matter has been well canvassed and I think it would suit the needs of the committee in relation to other matters if the discussion on this matter were concluded.
Motion (by Mr. Harold Holt) agreed to -
That the question be now put.
– When I first spoke on this measure, I foreshadowed an intention to move amendments to clauses 26 and 74. I understand that I can move an amendment only by leave of the committee. Clause 26 reads -
The Reserve Bank -
subject to this Act and to the Banking Act 1959, shall not carry on business otherwise than as a central bank.
I ask for leave to move an amendment to this clause; the other amendment will be moved by a colleague.
I move -
Omit paragraph (c) of clause 26.
As was pointed out earlier in the debate, this really is the whole germ of the measure before the committee. The intention of the Government is to sever the central bank activities from the other activities of the Commonwealth Bank and that can be done only by setting up a separate organization - the Reserve Bank of Australia. We have had considerable discussion this evening about historical circumstances and the attitude of the Labour party on this matter. The Opposition still asserts that all the authorities that can be consulted in this country speak in favour not of a separate central bank, but say that the central bank is strengthened by association with commercial activities. We believe that the step proposed by the Government in this legislation will be detrimental to the future operation of the banking system in Australia. We view this matter as an urgent one. It is a matter of great importance. Earlier in the debate, I and the honorable member for Yarra (Mr. Cairns) referred to the authorities, because they have been cited over and over again. We cited the very good authority of the royal commissions of 1936 and 1937. We cited the opinion of the Governor of the Commonwealth Bank, expressed as recently as 1954. We referred also to the fact that the Prime Minister (Mr. Menzies) in 1953 pointed to the valuable assistance that the commercial activities of the Commonwealth Bank gave to that organization in carrying out central bank functions.
During the course of this debate, the honorable member for Wentworth (Mr. Bury) and the honorable member for Barker (Mr. Forbes) referred to the activities of the Bank of England. I wish to cite an authority the burden of which I am sure the honorable member for Wentworth will appreciate. The honorable member for Yarra said - and I agree with him - that the Bank of England still has a certain number of private customers.
– But you cannot open an account.
– May I please develop my point? I am simply saying, in the first instance, that the Bank of England does have a number of private customers. Secondly, and this is something to which the honorable member has made no reference, the Bank of England does have an important group of customers that, as yet. do not exist in Australia. I refer to the discount houses and the acceptance houses as they exist in England. Those organizations, which do not exist on any grand scale in this country, perform functions which in this country are carried out by the private trading banks. I would refer the honorable member for Wentworth to Professor Sayers, and I am sure that he will not dispute the bona fides of this authority. Earlier in the debate the honorable member for Werriwa (Mr. Whitlam) referred to Professor Sayers’s most recent book, “ Central Banking After Bagehot “.
In a section of that work which deals specifically with the subject of the central bank as a banker - not as a central bank - Professor Sayers makes an important reference to the Bank of England. His remarks on page 119 of his book illustrate that what is important in Great Britain is important also in Australia, taking into account the different circumstances in the two countries and the importance of historical development in each instance. The professor states -
The Bank of England today rightly attaches importance to the control it can impose, as banker upon customer, upon the Accepting Houses and Discount Houses of the City of London;
Then he makes this very important comment - yet a narrow restriction of this list of customers from the beginning might well have left these important firms outside.
In other words, he is saying that the discount houses in the first instance historically became customers of the Bank of England because they were private customers in those days. If, 70 or 80 years ago, the Bank of England had adopted the purist view that the honorable member for Wentworth now advocates should be adopted by the central bank, it would not to-day be in a position to exercise control as a central bank over the operations of the discount market. Those historical references and those economic circumstances as they relate to Great Britain are pertinent so far as Australia is concerned.
The historical circumstance of Australia has been the association of the central bank with private customers, because it carries out trading activities as one part of its operations. Despite what has been said by honorable members opposite in apparent rebuttal, no substantial authority has been cited other than what is vaguely called the idea of the private trading banks as to the nature of a true central bank. I think honorable members will agree that the functions of a central bank vary from country to country. As I said earlier, the principles are largely writ in sand. They are not permanent features at all. I suggest that honorable members opposite are meddling with the structure of the central bank as it operates in Australia and are tampering with something that in all circumstances has worked reasonably well. They are throwing it away for something about which you know very little. The honorable member for Mitchell (Mr. Wheeler) was pleased on one occasion to describe the Governor of the central bank as a public servant. I am glad that he used that description.
– Order! The honorable member’s time has expired.
– The honorable member for Melbourne Ports (Mr. Crean) is quite wide of the mark in not realizing the effect of the Reserve Bank as set up under this legislation. The Bank of England rigorously eschews new competition with trading banks and that, after all, is characteristic of a central bank. But the Bank of England does not have the powers that are envisaged in Division 3 of the Banking Bill. That division refers to statutory reserve deposits. I shall not traverse the division in detail - no doubt it will be dealt with later in the debate - but a bank such as the Reserve Bank will be, armed with these powers, has no need of further power. It is also in point to remind the honorable member of something that he has deliberately slurred over. That is, until recently there was no short-term money market in Australia, the short-term money market being one of the effective instruments of central bank control. There is now a short-term money market in Australia and that is one other instrument that was not envisaged in the Prime Minister’s policy speech which has been quoted here. Certainly it was not envisaged in the prewar banking report. It makes the banking system technically much more amenable to direction by the Reserve Bank.
There are ample powers in this bill and the associated legislation for the Reserve Bank to control the tempo of the banking system in whatever way it desires. Those powers reside, first, in its capacity for open-market operations; secondly, in its relationship to the Government and governments to come; thirdly, and most importantly, in the powers of various statutory reserve deposits in accordance with the provisions of the Banking Bill; and fourthly, in its relations with the short-term money market recently created. All these things, added together, mean that the Reserve Bank will need no more powers than it has already.
.- After listening to the arguments of honorable members opposite about the necessity for separating the Reserve Bank from the ordinary trading activities of the Commonwealth Bank, I am more than ever satisfied that Government speakers are absolutely on the wrong track. The reasons that they have adduced are by no means substantial. They have been forced to call in, to support their argument, the fact that the Bank of England is a central bank which is divorced from all banking facilities. They say that we should follow suit. The honorable member for Melbourne Ports (Mr. Crean) has very correctly pointed out the nature of the Bank of England and its co-relation to the present Commonwealth Bank. Therefore, I suggest that there is no need for us to go overseas in order to ascertain how the bank should be governed.
The central bank section of the Commonwealth Bank has a splendid record under the present control. I am at a complete loss to understand why we have had this continual discussion on the suggested reasons why the present control should be changed. Not one example has been cited by Government supporters of a failure of the present administration. All sorts of reasons have been advanced to support the claim that the Commonwealth Bank has certain privileges under the present legislation, but those arguments have only been theoretical. Not one case has been cited by Government supporters to prove their allegation that an advantage has been given to the Commonwealth Trading Bank through its direct association with the central bank. I should think that, in view of the agitation of honorable members opposite to change the constitution of the bank, they would have been only too pleased to trot out one example after another of suspected discrimination in the activities of the central bank. But they have not done that. Therefore, the case presented by Government supporters has no substance whatever and I suggest that the day is certain to come when the people of Australia will rue the separation of the central bank that will take place if this legislation is carried.
I rose particularly to take distinct exception to clause 11 of the bill which deals with differences of opinion on questions of policy between the Government and the bank board. Clause 11 has been taken from a provision which was placed in the Commonwealth Bank Act in 1951 and which, as far as I can ascertain, has never been invoked. The whole clause is based upon anti-Australian premises. To me, it represents an abrogation of the functions of the Government by giving those functions to the private banks. The most vital duty of any government is the creation of monetary policy. Clause 11 specifies that the Reserve Bank Board has the right to create the monetary and financial policy of the Commonwealth. It provides that, in the event of any difference of opinion between the bank and the Treasurer, certain machinery shall be invoked by which the difference can be worked out.
My first point is that it should be the Government’s obligation, at all times, to make major decisions on monetary policy. In an endeavour to circumvent that very admirable philosophy, the provisions of clause 11 were put into the 1951 bill. But they have never been used because the machinery for the settling of differences is cumbersome, unwieldy, ambiguous, and in some respects, unworkable. We find, on close examination of clause 11, that the whole conception of parliamentary control over the financial structure of the Commonwealth is shown to be a sham and a delusion.
These provisions were deliberately put in the act in 1951 for the purpose of taking away the power to implement policies from the people’s representatives and placing it in the hands of a private group of individuals called a bank board. As everybody knows, the composition of the bank board has always been open to the gravest suspicion. Men have been appointed to the board from many walks of life and, in some cases, their interests have not been compatible with the national interest.
Clause 11 offers a splendid opportunity for the Government to transfer the responsibility for an unpopular decision to the board. The board and the Government can stage a sham fight. While awaiting the decision of Parliament, which could take several weeks, the board could do something which would be inimical to the interests of the people.
An example of what a Commonwealth Bank Board could do against the interests of the people was provided in 1929 and 1930. This legislation gives the Reserve Bank Board the same power that the Commonwealth Bank Board possessed in 1929. That is one reason why I object to it. In the event of an acute difference of opinion between the Government and the board, months may elapse before finality is reached. If we look at the clause, the truth of my assertion can be amply demonstrated. For example, sub-clause (1.) reads -
The Board shall, from time to time, inform the Government of the monetary and banking policy of the bank.
This clause is very ambiguous and offers all the loop-holes necessary for collision between the Government and the bank board, to permit the board to adopt a policy of procrastination or, alternatively, for the board to circumvent the Government. Subclause (2.) of clause 11 reads as follows: -
In the event of a difference of opinion between the Government and the Board whether that policy is directed to the greatest advantage of the people of Australia, the Treasurer and the Board shall endeavour to reach agreement.
But for how long will they endeavour to reach agreement? There is no stipulation that agreement shall be reached within a certain period- The whole clause is a meaningless collection of words designed to induce the people to believe that the Government has control over the financial policy of the bank. It has nothing of the kind because provisions such as I have mentioned open the way for the board to do as it likes, irrespective of what the Government thinks. Sub-clause (3.) of clause 11 reads -
If the Treasurer and the Board are unable to reach agreement, the Board shall forthwith furnish to the Treasurer a statement in relation to the matter in respect of which the difference of opinion has arisen.
But a hostile board could delay a settlement. Let us imagine the situation that could exist between the board and a Labour government. For example, the present bank board would do everything possible to cut across the policy of a genuine Australian government, namely, a Labour government. There is no provision at all that the board must make a statement on these negotiations within a week or fortnight. It could make it at any old time. Why is not a certain time specified within which a statement shall be made? Sub-clause (5.) provides -
The Treasurer shall inform the Bank of the policy so determined and shall at the same time inform the Bank that the Government accepts responsibility for the adoption by the Bank of that policy and will take such action (if any) within its powers as the Government considers to be necessary by reason of the adoption of that policy.
To me that means exactly nothing. Never has this provision been invoked because it is not possible for that to be done. Even if that were attempted the board could dig its toes in and refuse to abide by it by invoking other provisions of the Act. Subclause (6.) lays down -
The Bank shall thereupon give effect to the policy determined by the order and shall, if the order so requires, continue to give effect to that policy while the order remains in operation.
But the board could quite easily adopt a policy of non-compliance. After all, a board which, in 1930, said it was not prepared to carry out the dictates of the Government might, under this legislation, be followed by one with a similar outlook and refuse, point blank, to carry out the desires of the Government.
– Order! The honorable member’s time has expired.
– The Government cannot accept the amendment which has been proposed by the Opposition. I gather that the Opposition seeks to delete paragraph (c). which gives expression to a fundamental principle of the banking proposals, namely, that the central bank shall not carry on commercial banking business in competition with the private banks.
Since it would be an extremely difficult, if not impossible, matter to define in the law precisely what is and what is not central banking, the Government decided, after much thought, that the appropriate provision is the one contained in paragraph (c). The phrase “ subject to this Act and to the
Banking Act 1959 “ has been included to make it quite clear that the provision cannot operate so as to raise doubts about whether any functions entrusted to the Reserve Bank under the provisions of the Reserve Bank Bill, and in particular the operation of the Rural Credits Department, or of the Banking Bill, are proper functions for a central bank to carry on.
I think from what has been said earlier in the discussion that it is quite apparent this amendment goes right to the heart of the Government’s policy on this matter and it is clearly unacceptable.
Motion (by Mr. Harold Holt) agreed to -
That the question be now put.
Question put -
That the paragraph proposed to be omitted (Mr. Crean’s amendment) stand part of the bill.
The committee divided. (The Chairman - Mr. G. J. Bowden.)
Majority . . 12
Question so resolved in the affirmative.
– by leave - I move -
Omit sub-clause (2) of clause 74.
That sub-clause reads as follows: -
After the expiration of a reasonable time after the commencement of this Act, the head office of the Bank shall not be in the same building as the head office of any other bank or of the Commonwealth Banking Corporation.
We on this side of the House say that the requirement in the sub-clause should be entirely eliminated from the bill. We say so because, as has been pointed out earlier in the debate, from the very inception of central banking in Australia that activity has been carried on from within the portals of buildings owned or controlled by the Commonwealth Bank of Australia and, of recent years of course, in buildings controlled by the Commonwealth Trading Bank. There is no substantial or valid reason why the activities of the proposed Reserve Bank should be carried on at any place other than within the property occupied by Commonwealth banking instrumentalities. The provision is indeed, Sir, a reflection not only on the controlling authorities of the proposed Commonwealth Banking Corporation, but also on the directorates of the thirteen trading banks of Australia; because the result of the passage of this clause will mean that the Reserve Bank cannot occupy offices in any building in which is situated a branch of a commercial trading bank or a branch of any of the divisions of the Commonwealth Bank. There is no substantial reason for such a provision.
Is it suggested that if a private bank had evil intent, or if the newly created Commonwealth Banking Corporation, or any of its banks, had evil intent, the mere fact that the Reserve Bank occupied a separate building would prevent that bank from being corrupted, or from engaging in anything corrupt or in any practice either improper or outside its charter? The whole thing is utterly stupid, and we are justified in saying that the real purpose of this clause is to involve the new Reserve Bank in substantial expenditure for the building or acquiring of property in which to conduct its very important banking activities. What other reason could there be?
May I say that so far asI know, at no stage of this debate has any estimate been given to this Parliament of what the end cost will be of all the provisions in these several measures for the separation of staffs, reallocation of accommodation, and so on. One authority has suggested £15,000,000 as the cost. If that was the cost, it would mean a drain of £15,000,000 on the profits of the banking system owned by the Commonwealth of Australia, and ultimately £15,000,000 less to be paid into the National Debt Sinking Fund from profits. Tracing it even further back, it would mean the extortion of £15,000,000 from the Australian taxpayers.
But what strikes me, Sir, as very strange is this: Clause 83 of the Commonwealth Banks Bill, the measure which provides for the creation of the Commonwealth Banking Corporation, the Commonwealth Trading Bank, the Commonwealth Savings Bank and the Development Bank, reads -
In the exercise of its powers and the performance of its functions, the Development Bank -
may establish branches and agencies at such places within Australia as the Development Bank thinks fit:
may arrange with a person to act as agent of the Development Bank in any place, whether within or beyond Australia, and shall–
And this is the important point I want to make - on request by a bank specified in Part I. of the First Schedule to the Banking Act1959, appoint that bank to be an agent of the Development Bank for the receipt and transmission of applications for the provision of finance by the Development Bank: and
The thirteen private trading banks are the banks mentioned in the first schedule to the Banking Bill, and the point I want to make is that although the Government holds that the Reserve Bank must be separated from the possibility of contamination by any other banking institution, including a banking institution controlled by the Commonwealth Banking Corporation itself, when it comes to the Development Bank, any private bank may, on request, assume an agency of the Development Bank within the portals of that private bank.
It is apparently important to the Government that the Reserve Bank should be a separate entity so far as its accommodation is concerned, but a different view is taken when it comes to something that can be profitable in a diverse manner. A private banking institution - any one of the thirteen - may be appointed an agent for the purpose of receiving and transmitting applications from persons who require financial accommodation from the Development Bank. Of course, Sir, if the receiving and transmitting of applications for loans from the Development Bank were purely a postal activity, all that would be required to carry on the transaction would be for the applicant for the loan to go to a post office or a local agency of the Commonwealth Banking Corporation, obtain an application form, fill it in and post it to the Development Bank immediately, after having received such advice as he required regarding it. It is evident that, given the right, on request, to establish agencies of the Development Bank within their portals, the private banks will have an opportunity to advise applicants for loans from the Development Bank, to see the nature of the applications and, consequently, the reasons why the applicants propose to make them. A private bank would thus obtain a very complete knowledge of an applicant’s business, and, if he happened to be a client of that private bank, and the bank considered it deleterious to its interests for him to obtain a loan from the Development Bank, it might see fit to be not very helpful to him. On the other hand, if he happened to be a financially strong member of the community the bank could be in the very advantageous position of being able to say that it was willing to make him a loan at a cut rate of interest.
– Order! The honorable member may not continue on the subject of the Development Bank in speaking to the amendment that he has moved.
– I am sorry, Mr. Chairman, I was just winding up.
– Sub-clause (2.) of clause 74, to which the amendment of the honor able member for Lalor (Mr. Pollard) refers, provides, as the honorable gentleman has pointed out, for the physical separation of the Reserve Bank’s head office from the head office of the Commonwealth Ranking Corporation or, for that matter, any other bank. It is considered that a provision to this effect is a necessary step in effectively separating the central banking and noncentral banking components of the present Commonwealth Bank group of hanks. It would be undesirable, I suggest, for officers engaged in policy work at the head office of the Reserve Bank to remain in close physical contact with the head office staff of the Commonwealth Banking Corporation or any other bank. It is proposed that the present head office of the Commonwealth Bank group of banks in Martin-place, Sydney, will become the head office of the Commonwealth Banking Corporation and its constitutent banks, and that the head office of the Reserve Bank will be established elsewhere. The Martin-place building, the ground floor of which is at present used for the transaction of banking business with the public, is ideally suited to the head office requirements of the Commonwealth Banking Corporation group of banks. The Reserve Bank will have few dealings with the public, and the establishment of its head office elsewhere will not have any adverse effect on the efficient conduct of its operations.
In any case, as was announced by the Governor of the Commonwealth Bank in December last, it is felt by the bank that the present head office premises are unsuited for certain central bank functions and that a more specialized building is necessary. An offer has therefore been made for a site on the southern side of Martin-place, on which it would be proposed to erect modern premises for central bank use. This need has arisen independently, I am assured, of the banking legislation. It is not known when it will be practicable for the head office of the Reserve Bank to be established in a new building. For this reason, the clause provides that its establishment in a separate building is to be effected after the expiration of a reasonable time after the Reserve Bank Act comes into operation. The determination of “ a reasonable time “ will depend on the practical circumstances involved in establishing the Reserve Bank’s head office in a separate building. Meanwhile, it is proposed that steps will be taken to segregate the Reserve Bank and Commonwealth Banking Corporation officers in the Martin-place building.
It will be noted that the proposed statutory provision relating to physical separation refers only to the head office buildings in Sydney. In other capital cities, where the business of the Commonwealth Bank group of banks is at present conducted in the same building, it is intended that Reserve Bank and Commonwealth Banking Corporation staffs will be accommodated in separate buildings as and when it is reasonably practicable to do so. It is, however, felt to be unnecessary for the legislation to include provisions to this effect, because little work of a policy nature is performed outside the head office in Sydney.
As to the comparison by the honorable member for Lalor of the circumstances in which the private trading banks will be able to receive and transmit applications to the Development Bank, I suggest there is no parallel at all. In any event, the present practice is of that character, and all we are doing is giving statutory recognition to what has been a continuing practice.
– It is to be mandatory.
– That is the point that I want to clear up for the honorable gentleman. I referred to it a little earlier in the evening on another matter to show that the Government had been careful to avoid embarrassment to the client of the private trading bank by refusing to have it made a condition of his loan from the Development Bank that he should first disclose evidence of a refusal of his proposal by at least one other bank. If the honorable gentleman examines the clause, he will see that it is by no means mandatory. It is a convenience, to be used if desired by the client of the private trading bank, to have his application sent on, but it is certainly not mandatory, and he can by-pass the private bank altogether, if he wishes.
– It is mandatory that a private bank, on request, be appointed an agent of the Development Bank.
– Yes, but only for this purpose.
– Then you admit that?
– I visualize that in practice the client of a private trading bank, on being informed that an application for a loan does not fall within the ambit of the banking policy of that bank may, in cases where the private bank believes that the proposition is of a character that would commend itself to the Development Bank, although outside the scope of normal banking policy, suggest to the client that he make application to the Development Bank, and offer for that purpose to transmit the application to the Development Bank. I am sure that many people, particularly those who had not a very close knowledge of business practice and who would find it a convenience to have their own bank act for them in that way, would be glad of that service. If they felt that it would be an embarrassment to approach the private bank in the first place, they would not need to do so. They could lodge an application direct with the Development Bank. I think I have covered quite adequately the points raised by the honorable member and that the committee might now pass on to other matters.
Motion (by Mr. Holt) agreed to -
That the question be now put.
Question put -
That the sub-clause proposed to be omitted (Mr. Pollard’s amendment) stand part of the bill.
The Committee divided. (The Chairman - Mr. G. J. Bowden.)
Majority . . 12
Question so resolved in the affirmative.
Question put -
That the bill be agreed to.
The committee divided. (The Chairman - Mr. G. J. Bowden.)
Majority . . 12
Question so resolved in the affirmative.
Bill reported without amendment; report adopted.
Bill read a third time.
Address-in-Reply: Presentation to the Governor-General.
– I desire to inform the House that, accompanied by honorable members, I waited to-day upon His Excellency the Governor-General at Government House, and presented to him the Address-in-Reply to His Excellency’s Speech on the opening of the first session of the Twenty-third Parliament, agreed to by the House on 10th March. His Excellency was pleased to make the following reply: -
Thank you for your Address-in-Reply which you have just presented to me.
It will afford me much pleasure to convey to Her Most Gracious Majesty the Queen the message ofloyalty from the House of Representatives of the Commonwealth of Australia, to which the Address gives expression.
Committee of Privileges - Taxation in
Motion (by Mr. Harold Holt) proposed -
That the House do now adjourn.
.- Mr. Speaker. I wish to say a few words about the Committee of Privileges of this House. It is my understanding of that committee that it is an impartial and important one, and that the judgment of its members should not be in any way impaired by their implication in the matters before it. I have in mind particularly a previous occasion when two persons named Browne and Fitzpatrick were before the committee. On that occasion, the honorable member for Darling (Mr. Clark), if my memory serves me right - and I think it does - withdrew from the committee because, some years before, he had known or been in contact with one of the two men before the committee. He thought that that previous contact might have impaired his judgment on the matter under consideration. In other words, to quote an expression used by lawyers, although, I do not know who originated it, justice must not only be done but must also be p.en to be done. I think this applies particularly to the inquiries of the Privileges Committee. So that the highest traditions of this Parliament may be upheld, at no time should the accuser be the judge.
This brings me to a point which I believe the House should consider to-night, and which the person concerned might well consider when next the Privileges Committee meets. Let me quote a passage from “Hansard” of 8th and 9th May, 1958. This appears at page 1682 -
Yesterday, an advertisement was inserted in a newspaper of this city and is causing considerable concern, to say the least. It is an advertisement inserted under the name of J. Somerville Smith or, to be more precise, it invites applicants interested in the advertisement inserted by Mr. J. Somerville Smith to write to the principals for further details, through J. Somerville Smith. I think that the key word in the context is “ through “.
It is running in heavy rumour throughout this place that no fewer than ten members of the Parliament have applied for the advantages offered by Mr. J. Somerville Smith. This matter, Sir, is a very serious indictment of this Parliament, and I believe that it comes perilously close to a breach of privilege. It throws a heavy cloud of suspicion and doubt over every member of this Parliament. If there is any degree of substance in Mr. J. Somerville Smith’s alleged press statement last night that ten members of the Parliament had applied for the advantages offered by him, then I believe that, prima facie, this is a case for the Committee of Privileges to examine.
Leaving out some of the intervening remarks, the report goes on -
Mr. Smith gives a box number in the advertisement. It is “P.O. Box 300, Civic, Canberra”. I should like to know who owns that box number. I think that this case warrants thorough investigation by the Commonwealth Investigation Service. Mr. Smith’s advertisement and his alleged statement to the press that ten members of the Parliament have responded to it, are a slur on the whole Parliament, as well as being a slur on the entire Civil Service of this country.
That speech was made by the honorable member for Moreton (Mr. Killen), who is a member of the Privileges Committee which is about to deliberate on matters associated with Mr. J. Somerville Smith and the honorable member for Capricornia (Mr. Pearce). T hold no brief for Mr. J. Somerville Smith, and I have no wish to impair in any way the judgment of the committee. I believe, however, that in all fairness to the highest traditions of this Parliament, and in keeping with the principle that justice must be done to all parties concerned, the honorable member for Moreton should not deliberate on the matter that is presently to be inquired into by the committee, because he was the person who first raised in this House the matter of the activities of Mr. J. Somerville Smith. He would, then, be in the position of an accuser sitting in judgment on an accused. I believe, therefore, that consideration should be given to my proposition that the honorable member for Moreton, the person who first raised this matter, should withdraw from the Privileges Committee for the period of its forthcoming inquiry, as was done in similar circumstances by the honorable member for Darling on a previous occasion. When all is said and done, this committee and its finding must be accepted by all as being above reproach.
– Order! I think the honorable member is canvassing a decision of the House, and it would not be prudent for him to pursue this line. There was a decision of the House in relation to the appointment of the committee, and also the appointment to it of the honorable member for Moreton.
– I did not wish to canvass that matter, Mr. Speaker, and I respect your views. The point I make is that in the eyes of the people of this country the Parliament and the Privileges Committee will suffer if one of the members of the committee sits in judgment on a person whom he attacked in this House on a prior occasion.
– Order! The honorable member is not in order in pursuing this line.
.- I wish to make a short comment on the taxation proposals affecting the Territory of Papua and New Guinea, where the allpowerful bureaucracy of Canberra seems to be pushing the Government towards another Boston Tea Party. It seems to have decided on certain taxation proposals in New Guinea without proper public inquiry and without any opportunity having been given to the residents of the Territory to state their views on the matter. I raised this subject in the House on 18th February last, by way of a question to the Minister for Territories (Mr. Hasluck). I mentioned to the Minister the uneasiness caused in the Territory by rumours and reports of the Government’s intention, and of the tendency of some firms, as a result of these rumours to withdraw their investment, and of others to refrain from allotting further capital to development ventures in the territory. The Minister waved these fears away in airy fashion, saying -
They always see some shadows for alarm even when shadows do not exist.
I am now rather perturbed by a report appearing in the current issue of the “ Taxpayers’ Bulletin”, which suggests that the taxation proposals had gone so far, eight months ago, in July last, that a decision had been reached by the bureaucrats. This report alleges that a notice appeared at that time in a taxation office, commencing with these words: -
As income tax will be introduced in the Territory of Papua and New Guinea on 1st July, 1959 ….
It then went on to ask the staff to indicate whether they would like to transfer to the Territory. If this is true - and I emphasize the word “ if “ - the legislation was anticipated and recruits were being called for the New Guinea tax forces in July last, eight months ago. I suggest that the Minister should examine this report for veracity, and if it is untrue it should be denied.
It is not my purpose to argue whether or not these taxes should be imposed in the Territory. I merely wish to direct attention to the way in which this is being done. I believe all honorable members will agree that New Guinea is a very critical area for Australia. In endeavouring to justify our stewardship in the eyes of the world, and to maintain our security, we must do nothing which will interfere with the development of Papua and New Guinea. Certainly, in the light of recent happenings in Dutch West New Guinea, we must retain at all costs the loyal support of the local population. That loyalty helped us tremendously, and perhaps saved us, in the 1940’s. and we may need it again.
In seeking to impose these taxes we are breaching one of the most cherished principles in British government, learned at great cost during the American revolution.
That is that there shall be no taxation without representation, lt may be necessary, for the time being, for us to break this rule, but I think it is of vital importance that the people affected should be given every opportunity to have their say. Above all, every effort should be made to convince them of the necessity for these taxes, if they are necessary, and to make sure that no injustice is done. Yet little has been done to ensure that these objectives are achieved. Admittedly a review of Territory revenue, which I have before me, has been made, but the very manner in which this review was prepared leaves the Government’s action open to a certain amount of criticism. One would have thought that there would have been at least a public inquiry in the Territory, at which all local residents, including both the business community and the civil servants, could have stated their views. This inquiry could have been carried out by the Public Accounts Committee of this Parliament. Alternatively, there is a Government taxation committee, consisting of experienced private members, who are well qualified to carry out an investigation of this kind.
However, Canberra’s idea of democratic procedure was to send over a civil servant charged with the duty of making a report. He is stated to be an economist, well experienced in marshalling facts. The review has been prepared and is apparently the last word. It is certainly the last word from a departmental point of view, because it is couched in “ officialese “ of the purest possible brand. I venture to say that the advocates of basic English will find little to appeal to them in this review. The simple and effective phrasing of the Public Accounts Committee is sadly lacking. The review separates the community into two groups. In deference to the United Nations ukase, there are no natives or nonnatives; there are no Europeans or nonEuropeans. The residents are either indigenous or non-indigenous, and they are departmentalized for the purposes of this report into indigenes and non-indigenes.
The review analyses the situation of the non-indigenes, who are the ones who will pay the taxes. No doubt the author performed his task admirably, but he did it from the smug angle of Canberra complacency. However, I think a great deal more could be said by people who have actually lived in the Territory over long periods. I think there is a good deal more that should be considered as to what effect taxation will have on the development of the Territory. There is no doubt in my mind that the absence of income tax is a psychological as well as a financial attraction for people contemplating residence in the Territory. In an area which so badly needs more people of the right type and more capital for development, I do not think that the advantage of no taxation should be lightly taken away. I suggest to the Government that it is not too late to retrieve the situation.
Many Territorians feel in this matter that they have been condemned without a fair trial. It is reported that three elected members of the council are contemplating resigning in protest. There is every reason to doubt that justice has been done. Therefore, I suggest to the Government that it remedy the situation by appointing a select committee to investigate all aspects of the case. Such a committee could well comprise members of this House, together with a practising taxation specialist and representatives of the Territory. The committee should meet publicly and invite witnesses to give evidence. I believe that the situation demands that we at least consider this matter if we are concerned with the democratic rights of these people.
I do not want to weary the House with a recital of the contents of the document which I have before me. However, if honorable members have not read it, I commend it to them for perusal. I believe that this review of Territory revenues is an unsatisfactory document and should be replaced by the report of a parliamentary select committee. I hope that the Minister will give some consideration to this proposal.
.- I desire to bring to the notice of the House the case of a man who, despite mounting adversity, and unsympathetic and unjust treatment from the Repatriation Department can still face life with a smile. Despite grave difficulties, he has shown great determination, endurance and courage. It is a case in which the onus of proof clause of the Repatriation Act has not been properly applied. The man concerned is Mr.
Leslie Samuel Broadbent of 20 Garrongroad Lakemba, and his repatriation file number is MX 120399.
Mr. Broadbent was injured when he was knocked over by a motor car while serving in the Army in 1945. The accident occurred in Centennial Park, Sydney, and he received grave injuries, including internal injuries, head injuries, back injuries and a broken left femur. He spent twelve months in hospital. Since the date of the accident he has been troubled constantly by his disabilities. At the moment he suffers from a perforated ear drum, which causes him to have attacks of dizziness and sick spells, and to lose his balance. He is blind in the left eye and will probably go blind in the right eye. He has osteoarthritis of the left knee, osteoarthritis of the lumbar spine, osteoarthritis of the right great toe, and osteoarthritis of the right ankle. He has been permanently unfit for work for the last four years. He is m receipt of an invalid pension and for the osteoarthritis of the left knee he receives a 20 per cent, pension, which has been payable since 21st June, 1955, but which was not increased to the 20 per cent, rate until 24th April, 1958. It was then back dated to 21st June, 1955. He has a wife and three children to keep. He has made numerous applications to the Repatriation Department for the acceptance of his disability as due to the accident which he suffered in 1945. However, each application has been rejected by the department and by the entitlements appeal tribunal.
The accident that he suffered was a serious one. The fact that he spent 12 months in hospital shows that he must, of necessity, have been seriously injured, but the Repatriation Department now holds that the perforated ear drum from which he is suffering was not caused by the accident. It is quite apparent to me that a man who was knocked over by a motor car and suffered head injuries could have had his ear drum affected by the accident. He suffered an injury to his back in the accident and now suffers from osteoarthritis of the lumbar spine. He also suffers from osteoarthritis of the right great toe and of the right ankle. The Repatriation Department has accepted the osteoarthritis of the left knee as due to the accident. It is reasonable to assume that, if osteoarthritis of one injured part is accepted, osteoarthritis of other parts injured in the same accident should also be accepted.
This is a classic case in which the onus of proof clause has not been interpreted in the way in which it was intended. This was a serious accident. The man was badly injured and most of the parts of his body in which he now suffers disability were hurt in the accident. There is no doubt in my mind that the accident could have caused the perforation of the ear drum and could also have been responsible for the osteoarthritis of the lumbar spine from which he is now suffering. But the Repatriation Department has rejected all these claims. None of the disabilities was apparent before the accident; all developed within a few months of the accident. This seems to me to be a case in which the benefit of any doubt in the interpretation of the onus of proof clause should be given to the man concerned.
On one occasion, Mr. Broadbent was supposedly examined by a special board, which included an orthopaedic specialist. This board decided against his appeal for the condition of his lumbar spine to be recognized as having been caused in the accident. He has now received the report of an X-ray which shows that the second piece of his coccyx appears to be in two parts. Dr. C. Mills, of Lakemba, has given Mr. Broadbent a certificate which states -
Mr. S. Broadbent was injured in a road accident whilst in 1945 - thigh, &c. During 1948 he was treated at Sydney Hospital for back pain - this pain he has had since 1946 and has persisted. A recent X-ray shows that the second piece of his coccyx appears to be in two parts.
This is possibly due to the road accident and is worth a review if indeed it is new evidence.
It is new evidence and I feel that the Repatriation Department should again consider this case. I make an earnest appeal to the Minister representing the Minister for Repatriation in this House to bring this case before the attention of the Minister, so that justice may be done in this very worthy case.
– The honorable member for Mitchell (Mr. Wheeler) referred to the general subject of taxation in Papua and New Guinea and to one particular matter relating to the posting of a notice in taxation offices. As I have no personal knowledge of any such notice having been published or posted, all I can do is promise the honorable member that I will make inquiries into the truth of the statement he made and find out what the position is. I can say that if the notice was phrased in the way he reported it to be phrased, it was not correctly drawn.
On the main subject that the honorable member raised, I think the starting point that has to be established is whether or not any new decision is being made on taxation - whether any new decision is being made as to whether or not the people of Papua and New Guinea are to be taxed. Of course, the people of Papua and New Guinea have been paying taxes for years. The evidence of that is in the existence of a revenue of £5,000,000 that comes out of their pockets. The greater part of that £5,000.000 that comes out of their pockets comes out in the form of taxes of one kind or another. No new decision is to be made on the question whether or not the people of Papua and New Guinea are to be taxed. They are taxed already and have been taxed for a great number of years. The history of what is taking place, and the matter to which the honorable member refers, goes back to 1957 when, in this chamber - and I would assume the honorable member was in his place and heard the statement - in the course of a debate, I assured this House, in response to some statement that had been made, that we proposed to make a review of the way in which revenues were being raised in the Territory of Papua and New Guinea.
The reason for making that promise was that we had arrived at the conclusion that the burden of raising the revenues was falling unevenly on the population, that our taxation measures were possibly not equitable, that our taxation measures were probably not conducive to the economic development of the country, bv reason of the fact that they were falling in the wrong places. I promised this House - the promise was made in the first place in this chamber - that we would review the method of raising revenues in the Territory in order to ensure that they were raised more equitably so far as individual taxpayers were concerned, and that they were raised in a way that was conducive to the economic development of the Territory.
In keeping with that promise, an inquiry was set on foot at a departmental level. This story that some single officer was sent to the Territory to do the job has already been publicly denied as a complete fiction. It was a departmental inquiry, carried out by several officers drawn from both the Administration of the Territory and from the Department of Territories in Canberra.
– It was departmental.
– It was a departmental inquiry conducted by Administration officers and Department of Territory officers, and the final result was drawn together in a report written, as the honorable member indicated, in departmental language. The purpose of that report was to inform the Government of the way in which the Territory’s revenues were being raised, and to give some information on what might be termed broadly the taxable capacity of the Territory.
It would have been quite proper for the Minister, on receiving that report, to have treated it solely as a departmental document, but I arrived at the conclusion, which I think is completely in keeping with everything that the honorable member has said, that this was a matter on which the opinion of the people of the Territory should be invited. So I requested the Administrator of the Territory to table this departmental paper in the Legislative Council for the Territory, and it was tabled there in October, 1958 - many months ago. When it was tabled it was accompanied by a statement, made on my behalf, that the purpose of tabling it was to attract a debate in the Legislative Council, and to attract comment throughout the Territory on the soundness of the information contained in the paper. Over the period of several months following October, 1958, there has not been a month, scarcely a week, during which I have not received from one quarter or another information or comments on this precise subject. In the press of the Territory, by direct communication to me, by deputation and, finally, by debate in the Legislative Council itself, the views of the people of the Territory have been expressed on the contents of this document.
The latest outcome of this procedure was a petition presented to the Legislative Council by certain residents of the Territory and a full-dress debate by the Legislative
Council on the subject. The petition has been sent down to the Government. A full transcript of the whole of the debate was in my hands within 24 hours of its having been completed. I have already myself studied that debate word for word, from beginning to end. I have already mentioned in Cabinet the substance of the petition and the substance of the debate, and arrangements have been made to summarize the main points of the debate and see that they come to the notice of the Government.
It is still competent for the Government to make whatever decision seems fit on the subject of changing the method of raising revenues in the Territory. The council has been adjourned until 23rd March and an assurance given that no taxation measures will be introduced on that date. If the Government makes a decision that taxation bills are to be introduced, those bills will be introduced at a further adjourned session of the council on 20th April.
– You have already got those bills prepared.
– That is not novel. I think any government would be open to very justifiable criticism if it permitted itself, or even prepared itself, to make decisions on a subject without having seen in advance what those subjects would entail. Of course it is a customary procedure to have bills ready before you go to Parliament. The fact that you have a bill ready is no more a certainty that you are going to use the bill than the fact that you have a revolver in your drawer means that you are going to load it and shoot somebody. The honorable member for Balaclava (Mr. Joske) had a bill prepared for a very long time and, unfortunately, never had the opportunity of introducing it. Governments have had bills and Ministers have had bills that have never seen the light of day. The mere existence of a draft bill or the mere making of administrative preparations is not in itself the making of a law, nor is it the making of a decision that those bills are to be presented to any legislative body.
One could go further and recall an historic instance before the war when a national insurance scheme reached a very advanced stage of administrative planning, but it never came into effect. I think that the honorable member for Mitchell is on shaky ground when he says that we have a draft bill ready. Of course we have a draft bill. We want to know what will be the effect of the measures if we take the final decision to introduce the bill. We would be foolish and lacking in responsibility if we had not drafted any legislation before considering this question. The main point in the honorable member’s complaint was that we had been unfair to the Territory in not giving the people the chance of expressing an opinion. We have given them the chance of expressing an opinion. They have not been reticent in any way in expressing an opinion. They have expressed it forcibly, at length and with considerable eloquence. What they have said has been studied with care and will be studied with further care by the Government before the final decision is made.
The honorable member made the suggestion that a public inquiry should be held. If there was some fundamental question as to whether to tax or not to tax at all he might have a case. But that decision was made years ago. Taxation is levied in the Territory. The question before us is how most fairly to levy that taxation. Surely, the Government would be abrogating its responsibility if it handed over that sort of matter to some public inquiry. Moreover, when it comes to this technical question of revenue raising, I would suggest to the honorable member, in spite of what he might think of the Public Service, that there is in fact no body of experts better equipped for this work than members of the Taxation Branch of the Treasury.
– Order ! The Minister’s time has expired.
.- I wish to speak on a matter about which the Attorney-General (Sir Garfield Barwick) has been questioned twice in this House in the past two days. His answers have not been satisfactory to the Opposition. This matter concerns what has become known as the Hursey case. The Hurseys have been used politically for some time by the Government parties in an attempt to create a disadvantage for supporters of the Australian Labour party. I am sure that the Attorney-General will agree that in cases like this everything must be done by him and by the Government not to allow any impression to be gained as a result of their treatment of this matter that they are seeking further to protect the persons involved. The impression has been given over a considerable time that the Hursey family is of good repute, beyond reproach and altogether the victims of individual unionists and trade unions who have been unfair and aggressive towards them. A recent case in Sydney before Mr. Justice Ashburner has revealed that this is not the true position.
In this case, it was revealed that a man named Gold had assaulted Mr. Hursey, but that Mr. and Mrs. Hursey had both told lies about the circumstances of that assault. In that way, it was indicated that the Hurseys were not beyond reproach but that they were prepared to agree to go into court to tell lies on oath in an action that was calculated to deprive a man of his job. They were not defending themselves, and they were not committing perjury as a result of an attempt to defend themselves, but were doing something quite different. They were prepared to commit perjury to attack another person.
I have not had access to the transcript of the proceedings, but I should like to direct the attention of the House to a published report of the case. Mr. Justice Ashburner found that the most important witness was John Michael Banks who, on 4th December last, was third officer of the ship “ Noongah “. Mr. Justice Ashburner is reported to have stated in his finding -
My acceptance of Banks raises the question of the credibility of the Hurseys.
As described by Banks, the assault was wholly in the shed. Hursey was pushed further into the shed, not out on to the wharf, and Mrs. Hursey could have seen none of it.
I cannot escape the conclusion that the Hurseys, fearing or anticipating that no one who had seen the assault would give evidence, altered the details of it and swore falsely to them in order that Mrs. Hursey could give evidence corroborative of her husband’s.
This statement seriously affects the credibility of the Hurseys, not only in this case, but in all cases. It affects very much their value to the Liberal party as a political weapon against the Opposition. Indeed, they are the key figures in at least one significant section of that attack that is being made upon the Labour movement, that is the attempt being made to make it legally impossible for the trade unions to raise funds for party political purposes. Should the credibility of the Hurseys have been seriously impaired, this attack could hardly succeed.
During the week, the Leader of the Opposition (Dr. Evatt) and I have asked the Attorney-General whether the alleged perjury by Mr. and Mrs. Hursey would be examined and if a prima facie case existed, whether they would be prosecuted. The Attorney-General, who is a distinguished lawyer, has made two attempts to answer those questions, and I submit to the House that he has not discharged his duty to answer the questions adequately. There might be a reason why the Hurseys could not be prosecuted in this matter, but the Attorney-General has not made it clear. At first, the Attorney-General stated -
His Honour then concluded, as a matter of reasoning, that as he believed the independent witness, it followed that Mrs. Hursey could not have seen the assault she described.
The Attorney-General made no mention then of what he called to-day “ the legal position “. The reason, it seemed, why a prosecution of the Hurseys would not lie was because Mr. Justice Ashburner had used a process of “ reasoning “ to reach his conclusion that Mr. and Mrs. Hursey had committed perjury. It is only too apparent that a court reaches its decisions on reasoning, but we had the Attorney-General to-day attempting to give an explanation why a prosecution could not lie in this case, and he gave that as the reason. He did not mention, what would have been obvious to any first-year law student, that in a perjury case, you need corroboration. He made no mention yesterday of the matter which today, he called “ the legal position “, that is that a prosecution for perjury required corroboration and there was no corroboration in this case. On the contrary, there is obvious corroboration. The AttorneyGeneral might say that one of the witnesses involved in that corroboration is not a satisfactory witness, but he did not say that this morning or yesterday.
I suggest that it can be established that when the assault took place, Mr. Hursey and Mr. Gold were on the wharf and that Hursey was pushed into a shed where the rest of the assault relevant to this case took place. It can be established from the circumstances that Mrs. Hursey was in a motor car in a position where she could not possibly have seen what happened in the shed. It can further be shown that the assault took place and that Mrs. Hursey did not see it, but in collaboration with her husband, she swore that she did. It appears that there are at least two witnesses available on each of these material particulars. It is clear that there is a prima facie case of perjury, and I submit that it is, therefore, a matter for a court to say whether a case is to be accepted or not. It is a matter for the court to say whether the witnesses are credible or not.
The proper responsibility of the Attorney-General is to see that this matter, which has become one of political importance, should be left to a court so that it may state what the position is. On the other hand the Attorney-General, on the two occasions when he has dealt with this matter, has given a different explanation for inaction. The first time he said that there could be no prosecution because Mr. Justice Ashburner had used the reasoning process to come to a conclusion. What is wrong with that? Everybody uses the reasoning process. To-day, the Attorney-General said the prosecution, was not possible because there was no corroboration. I am suggesting that there is corroboration. If the Attorney-General believes that the corroboration in the terms of the second witness is not satisfactory, let him say so.
– Who is the second witness?
– For the information of the honorable member for Balaclava, the second witness was a man named Gold. If you want to say that this man is an unsatisfactory witness, say so; but at least there is a prima facie case, based upon corroboration by one witness of what the main witness, Banks, has to say.
Because of the political implications, it is most important that this matter should be cleaned up with more precision and certainly with a more complete answer. I ask the Attorney-General to give serious consideration to it.
– The hour is very late and I do not propose to take up a great deal of time. So far as I am concerned, this matter does not involve any politics at all. Any politics that have been brought into it have been introduced by the honorable member for Yarra (Mr. Cairns).
– That is right. The question at the present time is whether or not there is material on which these two witnesses could rightly be put on trial for false swearing. I repeat that that is the question. I have not imported any politics into the matter, and I do not intend to. I propose to look at it in a perfectly cold and impartial manner, as I have already done. It is quite plain that the honorable member for Yarra thinks he can continue persecution of these two people who have had a great deal of courage and who on this occasion were found to be right - because His Honour found that Gold did assault Hursey. His Honour said not only that, but also that the assault was accompanied by language and gestures of a kind that he would not repeat. That is what was decided in this case. It is to attempt to harm these persons further that the honorable member for Yarra rises. The honorable member has no interest in the law or in its due administration.
Apparently, in this House I have to learn a new language. I thought that even a child would have understood what I said in the answers that I have given on two occasions. But I was mistaken. There are some minds which do not want to understand. Let me remind honorable members of what I said. I said that the case in question was one in which the matter to be tried was whether Gold had assaulted Hursey. The judge found that he did. Gold, who is stated by the honorable member for Yarra to be a corroborating witness, denied the assault, The judge disbelieved him and said that he was a self-confessed liar.
– What did he say about the Hurseys?
– f will come to what he said about the Hurseys. Do not take the fences too quickly.
– Don’t you go around them, either.
– I said that the judge, having found an assault had occurred, turned to a question which, with very great respect, in one sense had become unnecessary. He said, in effect, “ I believe there was an assault, because one man whom I believe described the assault as taking place in the shed “. Let me emphasize that, because a moment or two ago the honorable member for Yarra said that thai was corroboration for the proposition that Hursey was assaulted on the wharf and pushed into the shed. That, strangely enough, is very like what Mrs. Hursey said. But what the independent witness said was that it did not take place on the wharf but took place in the shed. That was a very fine point, because this occurred between eight and nine o’clock at night on a wharf. The Hurseys’ case was that it occurred on the wharf as well as partly in the shed. The judge said, “ As I believe the witness who described it as occurring in the shed, it follows that the Hurseys have not told the truth “. The honorable member, 1 understand, has had some experience in courts - not disreputably - and he would know that it was idle to maintain the proposition that a person who is disbelieved in a court has committed perjury. We could prosecute a lot of policemen if that proposition was right. All that has happened in this case is that the judge has disbelieved the Hurseys.
When’ I come to look at it quite independently and coldly, I find that there is no corroboration of the independent witness. If I were prosecuting, I would be left with the evidence of this witness without a shred of corroboration. The amusing statement of the honorable member for Yarra was that there was corroboration of the fact that Gold assaulted Hursey in the shed. But the corroboration is that Gold denied that he assaulted Hursey at all! One cannot imagine anything so silly. But it does not matter; it is good enough to try to beat the Hurseys with this birch broom.
The honorable member says, in effect, “ I have not seen the transcript, but I have read a newspaper report and I set myself up as the one who is going to agitate and decide, if I can, that there ought to be a prosecution of the Hurseys “. When we say there is no material for a prosecution, he attempts to fasten some political motive on to me and the Government. Nobody but a person wanting in intelligence would think that the Hurseys could be put on trial for false swearing. I have brought no politics into my decision, Mr. Speaker.
– Not at all!
– None at all. I have decided this matter for myself as a question of cold law. The honorable member can take this answer from me: There is no corroboration, and a prosecution could not be brought. Above all, I would not put a person on trial in these circumstances simply because a judge said, “ I do not believe you. I prefer the other person’s word to yours “. I am content to leave the matter at that.
– I wish to refer to a reply given by the Minister for the Interior (Mr. Freeth) to a question I asked concerning office space rented by the Commonwealth Government from the Adelaide “ Advertiser “. I asked whether it was a fact that £960,000 would be paid to the Adelaide “ Advertiser “ over the next twelve years, which amount approximated to the total cost of the erection of the building.
– Is it to be paid in advance?
– No, to be paid over the next twelve years. The Commonwealth entered into a contract to pay to the Adelaide “ Advertiser “ a sum of £80,000 for a period of twelve years. The “ Advertiser “ prominently displayed the Minister’s reply, with special emphasis on his statement that I was very wide of the mark. I can visualize Sir Lloyd Dumas reading his copy of the “ Tise “ in the morning, looking at the headlines, and saying to himself, “ What wonderful sub-editors I have employed! “. Both Sir Lloyd Dumas and the Minister, but especially Sir Lloyd Dumas, know the facts of the case. The facts are these: The Minister, in his reply, said that it was costing, not £80,000 a year as I had said, but £90,000 a year, making the position ever so much worse than I imagined it to be. The Minister went on to say that the overall rental amounted to 29s. 6d. a square foot and that this was slightly below the rental that was sought by the Adelaide ‘” Advertiser “. The Minister said that a base rental of 30s. a square foot was quoted in the case of each of the last three major buildings constructed in Adelaide. He went on to talk about the Taxation Branch being in a central position in the “ Advertiser “ building, to which I would reply at once that the position is no more central than is the railway station, from which building the Taxation Branch had not been asked to leave by the Railways Department.
The Minister said that it was not possible to indicate, in spite of the Commonwealth’s tremendous commitments, whether the department would even consider the commencement of a building for Commonwealth offices in Adelaide. There is something very strange about this whole business. When 1 asked the previous Minister for the Interior for certain information 1 was told that the cost of rentals of the Bank of New South Wales premises for the Commonwealth Government was 19s. 3d. a square foot and that the cost of rental of the City Mutual Life building was 18s. 7d. a square foot. They are the two buildings in which Commonwealth Parliament Offices are situated - good enough for anybody and just as centrally located as the Adelaide “ Advertiser “ building.
The South Australian Savings Bank offices, which are closer still to the Adelaide “ Advertiser “ building, are being rented from the bank for 18s. a square foot. The Do Costa building is being rented for 25s. 6d. a square foot, which is not very close to 30s., as the Minister would have us believe. He said that the amount paid for other buildings was very close to the 30s. The City Mutual Life building, where the Minister is situated - and I am pleased to know that he is in an office in keeping with the high position that he holds - is costing only 26s. 8d. a square foot. That building is just as central as the Adelaide “ Advertiser “ building. The City Mutual Life building is on one corner of an intersection, immediately facing the Town Hall, and the Adelaide “ Advertiser “ building is diagonally opposite. Nobody can say that the City Mutual Life building is not a very fine building and does not provide accommodation at least equal to that provided by the “ Advertiser “ building.
I cannot understand the information given by the Minister who said that £90,000 a year is being paid to the Adelaide “ Advertiser “ when on 17th September last year his predecessor told the honorable member for Bonython (Mr. Makin) that the amount that the Commonwealth was paying for space in Adelaide was £80,800 a year. Either the figures supplied by the previous Minister were incorrect, or the Government’s rental bill in respect of the “ Advertiser “ building has increased by £10,000 a year during the last twelve months. Of course, the information supplied by the present Minister may not be accurate. In fact, there is a discrepancy even as to the amount paid per square foot. The previous Minister told me on 2nd October last that the Commonwealth was paying 29s. 4d. a square foot. Now I am told that the amount is 29s. 6d.
I should like to know the true circumstances of this matter and whether any political pressure was brought to bear on the previous Minister to agree to what appears to me to be a rather shady transaction. I am reinforced in that view after my efforts to get the Adelaide “ Advertiser “ to publish my reply to the Minister for the Interior. In view of the fact that the “ Advertiser “ had given such prominence to the first statement, I thought that it would be only fair, if there was nothing to hide, for Sir Lloyd Dumas to give instructions for my reply to be published. But I am absolutely certain that either Sir Lloyd or Mr. McFarling gave instructions that my statement should be suppressed. I should like to know why my statement was suppressed. The statement was fair enough. I said -
The Minister’s admission that the Commonwealth Government has agreed to pay the Adelaide “Advertiser” £900,000 in rent over ten years for six and one half floors of the new “ Advertiser “ building instead of building its own administrative building calls for a full inquiry. In his reply yesterday the Minister tried to gloss over this strange transaction by references to the rentals that were paid for other premises. He said that the Adelaide “ Advertiser “ rental of 29s. 6d. a square foot compared favourably with the rentals paid for other premises. This is not true, because his predecessor is reported in “ Hansard “ of 2nd October last as stating that the premises occupied by the Commonwealth in the new City Mutual Life building cost only 26s. 8d. a square foot and that the Da Costa building costs only 25s. 6d. a square foot. In fact, the premises occupied by the Commonwealth Parliament Offices in the Colonial Mutual Life building cost only 18s. 7d. a square foot and the premises now occupied by the Taxation
Branch in the Savings Bank building in King William-street, which is not far from the “ Advertiser “ building, cost only 18s. a square foot. All those charges include rates, taxes, and cleaning costs. Mr. Freeth’s reference to the £14,000 odd that the Commonwealth would dodge in rates by building its own building is a very clumsy attempt to escape a straight out answer to my question. I now want to know whether it is the present Minister or his predecessor who is telling the truth about this mysterious deal. Mr. Freeth’s predecessor is reported in “ Hansard “ of 17th September, 1958, as saying that the annual rental was £80,800, and Mr. Freeth now says that it is nearly £10,000 greater than that figure. I believe that only a full public inquiry would satisfy the people of South Australia on this point.
It is idle to say that the Commonwealth is dodging £14,000 in city council rates. The Commonwealth does not pay rates -
– Order! The honorable member’s time has expired.
Question resolved in the affirmative.
House adjourned at 12.18 a.m. (Thursday).
The following answers to questions were circulated: -
s asked the Prime Minister, acting for the Minister for External Affairs, upon notice -
– There are as a matter of course discussions at various times between the Australian Government and other interested governments, including the United States, United Kingdom and the Netherlands, on matters of common interest, including aspects of Netherlands New Guinea.
s asked the Prime Minister, acting for the Minister for External Affairs, upon notice -
– I have nothing to add to what has already been said in earlier statements on behalf of the governments.
n asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follows: -
m asked the Treasurer, upon notice -
– The answers to the honorable member’s question is as follows: - 1, 2 and 3. There is no provision for the publication by the Commonwealth Statistician of information of this nature under the terms of the Banking Act 1945-1953. However, the Banking Bill at present before the House does make appropriate provision for the publication of savings bank statistics. The following details, which have been published in the latest annual balance- sheets of the banks concerned, may be of assistance to the honorable member: -
m asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follows: -
It is understood that the Bank of New South Wales is the only private trading bank to have established a unit trust - The Wales Unit Investment Proprietary Limited. It is also understood thai another bank, The English, Scottish and Australian Bank Limited has, through a wholly owned subsidiary, a 40 per cent, interest in a unit trust company. 3 (a). The published profits of the three private savings banks for the last financial year were - Australia and New Zealand Savings Bank Limited, £161,486 for year ended 30th September 1958; Bank of New South Wales Savings Bank Limited, £198,000 for year ended 30th September, 1958: C B.C. Savings Bank Limited, £69,992 for year ended 30th June, 1958. Apart from a dividend of £28,865 declared and paid by the Australian and New Zealand Savings Bank Limited to its parent bank, these profits were, according to published financial statements, retained in the business of the respective savings bank.
n asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follows: -
The Commonwealth Savings Bank has furnished the following general description of the composition of the items referred to -
d asked the Treasurer, upon notice -
Is he able to furnish the following information: -
What amount of American subscribed capital has been invested by General Motors-Holdens Limited in the Australian motor manufacturing industry?
What percentage of the capital of the Australian subsidiary of this company was subscribed from Australian sources?
What profits have been transmitted to American shareholders in each year since the company commenced the manufacture of the Holden car in Australia?
What is the estimated saving made by American shareholders as a result of the operation of the agreement between the Australian and the United States Governments for the elimination of what has been described as double taxation?
– The answer to the honorable member’s questions is as follows: -
Questions (a), (b) and (c) concern the affairs of an individual company on which it would not be appropriate for the Government to disclose information. I understand, however, that the published annual reports of General-Motors Holden’s Limited contain information of the nature requested by the honorable member. If the honorable member has not seen or is unable to obtain copies of the relevant annual reports, I shall endeavour to arrange for him to be supplied with copies. The estimate requested by the honorable member in question (d) would involve a comparison of the total of the Australian and United States taxes now payable by the shareholders concerned with those which would have been payable if the agreement had not been entered into. The secrecy provisions of the Australian law prohibit the Commissioner of Taxation from divulging information relating to the affairs of taxpayers and the information relating to United States tax liability of the shareholders is not available to the Australian Government. It is accordingly not practicable to furnish the estimate requested by the honorable member.
i asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follows: -
m asked the Minister for Health, upon notice -
– The answers to the honorable member’s questions are as follows: -
s asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follows: -
Cite as: Australia, House of Representatives, Debates, 18 March 1959, viewed 22 October 2017, <http://historichansard.net/hofreps/1959/19590318_reps_23_hor22/>.