House of Representatives
19 March 1959

23rd Parliament · 1st Session

  1. House of Representatives
  2. 23rd Parliament
  3. 1959

Mr. SPEAKER (Hon. John McLeay) took the chair at 10.30 a.m., and read prayers.

page 787

MINISTERIAL ARRANGEMENTS

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

- Mr. Speaker, it is expected that the Minister for External Affairs will be leaving shortly on a brief visit to Japan, Korea and Singapore. Immediately after this, he will attend the meeting of the Seato Council in New Zealand. The Attorney-General will act as Minister for External Affairs from 21st March while the Minister for External Affairs is absent - until about 11th April. For the same period, Senator Gorton will act as Minister-in-Charge of the Commonwealth Scientific and Industrial Research Organization and the Attorney-General will represent him in this House.

page 787

QUESTION

OVERSEAS LOANS

Dr EVATT:
HUNTER, NEW SOUTH WALES

– Yesterday, my colleague, the Deputy Leader of the Opposition, asked the Treasurer a question in relation to the recent loan floated by the Commonwealth Government in London. Will the Treasurer elaborate his answer to that question, and state, as far as possible, the surrounding circumstances of the loan and any special reasons for the results? Perhaps the right honorable gentleman will state what type of investors came in and what type did not. I suggest that some such statement is needed to supplement the answer which the Treasurer gave yesterday.

Mr HAROLD HOLT:
Treasurer · HIGGINS, VICTORIA · LP

– I do not think there is very much that I can usefully add to what I said yesterday except to suggest to honorable members that they do not try to read too much into this result. Certainly, no one in London is reading anything dramatic into the result. The loan opened at a small discount but was still showing rather more favorable terms, from the Commonwealth Government’s point of view, than either of two earlier loans which had been raised. It is only in comparatively recent times that the Commonwealth Government has been able to return with prospects of success to the London market. That is no reflection upon the Commonwealth Government because the Government has, on my information, been able to approach the market on more favorable terms than any other country outside the United Kingdom itself.

The firm which represents the Australian Government in these financial arrangements in London is a very well known and highly regarded firm. The terms of the loan in question were discussed with that firm at some length. It was felt, at one stage, that because of the uncertainty of the market, arising out of the international developments to which I referred yesterday, the loan should be postponed. But there are problems about that in the United Kingdom. There are many borrowers on the London market, and normally, in conjunction with the United Kingdom financial authorities, a time-table is worked out and one cannot just pick and choose the dates according to one’s wishes. Had we decided to postpone the loan operation we would have had to do so, perhaps, for an indefinite period and, for all we know, the international situation could become worse in that period. There might also be economic developments which would cause our loan raising opportunities to be less favorable. In addition to the international arrangements to which I have just referred, was the fact that the financial administration in the United States of America increased the bank discount rate there, and that had some repercussions.

Mr Ward:

– That is not very convincing.

Mr SPEAKER:

– Order! The honorable member for East Sydney must remain silent.

Mr HAROLD HOLT:

– I do not know what atmosphere the honorable member for East Sydney is seeking to create, but as far as we are concerned we know that our credit stands high, and not merely on the London market. No country, with the possible exception of Canada, enjoys today a higher credit rating on the money market in the United States of America than Australia enjoys.

Mr Ward:

– What about the-

Mr SPEAKER:

– Order! The honorable member for East Sydney will cease interjecting.

Mr HAROLD HOLT:

– I do not believe that too much significance should be read into these developments. That is certainly the view being taken by our financial advisers and by our High Commissioner in London. Finally, I would remind the House that all matters such as the terms and conditions of this loan operation in London and, indeed, the timing of it and other arrangements, were unanimously agreed upon by the members of the Australian Loan Council, which includes senior representatives of all the State governments.

page 788

QUESTION

TOOWONG BRIDGE

Mr DRURY:
RYAN, QUEENSLAND

– My question, addressed to the Minister for the Army, relates to representations which I made to him earlier this week. Can he yet say whether the Army is able to alleviate the present acute traffic difficulty at Toowong by supplying a Bailey bridge for temporary use? Does he agree that the erection of a Bailey bridge at this busy centre would be a useful exercise for the Army as well as a very helpful and valuable contribution in the present situation? As I explained to the Minister, present traffic congestion is causing considerable loss to the business community and inconvenience to many hundreds of local residents.

Mr CRAMER:
Minister for the Army · BENNELONG, NEW SOUTH WALES · LP

– I am not yet in a position to tell the honorable member that the Army can help in this matter, but I have inquiries afoot in relation to it. As the honorable member knows, the Army on many occasions has assisted, and is very willing to assist, in cases of dire emergency, but, of course, we have a very limited number of the Bailey bridges in Australia. Their principal purpose is for training young Army engineers and it is only in extreme circumstances that we use them for other purposes. If it is possible to do so, we shall certainly help in the way the honorable member asks. I understand that the present problem at Toowong has been brought about by some error of judgment on the part of the local government authority. However, that is by the way. If a dire emergency exists and we can help to relieve it. we will do so. T will let the honorable member know as soon as possible.

page 788

QUESTION

LAND SETTLEMENT OF EX-SERVICEMEN

Mr NELSON:
NORTHERN TERRITORY, NORTHERN TERRITORY

– I ask the Minister for Territories whether, in view of the decision of the Minister in charge of the war service land settlement scheme not to extend the provisions of the act to ex-servicemen in the Northern Territory he will now introduce a scheme similar to that recently brought into being in New Guinea under which ex-servicemen receive assistance along lines similar to the land settlement scheme now operating in the States of Australia.

Mr HASLUCK:
Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– As the honorable member for the Northern Territory knows, there are two credit schemes available in the Northern Territory at the present time, one designed for the resident pastoral lessee and one for the small agricultural enterprise. Although no advantage has been taken of the scheme for the pastoral lessee, considerable advantage has been taken of the scheme for the small agricultural enterprise. I will have the officers of the department examine the honorable member’s suggestion, in conjunction with officers of the other departments concerned, to see whether there is any way in which these credit schemes can be extended in order to help ex-servicemen and the agricultural development in the Territory.

page 788

QUESTION

TAXATION

Mr ERWIN:
BALLAARAT, VICTORIA

– Will the Treasurer consider the introduction of amending taxation legislation to provide for the granting of concessional rebates in respect of gifts to technical training institutions?

Mr HAROLD HOLT:
LP

– I can give the honorable member the same assurance as I have given to other members who have sought taxation relief in respect of matters which call for some consideration. That assurance is that, as we approach the time for the preparation of the Budget, submissions of this character will be closely examined against the background of the general economic circumstances of the country.

page 788

QUESTION

AUSTRALIAN AIRLINES

Mr MAKIN:
BONYTHON, SOUTH AUSTRALIA

– I desire to direct a question to the Prime Minister. Is it correct that Mr. Ansett, the head of certain airline interests, is to-day to interview the Prime Minister regarding the importing of another Electra aircraft? Will the Prime Minister safeguard the public interest by indicating that the future requirements of this airline organization shall not be allowed to cause the organization to incur any further obligation on public funds? Will not the right honorable gentleman agree that the time has arrived when this airline, which runs in competition with the Commonwealth’s own airline, Trans-Australia Airlines, must stand on its own feet? If funds are not being sought by the airline will the Prime Minister elicit the information as to how the purchase of this Electra aircraft is to be financed, and by whom?

Mr MENZIES:
LP

– I am sorry that my friend was put to the trouble of asking all that part of his question after the first sentence, because I am not seeing Mr. Ansett. This is a matter for my colleague, the Minister for Civil Aviation.

page 789

QUESTION

CYCLONE DAMAGE RELIEF

Mr LUCOCK:
LYNE, NEW SOUTH WALES

– I direct to the Prime Minister a question that is prompted by the fact that residents in certain areas of northern New South Wales early this week suffered serious loss through severe thunderstorms and cyclonic winds. Will the right honorable gentleman inform me of the conditions under which those who suffered may secure financial assistance in the provision of which the Commonwealth will participate?

Mr MENZIES:
LP

– Matters of this kind are dealt with in this way: The State Government reports the matter to the Commonwealth and indicates that it is prepared to make a provision for dealing with cases of personal hardship. It has been our practice to reply to that by matching that provision. In some circumstances other items can be looked at. I cannot say offhand what are the procedures for ascertaining the circumstances, but if it will assist the honorable member I shall have a precise statement on these matters prepared and made available.

page 789

QUESTION

CORTISONE

Mr BIRD:
BATMAN, VICTORIA

– I direct a question to the Minister for Health. Is the Minister aware that there is widespread concern among chronic asthma sufferers who are compelled to use cortisone to alleviate this distressing illness, at the high cost of this vital drug? Will the Minister take the necessary steps to secure the inclusion of this life-saving drug in the list of drugs provided free by the Government?

Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

– Cortisone and its derivatives are available as pharmaceutical benefits for treatment of the condition known as status asthmaticus. As the honorable member knows, it is not open to the Minister for Health to make additions to the list of pharmaceutical benefits unless such additions are recommended by the Pharmaceutical Benefits Advisory Committee, which consists of people in close touch with medicines and the practice of medicine. So far, the committee has recommended only that cortisone and its derivatives should be made available for treatment of this particular form of asthma, and until those gentlemen who are, I suggest to the honorable member, especially well-qualified to make the necessary judgment, recommend the inclusion of the drug for use in cases additional to those now covered, we have no power to include it in the list.

page 789

QUESTION

AUSTRALIAN AIRLINES

Mr FAIRBAIRN:
FARRER, NEW SOUTH WALES

– I direct a question to the Minister representing the Minister for Civil Aviation. It is supplementary to the question asked by the honorable member for Bonython. Is it a fact that the Ansett-A.N.A. airline has asked for permission from the Government to import an extra Electra aircraft? Is it also a fact that, in order to make this importation, the airline has cancelled an order for two Viscount aircraft, one of which is already partly built? If the Ansett-A.N.A. organization is allowed to purchase this extra Electra, will consideration be given to allowing Trans-Australia Airlines to purchase the Caravelle aircraft which it has always desired to purchase?

Mr TOWNLEY:
Minister for Defence · DENISON, TASMANIA · LP

– T think I must follow the line taken by the Prime Minister. I have no knowledge of this particular proposition, or of whether Mr. Ansett has approached the Government. The Prime Minister says that Mr. Ansett has not approached him. I undertake to convey the honorable member’s question to my colleague in another place and see that a reply is furnished to the honorable member.

page 789

QUESTION

CRICKET BATS

Mr McIVOR:
GELLIBRAND, VICTORIA

– Has the Prime Minister any knowledge as to the accuracy or otherwise of a report which is circulating to the effect that an official of the English cricket team, which recently visited Australia, brought illegally into this country a quantity of cricket bats which he then proceeded to retail to members of the Australian public? Is it a fact that the English official concerned and a formerly prominent Australian cricketer were interrogated by Customs officials regarding this matter? If the Prime Minister has no personal knowledge of the incident, will he have inquiries made and make the result known to the Parliament?

Mr MENZIES:
LP

– I have no knowledge of it. I shall tell my colleague, the Minister for Customs, about the question.

page 790

QUESTION

JURY SERVICE

Mr STOKES:
MARIBYRNONG, VICTORIA

– Is the Attorney-General aware that the schedule of exemptions from jury service set out in section 6 of the Juries Act 1956 of the State of Victoria does not include honorable members of this House or of the Senate, although members of both Houses of the State Parliament are expressly exempted? ls there any federal legislation which exempts honorable members from jury service in the States? If not, will the Attorney-General take action to correct this omission?

Sir GARFIELD BARWICK:
Attorney-General · PARRAMATTA, NEW SOUTH WALES · LP

– I am not sure whether the honorable member’s question is asked in the interests of litigants or in the interests of members. It raises a very pleasant prospect that litigants might have to litigate their affairs before some honorable members, and it also raises a very pleasant prospect for the Whips, in that, by dint of a jury summons, we could alter the majorities. However, I can assure the honorable member that the Commonwealth has paid attention to this matter and that there is a statute of this Parliament, the Jury Exemption Act, which saves senators and members of the House from the trouble of being summoned to serve on juries - and protects litigants.

page 790

QUESTION

LOBBYING

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– Will the Prime Minister examine the Hatch Act of the United States Congress to see whether Australia should follow the American practice of requiring lobbyists to register with the clerks of the House of Representatives and the Senate, to give .the names of their em ployers and the amount of their pay and expenses, and to file each quarter a sworn report of all money received and expended by them during the preceding quarter in carrying out their lobbying work?

Mr MENZIES:
LP

– I am indebted to the honorable member for the suggestion. I will have a look at it. I must say that, having regard to the description he gave, the name, Hatch Act, seemed to me to be singularly happy.

page 790

QUESTION

FLOUR

Mr THOMPSON:
PORT ADELAIDE, SOUTH AUSTRALIA

– My question is addressed to the Minister for Trade. Can the right honorable gentleman inform the House what is being done to implement the arrangements to export to Ceylon 100,000 tons of flour, and further quantities that he mentioned later, and particularly whether the millers have privately to make arrangements, if they can, with the Ceylon authorities for the sale of this flour, or whether the arrangements will be made through the Australian Wheat Board or some Government authority? I would point out that, in South Australia, there is great disappointment at the continuing deterioration of the flour-milling industry. The employees are much concerned, and wonder why they hear nothing at all about flour from the State being supplied, in view of the statements that we have heard about the sale of flour to Ceylon.

Mr McEWEN:
Minister for Trade · MURRAY, VICTORIA · CP

– I will try to get some specific information for the honorable member, although I think that the details will come from my colleague, the Minister for Primary Industry. Broadly, the fact is that, after negotiations on this matter were taken up with the Ceylon Government, that Government contracted to buy 30,000 long tons of Australian flour in the last calendar year, and did so. I assume that that flour has been delivered. Then, pursuant to the terms of the arrangement under which Ceylon was to buy at least 100,000 long tons of flour in each of the next two calendar years, a representative of the Ceylon Department of Commerce and Trade came to Australia in February, conducted negotiations with the Australian Wheat Board and signed a contract to purchase 50,000 tons of flour. That was done about three or four weeks ago, and the arrangement is that further negotiations will be undertaken, I think within two or three months, to dispose of the purchase of the second 50.000 tons of flour during this year.

Mr Thompson:

– Does the Minister know how it is allocated?

Mr McEWEN:

– No, I do not know that, but I do know that the Australian Wheat Board, on which there is a representative of the Australian flour millers, has been the negotiating authority.

I will consult with my colleague, the Minister for Primary Industry, and supply to the honorable member, who, I know, has always been very interested in this matter, details of the orders that have gone to South Australia as a result of these arrangements.

page 791

QUESTION

UNITED STATES DUTIES ON WOOL

Mr FAIRBAIRN:

– I desire to ask the Minister for Trade a question also. Is it a fact that Australia has a very adverse trade balance with the United States of America, and that part of the reason for this is the heavy tariff of 25 cents per lb. against Australian wool and another heavy duty against imported woollen cloth? Has the Australian Government put the strongest possible pressure on the United States Government to reduce or abolish these tariffs, as they appear to be killing the wool trade in the United States?

Mr McEWEN:
CP

– I do not know that the situation mentioned could be described as explaining the adverse trade balance with the United States of America, but the points that the honorable member has made are correct. There is a substantial duty against our wool, and a duty on woven woollen materials which recently has operated more severely against United Kingdom woollen manufacturers, I think, than against our own. The Australian Government has, over a long period - as, I would say, did our predecessors in office - made strong representations to the United States Government in respect of these wool duties. A reduction was negotiated by our predecessors in office, I think in 1946. There has never been any abatement of our effort to secure more advantageous entry of Australian woollens to the United States. We will continue that effort, but I am afraid that I cannot be optimistic at this stage.

page 791

QUESTION

WOOL INDUSTRY

Mr LUCHETTI:
MACQUARIE, NEW SOUTH WALES

– I ask the Prime Minister whether he will give a lead to the wool industry by convening a conference of representatives of wool-producing organizations with the object of achieving a uniform approach to the industry’s problems. Further, will the right honorable gentleman take .action to deal on a national basis with restrictive trading practices?

Mr MENZIES:
LP

– My colleague, the Minister for Primary Industry, of course, is in constant contact with all the organizations concerned. I do not at the present time see any reason for substituting my activities in that field for his. There is no lack of communication and co-operation with these organizations.

page 791

QUESTION

TELEVISION

Mr STEWART:
LANG, NEW SOUTH WALES

– My question is addressed to the Postmaster-General. Some months ago I asked the Minister whether any surveys had been undertaken by the Australian Broadcasting Control Board to ascertain the effects of television on the studying, reading and sporting activties of young children. Subsequently the Minister informed me in writing that various organizations were carrying out such surveys. I now ask him whether these surveys have been completed. If so, what were the findings, and will he make information obtained by means of these surveys available to the House?

Mr DAVIDSON:
Postmaster-General · DAWSON, QUEENSLAND · CP

– I remember the honorable member for Lang directing this question to me some time ago, and also my reply. This morning, he has asked me whether the surveys that I mentioned in my reply have been completed. My reply is that they have not been completed. In explanation of that statement, I should like to point out that the Australian Broadcasting Board has co-operated with certain research bodies in the universities of Sydney and Melbourne which are carrying out their own research into social problems. These bodies are looking into a number of problems associated with the development of television, The studies are of such a nature that they cannot be finished off in just a few months. They will be directed continuously to all aspects of the problems over a number of years.

At the same time, studies of other matters are proceeding. For instance, the effect of television on family life and habits is being studied, particularly in Sydney and Melbourne, where it is possible now to study the impact of television because of the knowledge of family habits before and since the introduction of television. It is proposed to carry these studies into rural areas when television is extended to those areas, and preliminary investigations are now being made of this aspect. It will be remembered that some time ago reference was made in this House by my colleague who is now the Minister for Immigration to a new feature that was being introduced into television, the use of what is called subliminal advertising. That also is a subject of the studies which these groups are carrying out as a result of co-operation between the university research bodies, the Australian Broadcasting Control Board and the Australian Broadcasting Commission.

The commission and the board are contributing certain funds for the purpose of these university studies. The position is that the studies are primarily carried out by the university groups, and such portions of their reports as have a bearing on the board’s operations or on the operations of television are made available to the board and are used by it in determining its attitude towards the various problems. For instance, already there has been an examination of the report on the effect of the normal type western film, as a result of which the board has been able to confer with the Commonwealth Film Censor as to what standards should be observed in the censoring of such films.

The honorable member will see, I hope, that this is not such a matter that I can say to him now, “ Here is a big report for you to read.” The studies are proceeding, and they will continue over a period of years. But any preliminary information that the board has is readily available to the honorable member. If he or any other honorable member wishes to look at such information as the board has. I will see that the opportunity is given to him to do so.

page 792

QUESTION

MEXICAN GUAYULE

Mr CASH:
STIRLING, WESTERN AUSTRALIA

– My question is directed to the Attorney-General, representing the Minister in charge of the Commonwealth

Scientific and Industrial Research Organization. Is it a fact that the production of rubber from the Mexican guayule plant, as envisaged by the Western Australian Government, would be more costly than production from present sources of natural and synthetic rubber? If the world demand for natural rubber decreases, is it a fact that the guayule plant, if commercial production were abandoned, could become a plant pest in Western Australia similar to the prickly pear and mesquite? «ir GARFIELD BARWICK.- I am sure that the honorable member will not mind my saying that I have never heard of this plant and that I have not much knowledge of world demand for rubber. However, I will certainly make due inquiry and let the honorable member know what I find out.

page 792

QUESTION

UNITED STATES DUTIES ON WOOL

Mr PETERS:
SCULLIN, VICTORIA

– I ask the Minister for Trade a question arising from the question asked by the honorable member for Farrer. In August last, I asked the Minister whether he was aware that vast quantities of synthetic fibres were being freely introduced into Australia from America to the detriment of our overseas dollar position and of our wool industry, and whether any action would be taken. The right honorable gentleman will remember that, in reply, he said that a group of people was advising the Department of Trade on this matter, that the Government was acting in accordance with directions and, in effect, that everything in the garden was lovely. Is the Minister aware that the chairman of the wool board, a Mr. G. Hunter, has pointed out that synthetics in vast quantities, bought with dollars borrowed from America, come into this country, free of all taxation, to the detriment of the wool trade? Will he do anything to prevent this unfair competition with both secondary and primary Australian industries?

Mr McEWEN:
CP

– The honorable member has reminded me of a question which he asked some months ago. I remember the question, but I do not think that my answer followed exactly the lines he has indicated. However, I do not want to argue on that. I shall put the honorable member right on one fact immediately: Mr. G. Hunter is not chairman of the wool board.

Mr Peters:

– Tell the “ Sydney Morning Herald” that!

Mr McEWEN:

– Well, you tell it. The chairman of the Australian Wool Bureau, which is the chosen body representative of the two major organizations of Australian woolgrowers - the Australian Woolgrowers Council and the Australian Wool and Meat Producers Federation - is Mr. William Gunn. The Australian Wool Bureau, if we are to speak of statutory boards, is clearly the body to express a view on such a point as that raised by the honorable member, but it has never suggested to the Government that a duty should be imposed on orion and similar fibres; nor am I aware that any authoritative body of woolgrowers has made such a suggestion. I do not brush off this issue; it is quite validly the subject of different points of view, but I point out to the House that, if there is one commodity which, in Australia’s interests, should have free access to all markets, it is wool. It is not consistent that we should obstruct the entry to our market of a competitor for wool and at the same time argue that no country should obstruct the entry of our wool to its market.

This is, I will admit, a controversial issue and not an easy one to decide. However, 1 put this to the House: If, for instance, Japan, which may well develop as a highly important supplier and exporter of synthetics, were to find that we had placed an embargo on or raised an impossible barrier against the entry of synthetics from Japan to this market of 10,000,000 people, how could we complain if Japan then raised a similar barrier against the entry of Australian wool to her market, not only for her 90,000,000 peoples but for the great re-export trade which Japan has in wool? I make it quite clear to the House that this is not an easy matter, and there is no evidence that the Australian wool industry, which is very conscious of all these things, believes that in the long term, it would be in its interest to support this kind of competitive exclusion of textile fibres.

Finally, if there ought to be a duty on these yarns or fibres, then it is competent for those who regard their interests as at issue to ask for a hearing before the Tariff Board, and their request would be granted immediately. That is the way Australian tariff adjustments are made and, in the opinion of the Government, that is the way they ought to be made.

page 793

QUESTION

BROADCASTING

Mr TURNBULL:
MALLEE, VICTORIA

– I direct a question to the Postmaster-General. As the Minister is aware, the broadcast interviews conducted by rural officers of the Australian Broadcasting Commission are appreciated and are of value to primary producers. To render this service successfully, rural officers have to cover great distances. Will the Postmaster-General give consideration to supplying motor vehicles for the transport of these officers so that this rural service may operate at the highest level of efficiency?

Mr DAVIDSON:
CP

– Actually, my friend, the honorable member for Mallee, has asked me for something which is rather outside my sphere or capacity. As he knows, the Australian Broadcasting Commission has its own authority under the Broadcasting and Television Act and, apart from the fact that I am responsible for putting its annual proposals to the House, the commission itself decides how the money made available to it in each year shall be expended. This question of the supply of motor vehicles to rural officers who have to travel considerable distances in rural areas collecting information and news has been engaging the attention of the commission, and I have had quite informal discussions about it with the chairman of the commission. I know that the A. B.C., sets out to provide its rural officers with adequate means of transport so far as it can within the limit of its own finances. The honorable member can be assured that this matter has been under consideration, and will continue to receive consideration from the commission.

page 793

QUESTION

WOOL

Mr POLLARD:
LALOR, VICTORIA

– I preface a question to the Prime Minister by directing his attention to the fact that official figures published to-day indicate that in the last seven months, Australia’s export income from wool has fallen by £75,000,000 compared with the income for the corresponding period last year. In view of that fact, and in view of the fact that decisions reached by the Australian Woolgrowers’ Council on 28th February indicate that it is engaging in procrastination and delaying tactics concerning a decision of the wool- growers as to whether they want a change in the wool selling system, will the right honorable gentleman convene or arrange for a conference of State Premiers or a meeting of the Australian Agricultural Council so that action may be taken urgently in the national interests to remedy this disastrous state of affairs?

Mr MENZIES:
LP

– I always regard any proposal put forward by my honorable friend with great interest. I do not go beyond that. I will think about what he said.

page 794

QUESTION

OVERSEAS TRADE

Mr FORBES:
BARKER, SOUTH AUSTRALIA

– My question is directed to the Minister for Trade. Is the Minister aware that the New Zealand Dairy Products Marketing Commission has arranged a direct shipping service from New Zealand to South America every two months for dairy produce in an endeavour to foster the kind of market that can only be established when a regular shipping service is in force? Will the Minister investigate the possibility of arranging for a similar regular shipping service from Australia to this potentially important market in South America?

Mr McEWEN:
CP

– I can inform the honorable member that, not particularly in respect ‘ of dairy produce, but generally, in the hope that Australia’s trade with South America may expand, some investigations and inquiries are proceeding at the present time - largely on my own suggestion - by officers of the Department of Trade to discover what better regular shipping service may be arranged from Australia to South American ports.

page 794

QUESTION

ARMY PAY AND ALLOWANCES

Mr BARNARD:
BASS, TASMANIA

– Can the Minister for the Army inform the House whether a committee has been set up to consider the pay and retiring allowances of permanent members of the Australian forces? Will the Minister advise me whether that committee, if it has been set up, has considered this matter, and if so, when its findings will be made public?

Mr CRAMER:
LP

– I think that the honorable member knows that a committee is actively considering this matter at present. The result of the committee’s consideration is not yet available.

page 794

QUESTION

TELEVISION

Mr COPE:
WATSON, NEW SOUTH WALES

– Is the Postmaster-General aware that some sponsors of television programmes are using canned advertising material, imported in the main from the United States of America? Two such programmes are sponsored by “ Marlboro “ cigarettes and “ Sunbeam “ electrical appliances respectively. Does the honorable gentleman agree that this practice, if allowed to extend, could be detrimental to many Australians engaged in the advertising industry?

Mr DAVIDSON:
CP

– The honorable member’s question raises a subject that has been discussed quite often in this House, namely, the use of Australian-produced film material and advertising material in television programmes. As I have said before, this is a matter-

Mr Cope:

– I was not referring to programmes. I was concerned with television advertising.

Mr DAVIDSON:

– The two kinds of material are interlocked. As far as advertising alone is concerned, I can inform the honorable member that my latest advice is that practically all of the film material required for advertising is produced in Australia. If the honorable member knows of some instances where this is not so, and gives me definite details, I shall have inquiries made.

The problem of providing material for use on television can only be solved by establishing conditions in which the Australian content of programmes can be steadily increased. A continuous effort to achieve this is being made by the Broadcasting Control Board and, in spite of what some honorable members opposite have said from time to time, it is also the concern of the television station licensees. I point out to honorable members that as the use of television extends, so the market available extends and the advertising value of the medium extends. This, in turn, will afford more scope for the building up of an Australian industry that will enable costs to be reduced and more people to be employed in the industry. These results can be achieved by maintaining steady progress; they cannot be achieved in a moment.

page 795

QUESTION

TELEPHONE SERVICES

Mr CASH:

– I ask the PostmasterGeneral a question. Will the honorable gentleman consider giving new schools a higher priority for telephones than is given to them at present?

Mr DAVIDSON:
CP

– The question of the supply of telephones to schools, particularly country schools, has engaged the attention of the Postal Department from time to time. Certain priorities are laid down for the installation of telephone services and top priority is given to such essential users as doctors, hospitals, nurses, the Red Cross and ambulances.

Mr Menzies:

– And members of Parliament.

Mr DAVIDSON:

– Yes, members of Parliament as well, because many members make application to me for the urgent installation of telephones, and those requests are always met by the department. However, the normal procedure in relation to schools is that the committee which is generally responsible for handling the affairs of a school applies for a telephone and looks after it when it is installed. I cm assure the honorable member that, conditional upon the availability of such things as cable, overhead lines and exchange equipment in the area, the department will sympathetically consider any application for a telephone to be installed in a school.

page 795

QUESTION

COMMONWEALTH EMPLOYEES’ COMPENSATION

Mr HAROLD HOLT:
LP

– Mr. Speaker, could I answer, very briefly, a question which the honorable member for Werriwa asked without notice on 11th March? The honorable member will recall having asked me about payments under the Commonwealth Employees’ Compensation Act for hospital treatment. I have made some inquiries and it would appear that the honorable member has been misled. There is no ruling - to quote what he said at the time - “ that an employee must not be paid more than public ward rates, even if his doctor can secure prompt and proper treatment only in a private or intermediate ward “. In the only recent ruling on this subject, the commissioner advised his delegates that payment of any increased costs due to the admission or transfer of an employee to an intermediate or private ward should be authorized only if treatment in such a ward is reasonably necessary in relation to the injury or the disease suffered by the employee, that is, where suitable treatment cannot be given in a public ward or where public ward accommodation is not available. I think it follows from the commissioner’s ruling that, in those circumstances, treatment in the other type of ward could be paid for.

page 795

SPECIAL ADJOURNMENT

Motion (by Mr. Harold Holt) agreed to -

That the House, at its rising, adjourn until Tuesday, 7th April, at 2.30 p.m.

page 795

NORTHERN TERRITORY (ADMINISTRATION) BILL 1959

Motion (by Mr. Hasluck) agreed to -

That leave be given to bring in a bill for an act to amend the Northern Territory (Administration) Act 1910-1956.

page 795

NORTHERN TERRITORY REPRESENTATION BILL 1959

Motion (by Mr. Hasluck) agreed to -

That leave be given to bring in a bill for an act to amend section five of the Northern Territory Representation Act 1922-1949.

page 795

COMMONWEALTH BANKS BILL 1959

In committee: Consideration resumed from 17th March (vide page 698).

The bill.

Mr CREAN:
Melbourne Ports

– This is the second of the measures dealing with the dismembering of the existing structure of the Commonwealth Bank. This bill, as it were, cuts up the body into three sections, although admittedly they will remain under one corporation. The three sections are the Commonwealth Trading Bank, the Commonwealth Savings Bank and the new institution to be called the Development Bank. All these will be embraced under one general management but, underneath, will be a hierarchy of boards and executive committees which it is rather difficult to follow. I am sorry that the Treasurer (Mr. Harold Holt) did not have mimeographed the very convenient plan in which the former Treasurer had this new organization displayed in his office. On one occasion, he showed me on his wall a chart which showed quite clearly the structure and management and committees of the new banking corporation.

The Opposition believes that whilst the new Commonwealth Banking Corporation will be a vigorous body, it will not be in a position to perform as efficiently under the new management as it did under the old. We repeat our view that the central bank activities which are no longer contained within this structure will suffer because they have been severed from the new corporation.

During the last debate, Mr. Chairman, a great deal seems to have been expected by Government members from this new body, the Development Bank. As Opposition members stated in their second-reading speeches, we believe that this organization, as it is now set up, is, in a sense, not a bank at all. In fact, certain back-bench supporters of the Government have done their best to restrict its activities as a bank. In a sense, this body will be only a lender. It will have very few sources of new finance other than the £5,000,000 that is being provided under this legislation. It is true that it will take over the existing assets - and of course the existing liabilities - of the Industrial Finance Department and the Mortgage Bank Department. Their assets, 1 think, aggregate £15,000,000 at the moment, but, for the most part, that £15,000,000 is already utilized. Therefore, the new money will be only in the region of £5,000,000. It is hard to know how this very limited amount will be able to perform the functions that the Australian Country party and some Liberal members believe that this new Development Bank will perform.

There is not any doubt that, historically, there is a considerable gap in the Australian financial structure in the provision of what is relatively long-term credit for rural activities and for new industrial ventures. It is a gap that occurs in other economies, as well. Many years ago there was a monetary inquiry in Great Britain. I think that the name of the present Prime Minister of Great

Britain attaches to the phenomenon that was pointed to there - what is popularly called the “ Macmillan gap “. This is a gap in the structure of financial institutions in the providing of finance for undertakings that can be expected, over a long term, to be successful, or rural undertakings that can be expected over a period of years to be productive but which may not immediately give any great returns. That sort of gap was pointed to by the Rural Reconstruction Committee which sat in Australia during the 1940!s. As recently as December, 1956, in the “ Review of Marketing and Agricultural Economics “ published by the New South Wales Department of Agriculture, an observation is made in an article on rural credit policy for rural development by P. C. Druce, the principal economics research officer for the New South Wales Department of Agriculture.

He said -

That there should be doubts about the adequacy of existing rural credit facilities in Australia is hardly surprising in view of the fact that the credit structure has remained largely unchanged since Federation.

Recently, Dr. Coombs, in a paper which was delivered at the 1959 annual conference of the Australian Agricultural Economics Society pointed also to the situation as he finds it in Australia at the moment. He said -

The real question of the adequacy of rural credit is therefore one of deciding whether rural industries get a reasonable share of the available resources or whether a greater increase in productivity could be obtained by diverting to the rural economy some of the credit at present provided for other sections of the economy.

He points out, as must be observed in an economy where all the resources are being fully utilized, that it might be possible to give additional credit to the rural side of the economy only at the expense of the other side of it. But whether that is the circumstance in Australia at the moment is arguable. He went on to say -

There does seem to be some weakness in the Australian rural credits system when it comes to the provision of finance for farm improvement, development and for increasing productivity. I believe there is, therefore, need for a specialized institution or institutions designed to satisfy this need. It will not, however, bc a simple institution to administer.

I think those words were quoted by the honorable member for Mitchell (Mr. Wheeler) the other evening. I commend the Governor of the Commonwealth Bank for occasionally making statements as he does about the functioning of banking in this country. I am pleased that the Prime Minister (Mr. Menzies) at least answered the criticism that was raised by members on the Government side that “ public servants “, as they call them, should be making important statements. The Governor of the Bank is in a particular and peculiar position which nobody else enjoys, and he is able to provide often illuminating information for the benefit of all sections of the community. I trust that instead of retreating further into his ivory tower he will come out more and more in the making of public statements apart from his annual report. In this lecture he said -

It may be that the new Development Bank proposed by the Government will be able to contribute to the filling of this gap. I hope, however, that too much will not be expected of it.

I direct the attention of the honorable member for Wannon (Mr. Malcolm Fraser) to that.

The CHAIRMAN (Mr Bowden:
GIPPSLAND, VICTORIA

Order! The honorable member’s time has expired.

Mr FORBES:
Barker

.- I regret that the honorable member for Melbourne Ports (Mr. Crean) did not have time to finish, because I was enjoying his remarks very much as I agree with most of what he said. I do not know what conclusion he will come to. We will have to wait to hear it. I would say that the Rural Reconstruction Commission to which he referred and which recommended the establishment of an institution, pointed out, first of all, the existence of a gap in the credit structure of the rural sector of the economy. That commission was set up by a Labour government. Although it made that recommendation in its report published as early as 1944 or 1945, no provision for the rural sector of the economy was made in the very extensive banking legislation which was introduced by the Labour government between 1945 and 1949.

Mr Crean:

– There was, of course, the Mortgage Bank Department of the Commonwealth Bank.

Mr FORBES:

– It established that department. To me the important part of the Development Bank activities is the terms on which credit will be made available.

Clause 73 of the bill which has been included only in respect of the Industrial Finance Department, provides that - (1.) In determining whether or not finance <shall be provided for a person, the Development Bank shall have regard primarily to the prospects of the operations of that person becoming, or continuing to be, successful and shall not necessarily have regard to the value of the security available in respect of that finance.

That clause was taken more or less holm bolus out of the previous legislation relating to the Industrial Finance Department of the bank. It was first included by the Australian Labour party in its banking legislation, I think in 1945. Not only did the Mortgage Bank Department have very small capital, but that particular provision was not included in respect to it. Although the Mortgage Bank Department provides longterm finance, it maintains the same security requirements which are asked by the trading banks in making either short or longterm loans. That is why I feel it is worth while emphasizing the importance of the Development Bank to the rural sector. Admittedly, it applies also to exactly the same degree to industrial undertakings to which it applied in that respect previously through the Industrial Finance Department. In this legislation that important principle has been extended by clause 73, which I have just quoted, to the rural sector of the economy.

That, to me, is vitally important. It justifies our describing the Development Bank as introducing a new era in the sphere of rural credit). Despite statements to the contrary, ! am sure that some ‘metropolitan members of this committee, some of them among my colleagues, are doubtful of the wisdom of setting up the Development Bank. I have heard honorable members opposite, particularly the honorable member for East Sydney (Mr. Ward), make the point that the Development Bank, according to its definition, will have as customers the nohopers, the bad risks, and it will necessarily become the subject of log rolling or boondoggling. I cannot see why it should. The difference in the organization of the structure of primary industry compared with that of secondary industry must always be borne in mind in considering this matter.

The structure of secondary industry is such that it can generally raise capital on the open market for its developmental needs. Only a very small sector of rural industry does that. By far the overwelming proportion of rural industry has a structure which makes it impossible, for it to raise its developmental capital in that way and, therefore, it has to turn elsewhere for developmental capital. If we take the analogy a little further, we may ask: What criterion does the investor adopt when declining to take up ordinary shares designed to enable a company to expand or develop its operations in industry? Does he try to make sure that if the company goes broke he will get his money back? Of course he does. He concentrates on the earning capacity of the development project and the skill of the management. Surely that is precisely what the Development Bank is designed to do. I do not believe that it will lend money to a no-hoper or a farmer who is likely to go broke any more than it will to an investor in a company that is likely to go broke. The whole tradition of the Mortgage Bank Department and the Industrial Finance Department of the Commonwealth Bank lead us to believe that a prudent policy will be followed. I do not think that any of us on this side of the House would seriously suggest that the Development Bank should do otherwise. All we say is: Let us adopt a different standard of security requirements in relation to developmental projects. Security would still be required, but instead of the borrower having to have the security in assets and cash, let the security be the income which will come from the development financed by the loan. In other words, the bank backs the skill and the character of the person concerned, together with the soundness of the project for which he asks finance. If the project is not sound, the loan is not granted. That is the point which was made very clearly by the honorable member for Wannon (Mr. Malcolm Fraser), and I agree with everything he said.

I think we would be failing in our responbilities if we were to suggest that the Development Bank should provide finance for development purposes in the rural sector for projects not likely to succeed. Every one of us who represents a rural electorate can testify to the fact that there are perhaps hundreds of projects in each electorate which meet the sort of criteria that would be required by the Development Bank before making a loan. They are sound projects that are waiting to be undertaken as soon as the finance is available on the kind of terms which, I hope, will be available from the Development Bank. There are plenty of such sound projects available without the bank’s having to take chances on projects that are quite unlikely to succeed - the shaky sort of projects which many people seem to believe the bank will finance. I should like to say, Sir, that I fully support the establishment of the Development Bank.

The CHAIRMAN:

– Order! The honorable gentleman’s time has expired.

Mr CREAN:
Melbourne Ports

– If I may complete the quotation from the statement by Dr. Coombs that I was giving earlier, I think it may add to the understanding of the honorable member for Wannon (Mr. Malcolm Fraser) of this matter. The quotation continued -

I hope, however, that too much will not be expected of it.

He was referring to the Development Bank. I ask the honorable member for Wannon to mark that. Dr. Coombs went on to say - and I think this ought also to be noted -

Although I believe that this specialized task calls basically for a specialized institution there is still much that can be done within the structure of the existing banking system.

That is the belief of this side of the House - that you do not need to create a separate Development Bank. Nobody is questioning the need for a new kind of financing method, or a new kind of approach, but I suggest that, if certain objectors on the Government side to the scope of this Development Bank were to examine their hearts closely they would agree that what they really object to in this new institution is, as it were, the new concept of banking under which the existing assets of a borrower will not be the test of whether a loan is made, and loans will be made on the basis of faith and hope, perhaps tinged with a little charity. This is an entirely new concept, different from that adopted normally by bankers.

The honorable member for Barker (Mr. Forbes) referred to rural reconstruction and asked us why we did not alter our legislation in 1945 to provide for this kind of financing in the rural sector. There are several answers to that question. First, the Mortgage Bank Department of the Commonwealth Bank was created at that time and, secondly, the war service land settlement scheme was then being inaugurated and was placing a heavy burden upon the existing financial capacity. The Labour government had its hands full with that scheme, which took a long time to come to fruition, as honorable members know. In 1945, the Rural Reconstruction Commission pointed out something which I think is still true. It said -

In this regard the Commission is of the opinion that the trading banks do not give sufficient consideration to -

projects which are in the development stage;

farmers with small capital resources;

the tenant-farmer and the share-farmer.

I suggest that the strictures that are made there with regard to farming can also be made in the industrial field with regard to small entrepreneurs. They, too, do not get the sympathetic consideration that they ought to get from the banking system, the reason being that their prospects are greater than their assets. The point is that if this great need existed then, it still exists, as honorable members have stated. Does anybody think that the Development Bank, as envisaged in this measure, with its limited initial capital, its limited right to increase capital, and its inability to augment its resources through the normal channels open to any other bank, can obtain the money that will be needed? Bankers always claim that all they really do is lend other people’s deposits; but this legislation will virtually restrict the access of the Development Bank to deposits. Where is the money to fill this great gap to come from? With all respect to the provision which will allow the appointment of trading banks as agencies of the Development Bank, I doubt whether this is the proper approach to the problem.

I was rather interested to read of the experiments, as Dr. Coombs called them, that the trading side of the Commonwealth Bank has undertaken in New England and Queensland. Dr. Coombs said that the bank had taken ten dairying properties and eight pastoral properties which it believed capable of development. It had chosen the people carefully, and had made advances averaging only £500 to the dairy-farmers, but nearly £25,000 to the pastoralists. He said that so far the experiments seemed to be going successfully. I suggest that something similar could be undertaken by the private banks with regard to that kind of activity, and that a new kind of organization is not really needed. All that is needed is this combination of faith, hope and a little charity, and the taking of such risks as the private banks have always said they are willing to take, but actually eschew as often as they can. What will be the nature of the transactions envisaged for the Development Bank? The honorable member for New England (Mr. Drummond), who, I hear, is unfortunately ill, cited the Canadian Industrial Development Bank, which is not a rural bank but a bank for industrial development. That bank’s last annual report, which is for the year ended June, 1958, shows that during the year it made 564 new loans, totalling nearly 36,000,000 dollars. The important point about it is that the average loan was over 70,000 dollars, so it is not small stuff that is being handled. Of those loans 234 were under 25,000 dollars, which is approximately £10,000 Australian, but 330 of them were in excess of that sum. So the Canadian organization, which was cited as an example of what this Development Bank might be, is not a small undertaking. I do not know what sort of client will be fostered by the Development Bank, as it is envisaged by the Country party and by country members of the Liberal party. After all, in Australia to-day, when we leave dairying and get into the field of pastoral undertakings, even £10,000 does not go very far. It takes quite a sum of money, as the soldier settlement schemes show, to settle one man on a farm that can yield him an income which will provide him with a reasonable standard of living.

Government supporters ought to have given us more illustrations of the kind of projects likely to be fostered by this bank. I think the words of Dr. Coombs ought to be noted, and not just observed critically, as they were by the honorable member for Mitchell (Mr. Wheeler). Dr. Coombs said, “ It will not be a simple institution to administer. I hope too much will not be expected of it.” He pointed out that the fruits are not likely to be immediate and that it might be some years before one could point to anything and say that it flowed from the bank. 1 also stress to the committee and to the private banking institutions that Dr. Coombs believes that more can be done within the structure of the existing banking system for the kind of project that can be embraced by the Development Bank. We do not deny the need for finance and credit to be given to certain kinds of institutions and people in the community, but we do deny the need to create a new organization altogether. Much more could have been done within the old structure of the Commonwealth Bank. A great deal was done by the Industrial Finance Department and the Mortgage Bank Department for small people beginning to make their way in projects which would ultimately be successful, although not bearing positive fruits for a few years. Such people have to be given some kind of assistance to carry on. The old banking practice has largely been that if one is already in possession of assets he can get a loan, but the man who can bring along only willing hands, a strong back and, in these days, a certain amount of machinery, does not necessarily get assistance, although in the long run he may be the man who is most worthy of it. Therefore, the new approach to banking is to be welcomed. It is not that loans should be given to the already reasonably successful but that they should be given to those persons who can convince the organization that they will be successful. At least, this indicates a new approach to banking and I suggest that, basically, that is what some of the critics fear most.

The CHAIRMAN:

– Order! The honorable member’s time has expired.

Mr HAROLD HOLT:
Treasurer · Higgins · LP

– I thank the honorable member for Wannon (Mr. Malcolm Fraser), who received the call before me, for allowing me to precede him. It may assist his own discussion of this matter if I explain in rather more detail than was possible in the course of my second-reading speech some of the aspects which the Government sees in the proposed Development Bank. The other clauses of the bill before the committee are much more familiar to honorable members. The Development Bank, which has attracted most of the discussions so far. is the novel aspect of this measure, and I want to comment in quite some detail upon it.

Basically, the Development Bank will be an amalgamation of the Mortgage Bank and Industrial Finance Departments of the Commonwealth Bank. It is, however, to be provided with additional capital of £5,000,000, and it is to have functions that are different from those of the Mortgage Bank and industrial Finance Departments in some important respects. The present Mortgage Bank Department has power to make a loan to a primary producer on the security of land. I would like to remind the committee that the legislative provisions relating to the making of such loans, as they have been made in the past, are that the borrower must use the loan in connexion with his operations as a primary producer; a first mortgage over the land must be provided as security; a loan may not be made for a period of less than five years or more than 41 years; the maximum amount of a loan is 70 per cent, of the bank’s valuation of the land or £10.000, whichever is the less; and repayment must be effected by equal half-yearly instalments of principal and interest, subject to certain provisions relating to repayment before maturity.

The present Industrial Finance Department has a statutory function of providing financial and other assistance “ for the establishment and development of industrial undertakings, particularly small undertakings “. The department has power to provide finance for these purposes on such terms and conditions as it determines, subject only to the following: First, the department may not provide finance unless it is satisfied that the industrial undertaking being assisted has reasonable prospects of continuing to be, or of becoming, a profitable undertaking; and secondly, in determining whether or not to provide finance, the department is required to have regard primarily to the prospects of the industrial undertaking continuing to be, or becoming, a profitable undertaking, and not necessarily to have regard to the present value of the assets of the undertaking.

The functions and responsibilities of the Development Bank are defined with greater precision than those of the two existing departments which I have just mentioned. The statutory functions of the Development Bank, apart from the provision of technical advice, will be to provide finance to primary producers and to industrial undertakings, particularly small undertakings, in cases where, in the bank’s opinion, provision of the finance is desirable but would not otherwise be available on reasonable and suitable terms and conditions. In other words, the Development Bank’s role will be to supplement, but not to take the place of the other sources of financial assistance that are available to primary producers and industrial undertakings through ordinary commercial lending institutions. Further, the Development Bank will be prohibited under the bill from providing finance for the purchase of goods otherwise than for use in the course of the borrower’s business, and all of its resources will therefore be devoted to productive purposes.

Within these limitations, which are designed to keep the Development Bank to its given field, the bank will have ample opportunity for worthwhile service to -the community, particularly to those persons who would have good chances of making a success of a farming or industrial venture but who lack sufficient security to obtain initial finance through the usual channels. With this kind of person in mind, it is provided that the Development Bank shall, when determining whether or not to make a loan, have regard primarily to the prospects of the borrower’s operations being successful and shall not necessarily have regard to the security available. This, I suggest, closes, to some extent at any rate, the gap which exists in our banking structure at the present time. In order to permit the Development Bank to adjust the terms and conditions of its lending to particular requirements, the bank is not made subject, as the Mortgage Bank Department now is, to restrictive provisions relating to the types of security it may accept or the period and maximum amount of loans it may provide. This freedom should enable the Development Bank to provide a wider range of assistance in the agricultural field than can be provided by the present Mortgage Bank Department.

The capital funds of the Development Bank, on its establishment, will consist of the capital and reserves of the Mortgage Bank and Industrial Finance Departments, amounting to some £15,000,000 on the basis of June, 1958. figures, plus an additional £5,000,000 of capital to be provided by the Reserve Bank. The Government has already stated that it will watch the position closely from the viewpoint of the possible need for a further increase in the bank’s capital later, in the light of the bank’s operating experience. Like the Mortgage Bank and Industrial Finance Departments, the Development Bank will retain all its profits and will not be subject to income tax.

The bank will have an appropriate place within the structure of the banking system and will be endowed with the banking powers and the resources necessary for it to carry out its allotted functions. The provisions which have been made for these purposes have been misconstrued in some quarters and have given rise to representations from the private banks. In general terms, the fear has been expressed that the Development Bank will be endowed with excessive powers and privileges and that it could step outside its given role and become a serious competitor with the private banks on unfair terms. More particularly, criticism has been directed at its unrestricted power to accept deposits from the public and its freedom from the reserve deposit provisions of the Banking Act and from the limitation to be imposed by that act on the amount that a savings bank may deposit with trading banks. Accordingly, suggestions have been made to the effect that some specific restriction should be placed upon the level of deposits that it may accept and/ or the total level of its advances.

The general answer to this kind of criticism is that, although the Development Bank is established -as a bank, with the normal banking power to accept deposits - this is necessary for constitutional reasons into which I shall not go in detail, because I think that most honorable members are familiar with that problem - it is precluded by the terms of the bill from exercising its banking powers except in the performance of its statutory functions, and, as I have indicated, these functions are precisely defined in the bill. Moreover, apart from the reserve deposit provisions, the Development Bank will be subject, under the Banking Act, to the same central banking controls as are the trading banks. These controls include those that relate to advance policy, interest rates, the protection of depositors, the provision of statistics, investigations by the Auditor-General, and the supply of information to the central bank.

The following further comments are applicable to the more detailed points of criticism that have been made. Dealing with the power to accept deposits: Although it has been necessary to give the Development Bank the power to accept deposits, it is not expected that it will either attract deposits from the public on any significant scale or seek to rely on such deposits as a major source of funds. Because its loans will mostly be made on a long-term basis, it would be inappropriate for it to rely on such funds. In any event, it is unlikely that the Development Bank, which will not be able to offer the wide range of facilities to depositors that trading banks provide, will be able to attract deposits from the public to any significant extent.

As to its freedom from the reserve deposit provisions of the Banking Act: The Development Bank will not be subject to the reserve deposit provisions of the act. It has not been made so liable because it will be a special institution, quite unlike trading banks as they are generally understood, and the level of any deposits with it will not be affected to anything like the same extent by the influences that cause the trading banks’ deposits to rise and fall. Its business could be inconvenienced without warrant, if, for instance, it were required to participate in a call to reserve deposits brought about through an increase in trading bank deposits in which it did not participate.

As to its borrowing powers: Like any other bank, the Development Bank will have fairly wide borrowing powers. It will, however, require the Treasurer’s consent to any borrowings in excess of £2,000,000 from the Reserve Bank and to any borrowings from overseas. And as to this latter, it is the normal practice, as honorable members are aware, for borrowings overseas to have been given the prior approval of the Australian Loan Council, on which all the State Premiers are represented. With regard to the making of loans to the Development Bank by the Reserve Bank, it is to be remembered that, under the provisions of the Reserve Bank Bill, the Reserve Bank will be able to make loans to the Development Bank, or to any other bank, only for central banking purposes. In other words, the Reserve Bank will be able to make such loans only in the traditional central bank capacity of lender of last resort, if they are needed for the purpose of supporting a bank’s liquidity position. It has always been the intention that the Development Bank would, like other banks, be able to call on the Reserve Bank only if there arose a need for its liquidity to be supported, and the Government is satisfied that the provisions in the legislation relating to such borrowings go no further than to give effect to this intention. In relation to borrowings by the Development Bank from the Treasurer, the Treasurer’s power to make loans to or deposit moneys with the bank will be subject to the appropriation of moneys by the Parliament for the purpose.

Then there is the point about freedom from application of the formula in the Banking Act limiting the amount of deposits a savings bank may lodge with a trading bank. The Development Bank is not, by its nature, a trading bank. Further, it will undoubtedly have to look to the Commonwealth Savings Bank as a major source of borrowed funds. It will inherit from the Industrial Finance Department an initial indebtedness to the Commonwealth Savings Bank of some £16,000,000 to £17,000,000, and it could be virtually crippled from the outset if it were classed as a trading bank for the purpose of the formula. The application of the formula, as honorable members will recall, means, on present figures, that the Commonwealth Savings Bank would be able to have approximately £20,500,000 on deposit with trading banks. As the Commonwealth Savings Bank, as a matter of necessary convenience, holds some £8,000,000 with the Commonwealth Trading Bank to compensate the latter for providing till money, officers’ homes advances and clearing facilities, it is clear that the funds available to the Development Bank would come under immediate pressure if the formula were applied to Commonwealth Savings Bank loans to that bank.

The bank has been freed from taxation and provision has been made for it to retain its profits. It is placed in the same position in these respects as are the present Mortgage Bank and Industrial Finance Departments. Having regard to the nature of the Development Bank’s charter and its essentially non-competitive role, the Government has decided that it should be permitted to retain all its profits for the purpose of financing the expansion of its operations.

The comment has been made that the Development Bank is, in effect, being provided with a gift of £20,000,000 from public funds with which to start its operations. The bank will take over the capital and reserve funds of the Mortgage Bank and Industrial Finance Departments, amounting to a total of £14,900,000 as at 30th June, 1958. It will take over, also, outstanding loans by the two departments, amounting to £32,200,000 as at 30th June, 1958. And the legislation provides for £5,000,000 of additional capital for the bank to be supplied by the Reserve Bank.

As a. final safeguard against the possibility that the Development Bank may discriminate between the trading banks in the choice of its agents, it has been provided, in clause 83, that any trading bank which so desires shall be appointed as an agent of the Development Bank for the receipt and transmission of applications for assistance. This provision is consistent with the whole concept of the Development Bank, namely, that it should supplement and not replace other forms of lending. It should ensure the continuance of present arrangements whereby the trading banks commonly refer to the Mortgage Bank and Industrial Finance Departments applications which are not suitable for trading bank loans, but which the trading banks feel would be considered by more specialized institutions.

Mr. Chairman, I have offered these explanations because I think they meet substantially criticisms which have been directed to the role of the Development Bank, criticisms which in most instances have been based either on imperfect knowledge or a misconception of the Government’s policy in relation to this institution. We think, as other speakers have said, and as I mentioned earlier in the course of my own comments, that this Development Bank will fill, to a degree at any rate, a gap which has existed for some time now in the facilities available through the financial institutions of this country.

It is prudent, I believe, to express some cautionary word as to the role it has to perform. I do not think it will be able to do all the things that some of the more optimistic commentators have suggested. On the. other hand, I feel confident that it will be able to go a good deal further than the two institutions which are being absorbed in the process of the legislation before us.

Although in my comments I have referred to some criticisms which have come from the private banks, it would be quite a wrong assessment of the attitude of the private banks generally to believe that they are opposed to this institution. They have not expressed themselves, so far as I am aware, to the Government as being opposed to it, and, indeed, comments which their spokesmen have made and which have been published from time to time make it quite clear that they recognize the value of an institution of this kind. They see that it can function usefully as a supplement to their own banking activities, and their concern has been not that the Development Bank should exercise a useful role in filling the gap between what they are able, to do at present and what others may desire from the banking system. Their concern has been lest the Development Bank will depart from that role and, in effect, become just another bank in competition with them, but on rather more favorable terms.

It might be worth mentioning in this connexion, as an illustration of the general attitude of the private banking representatives, that earlier this year at the summer school of the Adult Education Board of the University of Western Australia, Mr. F. A. S. Holt, who, while enjoying the same name as myself does not possess any blood relationship so far as I am aware, delivered an interesting address, entitled, “ A Banker Speaks “. He analysed the present role of the private banks, and time will not permit me .to go into the details of his analysis.

Mr Crean:

– Was he for ‘em or agin em?

Mr HAROLD HOLT:

– He was a representative of .the private banks, of course. After speaking of that role he made this general observation -

Short term finance on a reducing basis is therefore the primary role of the Trading Banks in all forms of lending including that for rural industry.

He had earlier referred to some of the limitations which exist on the capacity of the private banks to lend long-term to those engaged in rural industry. At a later stage in his comments he said -

From the list just given of the sources of finance for rural industry it will be clear that adequate arrangements for long-term loans for development purposes are conspicuous by their absence.

He said later -

A suggestion which has much to commend it is that a Development Bank such as is envisaged in legislation now under consideration by the Commonwealth Government should undertake the responsibility for providing long-term finance for rural development, using funds from Government sources.

I have quoted his remarks because I believe them to be reasonably typical of the general attitude of expert representatives of the private banks, who see this Development Bank as a useful supplement, particularly for those engaged in rural occupations, to the other financial sources to which they can turn. If it fulfills that role in the future, then I believe we will, in this series of banking reforms, have incorporated a valuable institution, able to serve the progress and development of Australia.

Mr CAIRNS:
Yarra

.- I think the Treasurer (Mr. Harold Holt) has performed a very excellent function in the speech he has just delivered. He told us that there had been concern lest the Development Bank should become a competitor of the private banks in an unfair manner. He told us that the trading banks had made representations to the Government to ensure that the Development Bank should not become such a competitor. I think the Treasurer has convinced us this morning that the fears of the trading banks must have been completely put at rest. The Goverenment must have satisfied the private trading banks that the Development Bank will not in any way become a serious competitor with them.

The Treasurer indicates, I think, the conflict or dilemma that exists, as between the powers of the Development Bank on the one hand and its functions or resources on the other. Certainly so far as this legislation is concerned, the Development Bank has all the powers of a trading bank and all the powers that would be necessary for it to carry ot’t every aspect of banking in the normal sense of the word. But it is pretty clear that the Development Bank, under the administration of the Government at any rate, is not going to have the functions of a bank nor the resources of a bank.

The Treasurer told us that the trading banks had asked that some restriction be placed on the power of the Development Bank to accept deposits. The Development Bank, under the bill that we are discussing, has power to accept deposits from the public or from anyone. It has all the powers of a bank, and this was the position when the legislation was before the Parliament last year. The Development Bank had these powers and it appeared from the debate last year that it was going to exercise them. But now we have been told by the Treasurer that it is not anticipated that the Development Bank will accept deposits from the public, and that it will not rely on such deposits for a substantial portion of its funds. He said that it is a special institution, quite unlike a trading bank. This has come about because of representations made by the trading banks last year that the Development Bank should have power to make them its agents. As a result clause 83 was inserted in the legislation, empowering the Development Bank to make the trading banks its agents. This means that the Development Bank from then onwards will become substantially a fund and not a bank.

The Treasurer has told us this morning that the Development Bank will not accept deposits. A bank is not a bank unless it accepts deposits. By the making of advances and the acceptance of deposits a bank really establishes its essential functions. It is able to operate to the extent to which it can make advances and receive its share of deposits. But what will happen in this case is that the Development Bank will provide funds from its £20,000,000 of capital, if it has that much available for this purpose, and from any additional amount that it might receive, for the trading banks, and perhaps the Commonwealth Trading Bank as well, to act as its agents and to lend to primary producers from those funds. The deposits resulting from that process will be deposits held by the trading banks and not by the Development Bank.

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

– By what reasoning do you work that out?

Mr CAIRNS:

– The Treasurer just said that. If the honorable member for Wannon has not been listening, I inform him that the Treasurer said that it is not anticipated that the Development Bank will accept deposits from the public; it will not rely on deposits as a substantial part of its funds.

Mr Stokes:

– You said it will not receive deposits.

Mr CAIRNS:

– The Treasurer said that.

Mr Harold Holt:

– No, I said it is necessary to provide that it can receive deposits, otherwise there would be some constitutional problem.

Mr CAIRNS:

– I think that when we refer to the record of the debate, that is what we will find in it. I took a careful note of it at the time.

Mr Harold Holt:

– The honorable gentleman has been misled, if that is his impression. I said that it is necessary to provide that the bank shall receive deposits. We do not think that in practice deposits will be a major source of funds, because it cannot provide the same sort of facilities for clients as other banks can, and so it is less likely that deposits will be attracted to the bank.

Mr CAIRNS:

– The result is the same whichever way you put it. If the Development Bank is not going to accept deposits, its ability to lend will be severely restricted. Its ability to lend will depend on its ability to attract deposits.

Mr Harold Holt:

– No, there are other sources of finance, which I have mentioned.

Mr CAIRNS:

– Precisely, but limited to the amount of capital that it is able to acquire, either under this bill or from later additions.

Mr Harold Holt:

– Appropriations by the Parliament.

Mr CAIRNS:

– Precisely, but this is not a banking process; this is not a bank.

Mr Harold Holt:

– Money raised by the Commonwealth Savings Bank is available, without restriction.

Mr CAIRNS:

– This is essentially the creation of a fund; it is not a bank. If the Government anticipates that the Develop ment Bank will not accept deposits from the public, it will not be a bank; let us have that point clear. The situation, as I see it, is that we will have around the Development Bank a ring of trading banks which will do the essential banking business, as far as any is done. Those trading banks in turn will make the loans and accept the deposits, and that is essentially where the banking procedure will take place.

Mr Stokes:

– They will act only for the receipt and transmission of applications, and nothing more than that.

Mr CAIRNS:

– This is something that could have been done under the legislation as it already exists. In the discussion that has already been mentioned, the Governor of the Commonwealth Bank said that, although he believed that this specialized task called basically for a specialized institution, there was still much that could be done within the structure of the existing banking system. What is being proposed in the creation of this fund could certainly have been done within the existing banking system. The justification for a Development Bank is that it will develop personnel capable of dealing with projects of the sort that such a bank is needed to handle. But the situation will be that the people who are dealing face to face with these problems will be the people in the existing private banking structure. Substantially, they will determine whether loans will be made, and, if so, what the conditions of repayment will be. A new staff will not be created to develop a new kind of developmental attitude to the work. The present members of the staffs of banks will be used for this purpose. In this sense, nothing new is being created.

The view of the Opposition is that in principle a bank of this sort, provided it is a bank, can be of great value. If it has the ability to lend and to accept deposits in a field of this sort, it can be of great value to the economy. But our criticism is that that is not what will be done. In fact, the Government is setting up a fund limited to £20,000,000, or something less than that because some of the money has been used already, plus subsequent appropriations. A banking institution is not being created for this purpose. Our second objection is that, whatever this could be used for - make no mistake, under a Labour government it would be used much more extensively than it will be used under this Government - this piece of legislation, which could have advantages to the Australian economy, is coupled to a great deal more legislation which we believe has nothing in its favour. We cannot accept legislation of this sort for two reasons: First, it is included in a series of bills which are harmful, we believe, in every aspect; and, secondly, this legislation does not set up a bank but in fact sets up a fund. Let me briefly summarize my reasons for saying that. They are that this institution will not accept deposits but will simply be a fund.

The CHAIRMAN:

– Order! The honorable member’s time has expired.

Mr BURY:
Wentworth

.- The honorable member for Yarra (Mr. Cairns) made two significant comments. He said correctly that the Development Bank has all the powers of a bank. If we read the legislation carefully, we find that it can perform all but one or two small functions of banking. He remarked also that under a Labour government it would certainly be used. I do not think that any one on this side of the chamber would have any quarrel with the intentions of this Government in regard to the Development Bank. As far as I know, the proposal has the wholehearted support of all honorable members on. this side. The only concern that we may feel is in relation to the way the powers that are given it may be used, or misused, by another government. If the honorable member for Yarra were in another position, one could well visualize a certain degree of misuse.

The honorable member for Melbourne Ports (Mr. Crean) raised the point about the resources of the Development Bank. It will, of course, draw on the Savings Bank. The Savings Bank will be the main source of operating funds for the Development Bank, and, up to a point, that is a very legitimate use of savings bank funds. The Savings Bank is a big .institution which will continue to suck in deposits throughout the whole of the banking system in Australia, and these funds will be available without any statutory limit for the use of the Development Bank. The Treasurer (Mr. Harold Holt) pointed out that the formulae that apply to savings banks in relation to their advances to other banks do not apply to advances by the Commonwealth Savings Bank to the Development Bank.

Any quarrel that honorable members on this side of the chamber may have with these provisions is not that the Savings Bank funds on even quite a large scale should not be used for the purposes of financing the operations of the Development Bank, but that there is no effective limit. The Commonwealth Savings Bank has assets of about £750,000,000, all of which could be used for this purpose if the government of the day so chose. Nothing that the Treasurer has said precludes a development of that kind. His own intentions, of course, are honorable, but the fears that some have expressed are that, if the government of the day is given the power to use the whole of the Savings Bank’s funds for this purpose, the way is open to misuse. Normally, when banks or other institutions are created they are provided with capital and some limit is imposed. For instance, a limit is imposed on the similar Canadian institution. When it becomes necessary to lift the ceiling on the limit, the authority goes before Parliament and obtains the necessary money or permission to raise it. But after this Development Bank is launched, there will be no limit at all to its operations. It will be empowered to go right beyond the intentions of the Parliament, unless the Parliament takes some specific steps to curb it. The Treasurer also referred to clause 84 in relation to the powers of the Development Bank to borrow from the central bank. As to blocking off the Reserve Bank lending to the Development Bank, the right honorable gentleman relies on clause 26 (c) of the Reserve Bank Bill, which provides that the Reserve Bank must operate in accordance with normal central bank practices. This might legitimately be regarded as blocking long-term loans1 by the Reserve Bank to any other bank. It might well be that that is right, but the fact is that the central banks of other British Commonwealth countries - Great Britain, Canada, South Africa and India - do in fact make long-term loans to provide long-term finance in one way or another for developmental institutions. Whether or not this will be precluded by clause 26 (c) is, of course, highly uncertain. No one can say, and there is certainly no means of bringing the Reserve Bank to heel if it chooses so to do. These are the gaps, and they remain.

Mr Harold Holt:

– I do not want to interrupt, but I think the honorable member conveyed the impression that the whole of the savings banks deposits could be made available to the Development Bank. He is aware of the limitation which does exist apart from the practical considerations?

Mr BURY:

– The regulations under clause 37 of the Banking Bill, of course, will apply to all savings banks so far as the build-up of their portfolio is concerned; that is, 70 per cent, in government securities and so on. But they are regulations. These things are regulated at present in the case of the private savings banks only under licence, but the provisions governing this matter are only in the form of regulations and will be in that form in future. If these provisions were applied in their present form they would limit what could be lent to the Development Bank to about 30 per cent, of some £750,000,000. Of course, nobody suggests that anybody would want to lend the whole of this sum to the Development Bank. The fact is that the process is unlimited and will be outside the control of Parliament. These may be fanciful fears. I do not want to build them up unduly to detract from a measure which is absolutely sound and should contribute to the welfare of the country.

There is another limitation which the Treasurer mentioned in passing; the power of the Development Bank to borrow from abroad. I hope it will not be prevented by any Treasurer from borrowing abroad. It is a potential inlet for capital from the International Bank for Reconstruction and Development to provide funds for rural development and for the development of industrial undertakings in Australia. This process should not be subject to the Australian Loan Council. I think the Commonwealth authorities should be able to carry on this process unimpeded by anybody outside, because the facts of life will limit this flow to reasonable amounts far less than the desirable limit.

It was indeed an improvement when the honorable member for Melbourne Ports (Mr. Crean) put away Professor Sayers’s book and either returned it to the Parlia mentary Library or lent it to the honorable member for Yarra (Mr. Cairns), and quoted some other people. Other documents to which he turned included the report on rural reconstruction which is well worth reading in this connexion. He also quoted the Governor of the Commonwealth Bank, and I share his views on this matter. It is proper that the Governor of the Commonwealth Bank should comment on the financial issues of the day. The powers of the central bank are wide. They affect the whole life of this country, and the more enlightenment we can get as to the views of the Governor of the Reserve Bank on matters of economic significance, the better. This procedure is followed by the governors of central banks everywhere - by Lord Cobbold of the Bank of England, Mr. Martin of the United States Federal Reserve Bank and Dr. De Kock of South Africa, to mention a few.

All give notable leads to public opinion from time to time by well-considered statements, and among them I would mention that to which the honorable member for Melbourne Ports referred - the lecture that was given recently by the Governor of the Commonwealth Bank in Melbourne to agricultural economists. This is an excellent guide to and an assessment of the prospects of the Development Bank, and no doubt such statements reflect much of what the Government has in mind. Provided the Development Bank is kept along those lines it will in fact make a useful contribution.

In the limited time available to me, I want to refer to one other matter which is not related to those that have been discussed so far; that is the provisions relating to the employment of women. In this respect, our Public Service as a whole lags behind the rest of the civilized world. The barriers against the employment of women and particularly of married women-

The TEMPORARY CHAIRMAN (Mr Luchetti:
MACQUARIE, NEW SOUTH WALES

– Order? The honorable member’s time has expired.

Mr BIRD:
Batman

.- The fears of honorable members on the Opposition side about the future of the Development Bank have not been dissipated after hearing the explanation given to us this morning by the Treasurer (Mr. Harold Holt). As a matter of fact, after hearing his explanation,

I am definitely satisfied that the policy of the Government under existing conditions is to stultify the Development Bank because of pressures by outside interests, namely, the private banks. The first great drawback that the Development Bank will have to face is the lack of capital. Whilst it will have a nominal capital of £20,000,000, the fact remains that £15,000,000 of that sum is already out, and it will be given £5,000,000 by the Reserve Bank to start off. Unless some extraordinary deposits are made by the taxpayers - and according to the Treasurer not much is expected from that source - I fail to see how, within a comparatively reasonable space of time, the capital of the bank can be increased to such an extent that the bank will be able to give satisfaction to the large number of people who will seek accommodation from time to time.

Members of the Australian Country party who were so enthusiastic during the secondreading debate about the good purposes that would be achieved by the Development Bank must have had their feelings considerably dampened when they heard the Treasurer this morning. He admitted that the high expectations held out by some honorable members about what the bank could do in the interests of the country community would possibly not be realized. Obviously, the Treasurer is aware of the restrictions that are to be placed on the bank, and he does not expect wonders from it.

If the Development Bank were given a free hand, I am satisfied that the outlets for its activities would be practically unlimited. If it could be given its rightful place in the banking structure and the necessary capital, and was freed from the restrictions imposed through the oversight of the private banks as provided in this legislation, in a very short space of time it would make a formidable mark in the banking structure of the Commonwealth. The remarks of the Treasurer this morning have satisfied me that the Development Bank will be a pale, anaemic imitation of what should be a live, healthy and vigorous institution. This bank has all the potentialities to play an important part in the future economic life and progress of Australia, but because we have a government in office with the quaint and odd philosophy that there must not be any competition between private and public banks, as that would be unfair to the private banks, the people who need the services of the Development Bank will be sorely disappointed.

If the Government were really concerned about encouraging development in every sense of the word, in addition to providing finance for primary producers and small business concerns it would have provided finance for another sector of the community which is most important to the progress of this country. It is of no use for a banking service to encourage small farms and small factories if public authorities cannot keep up with the demands for roads, sewerage, water, and other services. Everybody knows that local government to-day is fast dying because it cannot obtain the finance necessary to carry out urgent public works.

If the Government is sincere in its desire to develop Australia, why has it not provided financial accommodation for local government authorities, as well as providing accommodation for small primary producers and small business men? Local government services to-day are literally being starved for funds. Recently, Melbourne newspapers have published statements that a further 500 to 1,000 houses in Melbourne will not be sewered for another five or ten years. To-day, in Melbourne, 68,000 homes are without sewerage, and that is a state of affairs that did not exist before the war. Melbourne to-day needs a further 400 miles of water reticulation, but the public authority concerned cannot carry out that work. Thousands of miles of new roads are needed in Melbourne also.

A clause should be inserted in Part VII. of the bill, which deals with the Commonwealth Development Bank, to provide for adequate finance to be made available to local government authorities. The Government has missed the bus in this regard. The Government is not awake to the real needs of the community. There is a vacuum in the banking system to-day as far as local government finance is concerned. If the Government were prepared to grasp the nettle firmly with both hands and set up a development bank worthy of the name, it would have inserted a clause in the bill to ensure that local government bodies did not go short of funds. These bodies are conducted by men who act in an honorary capacity, and to-day they are at the end of their wits trying to find money for public works. If the legislation made some provision for resolving this difficulty it might have been worth while. I am sure that it must be disappointing to honorable members of the Australian Country party, who waxed so enthusiastic earlier in the debate.

I want to refer now to the proposal to set up the Commonwealth Banking Corporation Board which will take over the duties now performed by the Commonwealth Bank Board. The Commonwealth Banking Corporation Board will consist of the Managing Director, the Deputy Managing Director, the Secretary to the Department of the Treasury, and eight other members. I do not object to the appointment of the first three members mentioned, but I do object to that part of clause 14 which says that the board shall also consist of -

Eight other members, who shall be appointed by the Governor-General in accordance with this section.

The Labour party is totally opposed to bank boards of this description. We are opposed to them because of unhappy experiences in the past. We are satisfied that the Government’s proposal to appoint a board on this occasion, as in 1951, is a delegation of its powers and an evasion of its responsibilities. The Government wants to refrain from framing financial policy, and in so doing it is prepared to govern in a secondary degree. The appointment of the board is not in the interests of the people, but in the specific interests of the people responsible for this organization - the private banks.

The Labour party has always contended, and always will contend so long as it remains a party in the Australian public life, that the appointment of outside interests to the management of the Government bank is a breach of Labour principle. The Labour party firmly holds the view that outside interests should have no voice in the control of the people’s bank. That is a principle to which we strongly adhere, and our beliefs are reinforced by our experience of the Commonwealth Bank Board over the years. In an attempt to make out that appointees to the board will be impartial, the Government has disqualified from membership directors, officers, and employees of the private banks, but the clause does not prevent shareholders in the private banks from being members of the board. I am informed that in many cases the directors of the private banks hold comparatively few shares in the banks, whereas the larger shareholders are content to sit back and leave the management to others. A man could have any number of shares in a private bank, but so long as he was not a director he would not be disqualified from taking his place on the proposed Commonwealth Banking Corporation Board.

The TEMPORARY CHAIRMAN:

Order! The honorable member’s time has expired.

Sitting suspended from 12.41 to 2.15 p.m.

Mr WILSON:
Sturt

.- Mr. Chairman, this afternoon, I want to deal primarily with clause 104 of this bill which may be described as a marriage bar. Before doing so, as this is the first opportunity I have had of speaking on the banking bills, I want to say that I wholeheartedly support the general principles contained in the three interlocking bills. Three great reforms are made in these bills. The first is the establishment, for the first time, of a separate central bank, or reserve bank, free from all other banking duties and entrusted with the responsibility, within the limits of its powers, of so directing the finances of this country as to ensure full employment, economic prosperity and the stability of the currency.

The second great reform deals with the establishment of a stronger and better Commonwealth Trading Bank which will be able to compete fairly and freely with the private trading banks, having no privileges over the private trading banks and being subject to no disabilities that the private trading banks are not subject to. This bill will preserve to the people the freedom of choice as to bankers. The worst possible thing that could happen to this country would be the establishment of a banking monopoly, whether a government monopoly or a private monopoly. These bills make sure that free competition will be maintained between the banks, whether government banks or private banks.

The third great reform is the establishment, for the first time, of a Development Bank. I pay tribute to the wonderful job done by the managers and officers of the private banks and the Commonwealth Bank in relation to the development of this country. But they have been restricted and hampered because their functions have been the functions of a banker. The normal function of a bank is to borrow and lend money. Obviously, security must play an important part in deciding what advances they shall make. Under the new Development Bank, the managers will look at each project with different eyes. Their approach will be: What are the prospects of this industry being successful? If it is a new industry they will have to assess the prospects of its establishing itself on a profitable basis. If it is an existing industry, they will have to assess whether the additional money provided will enable greater development or greater expansion of the industry. Security will either take no part at all in their approach to the problem, or, if it does, purely a secondary part. I believe that these three bills are a milestone in the history of Australia and will enable us to develop to a far greater degree than we have been able to develop in the past.

My one criticism of the bills concerns clause 104 of the Commonwealth Banks Bill. I would certainly vote against this clause if I were not confident that, in the near future, the Government will take steps to remove this marriage bar. Clause 104 reads as follows: - (1.) A married woman shall not be appointed to the Service except in special circumstances. (2.) A female officer shall cease to be an officer on her marriage unless the Corporation is satisfied that there are special circumstances which make it desirable that she should continue in the Service.

The private banks are not subject to this restriction. Therefore, on the principles enunciated by the Government and private members on- the Government side, clause 104 should be deleted. I understand that the reason for its inclusion is one of uniformity with the Public Service, generally. It is a relic of the dark, dim days. It is a relic of the time when it was the exception rather than the rule for women to be employed. Nowadays, almost all women seek employment and they have played a very big part in the development of this country. Why should this bank, after it has trained experienced officers, be compelled to dismiss those officers, just because they marry?

This matter was examined recently by a very expert committee presided over by that great Australian, Sir Richard Boyer. It was called the Committee of Inquiry into Public Service Recruitment. The committee’s report was presented to the Prime Minister (Mr. Menzies) on 21st November, 1958, and tabled in this chamber a few weeks ago. The committee examined provisions in the Public Service Act which were identical with those in this clause. This is what the committee said -

It is probable that a substantial proportion of women employees would resign on marriage even if this were not compulsory. But when the Service is short of qualified people, even the small proportionate losses entailed by the present section are scarcely justifiable, while there is an unknown additional loss of potential recruits from among married women and from single women who are deterred by a knowledge of this section from seeking a career in the Service.

If we substitute “ bank “ for “ service “, we have the actual position in relation to the Commonwealth Bank. The report goes on -

This is at a time when increasing numbers, of women are gaining professional or other qualifications for employment, and when employment is increasingly sought by. married women, especially those without children, whose children have grown up, or- who need’ to be breadwinners on their own account.

Apart from these considerations, section 49 reads strangely in a country which has adhered to the I.L.O. Convention for equal employment rights for men and women. We have also been told that a U.N. Economic and Social Council Report, prepared for the Commission on the Status of Women in 1951,-

The CHAIRMAN (Mr Bowden:

Order! The honorable member’s time has expired.

Mr CALWELL:
Melbourne

.- I wish to refer to some of the clauses of this bill. The honorable member for Sturt (Mr. Wilson) referred to clause 104, but I wish to refer to clause 103 which is much more important. It deals with the question of excess officers in the Commonwealth Bank after these mutilating bills have been passed. Clause 103 lays down the procedure to be followed when officers of the Commonwealth Bank are told that there is no more work for them. The Government has claimed that the purpose of this legislation is to help the Commonwealth Bank. As a matter of fact Ministers have said that the intention of the legislation is to increase the. trading activities of the bank. If that is so why have they included a provision to deal with officers who will be thrown out of work once the legislation has been passed? I make a protest about this clause.

Mr Cope:

– Did the Commonwealth Bank ask for this?

Mr CALWELL:

– The Commonwealth Bank did not ask for this legislation to be introduced, and neither did its officers. The Government has introduced the legislation, and the people who will suffer under it will not be the employees of the private banks but the employees of the Commonwealth Bank. Their positions are to be declared redundant. Sub-clause (2.) of this clause reads -

If no position is available for the officer, the Corporation may retire him from the Service.

Sub-clause (3.) says -

An officer shall not be retired from the Service under this section unless he has been given at least one month’s notice or is paid salary in lieu of notice.

This bill is alleged to protect the Commonwealth Bank! It is a bill to mutilate the bank. The title of the bill ought not to be “ The Commonwealth Banks Bill “ but “ A Bill to strangle the Commonwealth Bank “.

Mr Harold Holt:

– Before the honorable member whips himself into too much of a passion, I hope that he has not overlooked the fact that this clause is identical with the provision in the legislation passed by the Labour Government in which he was a Minister.

Mr CALWELL:

– It is not as the

Treasurer suggests. We made provision for an extension of the services of the Commonwealth Bank. The only period in which the Commonwealth Bank has really been allowed to flourish and expand has been from 1945 to 1950.

Mr Harold Holt:

– It has not been stagnating in the last ten years.

Mr CALWELL:

– Ever since this Government has been in office it has been interfered with in one way or another. In the matter of hire purchase the Commonwealth Bank was allowed by this Government to advance £15,000,000. At the time that sum was fixed the total amount of hirepurchase advances was about £90,000.000. To-day, the total advances for hire purchase are something over £300,000,000, but the Commonwealth Bank is still pegged down in its advances for hire purchase to the original limit of £15,000,000. Yet the Government talks about its supposed record in extending the activities of the Commonwealth Bank!

Professor Arndt, whom, I hope, the Government will not object to when he is quoted as an authority, had a good deal to say about this matter. I have thrown out a challenge, but the Minister does not accept it because Professor Arndt was the author of the plan which he and some six or seven economists signed and which was the basis of the little horror Budget of 1956. Did we ever before hear, in the history of this country or of any country, of seven or eight economists agreeing not upon one particular item only but on a whole blueprint to put the economy on what they believed to be a firm basis? But we see how the economy is going by the failure of the two loans in London yesterday.

Mr Harold Holt:

– What about the oversubscription of the recent Commonwealth loan by £35,000,000?

Mr CALWELL:

– The Treasurer has made a great song about that, but he has not said a word about the failure of the two loans in London yesterday. Already, he has failed as badly as a tragic Treasurer - the right honorable member for Cowper - failed some 30 years ago. Now let me quote Professor Arndt, approvingly. In his book, “The Australian Trading Banks “, he wrote -

It was to enlist their-

That is, the private trading banks’ - good will and in conformity with prevailing canons of central banking that the Commonwealth Bank-

Meaning the Commonwealth Bank Board - -decided in 1928 to abandon all active competition for trading bank business.

The Labour government altered all that in 1945, but this Government is setting the position back again. The London “ Economist” of 7th December, 1957, in an article headed “ Commonwealth Bank Impasse “, said -

If this ogre-

That is the Commonwealth Trading Bank - cannot be entirely banished there is everything to be said at least for dissociating it absolutely from the central bank in order to promote harmony, trustful co-operation and sheer self-respect among the trading bankers.

Is not that in keeping with the nonsense we have been listening to here, ad nauseam, from previous speakers on the Government side, from the honorable member for Sturt, who preceded me, to the honorable gentleman who occupies the seat nearest the door of the chamber, the honorable member for Mackellar (Mr. Wentworth)? “ Rydge’s “ in December, 1957, said this under the heading of “ Commonwealth Bank Legislation “-

It took the Federal Executive of the Liberal party to force most Liberal Ministers to support the proposals and even then the Country party was sulky.

In January, 1958, “Rydge’s” had this to say -

Backbenchers have been fighting for three to four years to obtain some change in the laws governing banking in Australia. The reward for their efforts at party meetings was thinly veiled abuse and ridicule from the leader they were pledged to support. It took a meeting of the Liberal Party Council - the party’s most powerful body - to pass a motion - in face of a personal appeal against it by the Prime Minister - before he changed his attitude.

Mr Bryant:

– He did as he was told.

Mr CALWELL:

– Exactly! There is the justification for our claim that the Government has surrendered to the Liberal party and, through the Liberal party, to the bankers. This is not good legislation. These bills are not brought forward to reform the banking legislation but to deform and mutilate the Commonwealth Bank. If honorable members on the Government side were only partially honest with themselves and with the country they would say that what they want is the complete destruction of the Commonwealth Trading Bank as a competitor with the private banks.

Mr Buchanan:

– Nonsense!

Mr CALWELL:

– It is true. The honorable member for McMillan protests too much. He makes that exclamation today because he knows that if he took an honest attitude he would not hold the seat of McMillan any longer. The people of Australia want the Commonwealth Bank. The figures which I quoted the other night proved that, on the occasion of the last election, 51 per cent, of them voted for the Australian Labour party and the Australian Democratic Labour party, and both of these parties made it clear that they were opposed to this banking legislation.

All that the Government could muster for itself and the “ peasant “ party by way pf votes was 45 per cent, of the Australian people’s support. Where is the mandate the Government boasts about? I repeat the charge and the challenge I made earlier: Let us have a referendum on this question and then see what the Australian people want.

Mr Browne:

– We just had one.

Mr CALWELL:

– The honorable member for Kalgoorlie is a complete dolt if he does not understand what I have already said, that is that 51 per cent, of the people voted against the Government’s banking proposals. Let us have a referendum of the people to find whether they are for or against this legislation. If, according to the honorable member’s peculiar form of reasoning, the last election was a referendum, we will have another referendum in 1961 and as a result we will restore the 1945 legislation in its entirety. Banking has always been a problem in democratic countries because those in control of the money power have always wished to squeeze the people in their grasp. The history of banks in America is a notorious one. All the great Americans had to fight these predatory institutions in their turn. President Andrew Jackson, the seventh President, and President Abraham Lincoln, the sixteenth President, had to do so and justify their actions in language which is now historic.

The CHAIRMAN:

– Order! The honorable member’s time has expired.

Mr BURY:
Wentworth

.- The honorable member for Melbourne (Mr. Calwell), like other honorable members opposite, keeps on claiming falsely that something like 55 per cent, of the electors voted against the Government in the general election. Unless my memory is at fault, at least 53 per cent, of the electors voted against the Australian Labour party, and thus against their policy of nationalization, and all the other mischievous things that a Labour government would do.

The honorable member for Melbourne said he would challenge the Treasurer (Mr. Harold Holt) on this occasion, but he had already done this repeatedly and after each occasion on which his arguments had been discredited he had issued a further challenge in the same terms. The Opposition keeps on and on with such verbal repetitions, producing allegations which would make one think that, as a result of some vague process of reasoning in the minds of honorable members opposite, the Labour party believes it actually had a majority at the general election when, in fact, it was soundly defeated.

It is strange that the honorable member for Melbourne should take so much trouble over this legislation, because what he and his fellow members really want to do is to get rid of the private banks altogether - to nationalize the banking system. They tried to do it before, and I assume that they will try to do it again if they are returned to office. Why should the honorable gentleman worry about these provisions when he can only, apparently, utter generalities about them?

I should like now to add something to the remarks made by the honorable member for Sturt (Mr. Wilson) concerning the employment of married women in the Commonwealth Banking Service. There is no doubt that in this particular matter Australia lags well behind other countries. Disabilities on the employment of women have been imposed by successive governments, Labour and otherwise, and continue to be imposed by this Government. They are repeated in clause 104 of the Commonwealth Banks Bill, in a provision which means that when a girl employed on the Commonwealth Bank staff gets married, she will get the sack, even if she wishes to work two or three years after marriage so as to have the money to help to form a household for herself and her husband until her family begins to arrive. As far as my inquiries show this is a disability not imposed upon women by other banks. The trading banks do. in fact, allow most of their girls to stay after marriage, and they form a very useful part of the staff. Of course, more than banks are concerned in this matter of the employment of women. Like the honorable member for Sturt, the only reason I would not vote against this provision is that the Government has before it the report on Public Service recruitment which recommends the abolition of these penal discriminatory clauses. Therefore, the matter may be better dealt with in relation to the whole of the Public Service.

Apart from the disability in clause 104, there are other disabilities against women. For instance, there is the disability implied in clause 91 of the Commonwealth Banks Bill which enables the Commonwealth Banking Corporation to prescribe the sex and age of entrance examinees. This kind of provision may be interpreted as meaning that there are certain jobs in a bank which are reserved for men only, and from which women are excluded. There is a sound practical reason in the banking world for admitting women to ordinary banking service, and this practice is followed in America. A deadly part of banking service is the number of years members of the staff must spend in comparatively menial duties. Many of such duties can well be performed by women who, after a few years, will marry. When these duties are performed by women who mainly marry and leave, vacancies are created which make the careers of the remainder of the staff much more attractive. Of course, the Reserve Bank is not subject to this provision in regard to women, and there is a very wise and sound reason for this. Much specialized work will be required from the staff of the Reserve Bank.

I think that the dangers mentioned by the honorable member for East Sydney (Mr. Ward) are quite unreal. He complained of the shortness of the period provided under this legislation in which members of the Commonwealth Bank staff have to decide whether to join the staff of the central bank or the staff of the Commonwealth Trading Bank. Of course, members of the Commonwealth Bank staff have been poring over this legislation for a very long time. Most of them would have made up their minds on the matter a year or so ago, when the previous legislation was before us. So, the fear expressed by the honorable member for East Sydney is unreal.

There is a very sound reason for not circumscribing too closely the nature of the staff that the Reserve Bank would be able to recruit. Normally a reserve bank gains very much by having people with it for a short period of service of from, say, three to five years - people who have had experience in particular directions, very often in other countries and sometimes in other professions. They may be academic people or people who have been employed in activities other than banking, but their services can be extremely useful and valuable to a reserve bank, which is concerned sb’ much with the vital monetary policy which affects the whole country so closely. Itf is; important that the Reserve Bank should be able at any time to consult with the very best brains available to it. I repeat that the only reason I would not vote against clause 104, at this stage, is the fact that we shall in the next few months deal with this prob lem in relation to the whole of the Public Service.

Mr. DUTHIE (Wilmot) 12.42].- Honorable members on this side of the chamber are more and more amazed as this legislation, consisting of 400 or 500 clauses, goes through, and it becomes more apparent that the deliberate aim behind it all is the disintegration of the Commonwealth Bank as we have known if for more than 40 years. The legislation is to create a very fine-sounding instrument to be known as the “ Commonwealth Banking Corporation “. The term “ corporation “ is an American term, as is the term “ Reserve Bank “ and similar terms which are creeping more and more into Australian legislation under this American-minded Government.

This corporation is to be superimposed on all sections of the present Commonwealth Bank. It will control the policies of the Commonwealth Trading Bank, the Commonwealth Savings Bank and the Development Bank. The existence of such a monolithic structure will, as I tried to point out last night, widen the distance between the Commonwealth Bank and the people. It will make banking in Australia far more involved. The more I talk to people outside about this legislation the more I find that they are disgusted with it and unable to understand it. I have talked to folk in different walks of life, and have been told by them that they have given up listening to this debate because the legislation is so involved.

My first criticism of this section of the legislation concerns the creation of this Commonwealth Banking Corporation to control the destinies of the Commonwealth Trading Bank. My second criticism is that the legislation will lead to an increase of bureaucracy in Australian banking, and my third criticism is that the high cost of this dissection of the Commonwealth Bank has quite- obviously not been considered by the Government. Each of these new banks to be created by the legislation will have a general manager, a deputy general manager, and several board members, each of whom will be paid servants of the bank. Therefore, when it is all cut and dried, and a final balance-sheet is presented, the cost of disfiguring and disintegrating the Commonwealth Bank will be found to be enormous. This will make confusion worse confounded in Australian banking. In order that the officials of these three divisions of the corporation will know one another, they will need arm-bands with initials on them - B.C. for those who work for the banking corporation; T.B. for those who work for the Trading Bank; S.B. for those who work for the Savings Bank; D.B. for those who work for the Development Bank; and R.B. for those who work for the Reserve Bank. If they all met in a room without their arm-bands, they would not know to which bank the others belonged. It is utterly ridiculous to disintegrate a bank to such a degree, and to impose such a superstructure on these three sections of the Commonwealth Bank. That is the first criticism that I make.

Another board, the Commonwealth Banking Corporation Board, is to be established to run the corporation. It will consist of the managing director, deputy managing director, the Secretary to the Treasury, and eight other members, who will be appointed by the Governor-General. This will increase the remote control of banking referred to by my colleague, the honorable member for Batman (Mr. Bird), before the suspension of the sitting for lunch, and will further push away control from the people of Australia and from the Parliament in particular. I mentioned this angle last night in a speech on the Reserve Bank Bill, when I prophesied that the five members of the Reserve Bank Board, who are to be appointed from outside banking circles altogether, will be some of the moguls of private enterprise in Australia. When I made this statement, the honorable member for Wentworth (Mr. Bury) interjected “ Quite right “. It was interesting to hear from him confirmation of a suspicion that these five members of the Reserve Bank Board will be moguls of private enterprise. Likewise the eight outside persons who are appointed to the Commonwealth Banking Corporation Board will be bigshots of private enterprise.

This is a further step in disintegrating the power and prestige of the Commonwealth Bank. It is putting the board in the hands of men who have no experience of banking, let .alone of the Commonwealth Bank, which is a socialized bank. These will be men who are interested in private enterprise. As the honorable member for Batman asked this morning, what is to stop the shareholders of private banks from being appointed to the Development Bank Board? If they are appointed, the tie-up of all the boards will be beautiful. They will be run by men from private enterprise, whose sympathies lie with private banking, and not with Commonwealth banking or social banking.

An interesting point is that these eight persons are not to include members of the Reserve Bank Board, officers or employees of the corporation, other than the managing director or deputy managing director, the general manager of the Trading Bank, the Savings Bank, or the Development Bank, officers of the Public Service of the Commonwealth, or directors, officers or employees of a corporation the business of which is wholly or mainly that of banking. In my opinion, that is an astounding provision. It is just the same as preventing a dairyman from serving on a dairying board because he happens to be interested in dairying. It is like preventing a wheatfarmer from being a member of a wheat board because he happens to grow wheat, or a tobacco-farmer from being a member of a tobacco board because he happens to grow tobacco. It is just utterly fantastic that men from outside the field of banking and not connected with it can be appointed to a board the purpose of which is to do something which is very important to this country. This board will determine the policies of the corporation, the Trading Bank, the Savings Bank, and the Development Bank. Men who are not even connected with banking will be deciding that policy. This means that the control of finance in Australia is moving further out in ever-widening circles from the people and the Parliament of this nation.

I wish to refer to another point in regard to savings banks. The Commonwealth Savings Bank, which will be controlled by the Commonwealth Banking Corporation Board, is having a terrific fight to maintain its clients, four private banks having entered the field of savings bank business. This, of course, was another move in the long-range plan to destroy and cripple the Commonwealth Bank. In the last twelve months Commonwealth Savings Bank deposits declined by £1,000,000, and the deposits of the four private savings banks increased by about £3,000,000. There we see evidence of a deliberate, gradual reduction in the business of the Commonwealth Savings Bank, which has done magnificent service in Australia by lending to municipal councils for sewerage and other development in country towns.

I should like to refer also to the excellent radio session sponsored by the Commonwealth Savings Bank. It is called “ Life with Dexter “. That serial has done a tremendous amount of good in Australia in holding the custom of the Commonwealth Bank and, here and there, increasing it. I should like to commend the bank on its expenditure on this excellent radio session. It is one of the best sessions on the air anywhere in Australia to-day. It is also one of the cleanest, most humorous and most effective presentations of the life of people in ordinary homes such as those throughout the Commonwealth.

The CHAIRMAN:

– Order! The honorable member’s time has expired.

Mr WENTWORTH:
Mackellar

– I wish to refer to one or two matters of detail. I support the honorable member for Wentworth (Mr. Bury) in his remarks in regard to the employment of married women. I ask the Treasurer (Mr. Harold Holt) to have a look at Part VI., which relates to housing loans. There are in this a couple of matters of detail which might merit a little attention. Clause 63 (3.) provides that the owner of an estate or interest in land upon the security of which a loan has been made shall not, without the consent of the Trading Bank or of the Savings Bank, obtain another loan upon it. I am not quite certain of the reason for that clause. Clause 66 provides that the amount of a loan shall be limited to 90 per cent, of the bank’s valuation, and therefore, by reason of the normal practice of banks, it would be a good deal less than a 90 per cent. loan. The Credit Foncier loans are, of course, reduced during their currency. Why should a person who has an equity in a house and is in need of money - this deals only with small people - not be able to get a further loan upon his security? I would ask the Treasurer to have a look at that. Perhaps he could give an assurance to the committee - that would be sufficient - that the consent of the bank would not be unreasonably withheld, so that people who happened to be in difficulties and needed small loans could get the maximum benefit from the banking service.

I draw the Treasurer’s attention also to clause 56, which is also in the part dealing with housing loans. The clause reads -

In making loans under this Part, the Trading Bank and the Savings Bank shall give preference to loans for the erection of homes and for the purchase of newly erected homes. 1 think that is a good provision at a time when there is a housing shortage and in a place where there is a housing shortage. New South Wales is the State in which, unhappily, almost the entire housing shortage in Australia has become concentrated, and at present, in that State, there is a reason for this provision, but the housing shortage may not be with us always. However, this is a permanent measure. It is not meant just as something transitory. At some time in the future, the housing shortage will go in New South Wales, just as it has gone already in other parts of Australia.

Mr Wheeler:

– It will not end in New

South Wales under a Labour government.

Mr WENTWORTH:

– Not under a Labour government. When it does go, clause 56 will be redundant in respect of that State, just as it is already redundant in respect of a number of States. Why should a small person who wants to obtain a home be precluded from buying an old house, which may be perfectly good, because, as we know, many of the older houses are the best in their areas? Why should such a person be precluded from buying an old home which may suit him better? I do not suggest that the bank should advance more than 90 per cent, of its own valuation, but why should not the small man - and we are talking now only of the small man - get a fair go in order to buy a home which will best suit his family and his needs? I agree that this clause has merit in respect of States in which there is a housing shortage, for so long as there is a housing shortage, but I think that it is a little out of place in a permanent measure, and perhaps the Treasurer will have a look at it by the time the bill reaches another place. 1 turn now. Sir, to clauses 120 and 121. I was delighted when the Treasurer promised last evening to have another look at these audit provisions. Perhaps there will be an opportunity for an amendment to be moved in another place, following the more considered study which the Treasurer will have given to this matter. If the Auditor-General, who has full power to make all such investigations as he may require, and is not compelled to bring in a half-baked report, certifies that a serious and substantial breach has occurred, such a breach, I repeat, should not be covered up. Tt should be brought to the attention of the Parliament and of the country. The covering up by the Treasury and the banking service which is made possible under the terms of this bill as it stands is something which we should not tolerate. I fear that, in the drafting of this measure - I do not, of course, impute anything against the present Treasurer in this regard - there has been something of a competition in empire building between the Treasury and the Governor of the Commonwealth Bank. I think that the Cabinet from time to time, perhaps without realizing what has happened, has been the victim of this competitive empire building by skilled and experienced bureaucrats.

Now. Sir. I want to deal specifically with clause 121. under which the AuditorGeneral will have a duty to report, first, whether the annual statements of the Commonwealth group of banks are in agreement with the accounts and records, and show the financial position fairly. Secondly, he will have a duty to report on matters “ arising out of the statements “. I think that the phrase “ arising out of the statements “ is an unfortunate limitation which should not be there, because it will tie up the Auditor-General and prevent him from revealing to the Parliament or to the country at any time misfeasance which does not arise out of the statements. At present, as the bill stands, you have a secret system - because banking matters are secret - on which the AuditorGeneral will not be permitted to report. I think that the wording of clause 121 is a drafting error, and that when the Treasury has another look at it it may feel that the removal of the words “ arising out of the statements” is feasible and will not in any way entail undesirable consequences.

I draw the attention of the committee to the form in which the Auditor-General discharges his responsibilities under the existing act. Honorable members may see it in the small footnotes, to the tables in the accounts of the Commonwealth Bank which are from time to time laid on the table in accordance with the act. They will see from these that the Auditor-General - I think quite rightly, in terms of the present act, which is defective in this respect - interprets his duty as simply to make a formal report, and does not find it necessary to reveal or discuss any matters of substance in the way that, indeed, he does, and is entitled to do, in respect of his audit of other parts of the government accounts.

In the short time that remains at my disposal, Sir, I should like to turn to the Commonwealth Development Bank. I was fascinated by the excursus of the honorable member for Batman (Mr. Bird), who said that this bank would pursue a better course-

The CHAIRMAN:

– Order! The honorable member’s time has expired.

Mr CLAREY:
Bendigo

.- Mr. Chairman, it is now more than 47 years since the Commonwealth Bank of Australia was instituted under legislation brought in by the Fisher Government. During that 47 years, the bank has, unfortunately, been a political football and has been kicked about by the various governments that have occupied the treasury bench from time to time. In 1911, the Liberal party of the time strongly opposed the formation of the bank, and did its level best to prevent it from coming into operation. From that time to the present, opposition to the Commonwealth Bank has continued in some form or other. So, after 47 years, we now have presented to us for consideration a series of bills that effects almost revolutionary changes in the Commonwealth

Bank, which, for 47 years, so ably, with great credit to itself, and with great satisfaction to the people of Australia, carried on the functions of reserve banking, of trading and savings banking, and of the Mortgage Bank and Industrial Finance Departments, with much satisfaction to its customers and to the people of this country, at the same time making great profits which assisted the Commonwealth. After 47 years, we have this series of bills which will make radical changes in the structure of the bank.

I want to express my opposition to the measures now before us, because I believe that they will not strengthen the Commonwealth Bank. They will not strengthen it in its reserve banking functions, they will not strengthen the Commonwealth Savings Bank, and they will not give to the banking institutions or the people of Australia the advantages which the Government has proclaimed will be the result of the operations of the bank in its new forms. The determination to split asunder what is now the Commonwealth Trading Bank and to make it into three separate banks - a Trading Bank, a Savings Bank and a Development Bank - each under its own general manager, and each carrying out its functions in accordance with the policy of its general manager, who will be subject to the Commonwealth Banking Corporation Board and its chairman, will, in the opinion of myself and the Opposition generally, result in a cumbersome, complex and burdensome kind of management, which, by its very nature, will prevent the banks from functioning as they should function.

One cannot understand this proposal. In the whole of the debate that has taken place on these bills, I have not yet heard a satisfactory reason why this change should be considered necessary. Nothing has been said to show that in the past the Commonwealth Bank, with all its varied functions, has failed to carry out the functions required of it by the Parliament. During its 47 years of existence the bank has grown in every direction and has been able to give greater and more valuable service. One therefore asks why at this particular time it is thought necessary for the bank to be dismembered, to be cut up into four divisions, one of which is to be entirely separate from the other three, those three, as I said previously, being subject to a most complicated and complex management.

One can only think that this legislation has been introduced for the express purpose of weakening- the Commonwealth Bank. Let me point out that we, as a people, believe in democracy. When we speak of democracy we mean that the people are supreme and paramount. The people elect Parliament and have the right to dismiss Parliament. As a consequence, they are supreme and paramount. It logically follows that those things which are possessed by the people as a whole are also supreme and paramount, rather than similar things that are not possessed by all the people. It is the function of the Parliament to ensure that what the people own and possess shall be strengthened in every direction, and shall have rights over those institutions that are owned only by a portion of the community. What is owned by a portion of the community should not receive greater consideration than that which is owned by the people as a whole. The Commonwealth Bank structure is the people’s structure. It was created in the interests of the people. It is the duty of Parliament, as a democratic institution, to see that its assets and interests are preserved, and preserved against the encroachment of other interests in the community.

One cannot escape the conclusion that this legislation has been introduced for the purpose of assisting the trading banks in their competition with the Commonwealth Bank. I remind honorable members that this legislation will certainly result in disabilities being suffered by the Commonwealth Bank and the various sections of it. Let me mention, as an instance, the Commonwealth Savings Bank. In the past the Trading Bank and the Savings Bank have functioned together. They have been complementary to one another. They have been under the control of the one management. Under this legislation they will be separated and each will have its own management. The legislation does not contemplate, however, that the same process should be carried out with respect to the trading banks, which also carry on savings bank activities. This means, of course, that the management of the Commonwealth Savings Bank will be unfairly discriminated against, as compared with the savings banks that are operated by the private trading banks. This seems to me to indicate that wherever handicaps can be imposed on the people’s bank they will be so imposed.

I also suggest that quite a number of unnecessary provisions are contained in this legislation. The mere fact that clause 103, dealing with the retrenchment of bank officers, and clause 104, which has to do with the employment of married women, have been included in the legislation indicates a statutory effort to limit the power of the management of the bank, which should be able to conduct the business of the bank in the way that it considers to be in the best interests of the banking system or of the people.

I do suggest that it would have been far better if these bills had not been introduced. Looking back over the 47 years of the bank’s existence we find that when it was hardly three years old, as a trading bank and as a savings bank, it was able to deal with all the complex problems that arose as a result of the first world war. It was able to float all the Government loans and to finance the various pools of primary products that were created because of war conditions. It saved the Commonwealth hundreds of thousands of pounds in the floating of loans, and ensured that the financial structure of Australia remained intact and undamaged at the conclusion of the war. It was evident that the people had created an institution that was able to build up the financial strength of the Commonwealth.

It was not until 1924 that any alteration was made in the structure of the Commonwealth Bank. Before that time there was no bank board. A general manager controlled the bank very satisfactorily. After the new type of management was introduced in 1924 we had some very tragic experiences, because the board appointed to manage the bank showed itself to be particularly weak in the enforcement of policy, and tragically lacking in leadership in the time of the depression, when a central bank should have come to the assistance of the Australian community because of the economic conditions then existing.

Mr TURNBULL:
Mallee

.- I wish to reply to one or two comments made by the honorable member for Bendigo (Mr. Clarey). He started off by saying that the Commonwealth Bank had been in operation for 47 years and had served the community well. It must be remembered that nonLabour governments have been in office for most of those 47 years. The longest period of office of a Labour government during that time was eight years, from 1941 to 1949. Outside of that term, Labour governments have held office for less than three years at any one time, and mainly for less than eighteen months at a stretch. In the aggregate, the total time spent in office by Labour governments has been only about one-quarter of the total of 47 years referred to by the honorable member for Bendigo.

The honorable member has pointed out that during its 47 years of existence the bank has been growing in strength. This is quite true. Honorable members on each side of the House have said in their speeches during this debate that this has been the case. It is a matter of record. We all know it to be so. The Commonwealth Bank was established by the Fisher Government, but since that time the non-Labour governments must have assisted the Commonwealth Bank to a large extent in its continual progress. They could have done nothing calculated to bring about the downfall of the bank, as has been suggested by the Opposition, because the bank continues to grow. The separation envisaged in this legislation was never contemplated until the Labour party really showed its hand and decided that there should be a government monopoly and that the banking system should be nationalized. When this was made clear it became necessary - and this is one of the main features of the legislation - to provide every possible protection for the private enterprise banks against the threat of nationalization. Of course, the Labour party takes a very dim view of the objections expressed by the private banks to nationalization.

Mr Daly:

– What is wrong with that?

Mr TURNBULL:

– I am asked what is wrong with that. What is wrong with the private banks having so many more clients than the Commonwealth Bank? Nothing, whatever! We believe that if a citizen wishes to bank with the Commonwealth Bank, that is all right and we should give him every encouragement. But if the citizen wishes to bank with one of the private banks, that also is all right. Of course, we believe in giving the people the choice and the right to bank where they wish. That is why this Government, representing the people, at this stage in our history is most anxious to preserve the private banking system so that the people will have a choice. If the Commonwealth Bank in the past has been such a great success - and not one Labour member has said anything about its progress being disrupted in 1945 or 1953 or at any other time - why is it that all the people who want to put money in a bank do not clamour to go to the Commonwealth Bank? If the people regarded the Commonwealth Bank in the way that Opposition members say they do, it would have almost all the banking business in Australia. But that is not so. It has been said that members of the Commonwealth Banking Corporation Board will dictate the policy of the Trading Bank and of the Savings Bank. The honorable member for Grayndler nods his head.

Mr Daly:

– I said that.

Mr TURNBULL:

– Who does he think should dictate the policy?

Mr Duthie:

– We should!

Mr TURNBULL:

– The honorable member for Wilmot says, *’ We should “. That, of course, is the real story - Labour wants to dictate what should be done with these banks. That is why the honorable member says, “ We should “.

Mr Duthie:

– The Parliament should.

Mr TURNBULL:

– He now interjects, “ The Parliament should “. Let us examine that interjection. Labour thinks it should always be in government and that it should always set the policy.

It has been shown that in the past, nonLabour governments in appointing people to boards have selected some of the most worthy men in the community. In doing so, we expect that they will give us a fair deal, and we are sure we will get it. The honorable member for Wilmot said that clients are leaving the Commonwealth Savings Bank and are going to the savings banks that have been formed by the private banks.

Mr Duthie:

– Not clients, deposits.

Mr TURNBULL:

– All right, then, not clients, but deposits. We get all sorts of technical points such as this. If it is deposits, it is clients, because, after all, the clients make the deposits. The honorable member does shift his ground; he is on the same ground all the time, although he takes a technical point. Whether it is clients or deposits, the deposits are building up in the private savings banks at the expense of the Commonwealth Bank. If that is happening, the clients of the private banks, who make those deposits, are also increasing in number. What is the reason for that; are they getting a better deal?

Mr Duthie:

– You tell us.

Mr TURNBULL:

– I will tell you. I would say very definitely that they are getting a better deal. Of course, savings bank interest has only recently been increased and, goodness knows, this interest has been so low that it was time something was done about it. It has, of course, now been increased. Does the honorable member for Wilmot, or anybody else, disagree with that? After all, these deposits are chiefly made up of the savings of what are called the small people in the community. Since interest is not paid on deposits exceeding a certain amount in the savings bank, does the honorable member not think that the mass of the people should get a fair interest on their money, or does he think that interest should only be paid to people with large sums of money? Of course, the people should get a better deal and that is why they are changing over. They are offered certain incentives. People do not go to a business haphazardly; they go where they get service. If, as a motorist, I know that if I go to a certain service station an attendant will wipe the windscreen and check the tyres, whereas at another garage that will not be done, I will go to the one where I get service.

The honorable member for Bendigo said that the people’s bank, or some public monopoly, should be preserved against other instrumentalities in the community. I wrote down his words. The banks should get exactly the same deal, because this is a free country and we have private enterprise. The same deal should be given to the public banks and to the private banks. But Labour does not care much about the rights of the individual; that is the point. Labour believes in collective instrumentalities, and not in the rights of the individual. That has been proved in many instances. I do not want to enter the New South Wales election campaign, but it is a fact that the rights of the individual are not considered there. That has been instanced by land acquisitions at prices so low that it was like taking the land away from the people.

We stand for the rights of the individual. As far as the Commonwealth Bank is concerned, we believe that it should be allowed to operate fairly and that the people should be allowed to deposit their money with it if they wish to do so. We hope that the Development Bank will be of great benefit to the farming community and that it will facilitate development such as the singleunit farms under the war service land settlement scheme.

The CHAIRMAN:

– Order! The honorable member’s time has expired.

Mr BRYANT:
Wills

.- I do not think that many points in the remarks of the honorable member for Mallee (Mr. Turnbull) require an answer at this stage. He belongs to a group of people in this chamber who are continually making statements about private enterprise, freedom of the individual and other abstract ideals, but who supports governments and political parties which act contrary to these principles when in power. Yesterday, you, Mr. Chairman, pointed out that perhaps this was not the time to canvass that part of the subject, so I shall leave it until a later time.

This afternoon, I had the exhilarating experience of being able to agree with some of the remarks of the honorable member for Mackellar (Mr. Wentworth). I knew that, if I stayed here long enough, such a situation would eventually arise. On this occasion, he addressed his remarks to the housing position. I direct the attention of honorable members to the housing loan provisions which are contained in Part IV. of the bill. Here, the duties of the Commonwealth Bank in the field of housing are outlined. This is one of the most important and vital matters in the community. If we speak of development in the way in which the honorable member for Sturt (Mr. Wilson) spoke of it, I should say that housing is the most important national development that we have. It is the right of the individual to develop his property and eventually to have the private ownership of his house. This is fundamental, and is the view of the Labour party.

Therefore, 1 look at this part of the bill and consider my own experience with housing. I consider also the troubles of the average young person to-day in getting a home. I can say only that the general approach to housing in this legislation - unfortunately this has also been the position in the past - is unimaginative in the extreme. Let us consider the clauses which have restrictions in them. The honorable member for Mackellar mentioned clause 56 which, as it were, precludes the purchase of standing homes. What does this mean? In great sections of the community, such as in country towns, people cannot deal with this branch of the Commonwealth Bank if they want to purchase a home. This is a serious matter. In a small country town of perhaps 150 to 200 houses, there is no field for the constant building of new homes. A new resident in the area can purchase only a standing home. That is logical. It is economical to purchase only a standing home. But a new resident is unable to turn to this section of the Commonwealth Bank to obtain finance to do so. I say definitely that it is one of the principal duties of the Commonwealth Bank to see that any citizen can house himself under its auspices. The Treasurer might be surprised to know that I am supporting the honorable member for Mackellar in his plea to have him attend to this matter when the bill goes to another place.

Clause 65 of the bill provides that the amount of loan under this division shall not be for a period of more than 35 years. The War Service Homes Division seems to be operating very satisfactorily with a longer term than that.

Mr Harold Holt:

– Is the honorable member suggesting that clause 56 should be altered?

Mr BRYANT:

– That clause refers to loans for new homes. The argument in favour of that is logical enough as it im plies that we want to force people to build new homes, but in great sections of Australia it is not logical to try to erect new homes. For example, I might cite country towns; and, secondly, I refer the Treasurer to my own electorate where there are no more than 800, or 900, blocks where new homes could be erected.

Mr Harold Holt:

– I understand that these provisions are rather more liberal than those in the 1945 act.

Mr BRYANT:

– I am glad of that. I was not here in 1945 or I would have attended to that matter then. I have held this opinion ever since I began to build my own home when I returned from war service. There is a particular jinx, or jinni, in the housing system which makes sure that it is difficult for the ordinary citizen to get through the administrative procedures in building a home. I wish to revert now to clause 65 which provides for the time for which a loan may be granted. Well-built houses will stand for perhaps 100 years, and the limitation of the period of a loan to 35 years may be an unnecessary burden as many sections of the community have meagre incomes. They have little money available to purchase homes so they are driven to rentals.

Clause 66 provides that the amount of loan shall not exceed 90 per cent, of the value of the estate or interest in land on which the loan is secured or the prescribed amount, whichever is the less. The banks are always conservative in their valuation of homes. But the provision in clause 69 is even worse. It states -

A person indebted to the Trading Bank or the Savings Bank in respect of a loan made under this Division may, at any time after the expiration of five years from the date of the mortgage, repay the balance of the loan . . .

Why has the nominated period been limited to five years? I suppose in the end we will see regulations under which a person may repay a loan after paying a premium. What is the basis of this provision? It is commercialization run riot, because the first social duty in a community is the provision of homes. I refer to these clauses as examples of the unimaginative approach of the Government to this problem. The Treasurer has said, by way of interjection, that some of the terms are more liberal than those under the 1945 act. That act was probably a little more liberal than the legislation of 1934, or 1924 or 1910. I suggest that we should have a completely new approach to housing finance. Imagine the magnitude of the problem in Australia. The honorable member for Mackellar has said that there is no housing shortage. I do not know where he lives or to what section of the country he was referring, unless he spoke of the remote areas of central Western Australia; but all over this continent people are waiting for homes and they have few facilities to get them. Recent Statistics show that there are 2,800 marriages every week and about 1,300 houses are built each week. In the big cities there are numerous old houses, and if people had the opportunity they would rebuild or remodel them. There are no facilities for the owner of a standing home to get funds from the Commonwealth Bank to improve his property.

The Commonwealth Government itself participates in housing finance to a great extent. There are three fields in which we in this Parliament deal directly with housing. They are the War Service Homes Division which provides £35,000,000 a year, the Commonwealth and State Housing Agreement under which £36,000,000 is provided and the Commonwealth Bank itself which, according to its report, is providing £15,000,000. So that of a total of several hundreds of millions provided as capital for housing each year, £86,000,000 or thereabouts is the direct responsibility either of this Parliament or the institutions created by it. Therefore, we should have the greatest amount of initiative when it comes to a solution of the housing problem.

One aspect that has intrigued me since I have been studying this problem is the great profits that can accrue, particularly to the Commonwealth Government, from housing finance. Honorable members are probably aware that a great proportion of the revenue paid for war service homes comes through this place. It is mostly interest-free as we get it, but as a grateful country, we lend it to the ex-servicemen at 3i per cent., or 31 per cent. If honorable members will examine the tables which were published in answer to a question that I put to the- responsible Minister in 1957, and recorded at page 914 of “ Hansard “, they will see that repayments of interest over and above repayments of principal and the cost of administration of the War Service Homes Division since its inception in 1919-1920 had shown a total profit to the Commonwealth of nearly £37,000,000. That was nearly two years ago, and I presume that the profit is now a great deal more. So I put the point that the Parliament of the Commonwealth has used housing finance as a matter of profit. All these various fields of Commonwealth finance for housing should be brought under the Commonwealth Bank. It should be used in a much more liberal and imaginative way to allow people to purchase and erect homes.

The TEMPORARY CHAIRMAN (Mr Wight:
LILLEY, QUEENSLAND

– Order! The honorable member’s time has expired.

Mr WILSON:
Sturt

.- The honorable member for Bendigo (Mr. Clarey) who spoke earlier said that ever since this Government had been in office it had shown opposition to the Commonwealth Bank. He proceeded to say that this Government had been weakening the Commonwealth Bank since it came to office. Both statements are completely untrue. Ever since this Government has been in office it has- given tremendous support to the Commonwealth Bank. Not only have the deposits and advances of the Commonwealth Bank expanded tremendously in that time, but the ratio of deposits held by the Commonwealth Bank to the deposits held by the private banks has also increased, showing that, relatively, the Commonwealth Bank has gone from strength to strength while this Government has been in office. This Government believes in a strong Commonwealth Bank. It believes in strong private banks and in free and. fair competition. If you have a strong Commonwealth Bank competing with strong private banks, you will have the widest choice for the citizens of Australia and the most efficient banking system.

When my time expired previously in the committee stage, I was dealing with clause 104 which has been referred to as “the marriage bar “. I said I thought the inclusion, of. this clause in the bill was antiquated and that it. should be omitted. The only reason for its inclusion is that it has been in the Public Service Act ever since 1902. Under modern conditions, there is no justification for forcing an employee of the Commonwealth Bank, or of the Public Service for that matter, to resign merely because she is married. Nor should there be a complete bar on the employment of married women. This matter was dealt with by the Boyer committee, which inquired into Public Service recruitment last year. In paragraph 243 of its report, the committee said -

Apart from these considerations, section 49-

That is the identical provision in the Public Service Act - reads strangely in a country which has adhered to the I.L.O. Convention for equal employment rights for men and women. We have also been told that a U.N. Economic and Social Council Report, prepared for the Commission on the Status of Women in 1951, indicated that at that time Australia was one of only five countries out of 44 supplying information, which had a “ marriage bar “ in their public service legislation. The United Kingdom Civil Service removed the “ marriage bar “ in 1946.

The committee later said -

We recommend, therefore, that sub-sections (1) and (2) of section 49-

That is the same as sub-clauses (1.) and (2.) of clause 104 of this bill - be repealed, and replaced’ by a sub-section providing that married women shall be eligible for permanent or temporary employment in the Service on such terms and under such conditions as are prescribed.

I ask the Minister for Immigration (Mr. Downer), who is at the table, to raise this matter in Cabinet so that our practice can be brought up to date, as waa recommended by the Boyer committee, which grappled with this problem only last year. Its report was presented to the Prime Minister (Mr. Menzies) last December, and was tabled in Parliament a few weeks ago.

Now that men and women have virtually equal rights in almost all spheres of life, there is no justification for discrimination in the Public Service. Nor is there any justification for discrimination in the Commonwealth Bank. The Commonwealth Bank is asked to compete on even terms with the private banks. The private banks do not have to dismiss their valuable ser vants merely because they marry. So I ask the Minister for Immigration to raise this matter in Cabinet and endeavour to see that the recommendations of the Boyer committee are given effect. As I mentioned earlier, I would oppose this part of the bill were1 I not confident that the Government will, in the near future, consider the recommendations of the Boyer committee, and remove the marriage bar from all its legislation.

Mr BARNARD:
Bass

.- I wish to deal with matters other than those referred to by the honorable member for Sturt (Mr. Wilson), although I should like to preface my remarks by referring to the statements, he made in reply to the honorable member for Wills (Mr. Bryant). The honorable member for Sturt said that the present Government had, over the years, given every consideration to the Commonwealth Bank and to the extension of the services provided by that great institution for the people of this country. I say at once that the Government’s actions, and the measures now before honorable members, indicate quite clearly that the Government aims initially to cripple the Commonwealth Bank, and ultimately to destroy it. I think that the Leader of the Opposition (Dr. Evatt)- and other Opposition speakers conclusively proved that point in their speeches on the second reading of the bills.

Mr. Temporary Chairman, the bill before the committee deals primarily with the Commonwealth Banking Corporation. With the passage of the Reserve Bank Bill the Government has effectively destroyed the competition that existed between the Commonwealth Bank, through its trading bank and savings bank activities, and the private trading banking system of this country. The separation of central banking activities from trading bank and savings bank activities will give the private banks a great advantage over the Commonwealth Bank.

Although the Reserve Bank Bill has brought about this separation, the Rural Credits Department will remain under the control of the Reserve Bank. The Commonwealth Savings Bank and the Commonwealth Trading Bank will in future have separate staffs. That,. I submit, is in conflict with the view expressed by the Prime Minister in 1953, when he spoke on bank- ing reform. In his second-reading speech on the Commonwealth Bank Bill 1953, the Prime Minister said -

We do not believe that it is desirable that those officers, who are now in the service of the Commonwealth Bank, should be put to a final election as to whether they are on the central bank side or the trading bank side.

That is what the Prime Minister said in 1953 when he was offering reasons why the Commonwealth Savings Bank and the Commonwealth Trading Bank should not be separated from the central bank. He said -

The Government believes that it should preserve the greatest fluidity of promotion among the Commonwealth Bank’s officers, because the experience gained in both sections of the bank will be of great value . . . Consequently, there will be one service and one series of avenues of promotion, which is a result that the Government considers very desirable.

The Opposition agrees with that point of view. As was provided in the 1945 banking legislation, a person who entered the employment of the Commonwealth Bank should be able to perform central bank activities. At the same time, if he so desired, he could engage in trading bank activities and savings bank activities. In that great institution the staffs had the right of promotion, and could participate in any one of the activities of the central bank and its associate departments. But under the legislation now before the committee there will be two separate staffs. One staff will handle the savings bank section and another will handle the trading bank section. There will be very little scope for promotion. In other words, no officer of this great institution as we know it to-day will have the right to decide for himself whether he should engage in trading bank activities or central bank activities. So, only six years after it introduced legislation to amend the 1945 legislation, the Government has moved in direct contradiction to the considered opinion of the Prime Minister and therefore, I submit, in direct contradiction to the considered opinion of the government of the day. There will be two separate staffs and the members of one staff will have little opportunity to transfer to the other staff.

Mr. Temporary Chairman, the legislation before honorable members, having provided for the dismemberment of the central bank as we know it to-day, provides primarily for the establishment of the Commonwealth Banking Corporation.

At this stage the Opposition reiterates what it has said on this matter during previous debates. We are completely opposed to a board for the Commonwealth Bank. We disagreed with the establishment of a board in 1951, when the Government introduced amendments to the 1945 legislation. Now, there are to be two boards, one to control the -Reserve Bank, and one to control the Commonwealth Banking Corporation, which will consist of three separate institutions, the Development Bank, the Trading Bank and the Commonwealth Savings Bank. The latter board will comprise a managing director, a deputy managing director, and the Secretary to the Treasury, as well as eight other members, all selected by the government of the day. I suggest that at least ten of the eleven members of the board will be political appointees of this Government.

In addition, the Government has imposed definite restrictions in relation to membership of the board. It has said, in the first instance, that members cannot be former employees of the Commonwealth Bank. At the same time - and with this point I agree - it has stipulated that no person engaged in private banking activities shall be a member of the board. However, the Government overlooks the fact that there is nothing to prevent any member of the board from having some direct association with the private banking system. Neither does the bill prevent any member of the private banking system from resigning his association with a private bank, if necessary, only a few days before his appointment to the board. It is obvious that the Government intends to select members who will be sympathetic to the private banking system. That is the stipulation which the Government has made under the bill. It has placed intolerable restrictions on employees of the Commonwealth banking system. It has said, in effect, “We intend to establish a corporation, the members of which shall not have any association with, or knowledge of, banking in this country “. I suggest that what Opposition members said in 1951 in respect of the bank board applies in 1959. Unlimited powers will be given to the members- of the Commonwealth

Banking Corporation board who will have control of the Commonwealth Savings Bank, the Commonwealth Trading Bank and the proposed Development Bank.

The TEMPORARY CHAIRMAN:

–

Order.’ The honorable member’s time has expired.

Mr DUTHIE:
Wilmot

.- Mr. Deputy Chairman, I shall continue where I left off my previous speech. I should like to refer, again, to one phase of this legislation which is most unfair. The Commonwealth Trading Bank is to be separated from the Savings Bank and two distinct executive committees will control the two organizations. Private trading banks have not been put in that position. Each private bank which has recently undertaken savings bank business will be able to conduct both savings and trading business in the one building and under the same management. Why has the Government deliberately made this distinction between Government and private banking? The Government is not prepared to answer that question. It has not yet answered many of the pertinent questions that have been asked from this side of the chamber.

This is further evidence that the Government is determined, through the legislation of a democratic parliament, deliberately to restrict and confine the functions of the Commonwealth Bank. We know the old slogan, “ Divide and conquer “. It is easier to control several sections than one whole. So the Commonwealth Bank will be forced, through this legislation, to have two distinct authorities controlling two phases of its activities - trading bank business and savings bank business. It is most unjust. It is a most unfair restriction. It is a most unfair discrimination between the private banks which will not be touched and the Commonwealth Bank.

Evidence is piling up during this debate that this legislation is designed, not to improve banking generally throughout Australia, but to make absolutely sure that never again will the Commonwealth Bank be in the strong position that it has held in years gone by. The Government is doing this, not by regulation, but by legislation which it intends shall be passed through the two Houses of the Federal Parliament. The Commonwealth Bank will be cut to ribbons. Private banks, on the other hand, will be given every encouragement, help and assistance.

Government supporters talk about private enterprise! They talk about private enterprise having a free rein and having all restrictions removed from it in order to compete with the Commonwealth Bank - the socialized bank. It is interesting to hear this argument because during the regime of the Menzies Government private enterprise has been delivered some real body blows. Years ago, we really had free enterprise as between man and man. To-day, free enterprise means monopolist enterprise in which groups of individuals combine to defeat other groups of individuals. In other words, we have the “ dogeatdog “ principle in private enterprise reaching a stage it has never reached in this country before.

The old days of free enterprise have gone and in its place we have monopoly growth and combines. This will ultimately defeat the purpose of a free enterprise economy. This Government gives much lip service to the old gospel of free enterprise. That has gone long ago and has been replaced by this rugged, ruthless, jungle law in our economy. These bills will give a monopoly to private enterprise “which will have great power over the lives of individual Australians.

Another matter that I wish to mention is housing, for which finance is provided by the Commonwealth Savings Bank. That bank provides loans to building societies and private individuals for house construction. Never was a phase of the Commonwealth’s activities more in need of a financial injection than housing. Every State has this problem. Day after day and year after year members of the Federal Parliament and of the State parliaments find that the toughest request that anybody can make of them is to find a house. We feel helpless when folk who need houses come to us for assistance.

In my State of Tasmania, at the moment, the building societies, the Launceston Bank for Savings, and the Hobart Savings Bank are experiencing the seriousness of this situation. A person who wants to build a house worth £3,000 has to have a deposit of £1,500. How many people can afford a deposit of £1,500? It wipes out the possibility of 90 per cent, of the ordinary folk of the community buying a home. We need an instrumentality which is prepared to lend money at a low cost and on hardly any deposit. In Tasmania, the Agricultural Bank has amongst its functions the building of homes for the Tasmanian people. Incidentally, no deposit is required. It is the only organization in Australia which requires no deposit to build a home worth from £2,700 to £3,000 and offers terms of rental repayment of £4 10s. £4 5s. or £4 a week. Applicants go on a rent purchase basis on a 53-year term. These repayments are applied to the purchase of the home.

We need something like that on a Commonwealth basis. On a State basis it is good, but it is needed on a Commonwealth basis also. If only this new banking set-up would allow for something of that nature I believe that we could get people housed at a much faster rate than is happening to-day. I refer to people needing houses who cannot afford deposits and so need help. I am pleased to see this aspect of the trading bank activities emphasized in the bill in clauses 55 to 64.

The Development Bank is another phase of the split-up, and a clause which is very attractive to me is 73. It reads - (1.) In determining whether or not finance shall be provided for a person, the Development Bank shall have regard primarily to the prospects of the operations of that person becoming, or continuing to be, successful and shall not necessarily have regard to the value of the security available in respect of’ that finance.

That is a good clause. It shifts the emphasis on security away from the value of the security asset towards security of employment or of business. Any provision which can do that is helpful. I am reading this clause in relation to the work of the Development Bank. That bank is designed to help primary production, the development of industrial undertakings, particularly small ones, and to give other assistance to private individuals. This clause is a definite instruction to the bank not to look at the value of security as a first consideration but at the security of the applicant’s employment. I hope that this clause will be implemented to the great benefit of people applying for assistance.

When I was speaking of banking monopolies a while ago I forgot to mention that the number of private banks has been reduced from 70 in about 1850 to nine to-day. That tendency has continued throughout the whole economy during the regime of this Government.

The TEMPORARY CHAIRMAN:

–

Order! The honorable member’s time has expired.

Progress reported.

page 826

TARIFF PROPOSALS 1959

Customs Tariff Amendment (No. 2); Customs Tariff Amendment (No. 3); Customs Tariff (Canadian Preference) Amendment (No. 1); Customs Tariff (New Zealand Preference) Amendment (No. 1); Customs Tariff (Papua and New Guinea Preference) Amendment (No. 1); and Excise Tariff Amendment (No. 1)

In Committee of Ways and Means:

Mr OSBORNE:
Minister for Air · Evans · LP

.- I move- [Customs Tariff Amendment (No. 2).]

That the Schedule to the Customs Tariff 1933-1958, as proposed to be amended by Customs Tariff Proposals, introduced into the House of Representatives on the nineteenth day of February, One thousand nine hundred and fifty-nine, be further amended as set out in the Schedule to these Proposals, and that on and after the twentieth day of March, One thousand nine hundred and fifty-nine, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff 1933-1958 as so amended. THE SCHEDULE. THE CUSTOMS TARIFF. By omitting Prefatory Note (6) and inserting in its stead the following Prefatory Note: - " (6) " F.O.B. price " means free on board price and means - {: type="a" start="a"} 0. the amount comprising the actual money price paid or to be paid for the goods by the Australian importer plus all charges payable or ordinarily payable for placing the goods free on board at the port of export including the cost of outside packages expressed in Australian currency; or 1. in the case of goods consigned for sale in Australia, the amount which in the opinion of the Minister represents the money price which at the date of exportation of the goods would have been paid or would have been payable for the goods by an Australian importer plus all charges which would have been paid or would have been payable for placing the goods free on board at the port of export including the cost of outside packages had those goods been sold to an Australian importer expressed in Australian currency or its equivalent in Australian currency ascertained according to a fair rate of exchange at the date of exportation of the goods." By omitting Prefatory Note (13) and inserting in its stead the following Prefatory Note: - " (13) Unless the Tariff otherwise provides, or the Minister otherwise directs, the term " man-made fibres " means fibres or filaments of organic polymers produced by manufacturing processes, either - {: type="a" start="a"} 0. *by* polymerisation or condensation of organic monomers, for example, polyamides, polyesters, polyurethanes and polyvinyl derivatives; or {: type="1" start="6"} 0. by chemical transformation of natural organic polymers (such as cellulose, casein, proteins and algae), for example, viscose rayon, cuprammonium rayon (cupra), cellulose acetate and alginates." [Customs Tariff Amendment (No. 3).] {: type="1" start="1"} 0. That, in these Proposals, "the Customs Tariff" mean the Customs Tariff 1933-1958, as proposed to be amended by Customs Tariff Proposals introduced into the House of Representatives on the nineteenth day of February, One thousand nine hundred and fifty-nine. 1. That, on and after the twentieth day of March, One thousand nine hundred and fifty-nine, the rates of duly set out in the Schedule to the Customs Tariff in the column headed " British Preferential Tariff ", apply to such goods - fa) which are the produce or manufacture of Australia; {: type="a" start="b"} 0. which, having been exported from Australia, are imported into Australia; 1. the character of which has not been altered during the interval between exportation and importation; and 2. to which sub-item (a) of item 401 in the Schedule does not apply, as are approved in writing by the Minister of State for the time being administering the Customs Tariff, or that Act as amended from time to time, or the Minister of State for the time being acting for or on behalf of that Minister. 2. That section eight of the Customs Tariff be amended by inserting in sub-section (2.), after the word " goods " (first occurring), the words " the produce or manufacture of the United Kingdom ". 3. That the Schedule to the Customs Tariff be amended by inserting in sub-item (a) of item 401, after the word " produce ", the words " or manufacture ". 4. That the amendments to the Customs Tariff referred to in paragraphs 3 and 4 of these Proposals have effect on and after the twentieth day of March, One thousand nine hundred and fifty-nine. [Customs Tariff (Canadian Preference) Amendment (No. 1).] That the Schedule to the Customs Tariff (Canadian Preference) 1934-1958 be amended as set out in the Schedule to these Proposals, and that on and after the twentieth day of March, One thousand nine hundred and fifty-nine, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff (Canadian Preference) 1934-1958 as so amended. [Customs Tariff (New Zealand Preference) Amendment (No. 1).] That the Schedule to the Customs Tariff (New Zealand Preference) 1933-1958 be amended as set out in the Schedule to these Proposals, and that on and after the twentieth day of March, One thousand nine hundred and fifty-nine, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff (New Zealand Preference) 1933-1958 as so amended. (Customs Tariff (Papua and New Guinea Preference) Amendment (No. 1).] That the Schedule to the Customs Tariff (Papua and New Guinea Preference) 1936-1958 be amended as set out in the Schedule to these Proposals, and that on and after the twentieth day of March, One thousand nine hundred and fifty-nine, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff (Papua and New Guinea Preference) 1936-1958 as so amended. [Excise Tariff Amendment (No. 1).] That the Schedule to the Excise Tariff 1921-1938 be amended as set out in the Schedule to these Proposals and that on and after the twentieth day of March, One thousand nine hundred and fifty-nine, at five o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Excise be collected in pursuance of the Excise Tariff 1921-1938 as so amended. {: .speaker-KMD} ##### Mr OSBORNE: -- **Mr. Chairman,** the Tariff Proposals which I have tabled relate to proposed amendments of the schedules to the following acts: - the Customs Tariff 1933-1958, the Customs Tariff (Canadian Preference) 1934-1958, the Customs Tariff (New Zealand Preference) 1933-1958, the Customs Tariff (Papua and New Guinea Preference) 1936-1958. and the Excise Tariff 1921-1958. Where not already in operation the alterations will have effect as from to-morrow morning. Customs Tariff Proposals Nos. 2 and 3 embody a reintroduction of most of the tariff changes which were introduced into the Committee of Ways and Means on 14th August, 11th September and 1st October, last year. The reintroduced items relate principally to peanuts, peanut oil; fresh frozen vegetables, cotton sheeting for use in the manufacture of bed sheets and pillow cases, metal-working lathes, slide fasteners of the progressive interlocking type, hairdressers' and opticians' chairs, cotton yarns and yarns of man-made fibres. Sundry other amendments are also made deleting from the various tariff schedules the references to " artificial silk " and substituting the term " man-made fibres ". These amendments came into operation at the time of their introduction into the House last year, and were validated until 30th June, 1959. This being a new Parliament, it is legally necessary that they be reintroduced in order that honorable members may have the opportunity to debate the changes with a view to their incorporation in the various Tariff acts. I hope to be able to give honorable members that opportunity after the Easter recess. Amendments included for the first time are confined almost wholly to those which stem from adoption by the Government of the recommendations by the Tariff Board concerning hammers and mallets, insulating parts for sparking plugs, and electric filament lamps. At a later stage I shall table the board's reports dealing with those matters, with the exception of the report on electric filament lamps which was tabled in October last. The first new amendment concerns hammers wholly or principally of metal. Increased rates of duty are provided on carpenters' claw hammers and engineers' hammers at rates of 27£ per cent. British preferential tariff and 35 per cent, otherwise. All other metal hammers being hand tools are now specifically provided for in the tariff. Non-protective rates of free B.P.T. and *Ti* per cent, ad valorem otherwise are provided for those having a head weight of 4 lb. or more, whilst protective rates of 22i per cent. B.P.T. and 30 per cent, otherwise apply when the heads are lighter than 4 lb. This change represents a rationalization of the present tariff treatment on hammers and will result in both increases and reductions in the duties previously applying. On porcelain insulating parts for sparking plugs, duties of 20 per cent. British preferential tariff and 27i per cent, otherwise are proposed. These goods previously were admitted under Customs by-laws free of duty. The production of these insulators in Australia has reached a satisfactory degree of efficiency and in the opinion of the Tariff Board should be encouraged. The rates of duty which are now provided should enable Australian manufacturers to compete with overseas suppliers. In regard to electric filament lamps, a by-law item is now created. For British preferential tariff goods, the rate is free and for goods not entitled to the British preferential tariff the rate provided is7½ per cent. ad valorem or1s. 6d. per lb., whichever returns the lower duty. In the report tabled last October, the Tariff Board recommended that lamps of the types not made in this country should be admitted free of duty irrespective of origin. However, under the terms of our trade agreement with the United Kingdom, that country is entitled to a tariff preference on electric lamps. Following discussions with the United Kingdom Government, it has been agreed that this preference should be retained. Electric filament lamps which are of the types manufactured in Australia will of course continue to pay duty at the existing protective rates of duty. It is also proposed that the Intermediate Tariff on caffeine covered by nonprotective item 281(v)(l) be reduced from its existing rate of12½ per cent. ad valorem to 7½ per cent. This action is consequent on recent trade negotiations with Brazil. Turning to Excise Tariff Proposals No. 1, the tariff concession on certain spirituous liquors and cigarettes and tobacco which is at present granted under item 18 of the Excise Tariff to the personnel of Royal Australian Naval ships is being extended to personnel on sea-going ships which are in full commission and which are operated by the Australian Military Forces. The ships operated by the Department of the Army are employed on military maintenance tasks and in the training of crews, and make voyages to such places as Manus Island, Lord Howe Island and the Territory of Papua and New Guinea. This amendment is being made on the grounds of equity. The amendments in Customs Tariff (Canadian Preference) Proposals No. 1, Customs Tariff (New Zealand Preference) Proposals No. 1 and Customs Tariff (Papua and New Guinea Preference) Proposals No. 1 without exception are complementary to the amendments being made in Customs Tariff Proposals No. 2. I commend the proposals to honorable members. Progress reported. {: .page-start } page 840 {:#debate-30} ### TARIFF BOARD Reports on Items. {: #debate-30-s0 .speaker-KMD} ##### Mr OSBORNE:
LP -- I lay on the table re ports of the Tariff Board on the following subjects: - >Hammers and mallets. > >Insulating parts for sparking plugs. Ordered to be printed. {: .page-start } page 840 {:#debate-31} ### COMMITTEE OF PRIVILEGES Motion (by **Mr. Harold** Holt)- by leave - agreed to - >That the Committee of Privileges, when considering the matter referred to it on the 18th March, 1959, have power to send for persons, papers and records, and have leave to sit during the sittings of the House. {: .page-start } page 840 {:#debate-32} ### COMMONWEALTH BANKS BILL In committee: Consideration resumed (vide page 826). {: #debate-32-s0 .speaker-BV8} ##### Mr CALWELL:
Melbourne .- I wish to take advantage of the second opportunity provided by the Standing Orders to discuss further the provisions of the Commonwealth Banks Bill. I do not wish to repeat anything I said previously, although the statements I made before are worth repeating. It seems to me that the Government is prepared to waste a lot of the money of the Commonwealth Bank. It seems that the Government is determined to waste that money, which really belongs to the people of Australia, in order to oblige the private banking institutions. The change of name from " Commonwealth Bank " to " Commonwealth Trading Bank ", under the 1953 legislation, cost the Commonwealth Bank £300,000. When all the changes provided for in this present legislation are effected, the cost will be very much greater. There will be the cost of changing the frontispieces of more than 500 branches of the Commonwealth Trading Bank and the Commonwealth Savings Bank to carry the new nomenclature, " Commonwealth Banking Corporation ". There will be additional cost in changing stationery. There will be the cost of new premises for the Reserve Bank. All these things are to be done, all this wasteful expense is to be incurred, in order to give effect to the Government's legislation. {: .speaker-KDA} ##### Mr Duthie: -- Do you think the cost will reach £1,000,000? {: .speaker-BV8} ##### Mr CALWELL: -- It could reach £1,000,000, but what is £1,000,000 to the Government if the people's bank has to pay it and the private banks are to benefit as a result? The Government is doing the same kind of thing with regard to the Ansett interests in the airways field, and will no doubt do it in every other field. This Government squanders public money and believes that it has public support for doing so. There are evil minds behind the whole nefarious scheme of this Government, and we make our protest against the proposal to sacrifice the proud name that the Fisher Government gave to the Commonwealth Bank. The 1945 act, based on the recommendations of a royal commission appointed by the Lyons Government on the motion of a prominent member of the Australian Country *party* and who is now the Deputy Prime Minister of the present Government **(Mr. McEwen),** has been scrapped. The Fisher Government did a great job for Australia when it established the Commonwealth Bank, and the Commonwealth Bank in turn has done a tremendous job for the Australian people over the years. But this Government has decided that the name, " Commonwealth Bank of Australia ", is to disappear. Well, it will reappear when we occupy the treasury bench. We are determined to restore the 1945 act. We will settle for the 1945 act, and if the private banking institutions of Australia will settle for the 1945 act banking can go out of politics. As long as the 1945 act is not on the statute-book in its entirety we will fight to get it back and keep it there. The members of the present Government are not concerned one iota about getting banking out of politics, although they proclaim that that is their desire. The only way to get banking out of politics is for the private banking institutions to keep their itchy hands off the Commonwealth Bank. The members of the Australian Country party are being fobbed off with the Development Bank, which will not have too much money anyway, because it will begin with a nominal capital of £20,000,000. That, however, means only an extra £5,000,000 of capital for the bank, because the Commonwealth Bank has already got £15,000,000 for the purpose. So it will not be long before we are considering in this chamber a motion to give more money to the Development Bank, if the Australian Country party can force the Government to do the right thing in regard to the matter. The Labour party is ever watchful over the future of the Commonwealth Bank. When the Minister for External Affairs **(Mr. Casey)** was Treasurer in 1938, he tried to amend the charter of the Commonwealth Bank in order to permit private shareholding in it. The legislation was so outrageously unfair that it did not pass this House, and members of the Australian Country party at that time would not allow it to pass. There is no desire on the part of. members of the Liberal party to keep the present legislation intact. The honorable member for Wilmot **(Mr. Duthie)** said that the number of private banks in Australia has gone from 70 to nine as a result of amalgamation. Actually, as a result of amalgamation or absorption, there are now only seven of them. The process of amalgamation will no on. Nothing can stop it. Economic forces will determine that. As our industries grow bigger, as the monopolies increase, as fewer newspapers are published because of absorption by the ruling groups of their smaller rivals, as general stores amalgamate, so the banks will have to amalgamate in order to carry the financial burdens of these big institutions. Nothing can stop that trend. Nothing can stop the growth of giant corporations, and it will not be our doing if ultimately there are only two or three private trading banks. {: .speaker-009MC} ##### Mr Harold Holt: -- You want only one giant State corporation. {: .speaker-BV8} ##### Mr CALWELL: -- I do not. {: .speaker-009MC} ##### Mr Harold Holt: -- You do. {: .speaker-BV8} ##### Mr CALWELL: -- We do not. We will settle for the 1945 act. I told you that. {: .speaker-009MC} ##### Mr Harold Holt: -- That is not what your supporters say. {: .speaker-BV8} ##### Mr CALWELL: -- I am deputy leader of the Labour party, and I am expressing the policy announced by the leader of the party during the last two general elections. We will settle for the 1945 act, but will you? Of course, you will not! If you could remain in power long enough you would throttle the Commonwealth Bank. I feel that ultimately there will be two private banks in existence, or maybe only one. We will reach the stage in banking that we have reached in airlines. There will be a governmentowned bank and a privately owned bank. This appears to be almost a part of the inevitability of what is called modern progress. I make one plea on behalf of the employees of the private banks. When they worked to destroy the Labour Government led by **Mr. Chifley** they were told that they would be looked after by their employers. They have been fighting for nine years to get the same salaries, wages and conditions as members of the Commonwealth Bank staff, and they are still no nearer their objective. Last year, the bankers filed in the Arbitration Court a claim for an actual reduction of the wages of bank staffs. It appals me to think that there are bank clerks who are discriminated against by the directors of their own banks in their employment and are yet prepared to go out on election day to defeat the government or to destroy the party that would give them an opportunity to get reasonable wages and conditions. They demand what they call wage and salary justice, but they will never get it while this Government lasts, and they are foolish if they continue to vote for the return of anti-Labour governments. This Government says that it wants a strong central bank under Government control, and free from the activities of the Commonwealth Trading Bank. Of course, it does. It wants a central bank which will buttress the private trading banks and destroy the competitive activity of the Commonwealth Trading Bank. That was the very essence of the 1922 legislation introduced by the " tragic Treasurer " - the right honorable member for Cowper. That was the legislation that prevented the Commonwealth Bank from competing with the private trading banks until the Labour Government came into power in 1941 and eventually passed the legislation which made it obligatory on the Commonwealth Bank Board to enter into active competition with the private trading banks. This Government says that it wants plenty of competi tion, but when it gets plenty of competition it says that it would be unfair to the private banks to allow the Commonwealth Bank to compete any further, so it has to cut down or weaken the Commonwealth Bank. The Royal Commission on Banking to which I have referred was appointed by the anti-Labour government led by a Labour renegade named Joseph Aloysius Lyons. It criticized the part played by the private banks during the depression, and used these words - >They must bear some responsibility for the extent of the depression. Those words mean that the depression would have been lightened and some of the worst effects avoided if the expansion in banking credit which the Labour party, and particularly **Mr. Theodore,** advocated at that time, had come earlier. These banks paid dividends in 1920-31 which ranged from 8 per cent, to 10 per cent., while farmers, small shopkeepers and workers faced ruin. Over a lengthy period, the private trading banks of Australia paid dividends which averaged 10 per cent, of their paid-up capital. That means that in twenty years they received in dividends twice the amount of the capital subscribed and still had in reserve an amount nearly equalling the capital put in. {: #debate-32-s1 .speaker-JRJ} ##### The CHAIRMAN (Mr Bowden: Order! The honorable member's time has expired. {: #debate-32-s2 .speaker-009MC} ##### Mr HAROLD HOLT:
Treasurer · Higgins · LP -- The further the discussion on these bills has proceeded, the more obvious it has become that the Labour party, in this matter as in so many other matters now, is hopelessly divided. We have just heard the Deputy Leader of the Opposition **(Mr. Calwell)** speaking with the authority of the office he holds. Indeed, when I interjected in what I am afraid. **Mr. Chairman,** was a somewhat disorderly fashion, he emphasized that he, as deputy leader, was able to give expression to the policy of the Labour party and the official policy of his own leader. Presumably he was expressing the policy of the Labour party and his leader when he said that he would settle for the 1945 legislation. {: .speaker-BV8} ##### Mr Calwell: -- Hear, hear! {: .speaker-009MC} ##### Mr HAROLD HOLT: -- He confirms the point I am making. At least, therefore, all of our efforts over the intervening years have had some useful effect, even if it is limited to the honorable gentleman and those whom he can fairly describe as his own followers and supporters, because an earlier Labour government was not prepared to settle for the 1945 legislation. It wanted to go whole-hog for bank nationalization in 1947. The honorable gentleman may now say, " We will settle for the banking legislation of 1945 ", but who are " we "? That term does not include the honorable member for East Sydney **(Mr. Ward).** He made that very clear in the course of this debate. It does not include the honorable member for Grayndler **(Mr. Daly),** who, I thought, was becoming like a kamikaze kid when he spoke earlier in this debate. He appeared to be out to destroy the Labour party in New South Wales and even to carry himself to destruction in the process. It was a very laudable purpose, if that was in his mind. I could not otherwise fathom the somewhat extraordinary speech which he made, but he was not prepared to settle for the act of 1945, nor were other honorable members who sit on the Opposition side of the House. What they have said leaves us in a quandary. Do they stand for their printed platform? Do they stand for the bank nationalization legislation of 1947? Do they stand for the banking legislation of 1945? Or do they stand for any one of a number of variants in between? All of these propositions have been put forward to us during the debate. It would be tempting to pursue in this general fashion the case which the Deputy Leader has put to us, but we are on the committee stage of this bill, and I propose to direct my comments to particular matters which have been raised by honorable members, including the Deputy Leader himself. I shall not necessarily take these clauses in numerical order, because I should like to pay to the Deputy Leader who sits at the table the courtesy of discussing first one matter which he raised. He referred to clause 103, which deals with the problem of excess officers. He seems to be able, by some chameleon process, to adjust himself to the environment and to forget the shape and colour that he assumed a little time before. In making his criticisms of clause 103, I thing he forgot that it is in precisely the same form as the corresponding provision in the 1945 legislation, to which he was a party and which he now professes to applaud. It also corresponds to a similar provision in the Commonwealth Public Service Act. So far as I can ascertain, governments down through the years, irrespective of their politics, have felt it desirable to have this provision in their legislation. I am well aware of the fact that the Commonwealth Bank Officers Association has made representations for the deletion of this clause. No doubt the Deputy Leader, and others with him, wanting to curry a little favour, have pressed that request on this occasion. If those representations were adopted, the result virtually would be a guarantee of minimum salary and tenure of employment of officers until the age of 60, regardless of the actual staff requirements of the corporation. For quite obvious reasons, such a position could not be seriously contemplated. The honorable member for Wills **(Mr. Bryant)** and the honorable member for Mackellar **(Mr. Wentworth)** spoke about one or two of these clauses which relate to housing. Clause 63 (3.) provides - >The owner of an estate or interest in land upon the security of which a loan has been made under this Division shall not, without the consent in writing of the Trading Bank or of the Savings Bank, mortgage or charge the estate or interest in land upon the security of which the loan was made. The honorable member for Mackellar and, I think, the honorable member for Wills both urged that such consent should not be unreasonably withheld. I point out to the committee, **Mr. Chairman,** that this provision is precisely the same as that in the existing Commonwealth Bank Act. It is quite normal for any bank or other financial institution to require this kind of approval before a borrower enters into a second mortgage, but I am quite certain that neither the Commonwealth Trading Bank nor the Commonwealth Savings Bank would act unreasonably. Their proper concern is to protect themselves in the matter of security, and no doubt, if they could see that objective achieved, they would meet as best they could the wishes of the borrower. The honorable member for Wills will be interested to know that the various points which he made cannot be directed with any particular force against this Government, because, as I mentioned by way of interjection when he was speaking, the provisions of this bill are more liberal in their effect than were those written into the Commonwealth Bank Act 1945. {: .speaker-JO8} ##### Mr Barnard: -- In what way? {: .speaker-009MC} ##### Mr HAROLD HOLT: -- In relation to these housing loans about which he was speaking in particular. The honorable member for Mackellar raised a point in connexion with clause 56, which requires the Commonwealth Trading Bank and the Commonwealth Savings Bank to give preference to loans for the erection of homes and for the purchase of newly erected homes. The honorable member raised the point that it is sometimes convenient for the borrower to get a home that is not newly erected or about to be built by him, and suggested that this requirement need not be pressed when the housing shortage in certain States disappears. Of course, if the housing shortage disappears, there will be no occasion for it to be pressed. So I do not think that any major point arises there. The only other matter that I feel 1 need discuss at this stage, **Mr. Chairman,** relates to clause 104, which was dealt with by the honorable member for Wentworth **(Mr. Bury),** the honorable member for Sturt **(Mr. Wilson)** and other honorable members. It concerns the position of married women. The clause admittedly, places restrictions on the employment of married women in the Commonwealth Banking Corporation Service, but it merely repeats section 185 of the existing Commonwealth Bank Act, and is in similar terms to a corresponding provision in the Public Service Act. As honorable members are aware, in the report recently made by the Committee of Inquiry into Public Service Recruitment, there are certain recommendations on the subject of the employment of married women in the Public Service. Those recommendations will be fully considered by the Government from the standpoint both of the Public Service and of their implications for the Commonwealth Banking Corporation Service. I am by no means unsympathetic towards the viewpoint which has been put forward, and I can assure the honorable gentlemen who have stressed this matter with us in this committee debate that their views will be very much in mind when the matter conies before the Cabinet for its deliberation. It is quite apparent. **Sir, from** the speeches to which we have been listening in the most recent stages of the discussion, that the discussion has turned not so much to particularmatters as to the kind of general principles to which honorable members on bothsides of the chamber addressed themselves at the second-reading stage. As we have two other major measures and ten incidental ones to proceed with, 1 move - >That the question be now put. Question put. The committee divided. (The Chairman - Mr. G. J. Bowden.) AYES: 49 NOES: 33 Majority 16 AYES NOES Question so resolved in the affirmative. Question put - That the bill be agreed to. The committee divided. (The Chairman- Mr. G. J. Bowden.) AYES: 0 NOES: 0 Majority 16 AYES NOES Question so resolved in theaffirmative. Bill reported without amendment; report adopted. Bill read a third time. {: .page-start } page 845 {:#debate-33} ### BANKING BILL 1959 Consideration resumed from 17th March (vide page 698). In committee: The bill. {: #debate-33-s0 .speaker-JAG} ##### Mr CREAN:
Melbourne Ports .- This bill, which is the third of these banking measures, deals with some of the powers incidental to the conduct and regulation of banking. It vests certain powers in the central bank, and also in some circumstances gives powers to the Treasurer with regard to the fixing of interest rates and the ability to control advances. But, above all, this measure deals with what were formerly called special accounts but will in future be known as statutory reserve deposits. This particular section of the measure deals with the right of the central bank to call up excess liquidity or to release liquidity to the banking system according to the circumstances of the time. Here again the matter that is of significance is the particular circumstance of the Australian economy from time to time. There was some little mention of this matter last night, when we were dealing with the first of these measures, which concerned the Reserve Bank. There was some discussion regarding the powers of the Bank of England as a central bank, and it was indicated that the Bank of England has weapons which are not in existence in this country, and with which it is able to regulate the volume of money in the community. Reference was made to the discount rate. During the course of his remarks the honorable member for Mackellar **(Mr. Wentworth),** relying, I would think, on some text book that he read in 1930 or thereabouts, stated that the Bank of England has no such power as that which exists in Australia and is known as the special accounts power, and will in future be called the statutory reserve deposits power. That is not correct, because since July of last year the Bank of England has beengiven, with the authority of the Government, power similar to the special account provision. {: .speaker-JTP} ##### Mr Bury: -- Modelled On Ours. {: .speaker-JAG} ##### Mr CREAN: -- Yes, that is the point I "want to make. The honorable member for Mackellar said last night that it had no such power, and I just want to correct his antique argument. The honorable member for Wentworth **(Mr. Bury)** referred to **Mr. Cobbold,** the Governor of the Bank of England. In announcing this new move, according to the August, 1958, issue of " The Banker " at page 494, **Mr. Cobbold** gave a broad outline of the scheme. It was realized in Great Britain that the old traditional weapons, which were far stronger and more varied than those existing in Australia, were no longer adequate to control liquidity. **Mr. Cobbold** said - >When it appeared necessary in support of other monetary measures, to restrict the liquidity of the banking system and thus the ability of the banks to extend credit, the Bank of England would call for special deposits to be made with them by the banks. I quote that passage largely so that the honorable member for Mackellar may bring himself a little bit up to date. The special account mechanism, as it has operated in Australia, has been virtually the main method by which the central bank has been able to influence the volume of money in the community. Because of the circumstances of our balance of payments, there can be wide fluctuations up and down of considerable magnitude in our monetary position. The special account mechanism is one way by which fluctuations can be ironed out, but it is not a weapon that can be used in isolation. It is a weapon that also requires the co-operation of the private banking system and that co-operation has been signally lacking in Australia, particularly in the last few years. The big five banks in England are no greater relative to the economy than is the private banking *system* in Australia. They are both branch systems with comparatively few big banks but with many hundreds of branches throughout the length and breadth of the country. Traditionally, the big five in Great Britain ha-ve adopted and observed what are known as liquidity conventions. They have a rough rule that the amount of cash 'holdings shall be 8 per cent, of the total deposits. Of course, cash does not merely mean currency; it also means deposits with the central bank - in that case, the Bank of England and in our case the Commonwealth Bank. No such cash convention has been observed in Australia. Indeed, a glance at the figures in the December-January, 1959, issue of the Statistical Bulletin of the Commonwealth Bank shows that of total deposits at the end of December of £1,626,000,000, the amount of coin, bullion, and notes with the Commonwealth Bank, which is all characterized by the description " cash ", totalled only £76,000,000. This is in the region of only 5 per cent, of total deposits and shows how insignificant in aggregate is the currency itself. The second convention that is traditionally observed in the British banking system is what is known as the 30 per cent, ratio. It is that cash plus call money and other liquid assets shall be 30 per cent, of the total deposits. In Australia, the governor of the bank through the board endeavoured over several years to introduce a similar ratio into the Australian framework. He did not aim to put it as high as 30 per cent.; he aimed to achieve an L.G.S. ratio of 25 per cent. Unfortunately, he was not successful in getting the so-called gentlemanly private banks to follow the rules of the game. The figures were given here recently by the Leader of the Opposition **(Dr. Evatt).** In consequence, something like £100,000,000 of excess money was pumped into the Australian economy with disastrous effects not only to the banking system but also to the income and savings of all sections of the community. I would suggest that what ought to be done in this legislation is that, since the so-called gentlemen are not gentlemen and since they will not observe conventions, a statutory attempt should be made to define liquidity conventions for the Australian banking system. I cannot go into details now, but the point is this: How the banking system disposes of its deposits and distributes its assets - whether more finance goes into advances to private undertakings and less into government securities - alters the whole balance of economic development in the community. {: #debate-33-s1 .speaker-10000} ##### The CHAIRMAN: -- Order! The honorable member's time has expired. {: #debate-33-s2 .speaker-KKU} ##### Mr MACKINNON:
Corangamite -- I intrude into this debate, as the honorable member for Melbourne Ports **(Mr. Crean)** did, to do a little correcting. While I do it with a certain amount of diffidence, the subject is important in relation to the question we are now debating - banking control and the control of credit within the financial structure of Australia. Mention has been made on a number of occasions of the liquid assets - government securities ratio to bank deposits, and the honorable member for Melbourne Ports mentioned that a convention of 25 per cent, was to be adopted by the trading banks, after direction from the central bank. It may have been inferred from the remarks of the honorable member for Yarra **(Mr. Cairns)** that this arrangement failed because the banks flouted the instructions of the central bank. He quoted at some length from the well-known English, Scottish and Australian Bank Limited lecture given by **Dr. Coombs** in 1954, in which he referred to the 25 per cent. L.G.S. convention. I think that the honorable member was deceiving the committee by not explaining at some greater length why the convention failed. Again, I feel that the speech of **Dr. Coombs** last year in which he mentioned this subject should be read to honorable members. I shall read an extract from the Mills Memorial Lecture of 29th April, 1958, in which, referring to the question of liquidity, **Dr. Coombs** said - >The first attempt to establish a firm liquidity convention was not successful. It would be purposeless to try to allocate the responsibility for the failure, but it is worth while to consider what objective factors contributed to it. Looking back on the attempt I feel that the plan lacked precision in the obligations it placed on the trading banks and made insufficiently clear what they could expect from the Central Bank. It assumed that banks could and would be willing readily to adjust their practices to a system which required them to base their lending policy predominantly on their L.G.S. ratios. > >Furthermore, it under-estimated the time lag in policy changes becoming effective and the difficulty of interpreting changes in the L.G.S. ratios because of the magnitude and variability of the seasonal fluctuations to which they are subject. Since 1956 - and this a point which has not been explained - that 25 per cent convention has been discarded. The figure is now - or so I understand because it has never been publicly stated1 - not the old 25 per cent, average for the whole of the year, but a 14 per cent, minimum at any one time throughout the year. That is where the committee has been misled by the honorable member foi Yarra. I refer again to the same lecture by **Dr. Coombs.** In the next passage he said - >The new convention has been in operation now for two years and although thin cannot be regarded as an adequate test, experience so far gives modest hope of continued effectiveness. Banks have been faithful in their adherence to it and understanding of its working and the adjustments it calls for in Central Bank and trading bank management is steadily being built up. Its greatest weakness lies in the fact that it necessarily leaves to the individual banks the responsibility for judging the impact of our very variable seasonal movements on their own figures. A more even spread of Government tax receipts over the year and a development of the short-term money market, in which the Central Bank could help smooth out major irregularities in the seasonal swings of liquidity, would give it greatly increased strength. > >If the convention continues to function adequately, it will, I believe, prove to be one of the major steps in the development of our monetary system. It is gratifying that it has been established, after one false start, as a result of co-operation between the trading banks and the Central Bank. I mention this because it could have been inferred from the remarks of the honorable member for Yarra and other members of the Opposition that the private trading banks had been flying in the face of the central bank instruction. The honorable member for Yarra referred at great length to the liquidity ratios of the various trading banks last year. He did not tell this committee that that old convention of 25 per cent, was scrapped, as was shown in the remarks of **Dr. Coombs** on 29th April, 1958. Another point in connexion with liquidity which may be confusing, particularly in the way it has been presented by the Opposition, relates to the comparatively good position of the Commonwealth Trading Bank in relation to some of the private trading banks. One point that has been carefully omitted from all these arguments is contained in footnote (c) on page 49 of the October 1958 " Review of Business Statistics ", a publication which the honorable member for Melbourne Ports has quoted. It refers to the transfer that was allowed in 1952 from the general banking division of the Commonwealth Bank to the Commonwealth Savings Bank of some £24,000,000 of housing loans. I suggest, **Mr. Chairman,** that if any of the other private trading banks had had a windfall like that - a present from heaven - and had been allowed to transfer £24,000,000 of slowmoving advances to some other institution, their relative liquidity position would have been very much better. I think those two points must be brought out in any discussion. The honorable member for Yarra either deliberately excluded them from his remarks or, alternatively, his knowledge is not quite so accurate as his recently acquired degree would suggest. {: #debate-33-s3 .speaker-1V4} ##### Mr CAIRNS:
Yarra .- The honorable member for Corangamite **(Mr. Mackinnon)** has referred to the analysis of the cash reserve ratio in two distinct parts. The first part covered the first two years when, as the Governor of the Commonwealth Bank, **Dr. Coombs,** said in his lecture, the convention was not successful. The second part was the period since that time. I am not, at this point, concerned with the reasons that the private trading banks had for not conforming to that ratio in the first period, whatever they might have been. The point is that they did not conform to the ratio. They might have had good reasons which seemed excellent to them. Whenever the private trading banks fail to conform to the directions of the central bank, they will have excellent reasons for not doing so. The point that T and other members of the Opposition have been trying to make is whether or not the private trading banks conformed to the ratio as a matter of public interest or whether they act only in their own interest. The central bank and the Government should and must take into account those public considerations. If the Commonwealth Bank had not made clear to the trading banks what it wanted them to do. that was its fault. A fault also lay with the Government in not ensuring that the Commonwealth Bank had done its work properly. The fact that the honorable member for Corangamite can save that the private trading banks had very good reasons in that period for not adhering to the central bank instructions and resisted them is one thing that we know. Private trading banks will not do these things without what is for them good reason. The honorable member also said that the Governor, the board of the Commonwealth Bank and the Treasurer had not seen to it that their instructions were given clearly to the trading banks. That is no excuse for the Governor, the Treasurer or the bank board. Far from it! That is one of the reasons why we have been offering criticisms. As to the second period, the trading banks, having refused to adhere to the instructions of the Commonwealth Bank and what the governor said was strong pressure, did achieve a position more amenable to them. In other words, they have done what I have said they did. They have operated and shaped the public banking system in a way which suited them admirably. The honorable member for Corangamite has said that the convention now provides for a minimum ratio of 14 ner cent. If it does. I have no knowledge of it, and I suggest that this committee has no knowledge of it either. We have not been given by the Treasurer, the Governor of the Commonwealth Bank or anybody else in a responsible position a statement that the convention is now a minimum of 14 per cent. The honorable member has made the statement as though this were something which was quite definite and established; but the position is quite to the contrary. So far as we know, the Governor of the Commonwealth Bank is still trying to get the trading banks to observe an overall 25 per cent, convention. {: .speaker-KKU} ##### Mr Mackinnon: -- He said in his own words that that was out. {: .speaker-1V4} ##### Mr CAIRNS: -- He has not said that he is not trying to maintain that convention. {: .speaker-KKU} ##### Mr Mackinnon: -- He said it did not work. {: .speaker-1V4} ##### Mr CAIRNS: -- But he did not say he was not trying to maintain it. {: .speaker-KKU} ##### Mr Mackinnon: -- He gave good reasons. {: .speaker-1V4} ##### Mr CAIRNS: -- Of course. It did not serve the purposes of the private trading banks to do it; but **Dr. Coombs** did not say that he had given up trying to apply this ratio. The figures are in this bill, so it is the intention of the Government to adhere to a ratio of that sort. Perhaps, they are not going to do it. I am sure they are not, but it is still the expressed intention of the Government and the Commonwealth Bank on this matter. This is the second time that we have seen a departure by speakers on the Government side from something that they have assumed is continuing to apply. If this is the ratio, and if this is what the Governor of the Commonwealth Bank has been trying to do since 1957, as I said the other day there were only three quarters during which any private trading bank adhered to that ratio. In every one of the other quarters since March, 1957, they have not done so. This is in the second period. If the Government wants to say now that it is not the convention that the central bank is trying to apply, let it say so. Let it say that it is adhering to a minimum of 14 per cent, and is giving up the attempt to apply the 25 per cent, ratio. Is that what the Government intends to tell us? The final point I want to make is this: It does not suit the private trading banks in the first place to adhere to the 25 per cent, convention for various reasons that have been cited from **Dr. Coombs'** lecture by the honorable member for Corangamite. It has not suited them in the second period to do that, but it has suited the Commonwealth Trading Bank throughout to adhere to that ratio. From the figures that have been supplied it will be seen that not once was the Commonwealth Trading Bank below 25 per cent, in the ratio of its cash holdings and government securities to its deposits. If the instructions of the governor of the bank were clear enough for the Commonwealth Trading Bank to follow, why were they not clear enough to the private trading banks? If the management of the Commonwealth Trading Bank could so arrange its accounts and the circumstances of its financial transactions as to have a ratio in each period of substantially more than 25 per cent., and in some cases up to 38 per cent., why could not the private trading banks do that also? At all times there is one standard of reference with regard to the Commonwealth Trading Bank and one standard of reference with regard to the other banks. Government supporters are on the side of the private trading banks. We on this side of the House make no secret of the fact that we are on the side of the Commonwealth Bank. The record of the Commonwealth Bank in this matter of cash reserve ratios is better than the record of the private trading banks. Some honorable members opposite are interjecting, but I should like to see a better representation of Government supporters in the chamber. The standard of interjections might then improve. The honorable member for Mitchell **(Mr. Wheeler),** whose interest in banking is obvious, has been in the chamber quite a lot during the debate. The honorable member for Wentworth **(Mr. Bury)** is frequently here, but with the exception of those two honorable members the Government benches have been almost bare. I am pleased that one or two of them have been sufficiently roused to see fit to interject. But it is impossible for them, by interjection or by argument, to deal with the proposition that I am advancing. If the Commonwealth Trading Bank has been able to carry out consistently since 1953 the directions of the governor with regard to its cash reserve ratio, and the private trading banks have not been able to do so, the fault must lie with the private trading banks and not with the board or the Governor of the Commonwealth Bank. That is something that the honorable member for Corangamite **(Mr. Mackinnon)** overlooked in his examination of this matter. The issue before us has never changed. Either public control of the banking system will meet the social needs of the country, or it will lead to a breaking down and weakening of the system so that the emphasis, and the balance of decision, will lie more and more with the private banks and associated financial institutions. That is the issue that has been before us for the last 40 years, lt has been present in all banking legislation brought before this Parliament. The Opposition has always made it clear that it stands on the side of the public banking institution and for the application of rules to the private banks so that they will be required to operate in accordance with the policies of the government in office at the time. That is the only way to prevent unemployment and inflation. The honorable member for Barker **(Mr. Forbes)** has continued to ask questions which I would think were answered ten or fifteen years ago in the most elementary monetary theory books. The social objectives of any banking policy should be obvious. The first objective is the prevention of inflation and the second is the prevention of unemployment. {: .speaker-10000} ##### The CHAIRMAN: -Order! The honorable member's time has expired. {: #debate-33-s4 .speaker-JPE} ##### Mr BIRD:
Batman .- It is quite evident that the honorable member for Corangamite **(Mr. Mackinnon)** has had some inside information because the things that he told us this afternoon were not made known by the Treasurer **(Mr. Harold Holt)** or any high-ranking member of the Government. But apparently the Government, or somebody on the Government side, had asked the honorable member who, like myself, occupies a back bench, to throw some damning light on the present bank set up. The honorable member admitted that the Commonwealth Bank Board was blatantly ignored by the private banks. That is not to be wondered at, because we on this side of the House have always contended that the Commonwealth Bank Board was the representative of the private banking system. Now, our contention is borne out of its entirety. The Commonwealth Bank Board made no report to the Treasurer of the day. Parliament was never told that the agreed L.G.S. ratio had been departed from by by the private banks. History has a knack of repeating itself. This system has broken down in the past, and despite the honeyed words of the Treasurer in his second-reading speech, I am not at all satisfied that it will not break down in the future. The Treasurer said - >I should also mention at this stage that the trading banks have agreed to continue to observe the liquidity convention which is now in operation by arrangement between themselves and the Commonwealth Bank or such other liquidity convention as may be agreed in the future. As far as the liquidity convention was concerned, in the past the private banks ignored it. How can it be said that because the private banks agreed on a liquidity ratio of 25 per cent, in the past they will observe the present liquidity ratio of 14 per cent, or any liquidity convention that may be agreed on in the future? I am perfectly satisfied that if the banks brought the liquidity ratio down to 5 per cent., the Board would accept. The people who control the Commonwealth Bank belong to the same social class as the people who control the private banks, and you cannot expect them to cut across the dictates of the people whose feelings they must consciously or unconsciously respect. I refuse to accept the assurance of the Treasurer that the private banks will observe any liquidity convention that may be decided on in the future. The honorable member for Corangamite, in an unsuccessful endeavour to deride the honorable member for Yarra **(Mr. Cairns),** stated that the new ratio of 14 per cent, had been agreed upon on 29th April last year. But let us look at the ratios that were in force before that time. They were completely ignored. There can be no doubt that the honorable member for Corangamite is briefed by the private banks, because he received inside information that was not available to any other honorable member. He must have received it from the private banks. From March, 1957 to March, 1958, taking the year prior to the new agreed convention, on practically every occasion the 25 per cent liquidity ratio was ignored by the private banks. But the ratios adhered to by the Commonwealth Bank were as follows: - In other words, whilst it must have known perfectly well that the ratio was being completely ignored by the private banks, the Commonwealth Bank Board was keeping up far above the agreed ratio to the detriment of the people. The Commonwealth Bank was not prepared to make money available to municipalities which needed to carry out essential public works. The bank was not prepared to make money available to building institutions so that homes could be provided for the tens of thousands of Australians who are to-day compelled to live in garages and wash-houses. In other words, the Commonwealth Bank Board has a tie-up with the private banks. The Commonwealth Bank was prepared to allow the private banks to flout what was apparently a gentlemen's agreement. On the other hand, they kept their liquidity ratio high - well over 30 per cent. - when they could have made large sums of money available to many deserving causes. As I have said, this proves beyond any equivocation that the Commonwealth Bank Board has not functioned in the interests of the Australian people. At all times, it has connived with the banking system to ensure that the privileges of the private banks are in no way attacked or interfered with. On the other hand, to my way of thinking, it has not carried out directives contained in the Commonwealth Bank Act that it shall work in accordance with the best interests of the Australian economy. The Australian economy, in recent years, has run down because of a lack of willingness on the part of lending institutions to make finance available to certain borrowers including essential public authorities such as municipalities, semi-governmental bodies such as the Melbourne and Metropolitan Board of Works, and the building societies in Victoria. Although those societies were given £3,000,000 by the Commonwealth Government at the expense of the Victorian Housing Commission, they have found that other sources of money have been taken away from them. It is clear that when members of the Commonwealth Bank Board are transferred to the board of the Reserve Bank, they will be able to do incalculable damage to the Australian people. I am more than ever satisfied after hearing the statement of the honorable member for Corangamite **(Mr. Mackinnon)** that this legislation is nefarious in its design and that it has been put forward for the sole purpose of ensuring that the enormously successful people's bank will be emasculated in the interests of the private banking system. As the Deputy Leader of the Opposition **(Mr. Calwell)** has said, it will be the Labour party's first job on achieving office - and that will not be as long as some honorable members think - to repeal this obnoxious legislation and restore the 1945 act which functioned so successfully and smoothly in the interests of the people of Australia. {: #debate-33-s5 .speaker-JAG} ##### Mr CREAN:
Melbourne Ports -- I am surprised that no member on the Government side is rising to take part in this stage of the debate. I had previously suggested that the British banking system works on the basis of conventions - conventions which are observed by the banks in the United Kingdom. That is the great distinction and the important difference between the banks there and the banks here. I quote again from the document from which the honorable member for Corangamite **(Mr. Mackinnon)** quoted. At page 32 of his Mills lecture, **Dr. Coombs** says - >The Central Bank could not administer Special Account on the basis of a convention unless there was firm evidence of *the* banks' willingness and capacity to observe it. Again, I suggest that that is a very serious matter indeed. Supporters of the Government, whatever their views may be about the private banking system, must realize that there will be times when the interests of the private banking system will conflict with the general public interest. When there is a conflict of interest between private banking and the general public good, whose will should prevail? If the central banker, who was described by the honorable member for Mitchell **(Mr. Wheeler)** as a public servant, cannot make his will effective he ought to have his hand strengthened by the Government which, ultimately, whatever it likes to think about the independence of the central bank, is charged with responsibility for the actions of the central bank. If the central bank is not functioning efficiently the Government should give it greater strength. I suggest that, whilst the attempt at the 25 per cent. L.G.S. ratio was not successful, it would have been better for the Australian economy had it been successful. Unfortunately, it was unsuccessful, and the banks allowed their L.G.S. ratio to run down - in some cases I think it was as low as 8 per cent, or 9 per cent. Obviously, if the Governor of the central bank had attempted at that stage to enforce a ratio of 25 per cent., it would have meant the bankruptcy of some of the private banks. In consequence, in order to get some discipline and control, he had to come down to a lower figure. But that lower figure has never been stabilized on any public basis. **Dr. Coombs,** in his Mills lecture stated - and this appears in a report of the Commonwealth Bank itself - >The banks have now undertaken to direct their policy to ensuring an L.G.S. ratio which would not fall below an agreed uniform minimum. The honorable member for Corangamite states that, although it is not generally known, the agreed uniform minimum is 14 per cent. {: .speaker-6U4} ##### Mr Whitlam: -- Half the British ratio. {: .speaker-JAG} ##### Mr CREAN: -- Exactly. If there is an agreed uniform minimum why all the " hush hush " about it? Why is it not made public? The honorable member for Yarra **(Mr. Cairns)** recently obtained some very valuable information in reply to a question which he addressed to the Treasurer **(Mr. Harold Holt).** At the moment, there is not a bank that has not an L.G.S. ratio in the region of 20 per cent. This is the time when the Governor of the Commonwealth Bank ought to be raising that agreed minimum. As I said earlier, some attempt ought to be made to write into this legislation statutory power to be invoked in the event of the private trading banks, in future, failing to observe a gentleman's agreement. All through this legislation there is capitulation on the part of the Government. Does anybody give respect to those who have capitulated. Of course not! We will be facing the situation shortly of having to get the agreed minimum ratio not higher but lower. I suggest that strength ought to have been given, but not in the form of this new statutory reserve deposit which is a- most complicated formula. The argument used by the Government is that this gives simplicity. It does not give simplicity. It gives something which, in many other respects, the Government.,does not seem to want with regard to banking. It gives undue publicity. I should like to quote a statement from the annual report of the Reserve Bank of New Zealand for the year ended 31st March, 1957. It had been the practice in New Zealand, when call-ups were made, to attach a certain amount of publicity to them. It was found that misinterpretation was placed upon additional calls to reserve on the part of the central bank. Because of the adverse effect of publicity and the misinterpretation that was placed upon the action, the bank felt it better do the thing quietly. I suggest that there are some things that ought to be done quietly, and apparently the Governor of the Commonwealth Bank and other people feel at the moment that this so-called agreed minimum ratio ought to be determined quietly and ought not to be published. But the Government is quite willing to write into legislation something that will be very public in the event of an economic crisis occurring in this country. That is the provision that if the central bank, in its wisdom, feels that a call to special account is necessary above the figure of 25 per cent., it has to give 45 days notice of it. During that 45-day period, a great deal of damage may be done to the economy. What the central bank needs at all times is the drop on the private banking system. It needs to have strength in its hands. This new formula will not give it strength at all but will take strength away from the actions of the central bank. I just do not believe the sort of myth perpetrated by the Government that this new power it is giving is really more dreadful than the one it is taking away. If it were more dreadful, the Government would not be giving it. In the annual report of the Reserve Bank of New Zealand for 1957 this passage occurs - >To minimize the possibility of such misunderstanding it is the Bank's intention to discontinue issuing press statements when the ratios are altered in future, unless a change in the tightness of credit policy is involved. I suggest that if at any time - and nobody knows at this stage whether it will. happen - this new 25 per cent, power needs to be invoked, it will cause a great deal of discussion. Unfortunately, most discussion on banking in Australia becomes political and tends to be subject to misinterpretation. The old power, which was never invoked fully but which could be used for substantial call-ups at any time worked reasonably smoothly. I think it was the amendments made in 1953 which weakened that power. At certain times the old 100 per cent, power was necessary in some respects and there was a time in the operation of the 1953 powers that the central bank did actually run out of power to call up special account deposits. When, in Australia, the central bank runs out of power to call to special accounts it has for that time, at any rate, effectively lost control of the monetary power which it is supposed to have. Although theorists may say that this proposal simplifies operations, that is not the case. It only takes away from the central bank an essential power. There will be times when conflict will develop between the interests of the private banks and the general interest. At such times the public good ought to be the supreme concern of the central bank, and, if necessary, it should be strengthened by the Government itself to resolve the issue, not in favour of the private banks, but in favour of the public interest. {: #debate-33-s6 .speaker-KWE} ##### The TEMPORARY CHAIRMAN (Mr Timson:
HIGINBOTHAM, VICTORIA -- Order! The honorable member's time has expired. {: #debate-33-s7 .speaker-JTP} ##### Mr BURY:
Wentworth .- I had not intended to rise but I feel that some of the rather distorted arguments on the subject of L.G.S. ratios call for a reply. The fact that the L.G.S. system did not work and did not control the banking system - a fact on which members of the Opposition have made so much play - was, in fact, a demonstration of the complete inadequacy of the Australian Labour party's own legislation to deal with this central bank problem. Most of the framework of the current legislation in which the central bank is alleged not to have been able to control the private system was designed, brought down and imposed originally by the last Labour government. ft is true that some of the private banks did not observe, as they should, this 25 per cent. L.G.S. ratio. But the issues involved are not quite so simple as members of the Opposition have made out, and it is not true that all banks maintained a considerably lower ratio in their operations. But so far as the Commonwealth Trading Bank, like a good boy, keeping within its L.G.S. ratio is concerned, one has to look at the cash position of the Commonwealth Trading Bank. In fact, it may have been well doctored by the central bank to make this very easy. At the time of the split-up between the central bank and the Trading Bank's accounts, presumably the central bank was able to provide the Commonwealth Trading Bank with whatever cash it liked. When the formal book-keeping split-up was made, good care was taken to see that the Commonwealth Trading Bank had plenty of cash to enable it to expand in the future. In fact, my memory is that there was one period of twelve months in 1955-56 when, following a general appeal by the Governor of the Commonwealth Bank for restraint on the part of the private system, directed particularly towards keeping within certain L.G.S. ratios, the Commonwealth Trading Bank expanded its advances by about 25 per cent., which was just about double the rate of expansion of advances of any one of the trading banks. It is true that the Commonwealth Trading Bank during this time kept nominally to the appeal, that is within the ratios laid down by the governor. It was able to do this and expand its business for the simple reason that it was well supplied with cash by the central bank. In any case, this is a rather tedious postmortem on the past; but it is because of the experience of the past in this matter that the ratio provisions have been considerably tightened. There is no doubt whatever that the new statutory deposits are much more precise in their application or potential application than was the old special accounts system. As far as giving time for the trading banks to adjust their position, it would be quite impossible for any' trading bank to vary greatly its cash ratios overnight. We are not in the same position as banks in London, or the United States of America or other countries where there is a money market and the banks have large loans at call which they can bring in and so adjust their cash position rapidly. It is essential that the trading banks should have notice, and in many cases they may well find it difficult to make any substantial change in their cash ratios within a period of 45 days. As far as penalties go, according to my reading, clause 26 of this bill makes it quite clear that very heavy penalties will be attached to any bank failing to carry out the statutory reserve ratios which may be decreed from time to time by the central bank. The committee would be very gravely misled if it swallowed at face value tales about trading banks and their failure to observe the L.G.S. ratio. Likewise it could be extremely misleading merely to measure the advances of the Commonwealth Bank's trading wing against its cash reserves. The fact is that the Commonwealth Trading Bank has expanded very considerably over this period. Because it is actively competing and at times has been steadily taking accounts from the private system as a result of credit restrictions imposed on the latter, it has naturally aroused the suspicions of the private system. That is one of the reasons for mistrust between trading banks and the central bank, particularly in daytoday branch operations. This must be. remedied, and it will be remedied by this bill. {: #debate-33-s8 .speaker-1V4} ##### Mr CAIRNS:
Yarra -- I think it is necessary to have a little more of this postmortem. The honorable member for Corangamite **(Mr. Mackinnon)** may find it tedious, but I assure him that we do not find it tedious. {: .speaker-009MC} ##### Mr Harold Holt: -- Is not this the third time you have had a go at it? {: .speaker-1V4} ##### Mr CAIRNS: -- No, the second time, and if you were in the chamber more often you would know that. The honorable member for Corangamite began his examination of this subject at a very suitable point. He began with the proposition that **Dr. Coombs'** recommendation about establishing a firm liquidity convention was not successful, and he rightly said that it was not enough to leave it at that. He went on further to refer to **Dr. Coombs's** lecture, in which the following statement was made: - >Looking back on the attempt I feel that the plan lacked precision in the obligations it placed on the trading banks and made insufficiently clear what they could expect from the Central Bank. I think that that is true, and I concede it. To the extent that the trading banks found it that way they were no doubt embarrassed by the situation. **Dr. Coombs** went on to say - >It assumed that banks could and would be willing readily to adjust their practices to a system which required them to base their lending policy predominantly on their L.G.S. ratios. That is not a complete statement of the position. Certainly attention was being directed increasingly at this time to the L.G.S. ratio, but that was not all. Attention was also directed to advances which were too high. I think that we need now to ask the question: Why was it that the private trading banks in particular got into difficulties in 1953-54, and were in a position where they could not have maintained anything like a 25 per cent, ratio, and why was it that their cash resources fell so low in relation to deposits that they had no hope of achieving the ratio? That, I suggest, is the critical question. The English, Scottish and Australian Bank and the Australian and New Zealand Bank, I think it was, were down to 6 per cent. - either one or both of them - and it was quite impossible to make them come up to 25 per cent. Why did they get into that position? **Dr. Coombs'** lecture provides the best answer. It was not a matter of ratios alone, it was also one of total advances. **Dr. Coombs** said - >There can be no doubt that the rise in advances of £250,000,000 in the two years 1953-54 and 1954-55 was excessive and contributed significantly, both directly and through its impact on the general money supply, to the rapid emergence of inflationary conditions. The point is that in these years the trading banks, despite the central bank's advice to the contrary, were lending too much. **Dr. Coombs** continued - >However, the magnitude of this contribution can be, and, indeed, has been, exaggerated. The rise in 1953-54 reflected the working out of the easier lending policies of the previous year and showed itself particularly in loans to the rural sector and to housing. It was not the rise in advances themselves in 1953-54 to which criticism could be directed but the continuance of lending policies which ensured a further rise in the next year However, it is clear that perhaps £80,000,000 to £100,000,000 of the increase in advances over these two years was excessive and also that it took place despite strong central bank pressure to restrain it. That is clear. The trading banks got themselves into the position where they could not maintain the 25 per cent, ratio because they had lent too much, despite central bank pressure for restraint, and this must have been made clear to them. Once they got into that position, the alternatives that faced the central bank were: To give up any attempt to apply the ratio; to give the trading banks more cash through special account releases - that is to say, without charging them anything for it - or to give them cash as a loan and charge them interest on it so as to discourage them from the kind of policy which had created the situation from which they had to be saved. The central bank, as **Dr. Coombs** told us in this lecture, chose the second course. He said - >Accordingly, releases were made from special account totalling £71,000,000, about half the liquidity lost through the fall in international reserves. This, however, was sufficient to bring the liquidity of the least liquid banks to very low levels. This action proved effective and it soon became apparent that banks had at last brought their lending under effective control. In other words, they were very lightly and generously treated by the central bank at this stage. They had over-lent and reduced their ratios to such a point that they could not be restored to anything like 25 per cent. Instead of supplying them with cash at an ordinary rate of interest, the central bank chose the easier course of supplying them with £71,000,000 from special account and charged them nothing. **Dr. Coombs** went on to say - >The central bank could not administer special account on the basis of a convention until there was firm evidence of the banks' willingness and capacity to observe it. It has been said throughout this debate that there was unwillingness on the part of the trading banks even to try to observe the convention, and, in the end, as a result of applying their own policy of lending too much, there was an incapacity to observe this convention. They were saved from that position by the release from special account of £71,000,000. **Dr. Coombs** puts it this way - >In the absence of a convention, it could only revert to the practice of keeping the least liquid banks with little more than till money and thus continuously dependent on the central bank for loans. Therefore, cash was given to them to the extent I have mentioned. **Dr. Coombs** continued - >This was an arrangement which banks could scarcely find palatable. Of course they could not! Throughout this period they were going their own way. When money was to be made by making excessive advances they made excessive advances, and then they wanted to be saved from the situation which they themselves had created. But the situation to-day is different. The honorable member for Corangamite has said something about what **Dr. Coombs** calls the " uniform minimum ratio " being applied. If there is such a ratio why should it be kept secret? Why should we not be informed of it? If the honorable member for Corangamite has found in some way that the ratio figure is now 14 per cent., why should we not be informed that 14 per cent, is the agreed uniform minimum ratio now being applied? At the present time, the trading banks are not in difficulties with their ratios. They are not in a position where this agreed minimum ratio of 14 per cent, is appropriate. This is the time when a 25 per cent, ratio could be appropriate. At this stage the trading banks are the nearest to that ratio that they have been at any stage since 1953. I am not suggesting that more money does not require to be lent in accordance with economic circumstances of to-day. I take the view that it should be; but the private trading banks are in a far better position to-day to maintain a 25 per cent, ratio than they have been at any time since 1953. However, at a time when the 25 per cent, ratio could be maintained, the Government, through the central bank, is saying that there is no need to maintain this ratio, and that it intends to introduce a new minimum ratio which it will keep secret. Hence this post-mortem which the Government finds so tedious. I think that that is the really critical point which is involved in this part of the legislation. The statements that the honorable member for Melbourne Ports and I have made on this matter have not really been answered by any speaker from the other side, and certainly by nobody at the table. In this default of presentation, I suggest that what has happened here in the last hour or two has been only a continuation of what has been happening since these measures were first introduced, and that **Dr. Coombs** made out a pretty strong case in his R. C. Mills lecture. He declared that the trading banks had refused to adhere to the request of the central bank for restraint. Vague and indefinite as the requests may have been, they were clear enough. They were clear requests not to lend more; but the trading banks lent £50,000,000 or £100,000,000 more than they should have lent. There is nothing vague or indefinite about that. And when the position from which the banks had to be saved had come about the Treasurer of the day, **Sir Arthur** Fadden, who was supposed to be in charge of this situation, said to this House in 1954 - >There has been a formidable upsurge of spending. ... It has been facilitated by a far too generous expansion of credit on the part of the banking system, together with the rapid growth of hire-purchase finance. Did the Government do anything about the action of the private banks in ignoring the advice of the central bank? Not one thing, and not one supporter of the Government has attempted to explain that inaction. Rather, the Government let the private banking system go ahead and do what it wanted until the situation was reached where the private banks were in difficulties and had to be saved by the central bank, which released £71,000,000 from special account. {: #debate-33-s9 .speaker-009MC} ##### Mr HAROLD HOLT:
Treasurer · Higgins · LP -- The honorable member for Yarra **(Mr. Cairns)** did not display his customary alertness or perception when I interjected that this was the third time we had gone round, and that therefore the matter had become tedious to members on this side of the House. I was, of course, aware that the honorable gentleman was to embark on only his second presentation in this committee stage. I was referring to the fact that this is the third time on which this legislation has been before the Parliament and the committee, and it is not the first time that honorable gentlemen opposite have directed their criticisms to this aspect of recent banking history. I do not believe that it is necessary for me to go into this matter at any great length, because I have been assisted in that task by two very able speeches from this side of the House, one from the honorable member for Corangamite **(Mr. Mackinnon),** and the other from the honorable member for Wentworth **(Mr. Bury).** As they have pointed out, this is a matter of banking history. There is no very useful purpose to be served in conducting a lengthy post mortem on it. I admit, of course, that it was not a satisfactory situation which developed at the time referred to. That is one reason, and an important reason, why the legislation is now taking its present form, at least on this phase of future banking administration. The other comment which I think it is proper to make is that one of the compelling reasons for the reforms embodied in the scheme of legislation before the Parliament is the securing of more wholehearted co-operation between the private banks and the central bank. While the central bank remained an active competitor with the private trading banks, that degree of cooperation could not be secured, and it is not surprising that there were instances of friction and occasions when the private trading banks did not show themselves as ready as honorable members opposite and others might desire in meeting the wishes of the central bank. We certainly hone that in future the case will be very different. The undertakings which the private banks previously gave on this matter have, as I understand the position, been observed, and we are confident that in the improved atmosphere which should result from the enactment of this legislation we will not have difficulties of this kind occurring in future. In any event, as the honorable member for Wentworth has emphasized, the legislation does provide with greater certainty what the future situation should be. I am afraid that the honorable member for Yarra has merely given us further evidence of his own spleen against the private banking system of this country. We know that, whatever his deputy leader might say, the legislation of 1945 would not suit the honorable member for Yarra any more than it would suit the honorable member for East Sydney **(Mr. Ward)** or, on his professions the other night, the honorable member for Grayndler **(Mr. Daly)** and perhaps others in the Labour party at the present time. The honorable member for Yarra does not want a healthy, cooperative banking system. He wants a socialized banking monopoly. The Government violently disagrees with him, and I am glad to say that the majority of members of this Parliament share the Government's view. In the circumstances, I feel, therefore that we might now put the question to its issue. Motion (by **Mr. Harold** Holt) agreed to - >That the question be now put. Question put - >That the bill be agreed to. The committee divided. (The Temporary Chairman - Mr. T. F. Timson.) AYES: 47 NOES: 31 Majority 16 AYES NOES Question so resolved in the affirmative. Bill reported without amendment; report adopted. Bill read a third time. Sitting suspended from 5.59 to 8 p.m. {: .page-start } page 857 {:#debate-34} ### NORTHERN TERRITORY (ADMINISTRATION) BILL 1959 Bill presented by **Mr. Hasluck,** and read a first time. {:#subdebate-34-0} #### Second Reading **Mr. HASLUCK** (Curtin- Minister for Territories) [8.1]. - by leave - I move - >That the bill be now read a second time. **Mr. Speaker,** this bill, together with a bill amending the Northern Territory Representation Act, is intended to bring about constitutional reform in the Northern Territory. The main elements in that reform are: Firstly, a strengthening of the Legislative Council for the Northern Territory, and changes in its structure and membership designed to make it more widely representative of the Northern Territory community and to end the official majority in the Council. Secondly, changes in the procedures in respect of assent to and disallowance or non-disallowance of ordinances of the Legislative Council. These changes will give increased opportunity for this Parliament to carry out its responsibilities, will facilitate the working of the Legislative Council, and will give an opportunity for the reconsideration by the Council of bills which, under the present system, could only be rejected outright by either the Administrator or the Governor-General. Thirdly, there is a proposal to associate the elected members of the Legislative Council more closely with the Executive in the Territory by forming an Administrator's Council, on which non-official members will assist and advise the Administrator in the performance of executive acts in the Territory. Fourthly, in a separate bill, it is intended to give certain voting rights to the member for the Northern Territory in the Commonwealth Parliament. As is well known, at the present time, that member has no voting rights of any kind. The Government also considered a fifth reform which was intended to give a measure of financial control to the Legislative Council for the Northern Territory, including the submission to the Council of the Estimates for the Territory. Because it was found necessary that certain constitutional points should be further examined, it was not possible for the Government to proceed to a decision on this proposal. Although it was hoped by the Government that all the proposals for territorial constitutional reform might be introduced in one piece, it was thought that the measures on which a decision had been reached by the Government were so substantial that their introduction should not be delayed by reason of the need for further consideration of the request in regard to the finances of the Territory. Nevertheless, **Sir, I** think it would be desirableto make two points at this stage. First, I should make it clear that the Government has not completed its examination of the proposals on finance, and therefore it would be wrong for any one to assume either that they have been rejected or that they have been accepted. Secondly, in examining the other proposals now introduced in respect of reform in the Legislative Council for the Territory, it should be borne in mind that the question of financial control is as yet unresolved, but solong as the possibility remains that the Legislative Council may be given increased functions in respect of financial matters, that possibility has to be taken into account. It will be obvious, I am sure, to all honorable members that the question of the structure and membership of the Legislative Council is inseparable from the question of the powers of the Council. Before proceeding to a detailed description of the proposals outlined above, **Sir, 1** should like to say a few words about the historical background to these measures, and also about the situation which this Parliament is called upon to examine. During the term of the present Government, consistent efforts have been made to improve the functioning of the Legislative Council for the Northern Territory so that it may develop with the growth of the Territory itself. From time to time, as honorable members will recall, bills have been introduced in this Parliament making minor reforms in the Legislative Council. I would suggest that, contrary to some views which have been popularly held, the Government has also attempted to see that in the working of the Council full value is given to the participation of the elected members. It is an historical fact that over the past eight years the Legislative Council has had a record that disproves the statements that are sometimes made that Government legislation is merely steam-rollered through the Council. Steps have been taken to make sure that members of the Council have adequate notice of bills and adequate opportunities to study them, In all cases of major legislation, the procedure has been adopted of moving the second reading at one session of the Council and adjourning the debate until a subsequent session - a procedure which allows some reference to public opinion in the Territory between the introduction of a measure and the final determination on it. The successful moving of amendments by private members in the Council compares very much more than favorably with the practice in the Commonwealth Parliament or in any of the parliaments of the States. The opportunity for the introduction and passage of private members' bills has been much better than in most legislatures in Australia. It is quite natural that it should have become part of the campaign for constitutional change to represent the Legislative Council in a light which is far worse than the record of the Council really deserves. Nevertheless, having made that point, I can concede that there is a case for change in order to make the Council more fully representative of the Northern Territory community and in order to associate it more closely with the tasks of the Executive in the Territory. The Government itself has helped to promote such a change. It was at the suggestion of the Government, and with Government encouragement, that two select committees of the Legislative Council were appointed by the Council to consider these matters. Only the second of these two committees reported, and when it reported, the Government immediately gave the most careful and earnest consideration to its recommendations. It was not found possible to accept the recommendations in the form in which they were presented by the select committee, and the matters presented by it were found to have raised questions of far greater complexity than had perhaps been appreciated by all the members of the committee. And so a good deal of close and technical study of the issues involved was required. As I have indicated, in the case of the financial proposals, that close and careful study has not yet been completed. In July, 1958, a meeting was arranged between, representatives of the Government and members of the Legislative Council for the Northern Territory in order to discuss the report of the second select committee. That discussion was both informative and constructive and, if I may do so without seeming to be in any way patronizing, I should like to acknowledge what the transcript of the discussion itself will very clearly reveal - the very useful and significant contribution made in those discussions by two members of the Council, namely, the elected member for Darwin, **Mr. Ward,** and the elected member for Alice Springs, **Mr. Hargrave,** who, by reason of their interest and professional knowledge - both of them are lawyers - were able to join with the Crown Law Officer, **Mr. Withnall,** who had been chairman of the select committee, in a thoughtful and constructive examination, in company with Ministers, of the problem facing us. The present proposals of the Government owe a great deal to the discussions that took place in our meeting with the Legislative Councillors in July, 1958. I would express the hope that these proposals now presented to this Parliament will be examined with the same thoughtfulness and care that was shown in the discussions with the Legislative Councillors. We as a government share the desire to do what is best for the Territory. Having certain responsibilities as a government, we also have to think closely about what is practicable. I should now like to refer briefly to the situation with which we are dealing in the Northern Territory and the problems presented to this Parliament by that situation. Broadly speaking, the population of the Northern Territory has doubled during the last decade and the production of the Territory has probably increased four-fold. Public expenditures have increased at least seven-fold. Among the major elements in this progress - a progress far greater than the Northern Territory has seen in any previous decade - have been investment from outside the Territory in both the pastoral and mining industries and in a great agricultural experiment, and vastly increased expenditures by the Government or semigovernmental instrumentalities. The fact is that for the present the progress of the Northern Territory still depends in a very large measure on investment from outside the Territory, and on public expenditure of moneys raised outside the Territory and voted by this Parliament. Furthermore, those of us who are closely engaged in a number of projects which we hope will eventually lead to even greater development base our hopes for that development on the attracting of much greater investment than the north of Australia has hitherto known. The making of such an investment - and the sort of figures I have at the back of my mind are not £1,000,000, or £10,000,000, but something of the order of hundreds of millions of pounds - is always touch and go. The investment depends on the one hand on calculations to be made by the investor regarding the resources of the Territory in relation to world prices, and on the other hand they depend in part on the confidence of the investor in conditions in the Territory itself no less than in the whole of Australia. In particular, and I commend this view to the earnest consideration of all honorable members, any investor needs to have confidence that the laws of the Territory, particularly those governing the conditions under which land or mining rights or similar interests can be obtained, will not lightly be changed after he has made his investment. In that respect an investor needs stability the same as he looks for stability in other respects. Although the Territory has seen great progress, its total population at the present time consists of approximately 20,000 citizens and about 16,000 full-blood aborigines, who, although they have the prospect of eventually achieving citizenship, are at present under the protection of the Government as wards committed to the care of the Government. That population of 20,000 citizens yields a total constituency of a little over 8,000 voters, more than half of whom are located in the Darwin area and a very considerable proportion of whom are on the Government pay roll. A proportion of the wage and salary earners have made the Northern Territory permanently their home, which is a very desirable development. Others are there on appointments for a fixed term, and a number, as is quite customary in the remoter areas, are persons whose period of residence in the Territory is uncertain. They may stay or they may not. I mention these facts not by any means to suggest that the voter in the Northern Territory is in any way less intelligent, less perspicacious or less responsible than voters anywhere else in Australia, but simply to make a point of comparison between the nature of the constituency considered as a whole and what might be regarded as a normal constituency in other parts of Australia. As I have said, a great deal of the progress in the Territory and its increased prosperity are directly due on the one hand to the fact that more investment, particularly in mining and the pastoral areas, has been attracted to the Territory in recent years, and on the other hand to the fact that the annual spending of public moneys has greatly increased. If expenditure on defence, civil aviation, and semigovernmental enterprises is added to the expenditure under the control of my department, then something of the order of £12,000,000 per annum is currently being provided in the way of public expenditure from outside the Territory. The greater part of that sum, if not the whole, is being voted by this Parliament, and the Government is accountable to this Parliament for the way in which it is spent. I have mentioned this general situation simply to underline one point. In considering the question of constitutional reform in the Northern Territory, this Parliament has to be aware of the way in which the community in the Northern Territory, the economy of the Northern Territory and the prospective development of the Northern Territory are still in fact dependent on elements outside the Territory. We also must be aware that within the Territory itself - a vast region which extends approximately 1,000 miles from north to south and approximately 600 miles from east to west - there are wide disparities in conditions. Just as you could make a contrast between the conditions in the Territory as a whole and conditions in a metropolitan area like Sydney, so you could find the same disparity between the conditions of the area closest to Darwin and most thickly populated and the remote and, administratively speaking, comparatively neglected pre.is of small population elsewhere in the Territory. That internal disparity is also one of the factors to which we have to give attention. It is our responsibility as a Commonwealth parliament to try to make arrangements which will take account of these unusual conditions. I want to be clear on this point in order to avoid any possibility of misunderstanding. The argument is not that _ the individual Australian citizen in the Northern Territory is any different in his capacities or his rights from the individual citizen elsewhere in Australia. The argument is that the Territory as a territory and the whole community as a community are still in fact, to speak with the frankness that is required, a dependent area and a dependent community. That is not' to the shame of the Territory: It is to the shame of the nation that has allowed such a condition to prevail for so long. But it does exist and we must face the fact that in order to bring about the greater development which we all wish to see, the Territory will have to rely for some time to come on both private and public sources outside its own boundaries. So in approaching this problem of constitutional reform, the Government was impelled on the one hand by the motive of giving the people of the Territory a fuller share in the management of their affairs and of increasing the representative character of the Territory Legislative Council. On the other hand we had to be mindful of our responsibility in the Commonwealth Parliament in respect of the development of this part of Australia and the welfare of its people, both those who are citizens and those who are under our protection. After those brief preliminary observations may I now deal in some greater detail with the reforms proposed in the bill now before the House. I will leave to one side for the moment the question of the voting rights of the member for the Northern Territory in this House, as that will be dealt with in a subsequent bill. The first proposal in the bill that we are now considering is for changes in the structure and membership of the Legislative Council of the Northern Territory. The present council is composed of the Administrator, seven officially nominated members, and six elected members. It is proposed in the bill before the House to reduce the number of official members from seven to six; to increase the number of elected members from six to eight; and to add a new category of nonofficial nominated members to the number of three. Therefore, the total membership of the proposed new council will be seventeen on the floor of the House, with the Administrator as President. Of the seventeen on the floor of the House, six will be official members, eight elected members and three non-official nominated members. Whereas at present it is possible for the Administrator to ensure the passage of legislation, or even to force the passage of legislation by the support of his seven official members, in future it will become necessary for him to obtain the support for the legislation of some of the other members who are there in a representative capacity. I shall summarize that to make it clear: There is a reduction of one in the official members and an increase of five in the representative members, giving six official to eleven representative members. Of the eleven representative members, eight are elected and three nominated. {: #subdebate-34-0-s0 .speaker-ZL6} ##### Mr HASLUCK:
LP -- Not necessarily, but he might. It would depend entirely on the way in which the other representative members voted. {: .speaker-DTN} ##### Dr Evatt: -- They could all be nominated, and with him it would constitute a majority. {: .speaker-ZL6} ##### Mr HASLUCK: -- It does not follow as a matter of course that the nominated representative members will vote with the Government. The Administrator has to find support somewhere on the floor of the House. At the present time, six elected members are returned from five electoral districts, the electorate of Darwin returning two members. The bill provides that there shall be eight electoral districts, each returning one member. The present act defines the boundaries of the electorates in a schedule. The bill before the House proposes that a distribution committee, consisting of three persons, shall be appointed and that it shall be formed and function in much the same way as the distribution committees created under the Commonwealth Electoral Act. It is proposed that the distribution committee will consist of three members, one of whom shall be the Chief Electoral Officer for the Commonwealth or a person having similar qualifications and one of whom shall be the Surveyor-General for the Territory or a person having similar qualifications. In drawing boundaries of electorates, the committee will give due consideration to distribution of population, community or diversity of interests, means of communication and physical features. Before it makes its report, it will exhibit a map and description of the proposed boundaries of electoral districts at post offices in the Territory and a month will be allowed for the lodging of objections or suggestions with the committee. The committee will make its report to the Minister, and the boundaries of the electorates will be prescribed by regulation. {: .speaker-DTN} ##### Dr Evatt: -- Will they be approximately equal constituencies? {: .speaker-ZL6} ##### Mr HASLUCK: -- That is a matter largely for the distribution committee, but it will work on principles similar to those laid down in the Commonwealth Electoral Act. I should imagine that their aim, although they are not circumscribed in this, would be to make the electorates roughly equal to each other, while following the principles laid down. {: .speaker-JVU} ##### Mr Nelson: -- In numbers? {: .speaker-ZL6} ##### Mr HASLUCK: -- Yes, in numbers. In case there should be major shifts of popu lation before any further fundamental reform is made in the Legislative Council there is a provision that the Minister may at some future date direct that a further redistribution of districts shall be made by the same process. This provision, however, only applies to the total of eight electoral districts. If, in the future it is necessary to increase the number of electoral districts, or to make any other changes in representation on the council, that matter will necessarily come back to the Commonwealth Parliament. The bill also contains provisions regarding the qualifications of members, the procedure in respect of resignation and the payment of fees, allowances and travelling expenses. As a result of the increase in the 'membership of the Legislative Council the principal act is also being amended to raise the quorum of the council from seven to nine and to provide that nine members instead of seven as at present can request the holding of a session of the council. In a council with a total membership of fourteen the figure was seven and in a council with a total membership of eighteen the figure becomes nine. The second proposal for constitutional reform concerns the procedure relating to the assent to and disallowance of ordinances that are passed by the Legislative Council. Under the present procedure, when the Administrator or the Governor-General withholds assent from an ordinance that is the end of the matter. In the bill it is proposed that, instead of withholding assent., either the Administrator or the GovernorGeneral may return an ordinance to the council with suggested amendments. This provision is broadly similar to section 58 of the Constitution in its application to laws passed by this Parliament. Similarly, the Governor-General, instead of disallowing an ordinance, will be able to return it to the council with suggestions for amendment. The bill also provides that ordinances from which assent has been withheld, or which have been disallowed, shall be tabled in this Parliament as well as ordinances which have been assented to. By this means this Parliament will be able to maintain a scrutiny not only over those ordinances which become law but over those ordinances which, to use a popular term, have been vetoed. When an ordinance has not received assent or when an ordinance has been disallowed by the Governor-General the document will be tabled in each House of the Parliament together with a statement explaining the reasons for the withholding of assent or the disallowance. Provision is also made that the Governor-General may disallow a part of an ordinance instead of disallowing the whole of an ordinance; it gives him the choice. These procedures are exactly in accordance with proposals which emerged from the conference between the members of the Legislative Council and the Government in Canberra last July and also are in accordance with certain suggestions which were made during debate in this House by the honorable member for Mackellar **(Mr. Wentworth).** They should assist considerably in the better functioning of the Legislative Council and assist this Parliament in the discharging of its responsibilities towards the work of the Legislative Council. The third major proposal in this bill is for the creation of a body, to be known as the Administrator's Council, which will share the functions of the Executive within the Territory. The Administrator's Council will consist of the Administrator, two official members of the Legislative Council and three other members of the Legislative Council, none of whom shall be official members and of whom at least two shall be elected members. So, there should be three elected members, if the Administrator selected them by nomination. The members of the Administrator's Council will be nominated by the Administrator. In practice this means that he will seek to find two or possibly three of the elected members or alternatively two elected and one nominated member to sit on equal terms with him and two official members on the Administrator's Council. {: .speaker-JVU} ##### Mr Nelson: -- The council will not have the power to do that? {: .speaker-ZL6} ##### Mr HASLUCK: -- The Legislative Council will not elect the Administrator's Council. I will explain that point later. This cannot be made a committee of the Legislative Council because of general considerations relating to the theories of responsible government. The Administrator's Council will advise the Administrator, first, on any matter referred to it by the Administrator and, secondly, on any other matter which is confided to the Administrator in Council by ordinances of the Legislative Council for the Northern Territory. In order to give full effect to this proposal, some supplementary legislation in the Territory itself will be necessary. It is also proposed that Territory ordinances will be amended so' that certain statutory powers now exercised by the Administrator, and, I may add, some of the statutory powers now exercised by the Minister, will be exercised by the Administrator in Council. Just to give the House a rough indication of the sort of matters which might very well be confided under ordinance to the proposed Administrator's Council, I shall cite a few examples of what the Government has in mind. We might confide to it, I think quite rightly, all the regulation-making powers of the Administrator, together with his powers in relation to the making of by-laws; the powers of the Administrator under Territory ordinances in respect of the declaration of health areas, licensing districts, water control districts, gold or mineral fields, roads and streets, stock quarantine areas, the declaration of closed seasons, shopping hours, sitting of courts, holidays; the declaration of dangerous drugs, noxious weeds, poisons, pests; declarations in respect of schools; declarations of various rates and charges; the remission of fees, and so on. I mention these to give an idea of the pattern of the statutory powers which are at present exercised by the Administrator and which in future we propose should be exercised by the Administrator in Council. It is expected that, from time to time, as the Legislative Council itself passes laws applying within the Territory, it will itself make decisions on which matters are appropriate for handling by the Administrator in Council. While this Administrator's Council does not in itself constitute a full executive council for the Territory in the strict meaning of that term - and for reasons which I shall mention later it is not possible at this stage to create such an executive council - the provisions in this bill do create the first opportunity that the elected Legislative Councillors have ever had to be associated closely with the tasks of administration in the Territory. We believe that this is the beginning of a change which, as the Territory progresses, can become more and more far-reaching. The Administrator's Council will have no function in respect of the preparation of legislation or prior approval of bills before they are introduced into the Legislative Council, because it was thought that elected members would not wish to commit themselves firmly in advance to legislation before its introduction into the legislature; and as, in fact, they cannot occupy a place comparable to that of a Cabinet, it was thought that if they were given functions in respect of the scrutiny of the legislation before its introduction to the Council, that practice would be an abrogation of the functions which properly belong to the Legislative Council itself. The Legislative Council is a parliamentary body and could properly take objection to any proposal which created a body which had the nature of an inner legislative body, while not being a committee of the Council itself. The Administrator's Council cannot, at this stage of the constitutional development, be regarded as a committee of the Council answerable to the Legislative Council and responsible for its actions to the Council. Nevertheless, it will be open to the Administrator at any time, when he is considering the preparation of draft legislation on any matter, to seek the advice of the Administrator's Council on any of the matters of substance which might be under consideration by him. The working of the Administrator's Council will, if and when instituted, be watched keenly and with the hope that it may prove a means for blending local experience and wisdom with official responsibility, and bringing about a better understanding of local conditions and Territory interests in all phases of the administration of the Territory. The fourth reform relates to the voting powers of the member for the Northern Territory in this Parliament and will be discussed on the second reading of another bill. In commending these proposals to the House, I would ask honorable members to look at them not as the definitive action by this Parliament on the subject of constitutional progress in the Northern Territory, nor as the last word of the Government on proposals for reform, but as one step in what we hope will be a continuing process of change for the good of the Territory. There are undoubtedly some advocates of change who would like this bill to go further than it does. On the other hand, there will be some members who will think that it probably goes too far. As a Parliament, we have to try to achieve a balance between satisfying the demands of those residents of the Territory who have clamoured for constitutional reform and meeting our own continuing responsibility in respect of the good government of the Territory. Until the Territory achieves responsible government, neither the government nor the Parliament can abandon its responsibility. This point, I think, can be illustrated by a few brief references. So long as this Parliament votes the major part of the public funds in the Territory, it will assert a right to scrutinize the way those funds are spent. So long as this Parliament retains its character as a superior legislature over the Northern Territory and members have the right to examine and criticize everything that is done in the administration of the Northern Territory, so long will the Government, which is accountable to this Parliament for what happens, be required to retain some authority over what is done. Until such time as the public servants who take part in the administration of the Territory can be made answerable to a Minister who is held acountable by a fully elected legislature in the Northern Territory, they have to remain answerable to a Minister who is himself held accountable to this Parliament. I would suggest in passing that it is rather paradoxical that some persons who, in another context, are almost vehement in their attacks on the power of the so-called bureaucracy, should have entered in this case on a course of argument which *would,* in effect, tend to hand the government of the Northern Territory completely over to bureaucratic rule by a corps of officials free from any ministerial control and subject to no other restraint than the influence of opinion in a partly elected Legislative Council. In creating the Legislative Council for the Northern Territory as a subordinate legislature in 1947, the Commonwealth Parliament saw clearly that the smallness of the Territory's population and the inadequacy of its resources, apart from any other questions that might arise relating to the constitutional difficulties, precluded the inauguration of responsible government in the Territory. One question we have to ask ourselves is this: Is the Territory ready for responsible government now? I think we have to admit that the growth in population and in the financial resources of the Territory for the purposes of government, is not yet sufficient to enable us at this stage to create responsible government, even assuming that we could do so. I understand that members of the Legislative Council, in their discussion with the Government, accepted that point. That being so, our task was to devise a measure of representative government suited to the existing fact that, for the time being, the responsibility still rests in this Parliament. That is exactly what we have tried to do. In this bill, we have tried to give the Legislative Council for the Northern Territory the largest measure of representation of the community that we can, and in reaching an opinion on that point we have had to bear in mind constantly the responsibility of the Government itself and the responsibility of this Parliament. In an attempt to try to find the largest possible measure of representation for the community, we reached the opinion that an electorate of approximately 8,000 voters could not support more than eight elected members. We believe, however, that we can extend the measure of representation of the community by the addition to those eightelected members of three nominated non-official members. Although no categoriesarementioned in the bill, and it would be inadvisable to mention any categories of nominated members, we believe that this provision provides an opportunity of adding to the membership of the Council men of standing in the Northern Territory community; men with long experience of its problems. They will be private citizens not connected with government. We believe such members can make a significant contribution to the working of the Council. We have already had a number of years of experience of such a system in the Territory of Papua and New Guinea, where three non-official nominated members, sitting alongside the elected members, have made an outstanding contribution to the work of the council. Our experience, which we hope will be paralleled in the Northern Territory, is that these nominated nonofficial members lose neither independence of mind nor frankness of criticism by reason of the fact that they have been appointed on the nomination of the Administrator. At the same time, they have brought an impartiality and breadth of interest which has been of real service to the deliberations of the Council. The quality of independence of mind is in the man rather than in the means by which he obtains his position in the Council. One important point to be remembered in judging the significance of the changes proposed is that in future the Administrator, in introducing legislation to the Legislative Council, will be required to obtain the support of non-official members of the Council before that legislation can be passed. {: .speaker-DTN} ##### Dr Evatt: -- Do they hold office? {: .speaker-ZL6} ##### Mr HASLUCK: -- Yes, for three years. {: .speaker-DTN} ##### Dr Evatt: -- Can they be removed? {: .speaker-ZL6} ##### Mr HASLUCK: -- Yes, they can be removed. They can also resign. But again I would refer the right honorable gentleman to the experience in Papua and New Guinea, where the nominated members of the Legislative Council have taken views quite often contrary to those of the Administration and have voted on sides opposite to the Administration. Nevertheless it has not entered the mind of the Government, nor do I think it would be in the mind of any government, to exercise the sanction of removal against them. {: .speaker-DTN} ##### Dr Evatt: -- Has the Commonwealth Government such a power? {: .speaker-ZL6} ##### Mr HASLUCK: -- It resides in the Governor-General. This bill, and the Northern Territory Representation Bill to be presented, deal with all of the representations for constitutional development put forward by the Legislative Councillors except those relating to the public finances of the Territory; and as I have already said, a decision on that proposal has been postponed pending the examination of certain questions arising from the Commonwealth Constitution. {: .speaker-DTN} ##### Dr Evatt: -- May I ask the Minister one question regarding the important Administrator's Council? Is there any precedent in the British Commonwealth for a council of this kind? {: .speaker-ZL6} ##### Mr HASLUCK: -- Not exactly of this kind. We are dealing with a unique situation, and I think we have to try to devise a unique means to meet it. {: .speaker-DTN} ##### Dr Evatt: -- Nothing is proposed here that has been done somewhere else? {: .speaker-ZL6} ##### Mr HASLUCK: -- This is not being done in imitation of anything in existence elsewhere. It is, if I may say so, an attempt to devise something suited to the peculiar situation in the Northern Territory. I think we should improvise when there is need. Finally, I suggest that the changes contained in this bill are the result of a genuine attempt by the Government to understand fully the viewpoint of the citizens of the Territory and to give to the citizens of the Territory as great an influence on the Territory administration and as large a part in the making of Territory laws as it is possible to give, having regard to the present state of development and population of the Territory, and having regard to the inescapable responsibility of the Commonwealth Government and the Commonwealth Parliament at the present juncture. I hope that the provisions of the bill will be well received in the Territory. Should any individual citizen of the Territory feel that the Government has not gone far enough, I would ask him to consider the issues fairly, and to give full weight to the consequences of the generally accepted view that at this stage of its development the Territory could not accept the responsibilities of self-government. I would ask him also to remember that, in our tradition, constitutional change is a thing of gradual development. It is largely because of this that our institutions and system of government are sound and able to meet the demands and endure the strains of a modern society. I commend the bill to the House. Debate (on motion by **Mr. Nelson)** adjourned. {: .page-start } page 865 {:#debate-35} ### NORTHERN TERRITORY REPRESENTATION BILL 1959 Bill presented by **Mr. Hasluck,** and read a first time. {:#subdebate-35-0} #### Second Reading **Mr. HASLUCK** (Curtin- Minister for Territories) [8.45]. - by leave - I move - >That the bill be now read a second time. The purpose of the bill is to give certain voting rights to the member for the Northern Territory. In 1922, when provision was first made for the election of a member to represent the Northern Territory in this House, the member was given no right of voting in the House. In 1936 he was given the right of voting on any motion for the disallowance of an ordinance of the Territory. Since the establishment of the Legislative Council for the Northern Territory, the power of disallowing ordinances of the Territory has resided in the GovernorGeneral and not in the Parliament. Consequently, the member for the Northern Territory at present has no effective voting rights of any kind in this chamber. Both inside the Territory and outside it there are people who represent that it is undemocratic for the citizens of any part of Australia not to be represented by a member with full voting rights. At first sight this view may have anappeal, but it ignores certain facts relating to the composition of the House of Representatives. The number of members to be elected to this House is determined according to population and the number of voters in each electorate is fixed, in conformity with conditions set down in the Commonwealth Constitution and the Commonwealth Electoral Act. in order to make electorates approximately equal to each other. The numerical strength of electorates may not fall below or rise above certain limits. As a result of the observance of these requirements of the law the average number of voters in the normal electorate at the time of thelast election was 44,136. The number of voters for electorates ranged between 31.000and 65,000.In contrast with these figures. the number of voters enrolled in the Northern Territory at the same election was less than 8.000. It is contrary to the conditions on which the House of Representatives has been constructed that a member representing a constituency of less than 8,000 should have the same power as a member representing over 40,000. Often, it may be argued, the vote of one single member in this House has little effect on the decisions of the House. Yet, in the final outcome, the vote of a member can determine the fate of a government and decide whether a government stays in office or goes out of office. The issue that was put to the members of the Legislative Council for the Northern Territory when they met representatives of the Government in Canberra in July, 1958, and pressed their claim for full voting rights for the member for the Northern Territory in the House of Representatives, was this: Should the member for the Northern Territory be put in the position where his vote could decide the fate of an Australian government? No matter what party is in government or in opposition, is it just that the representative of 8,000 electors should have the same power as a representative of over 40,000 electors? Should the vote of an elector in the Northern Territory have about six times the weight of the vote of the average elector elsewhere in Australia in the determination of the fate of an Australian government? Would this be in accord with the spirit of those sections of the Constitution which require that membership of this House should be determined by population quotas? The members of the Legislative Council recognized that this was a substantial point. We therefore looked for a formula which would give the member some voting rights on matters relating to the Northern Territory but which would exclude him from voting on an issue that could determine the fate of a government. The Government's proposal in this bill is that the member will be able to vote on any proposed law that relates solely to the Northern Territory, or on any motion for the disallowance of regulations made under an ordinance of the Territory. Whether a proposedlaw comes within the definition will be determined in the first place by the ruling of the Speaker or the Chairman of Committees, subject to the customary provision that if the House dissents from the presiding officer's ruling the view of the House will prevail. This will give the member for the Northern Territory a limited voting right where at present he has no voting right of any kind. I may mention at this point that a bill relating to the voting rights of the member for the Australian Capital Territory is being prepared by my colleague the Minister for the Interior. {: #subdebate-35-0-s0 .speaker-ZL6} ##### Mr HASLUCK:
LP -- A very similar type of proposal. While commending this proposal to the House, I would suggest that we should not minimize the value of the presence of a member in the House quite apart from his voting power. The member can speak and ask questions in the House; he can bring the Territory viewpoint before his colleagues in both the party room and the House; he can make representations to the Government on any matter. An active, determined and intelligent member, no matter from what part of Australia he comes, can achieve perhaps more by his work as a member in the chamber and out of it than he could achieve as one vote among many. His influence and his power for good are by no means limited to his presence at divisions. I commend the bill to the House. Debate (on motion by **Mr. Nelson)** adjourned. {: .page-start } page 866 {:#debate-36} ### BANKING (TRANSITIONAL PROVISIONS) BILL 1959 Consideration resumed from 17th March (vide page 699). In committee: The bill. {: #debate-36-s0 .speaker-JAG} ##### Mr CREAN:
Melbourne Ports -- This is the fourth of the major measures which deal with the new arrangements for the Commonwealth Bank. It makes arrangements for the distribution of assets and liabilities as between certain aspects of the old bank's transactions. It makes provision for the staffing of the new Reserve Bank from the existing staff of the Commonwealth Bank. It provides for some right of appeal for those who may be chosen for one service and prefer to serve in another. It gives sanction, for the time that will be taken between the passage of this legislation and its final implementation, for certain essential functions such as statutory reserve deposits and exchange transactions to be conducted. Sub-clauses 2 to 4 of clause 10 indicate how simple it is in practice, apparently, to identify the transactions of the old Commonwealth Bank that belong to the Mortgage Bank Department and to the Industrial Finance Department. This clause simply says that the assets of the Mortgage Bank Department and of the Industrial Finance Department at a certain date, and the liabilities of those departments at a certain date, shall be, in fact, the assets and liabilities of the new Development Bank from the date of its inception. This shows, despite what Government supporters say, that although the various activities of the Commonwealth Bank in the past have been conducted successfully under one management, and conducted sensibly under one roof, the business of the departments has been, in fact, segregated. The Trading Bank activities have been separate from the Savings Bank activities; and the Savings Bank activities have been separate from the Mortgage Bank Department activities. The same may be said of the other specialized sections of the Commonwealth Bank which have existed in the past. The Opposition regrets that even the name " Commonwealth Bank " will no longer exist in any of the separate entities. The institution is to be called a " corporation ". {: .speaker-009MC} ##### Mr Harold Holt: -- Surely you are not back on that old argument. {: .speaker-JAG} ##### Mr CREAN: -- Perhaps it is an old argument, but it is an argument in which sentiment and traditions are enshrined. Those who trample on history sometimes have reason to regret their careless handling of established traditions in the community. In the past the various activities of this bank have been successfully encompassed under one management. Yet, they have been kept separate. The staffs have been able to be shifted freely from one kind of activity to another. This has given them a diversity of experience which will no longer be possible because this measure makes it possible for the governor and the general manager, as I think he is called, to select from the existing staff of the Commonwealth Bank those who shall staff the Reserve Bank and those who shall staff the new Commonwealth Trading Bank. There is some limited right of appeal within three months, but, basically, the separation is arbitrary and it is to be hoped that the rights of all staffs will be fully protected. {: .speaker-BV8} ##### Mr Calwell: -- There is no right of appeal to an independent tribunal. {: .speaker-JAG} ##### Mr CREAN: -- No. The appeal is back to the person who made the original decision, which does not seem to be very fair. Clause 13 provides that the governor and the managing director shall jointly determine to which of the services, that is to say the Reserve Bank or the Commonwealth Banking Corporation, it is appropriate to appoint a person. Section 17 provides that at any time within three months after the commencing date, the governor and the managing director - the two people who made the original decision - may, at the request of the person affected, jointly declare that, in their opinion, it is desirable that he should be retransferred. This seems to be a rather odd sort of way of doing justice to individuals. It treats them more as pieces of pie than as individual members with rights to be protected. Admittedly, there are subsequent sections which protect the seniority a man has acquired in the bank under the old name. He takes with him into the new section, whatever it may be, his rights in regard to superannuation, seniority, and various other matters. The Government has already intimated, I think, that a considerable period may elapse before everything envisaged in this legislation is consummated. Here, " transitional " may really mean a slightly longer period than "transitional" usually means. Of course, the longer the period the more likely is there to be dislocation and the more likely is there to be injustice and the loss of individual rights. I hope that these individual rights will be adequately protected, because the public, as a whole, has reason to respect the integrity of the services that the officers of the bank have provided over nearly 50 years of its existence. I do not know what is the total staff of the Commonwealth Bank in its present form. No doubt it is many thousands. While it is easy enough to pass laws in the name of political dogmas, it is not always easy to do justice to those people who chose to serve in the field of public banking rather than in the field of private banking. We, on this side of the chamber, once more express our regret that this legislation has been deemed necessary because the history of the bank shows that it has been a valuable institution to the people of Australia. We are still confident that it will be a vigorous competitor for the so-called private banking institutions. But we feel, also, that its effectiveness will be impaired by the dismemberment that this legislation is bringing about. {: #debate-36-s1 .speaker-009MC} ##### Mr HAROLD HOLT:
HigginsTreasurer · LP -- There are two matters to which I wish to address myself while this bill is before the committee. There may be others as the discussion proceeds. I think I should first bring directly to the attention of the committee amendments circulated in my name which, inter alia, propose the insertion of a new part in the bill. I ask for leave to move these amendments in toto. Leave granted. Clauses 2 and 3 are the clauses which I propose should be amended. Clause 2 reads in part - (1.) Parts I. and V. of this Act shall come into operation on the day on which this Act receives the Royal Assent. Clause 3 reads in part - >This Act is divided into Parts, as follows: - Part I. - Preliminary (Sections 1-4). Part II. - The Reserve Bank of Australia (Sections 5-9). Part III. - The Commonwealth Development Bank of Australia (Section 10). I move - >In clause 2, after " Parts I. ", insert " IIIa. "; > >In clause 3, after - " Part III. - The Commonwealth Development Bank of Australia (Section 10).", insert - " PartIIIA. - Preparatory Arrangements (Sections 10a-10b).". > >After Part III., insert the following new Part: - " Part IIIa - PREPARATORY ARRANGEMENTS. " 10a. - (1.) At any time after this Part comes into operation, but before the commencement of the Commonwealth Banks Act 1959, appointments may be made under that Act for the purposes of - > >paragraph (d) of sub-section (1.) of section fourteen of that Act; > >sub-section (1.) of section eighteen of that Act; > >sub-section (2.) of section twenty of that Act; > >sub-section (1.) of section twenty-five of that Act; > >sub-section (1.) of section thirty-three of that Act; > >sub-section (1.) of section forty-five of that Act; and > >sub-section (1.) of section seventy-eight of that Act, as if that Act were in operation but, subject to this section no such appointment has effect until the commencement of that Act. " (2.) For the purposes of an appointment to be made by virtue of the last preceding sub-section, being an appointment for the purposes of a provision of the Commonwealth Banks Act 1959 referred to in paragraph (c), (e), (f) or (g) of that sub-section, consultation with, or a recommendation by, all or a majority of the persons specified in the next succeeding sub-section shall be deemed to be consultation with, or a recommendation by, the Commonwealth Banking Corporation Board. " (3 . ) The persons referred to in the last preceding sub-section are the Secretary to the Department of the Treasury and the persons who would be the other members of the Commonwealth Banking Corporation Board if appointments made by virtue of sub-section (1.) of this section for the purposes of the provisions of the Commonwealth Banks Act 1959 referred to in paragraphs (a) and (d) of that sub-section had effect immediately. " (4.) A person appointed by virtue of subsection (1.) of this section - > >shall take such action as is appropriate having regard to the office to which he has been appointed to facilitate the coming into operation of the Commonwealth Banks Act 1959; > >shall be paid such remuneration (if any) in respect of the period from the time of his appointment to the commencement of the Commonwealth Banks Act 1959 as the Governor-General determines; > >shall not be deemed, as a consequence of of his having received remuneration under the last preceding paragraph, to have vacated any office held by him under the Commonwealth Bank Act 1945-1953; and > >if he was an officer of the Commonwealth Bank Service under the Commonwealth Banks Act 1959, to have time his appointment was made, shall be deemed, for the purposes of section one hundred and twelve of the Commonwealth Banks Act 1959, to have become at that time the holder of the office to which he has been appointed. " 10b. - (1.) The expenses necessary for the purpose of bringing the Commonwealth Banks Act 1959 into operation immediately upon its commencement (including any remuneration referred to in paragraph (b) of sub-section (4.) of the last preceding section) shall be paid by the Commonwealth Bank of Australia. " (2.) After the commencement of the Commonwealth Banks Act 1959, the Commonwealth Banking Corporation shall pay to the Reserve Bank of Australia an amount equal to the expenses paid under the last preceding sub-section.". The purpose of these amendments is to make preparatory arrangements to facilitate the establishment of the new banking structure. These arrangements comprise the making of appointments to statutory positions with the Commonwealth Banking Corporation and its three affiliated banks, and arrangements for the payment of the corporation's preliminary expenses. As I explained in my second-reading speech on the Banking (Transitional Provisions) Bill, which is now before the committee, a great deal will have to be done after the passing of the banking legislation by Parliament before the new banking structure can be brought into effect. Consequently, it will probably be some months after the passage of the legislation before it will be proclaimed. The amendments now before the committee are designed to facilitate the execution of the preliminary planning work to be done in this interim period. The amendments provide, first, that after the Commonwealth Banks Bill is passed but before it is proclaimed, appointments may be made to the top management positions with the Commonwealth Banking Corporation and its three banks, namely, members of the Commonwealth Ranking Corporation Board and the three executive committees of the board for the Commonwealth Trading Bank, the Commonwealth Savings Bank and the Commonwealth Development Bank, the managing director and deputy managing director of the corporation and the general managers of each of the three banks. The appointments will not become effective until the legislation is proclaimed, but the appointees will, meanwhile, be required to take such action as is appropriate to facilitate the coming into operation of the legislation. This action would include planning on such things as staffing and accommodation, arrangements for the commencement of business by the Commonwealth Development Bank, and the integration of the three banks in the Commonwealth Banking Corporation framework. Great care will, of course, have to be given to the planning of such matters if the new structure is to get off to a smooth start immediately upon proclamation of the legislation. The amendments provide also for the meeting of the preliminary expenses of the Commonwealth Banking Corporation including the remuneration of the persons to be appointed to the positions I have indicated. These expenses will be paid by the Commonwealth Bank in the first instance but will be reimbursed to the Reserve Bank later by the Commonwealth Banking Corporation. It will be seen that the amendments, although of considerable importance to the effective functioning of the legislation, do not involve new issues of principle in relation to the provisions of the three banking measures, and I recommend their adoption. Honorable members might ask why is it thought necessary to take this course at this late stage, particularly as the legislation has been before the Parliament in substantially the same form on two earlier occasions. {: .speaker-BV8} ##### Mr Calwell: -- I think you have a case to answer. {: #debate-36-s2 .speaker-009MC} ##### Mr HAROLD HOLT:
LP -- I am proposing to answer it. I do not think the honorable member would question the competency of our legal advisers in ordinary circumstances, and the view was taken that the Acts Interpretation Act which enables appointments to be made prior to legislation actually coming into full operation, applied in this case. But on further consideration it was felt that the safer course was to move along the line proposed by these amendments. No new matter of policy is proposed. I can assure honorable members opposite and other honorable members that there is no sinister purpose; the Government has no plot in mind in bringing forward these amendments. They are simply presented at this stage because the legal advisers to the Government have felt that this is a safer and more practical way to go about the business of ensuring the smooth transition from the former banking system to that embodied in the legislation than was the case when we were relying upon the provisions of the Acts Interpretation Act. {: .speaker-JAG} ##### Mr Crean: -- Is that the full explanation of the amendments? {: .speaker-009MC} ##### Mr HAROLD HOLT: -- Yes. {: .speaker-JAG} ##### Mr Crean: -- You do not envisage any difficulty with the expenses necessary to bring the Commonwealth Banks Bill into operation because they are paid by the Commonwealth Bank of Australia? {: .speaker-009MC} ##### Mr HAROLD HOLT: -- I think I have covered that. As I said just now, it will be seen that the amendments provide for the meeting of the preliminary expenses of the Commonwealth Banking Corporation, including the remuneration of the persons to be appointed to the positions I have indicated. These expenses will be paid by the Commonwealth Bank in the first instance, but will be reimbursed to the Reserve Bank later by the Commonwealth Banking Corporation. {: .speaker-JAG} ##### Mr Crean: -- In other words, the Reserve Bank will bear the lot? {: .speaker-009MC} ##### Mr HAROLD HOLT: -- No, they will be reimbursed to the Reserve Bank later by the Commonwealth Banking Corporation. {: .speaker-JAG} ##### Mr Crean: -- Does that mean that the expenses will be apportioned among the various sections? {: .speaker-009MC} ##### Mr HAROLD HOLT: -- Yes, that will be worked out. In the discussion of these measures, very proper emphasis has been placed upon the future of the staff. I know that my predecessor in office, **Sir Arthur** Fadden, gave a great deal of thought to this problem. He was concerned, as were all members of the Government, and, I am sure, all members of this Parliament, to see that, making such allowances as must be made for the fact that changes will occur, so far as practicable we were to meet the wishes of the very able and devoted staff now employed in the Commonwealth banking structure. The provision which we have made for transfer to the Reserve Bank Service within three months after the commencing date, and the succeeding clause which should be read together with it, is for a settling-in period of three months after the initial allocation of staff. Officers may be transferred from one service to the other if they wish and the governor and managing director agree. As provided in clauses 18 to 21 of this bill, officers transferred in this way will retain their rights to equal rate of remuneration, seniority, superannuation, leave, and so one, on the same basis as the officers who are originally appointed to the Reserve Bank Service from the Commonwealth Bank Service. The purpose of the provision is to avoid too precipitate an allocation of officers, perhaps before some of them have had time to appreciate where their true interests lie. It is expected that by the use of this provision and with the co-operation of the Reserve Bank and the Banking Corporation in the early stages of the change-over, the need for the transfer of officers against their wishes will be obviated or, at least, kept to the lowest practicable minimum. Representatives of the officers have put it to the Commonwealth Government that this settling-in period should be increased from three to six months. I think they have been under some misunderstanding as to how this thing will work. A letter reached me recently from **Mr. Henshall,** general secretary of the Commonwealth Bank Officers Association, in which he actually asked how this re-arrangement would work out. In my reply to him I said - >I have given this matter further consideration in the light of your comments and it seems to me that the Association might be under some misapprehension on timing aspects. I suggest this because of your references to the making of the structural changes within the next few weeks and to the probable division of the staff some months before the Association expects. > >The three months' period in question will commence to operate only from the time the legislation as a whole is proclaimed to come into operation. It will be seen that there will be quite a long interval before the legislation comes into force. It may be that the proclamation will not be made until 1st January next year, and if that is the case the three months will run from that point of time. {: .speaker-DTN} ##### Dr Evatt: -- If that is the commencing date? {: .speaker-009MC} ##### Mr HAROLD HOLT: -- If that is the date of proclamation. {: .speaker-DTN} ##### Dr Evatt: -- Which is the commencing date. {: .speaker-009MC} ##### Mr HAROLD HOLT: -- Yes, subject to these amending provisions which I have indicated to the committee. Because of the great number of preliminary matters that will have to be attended to before the new system can be brought into effect, I say that it will be some months after the passage of the legislation before the proclamation will be issued. I am not asking the committee to hold me to the date I have mentioned, 1st January. It may be somewhat earlier than that, and it may be later, but I think it will be of that order. A date at the beginning of a calendar year is clearly not a practicable date for the commencement of a financial year, but it may be found to be a convenient date in all the circumstances. In other words, bank officers will have the benefit of this period for the purpose of considering their desires with regard to their allocation to the Reserve Bank Service or to the Commonwealth Banking Corporation Service. The ensuing three months period will. I suggest, be sufficiently long for individual officers to resolve any second thoughts that might come to them after the legislation comes into operation. I think the committee will agree, as there is likely to be this long interval before the three months period begins to run, that in all the circumstances three months is quite a reasonable period of time. {: .speaker-JAG} ##### Mr Crean: -- Do you not feel that there may be some doubt in the employee's mind as to what he would call the commencing date in terms of his actual physical service, and might not his idea of the commencing date differ from what you would call the commencing date in terms of the legal proclamation? {: .speaker-009MC} ##### Mr HAROLD HOLT: -- What I am putting is that the three months as set out in this legislation will not begin to run against him until the date of proclamation, and that will be, on all the indications, many months ahead of the present point of time. {: #debate-36-s3 .speaker-DTN} ##### Dr EVATT:
Leader of the Opposition · Hunter -- I do not propose to refer in detail to the amendment that has been introduced by the Treasurer **(Mr. Harold Holt)** dealing with preparatory matters. It is obvious that in re-arranging a huge service such as the Commonwealth Bank Service, measures will be brought down that do not correctly anticipate what is going to happen. It is only as the legislation is discussed in this chamber that the Government is beginning to- see that its objectives cannot be achieved in as smooth a fashion as appeared possible. I think the Treasurer has been quite frank in saying sp. For instance, referring to the last clause that was cited by the Treasurer, further delays must occur, and the right honorable gentleman has indicated that the changeover may not occur until, perhaps, nearly 12 months from now. What I want to say, and I will say it shortly but firmly, is this: We had, before this series of acts of Parliament was introduced, one very large, very powerful and very efficient service, the Commonwealth Bank Service. It was a career service for all its members. A person might at some stage in his banking career consider that his particular talents and inclination would lie in the direction of general banking or trading banking, and he might be substantially successful in that field. It might later turn out that such a person was eminently suited for the specialized work of the central banking system, which has been operated within the framework of the Commonwealth Bank. Therefore I say that the commonsense approach to the question of the bank service itself was not to dismember it, but to leave the actual service intact, allowing for an appropriate authority which could move an officer from one place to another. Some authoritative service official, comparable with a Public Service Commissioner in the Commonwealth Public Service, could, acting in co-operation with the governor and the other officials, make these desired changes. Apparently this is not considered by the Government to be sufficient. It wants to split up the service itself. On one side there will be the Reserve Bank Service, which will have its own officers. It is perfectly true that they can change from one service to another, but by an elaborate and very awkward process. Clause 16 of the bill provides, in sub-clause (1.) - >At any time within three months after the commencing date,- and that date is uncertain - the Governor and the Managing Director may, at the request in writing of an officer of the Commonwealth Banking Corporation Service . . . jointly declare that, in their opinion, it is desirable that the officer should be transferred to the Reserve Bank Service on such date as is specified in the declaration, being a date not later than three months after the commencing date. Sub-clause (2.) provides - >Where a declaration is made under the last preceding sub-section in respect of a person - > >that person shall, on the date specified in the declaration, cease to be an officer of the Commonwealth Banking Corporation Service; and > >the Reserve Bank shall, on that date, appoint that person as an officer of the Reserve Bank Service. By that process, the officer goes from one service to another. I can understand the desire of the private banks to dismember the actual institution and to separate the functions that it performs. That I can understand. I cannot understand the point of view that impels them to require the separation of the services, instead of having, as I said a moment ago, something analogous to a public service in the various banking institutions, and thus retaining a single Commonwealth Bank Service. {: .speaker-JWU} ##### Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP -- This will merely destroy morale. {: .speaker-DTN} ##### Dr EVATT: -- That is so. It is the morale of the officers that tends to be weakened, as was shown by the letter that the Treasurer has read. He has seen the officers and he knows how anxious they are about their future. The Commonwealth Bank Service has been a great career service, and it has always been possible to arrange transfers of officers from one bank to another. But now this practice is to stop, because the private banks want to dismember, not only the institution, but also the service itself. That is what seems to me to be so wrong and so wanton. It is unnecessary. If the Government decided to yield to the demands of the private banks so far as the institution was concerned, well and good. We regard it as a tragedy, and a tragedy the effects of which must be removed by this Parliament by future legislation, so that we may return to the principle of the 1945 act. {: .speaker-009MC} ##### Mr Harold Holt: -- Have you abandoned the 1947 act? {: .speaker-DTN} ##### Dr EVATT: -- I said the 1945 act. {: .speaker-009MC} ##### Mr Harold Holt: -- And I asked whether you had abandoned the 1947 act. {: .speaker-DTN} ##### Dr EVATT: -- I said the 1945 act. The Treasurer will follow my point. I think he understands the point perfectly, because he has seen the officers concerned. As I said before, the point of view of the trading banks can be understood, so far as the institution itself and its functions are concerned. But there need not have been any interference with the Commonwealth Bank Service. Transfers could have been arranged through some authority analogous to a Commonwealth Public Service Commissioner, and all officers would have retained their existing and accruing rights. But the service is now to be split up, because the insensate desire of the trading banks is to get rid of the institution, and especially the sections of it that they particularly fear. I rise to protest against these provisions. The arrangements may work, but they are certainly awkwardly expressed. The allocations of officers have to be organized by arrangement between the Governor of the Reserve Bank on the one hand and the Managing Director of the Commonwealth Banking Corporation on the other. No provision is made for differences of opinion. It is assumed that they will agree. {: .speaker-009MC} ##### Mr Harold Holt: -- Has not the right honorable gentleman overlooked that these transfers will be made only if the officers so request? . They are not to be pushed about, as he is implying. {: .speaker-DTN} ##### Dr EVATT: -- I realize that. I do not say that they will necessarily be pushed about, but it is not a matter of their being pushed about. They will not have the right of free movement by way of promotion and transfer from one department to another. An officer may be specially skilled in general banking but not in reserve banking, but as the years go by he may become proficient by study in a. different field. The rights of transfer should be preserved. They are existing rights while there is only one service, and they are accruing rights. The organization is now to be broken up into separate branches, and it is quite unnecessary. No matter how much the private banks wanted to injure their competitors in the Commonwealth Bank, it was not right for the Government to yield to the private banks. I do hope that even in the time remaining for consideration the matter might be reviewed. This is a transitional arrangement, and it shows that sometimes, when operations of tremendous magnitude are undertaken lightly and, I submit, recklessly, the results are not those that are expected. This bill is a transitional measure, and as time goes by people will demand a return of the present Commonwealth banking structure. I want to make the point that no institution is left which will be the Commonwealth Bank of Australia. That is the institution. It is that with which people's affections are really engaged. It is an historic institution associated with great moments and periods in our history. When this legislation becomes law, there will be no Commonwealth Bank of Australia. {: .speaker-009MC} ##### Mr Harold Holt: -- There will be a Reserve Bank and a Commonwealth Trading Bank. {: .speaker-DTN} ##### Dr EVATT: -- I repeat that there will be no Commonwealth Bank of Australia. {: #debate-36-s4 .speaker-JRJ} ##### The CHAIRMAN (Mr Bowden: Order! The right honorable member's time has expired. {: .speaker-DTN} ##### Dr EVATT: -- With the concurrence of honorable members, I shall take my second period. It is true that, adding the institutions together, all the present functions will be spelt out, but the name is important. Why should we call the proposed institution the Reserve Bank, when it is the Commonwealth Bank of Australia that does the relevant work to-day. The Commonwealth Bank of Australia is known not only in Australia. It is known on a world-wide basis, and it is important that it should continue to be known. Why should the Commonwealth Bank of Australia as the name of the institution be wantonly destroyed. It will have gone as soon as this bill becomes law. {: .speaker-009MC} ##### Mr Harold Holt: -- It is the name " Australia " that is important. We shall have the Reserve Bank of Australia and the Commonwealth Trading Bank. {: .speaker-DTN} ##### Dr EVATT: -- I do not think that the Minister can be regarded as saying seriously that the name " Australia " is important. Of course, it is important. But we are not speaking of the name " Australia " in the abstract. It is the name of our native land, and of course it is important. But " Commonwealth Bank of Australia " has the name " Australia " in it and the Commonwealth Bank of Australia has a famous name. It is Australian and it represents the Commonwealth itself. The goodwill of a name like that is of inestimable value to the reputation of a bank which has performed so nobly for the people of Australia. This action shows the mean and rather malicious spirit of the competitors who have been, in many respects, defeated in fair competition by the Commonwealth Trading Bank. It really seems to me to be a tragic thing that this should be done. I would not have minded, on the question of names, if the name " Commonwealth Bank of Australia " had been given to the Reserve Bank. It is the reserve bank to-day. But all the signs appropriate to the office will have to be altered, and the staff will have to go into another building. It is completely unnecessary and wanton, and a waste of money is involved. The staff of the Reserve Bank consists of about 1,400 persons. Some members of the staff of the Note Issue Department are compositors and printers. They will still have to carry out those functions. The central banking business of the Commonwealth has been carried out at the head office of what is called the Common wealth Bank of Australia. Now it is to go to the other end of the street into a new bank. Everything has to be started afresh, and all reference to the Commonwealth Bank of Australia is to be obliterated. Things of that kind sometimes recoil upon the heads of their inventors. The name will not be forgotten. I hope that it will be brought back into the legislation. What has been said in debate on the three occasions this matter has come up is evidence of the need to have the name brought back, and of the success of the Commonwealth Bank of Australia in carrying out its duties in accordance with popular decision. The Trading Bank, although it is part of the Commonwealth Bank of Australia, has been obedient to the ruling of the central bank. That has been proved over and over again. But the private trading banks did not obey the directions of the central bank. They defied the Commonwealth Bank as a central bank. That is a nice augury for future relations! It is said that the private banks want good relations with the central bank; but even to have the staff of the central bank where it has been for so long upsets the private banks. It is a sorry picture. It is true that the Minister will get his legislation, but I think it is a fair forecast to say that in the long run the legislation will return to the form which is necessary for the purposes of having, in accordance with the 1945 act, full employment in this country, stability in the currency, and assistance in improving the economic conditions of the Australian people. Those were the objectives of the 1945 act, but they are not characteristic of the legislation which is now being forced through the Parliament. {: #debate-36-s5 .speaker-JTP} ##### Mr BURY:
Wentworth .- The Leader of the Opposition **(Dr. Evatt)** began by getting things completely upside-down. Under these measures, the career possibilities of those people now in the Commonwealth Bank service will improve. Instead of there being a head of just one bank, there will be a head of the Reserve Bank and a head of the Commonwealth Banking Corporation, and under each of them there will be a hierarchy of officials in charge of separate organizations. The staff of the Commonwealth Bank will in future, instead of having just one point to which their careers can lead, have a much wider choice. There are, of course, at least 10,000 people involved in the Commonwealth Banking Corporation. That is an enormous service which will in itself offer great scope. In the past the people in the Commonwealth Bank, particularly in the Trading Bank, were inhibited in competing with other banks because they were part of the central bank. Those inhibitions will be removed. They will be much freer to compete and, in consequence, more varied careers will be open to them. I think it would be very difficult to find any one near the top hierarchy of the new Commonwealth Banking Corporation who believes that this is not a forward move. Transfers between one service and another are limited at the moment because officers in the central bank do perform fundamentally different functions from those in the Trading Bank. In the past, ons has inhibited the other. In the future the members of each section will be able to go their own ways and make their own careers without being confronted continually with rivalries from the other sections. Within the central bank, there may be a certain number of posts which will be available to those with trading bank training, but only on a limited scale. Those in departments such as the Note Issue Department are essentially specialists. What is most important of all, the key central bank policy people will be free in future to concentrate on policy work and will not be continually concerned with the trading bank problems of their own institution. The Commonwealth Bank service will become much bigger with broader prospects of promotion and interesting careers. Those who work in the trading bank section never normally look ultimately to a career in the central bank, because the basic techniques are entirely different. They require different training entirely. This new organization will open excellent career opportunities which will be far better than those which have been available before to employees in the central banking wing, and, at the same time, those in the Commonwealth Trading Bank will be freed from the inhibiting effects of association with the central bank. So. for officers on the staff of the Commonwealth Trading Bank, the Commonwealth Savings Bank, or the Development Bank, the proposed scheme opens a new vista of opportunity. 1 turn now to the matter of the name, **Mr. Chairman.** Any one is entitled to be a little upset at the disappearance of an honoured name, but where goodwill is important is in day-to-day trading operations. The Commonwealth Savings Bank has been known by that name for a very long time, and for some years, the Commonwealth Trading Bank has been known essentially by that name. True, the generic name covering the whole is " the Commonwealth Bank ", but in relation to ordinary goodwill in dealing with the public the names will in fact be pretty much the same as they are at present, with the addition of the Commonwealth Development Bank, which will open yet another field of opportunity for those who like to specialize in the particular kind of operations which will be performed by that bank. Any one who is an officer of the Commonwealth Bank now sees opening before him a wonderful array of alternative careers which, in fact, have not been open before since there has been only one hierarchy and one line of promotion. I personally am sorry, **Mr. Chairman,** that the new Reserve Bank of Australia is not called simply " the Bank of Australia ". The Bank of England is the central bank in England, the Bank of Canada is the central bank in Canada, and so on, and the title " Reserve Bank " is not one that I would have chosen. Nevertheless, here it is. It does at least designate quite clearly what the functions of the bank are. The separate operative institutions, of which there will be four, will inherit a noble mantle. The Commonwealth Bank of Australia, under that name, has done notable work. It has played a great part in Australian financial history over the last 47 years, but time moves on, and sometimes it is necessary to make changes. {: .speaker-009MC} ##### Mr Harold Holt: -- Do they not call the Bank of England " the Old Lady of Threadneedle Street"? {: .speaker-JTP} ##### Mr BURY: -- Yes. In any case, the fundamental fact is that the existing institution will give birth to four new ones. The existing staff will carry on. The officers of the Commonwealth Bank have been thinking for months about whom they will get alongside in their own future interests. The prospect is very promising for most of them, whatever worries a few of them mayhave. Even if the name " Commonwealth Bank of Australia " disappears, every one who is concerned with these four new institutions will know that they spring from tha same source and a noble tradition. I am sure that this legislation not only will open up in the future more promising careers for those who work in the present Commonwealth Bank of Australia, but also will provide a better service for the people of Australia. {: #debate-36-s6 .speaker-BV8} ##### Mr CALWELL:
Melbourne **.- Mr. Chairman,** the Commonwealth Bank of Australia must be a very good bank, because it is taking a lot of explosive power to destroy it. The Government is employing fourteen bills to do the job. There are 318 clauses in all these bills, and there are about twenty pages of schedules. Even after this, the third attempt, the effort has not been successful enough, and the Treasurer **(Mr. Harold Holt)** has had to bring down to-night two pages of amendments which had not been thought of on the two previous occasions in 1957 and 1958. {: .speaker-009MC} ##### Mr Harold Holt: -- We have fourteen bills to block Labour's bank nationalization. {: .speaker-BV8} ##### Mr CALWELL: -- You are not blocking bank nationalization by these bills. The High Court of Australia and the Privy Council in the United Kingdom blocked bank nationalization by their peculiar judicial interpretations. Now we cannot do anything in the matter of bank nationalization under the Australian Constitution as it stands. {: .speaker-JTP} ##### Mr Bury: -- You are doing your best. {: .speaker-BV8} ##### Mr CALWELL: -- We are not doing our best. {: .speaker-JTP} ##### Mr Bury: -- You will be doing your best. {: .speaker-BV8} ##### Mr CALWELL: -- We will settle for the 1945 act. {: .speaker-009MC} ##### Mr Harold Holt: -- Who is "we"? {: .speaker-BV8} ##### Mr CALWELL: -- Despite everything that is being done by this legislation and has been done by previous legislation, and despite all the casuistical nonsense that has been talked by the Minister and the honorable member for Wentworth **(Mr. Bury)** this evening, we will succeed. The Minister asks, " Who is ' we '? " It means the representatives of the people, and those who are bringing down this legislation are the friends and agents of the banking institutions. That is a clear enough definition for even the dullest intellect. {: #debate-36-s7 .speaker-10000} ##### The CHAIRMAN: -- Order! 1 think that that sort of term is rather unpleasant. {: .speaker-BV8} ##### Mr CALWELL: -- Well, I shall not indulge in any farther unpleasantness. Let me just deal with this title. " Banking (Transitional Provisions) Bill 1959". There is a sinister connotation in that tills. The Government does not mean thai the provisions of this measure will implement the change from the existing legislation to the set-up which it wishes to see established. These transitional provisions are being passed into law with the intention of ultimately destroying the Commonwealth Bank in its entirety, that is if the Australian people are foolish enough to continue reelecting governments of the same political colour as that which at present occupies the treasury bench. The honorable member for Wentworth, who waxed so eloquent about the alleged benefits of these bills all this last evening, supposed an amendment, and was in turn supported by two colleagues, who in addition to the mover, are not here this evening and who have not put in an appearance at any time during the consideration of this bill in committee. The honorable member for Wentworth, the honorable member for Macarthur **(Mr. Jeff Bate)** and the honorable member for Mitchell **(Mr. Wheeler)** are the missing members. They indulged in a lot of shadow-sparring last night, but when it came to the final showdown they squibbed the issue by not voting for their particular amendment. For our part, we propose to vote for our views, and to state where we stand. Just as we have gone down in defeat on several occasions after having established the Commonwealth Bank, and having lived to re-establish it, we will once more re-establish the Commonwealth Bank which the Fisher Government established and called "The Commonwealth Bank of Australia ". Government supporters say. " What does it matter if the name of the Commonwealth Bank is changed? " A rose by any other name, presumably, would smell as sweeet If the directors of the Bank of New South Wales were told to change the name of their institution, there would be something like a minor revolution in this country. Who on the Government side of the chamber would dare to tell the English, Scottish and Australian Bank Limited or the Australia and New Zealand Bank Limited that they must change their names? What right has this Government to change the name of the people's bank - the Commonwealth Bank of Australia? We do not mind the E.S. &A. Bank amalgamating with the A.N.Z. Bank, as it will within the next few years. We do not mind these other banks amalgamating. They may do that. We will settle for one, two, five or seven private banks - in fair competition with the Commonwealth Bank! And we are sure that when the competition is fair - fair competition is not what this Government stands for - the Commonwealth Bank will win out, because it has better bankers in charge of it and the profit motive is not the compelling idea in its conduct of banking. The Australian Country party has been bought off with the Commonwealth Development Bank. The carrot has been dangled before the noses of the members of that party, and having swallowed it they have gone to sleep. They have taken no interest in this legislation over the last two days. They are happy! But, of course, they will be hungry later, and then they will probably discover that they made a mistake - and a very big mistake. I must hurry because I only have ten minutes in which to throw my pearls of wisdom around the chamber in front of those honorable members on the Government benches at whom I am looking now. Ten minutes, unfortunately is not long enough. The Treasurer said that the officers of the bank are not to be pushed about. Well, this momentous and significant clause 13 - to the superstitious a very significant clause - provides that two people will jointly determine to which of the services an officer of the bank will be assigned. Within three months the officer may apply for transfer to the other service, but he has no right of appeal. He is being pushed around as if his interests did not matter. That situation is objected to by the Opposition, and it probably is objected to by the people concerned. It is traditional in this country that the forces of predatory wealth, which at present dominate the Parliament, have never wanted a people's bank. They always wanted to see the private banks alone in charge of banking. The Commonwealth Bank was established in the face of the bitter and unrelenting opposition of tie same forces in 1911 and they and their successors have weakened it whenever the opportunity has presented itself since. But we who represent the people, we who walk in the Lincoln tradition in this country, remember that Abraham Lincoln, at his first attempt to enter politics - when he stood for the State Legislature of Illinois - said - in the course of a short speech - I am in favour of a national bank. We want a national bank. {: .speaker-009MC} ##### Mr Harold Holt: -- You want a socialized monopoly. {: .speaker-BV8} ##### Mr CALWELL: -- We do not want any socialized monopoly in banking or in anything else. We would never have tried to pass the 1947 legislation if the banking interests of the country had not challenged the 1945 legislation by indirect means. They challenged every clause of that legislation before the High Court of Australia through the Melbourne City Council. Had the banks been prepared to settle for the 1945 legislation, there would never have been any question of banking being a political issue afterwards. But they would not settle, and they never will settle. The Labour party will settle for the 1945 legislation because we are satisfied that with the 1945 legislation the best interests of the Australian people will be protected. {: .speaker-009MC} ##### Mr Harold Holt: -- Since when? {: .speaker-BV8} ##### Mr CALWELL: -- Always! We have said it before and we repeat it. {: .speaker-009MC} ##### Mr Harold Holt: -- The honorable member for Grayndler does not believe that. {: .speaker-BV8} ##### Mr CALWELL: -- The Treasurer is deluding himself if he thinks that we would try the impossible if we were back in power. We are realists. We know how far we can go within the Constitution. We will strive for the 1945 legislation, and we will be right in doing so. {: .speaker-K7J} ##### Mr Cramer: -- You want to change your policy. {: .speaker-BV8} ##### Mr CALWELL: -- We are not changing anything. We never change our policy on any matter, and unlike the supporters of this Government, we do not change our name from time to time. We are proud of our name and heritage and we are proud of our stand against the private banks, which has been in the interests of the Australian people. Let the Treasurer say why he is doing these things. Is it at the behest of the private banks or is it because public opinion demands it? A predecessor of this Government, of the same political kidney, appointed a royal commission consisting of six members, only one of whom was a Labour man - the late **Mr. Chifley.** All the others were distinguished gentlemen who knew the business of banking, but they did not recommend the separation of the functions of the bank. They did not recommend that the name of the Commonwealth Bank should be changed. The recommendation came from the private bankers, the people who want to destroy the Commonwealth Bank. {: .speaker-10000} ##### The CHAIRMAN: -- Order! The honorable gentleman's time has expired. {: #debate-36-s8 .speaker-KWP} ##### Mr TURNBULL:
Mallee .- As a member of the Australian Country party I resent the remarks passed by the Deputy Leader of the Opposition **(Mr. Calwell).** The honorable gentleman is very flamboyant in his utterances. I used to think that he had a dual personality. The man that we met outside the chamber was quite a gentleman compared with the man who spoke in this place. But now I am led to believe that he has a triple identity. There is the man we meet in the street - such a friendly man; and the man we hear in this place. Then there is the man who speaks on the " Labour Hour " programme on the radio in Melbourne on Sundays. Sometimes the honorable gentleman gets very worked up in this place, but, when speaking on the " Labour Hour " programme from Melbourne on Sunday afternoons, he makes statements that he would not dare to make in this place, because he knows that the people in this place are in touch with public opinion and proceedings. The honorable gentleman referred to the Australian Country party as the peasant party. Honorable members opposite are laughing about that. They think it is a great joke. {: .speaker-10000} ##### The CHAIRMAN: -- Order! I think it would be safer if the honorable member came back to the bill. {: .speaker-KWP} ##### Mr TURNBULL: -- May I not reply to the honorable member for Melbourne? {: .speaker-10000} ##### The CHAIRMAN: -- The honorable member can refer to what was said, but he cannot make a speech about it. {: .speaker-KWP} ##### Mr TURNBULL: -- Referring to the honorable gentleman's remark that the Australian Country party was a peasant party, I point out that members of that party come from country districts. They represent primary producers - the man on the land - and if the honorable member for Melbourne regards the farmers and the primary producers as peasants, it is just as well that they should know about it. The honorable gentleman said that his party represented the people. If that is so, after each election since 1949 the people have had a dwindling representation in this place. Each new Parliament since 1949 has seen the forces of Labour diminished in this place. The idea of the honorable member for Melbourne saying that his party represents the people! It represents only a portion of the people. The Government parties represent the major portion of the people, and everybody knows that. Regarding the bill, all I want to say is that this debate could be closed by the Chairman because of tedious repetition on the part of honorable members. {: .speaker-6U4} ##### Mr Whitlam: -- You have the capacity of being tedious without repetition. {: .speaker-KWP} ##### Mr TURNBULL: -- The honorable member for Werriwa is very abusive. Anybody can be insulting, but he is a master at it. I cannot speak about this bill without repeating what I or some one else has already said. {: .speaker-KID} ##### Mr Luchetti: -- I rise to order! The honorable member for Mallee is canvassing your ruling, **Mr. Chairman.** He has declared that there has been tedious repetition, and if such has been the case, I know that you would have ruled accordingly. {: .speaker-10000} ##### The CHAIRMAN: -- The point taken has no substance. {: .speaker-KWP} ##### Mr TURNBULL: -- I cannot speak about the bill without repeating something that I have already said or something that I have heard somebody else say. The Deputy Leader of the Opposition referred to the staff of the bank. He said that the staff would be disrupted by this legislation. Let me repeat what I said earlier. The Deputy Leader of the Opposition had little thought for the staff of the Commonwealth Bank when his party attempted to nationalize the private banks. When I raised the matter at that time I was assured by no less a person than the present Leader of the Opposition **(Dr. Evatt)** that the staff would be cared for and that everything would be all right. But, as I pointed out, it is physically impossible for the Commonwealth Bank, if it became a national monopoly, to employ all the staffs of all the other banks in the particular way in which they were being employed by those banks. The division of the functions of the Commonwealth Bank, as provided by the legislation that has been passed, will create employment rather than reduce employment. As the Labour party constantly asserts that it is the guardian of full employment, it must agree that this is a step in the right direction. But we find it debating in support of the very opposite view. The Deputy Leader of the Opposition just cries out .against capitalism in the speeches he makes in this House. I think the point is that in the Labour party, if a member does not cry out against capitalism and banking, he is in danger of losing his pre-selection. Many members of the Labour party must realize that if they had not made extravagant statements at Labour party conferences in the past they would never have reached this chamber. Having successfully arrived here, they have to continue making these extreme statements although they really do not believe in them. {: .speaker-6V4} ##### Mr Daly: -- On a poh.t of order: I was just going to say- {: .speaker-10000} ##### The CHAIRMAN: -- Order! If the honorable member was just going to say something, he should sit down. It is too late to do it now. {: .speaker-6V4} ##### Mr Daly: -- The honorable member has not touched on the bill since, he commenced to speak. {: .speaker-10000} ##### The CHAIRMAN: -- The Chair thinks otherwise. The honorable member will resume his seat. {: #debate-36-s9 .speaker-BV8} ##### Mr CALWELL:
Melbourne .- 1 challenge the Government to say what its justification is for separating the functions of the bank. Where does it get its authority to establish ,a Reserve Bank? I ask the Government to say why it is doing these things, although the royal commission of its own making, which reported on the Australian banking structure, did not make any recommendations to this effect. No Minister is present to say anything. (Government supporters interjecting) - {: .speaker-10000} ##### The CHAIRMAN: -- Order! I insist on honorable members remaining silent while the honorable member for Melbourne is speaking. In that way we will get on much better. {: .speaker-BV8} ##### Mr CALWELL: -- The Government has not justified its action by a reference to any recommendation from the Royal Commission on Banking. A former member for New England, **Mr. J.** P. Abbott a very good friend of mine, the late **Sir Edward** Nixon, **Mr. H.** A. Pitt, who was once my boss in the Victorian Treasury, Professor R. C. Mills, **Mr. J.** B. Chifley and the chairman spent several years preparing their report, and the 1945 act is based on the report of the royal commission. Why is the Government tearing up the report of this commission? Is it true that a Labour government put it into effect, but nothing was done earlier by anti-Labour governments. Until this legislation was introduced, we never heard any proposal in favour of the establishment of the Reserve Bank. Therefore, the Banking (Transitional Provisions) Bill in the circumstances should not be necessary. The Government has brought it down hoping to fool the people into the belief that it is a good thing to have a Reserve Bank away from the government bank and to have, in the words of the honorable member for Wentworth **(Mr. Bury),** a hank that will obtain the goodwill of all the trading banks. Why should the central bank need to have the goodwill of the trading banks? The central bank is there to give effect to the wishes of the government of the day in respect of its financial policy. That is provided for in the legislation and is as it should be. No government is popular with the trading banks. This Government will not go as far as the private' trading banks want it to go and to that extent it is unpopular. It is popular only to the extent that it has given them something that they want. The private trading banks, when they get the Reserve Bank physically separated from the Commonwealth Banking Corporation, will want to go further and will want separate representation of the private trading banks on the Reserve Bank Board, just as they had representation on the old Commonwealth Bank Board. Some people quitted the directorates of private banks on one day and became members of the Commonwealth Bank Board the next day. The late **Sir Clive** McPherson was a case in point. He left a directorship of the National Bank of Australasia Limited to become a member of the Commonwealth Bank Board. When we abolished the Commonwealth Bank Board, he went back the very next day to become a director of the National Bank again. {: .speaker-KVG} ##### Mr Stokes: -- He must have been a good man. {: .speaker-BV8} ##### Mr CALWELL: -- He was a good man in the interests of the National Bank and of the private banking system. We would not appoint any one to the board who had any association with the private banks. All this argument about the necessity to maintain the goodwill of the private trading banks is irrelevant because, in the first place, no Government will ever get it and, in the second place, it does not matter. This bill is divided into four parts. All of them are designed not to build anything but to destroy everything. I think the honorable member for Wentworth, for whose ability I have great respect, is engaging in a lot of double talk to-night when he says that he believes that this legislation will strengthen the Commonwealth banking structure. I do not believe he would want to do it. T do not believe the honorable member for Mitchell **(Mr. Wheeler),** the honorable member for Macarthur **(Mr. Jeff Bate)** or the honorable member for Mackellar **(Mr. Wentworth)** would want to do it. To the extent that they have criticized this and other bills, they have been more honest than the rest of the members of their party. If they had their way, there would be no Commonwealth Bank at all, in its trading activities or in its savings bank activities, and the Development Bank would quickly go overboard, too. If they could win the next two or three elections, I am sure that they would effect their purpose, but they will not win the next election and banking will remain a political issue, not until something that the private banks want but until something that we, the representatives of the people, want is settled on the statute-book. That will be something that approximates to the 1945 legislation of the Chifley Government and the legislation of the Fisher Government which preceded it. I conclude by reminding the members of the Australian Country party of the expression of the very able and learned member for Fremantle **(Mr. Beazley),** uttered in this chamber on one occasion during a debate on the banking bill. He said that the members of the Australian Country party would always want the Commonwealth Bank to finance their primary products pool because it is cheaper to get finance from the Commonwealth Bank than from private banks. He said the Country party believes in socializing losses and capitalizing gains. You cannot keep doing that sort of thing with banking. As I have said, we will settle for the 1945 act. We will not at any time in a parliament in which we have a majority attempt any scheme of nationalization. We will make an electoral compact with the people on that issue and will stand by it. On that assurance, I am satisfied that the Australian people will empower us to restore the 1945 act to the statute-book in its entirety. {: #debate-36-s10 .speaker-KLL} ##### Mr MAKIN:
Bonython .- I wish to supplement the remarks I made yesterday and to support the comments that the Deputy Leader of the Opposition **(Mr. Calwell)** made this evening. I wish to offer a protest at the change of name of the Commonwealth Bank. We know full well that the name of a business is a very important feature in goodwill. The Commonwealth Bank has become so integrated with the life of the Australian nation that to deny it the use of its proper name is to deny to this country the advantage of a fine reputation, which has been the result of the marvellous contribution that the bank has made to our national life. I deplore the action of the Government in denying to the community the advantage of the bank that has been the foundation of our financial structure for many years. It has served Australia in times of crisis and has brought solvency to those concerns which are the basis of our economy. That being so, I protest against the action of the Government. As to the staffing of the bank, I shall outline to the committee what I believe to be the design behind this change in the general pattern of the bank and its relationship to other branches of the financial structure. It is to be divorced from the Commonwealth Trading Bank and the Commonwealth Savings Bank and is to stand alone. It will be exempt also from the provisions of the Commonwealth Public Service Act. Therefore, it will not be governed by provisions which apply to other government institutions. There is a purpose in this proposal. Although the board cannot have among its members those who have a direct interest in banking, and its members will be drawn from commercial and industrial activities - and men of big business will no doubt be called to office - there is nothing to prevent leading members of the staff of a private trading bank from being given the opportunity ultimately to gain office in this Reserve Bank. Their advice will be given to the board concerning the activities of the Reserve Bank. This will mean that the trading banks, through that medium, will be able to determine the policy of the Reserve Bank according to their personal wishes. Surely there cannot be any other purpose behind the action of the Government but its compliance with the instructions the private banks have given on this matter; that is, to transfer the management of this bank from the Commonwealth Bank, as a national expression of Commonwealth policy, to the private trading banks. Through this medium, the private banks will give advice to those who will govern this institution so that it will no longer be an instrument of national expression but an instrument of private banking. Their first interest and their principal interest is to make profits for their shareholders and that means for a comparatively few people in the community. That great section of the population who need the bank's resources to provide full employment and enjoyment of the great assets of this country will be denied such an advantage because of the policies which will be enacted to conform with the advice and the instructions given from outside in directing the policies of the Reserve Bank. I join with other members on the Opposition side in saying that I believe that this is a retrograde step. It will injure the prestige as well as the financial standing of the bank, and supporters of the Government will live to regret what they are doing. At the earliest moment a Labour government will restore the Commonwealth Bank to its present standing and strength. {: #debate-36-s11 .speaker-6V4} ##### Mr DALY:
Grayndler .- The debate that has proceeded on this section of the banking bills has made more apparent than ever, if such could be possible, that the sole object of the Government is the complete destruction of the Commonwealth Bank as the people know it. As the Deputy Leader of the Opposition **(Mr. Calwell)** and the honorable member for Bonython **(Mr. Makin)** have said, clearly the Government is quite unscrupulous in this attack on the people's institution. The substitution of another name for the Commonwealth Bank of Australia is a change which would give an indication to many people, particularly those abroad, that the Government of the day is ashamed of the name of the Commonwealth Bank. That in itself is a tragedy, because no bank enjoys a higher reputation among the nations of the world than this bank which was established by a Labour government many years ago. This debate again shows clearly that the Government will never rest until the Commonwealth Bank is completely under the domination of the private banking interests. That is quite apparent from this legislation. It is quite apparent also that the Government, in submitting the measure before the committee to cover the transitional period, is giving effect to the policies on which it was elected in 1949. The Minister for Air **(Mr. Osborne)** is sitting on the front bench on the Government side. It is appropriate that he should be in the chamber now because he is a direct representative of the banks in this Parliament. He would not be here if the private banking interests had not supported him to the full in 1949, with other members, so that they would bring into effect this legislation on which he should not be eligible to vote to-night. {: .speaker-6U4} ##### Mr Whitlam: -- They saved him again in the Cabinet reshuffle. {: .speaker-6V4} ##### Mr DALY: -- Yes, in the recent reshuffle of the Cabinet he was saved because he represents the money interests in this Parliament. He is their spokesman in the Cabinet and in this Parliament. As such, he has to give lip service to the legislation we are debating and on which he seeks to pass judgment. In passing, it is interesting to note that at least a couple of Ministers are interested in this debate. Of a majority of 32 on the Government side, only three have seen fit to sit in the chamber and debate this legislation. In making these observations, I support the comments that have been made by other members of the Opposition on the attitude of the Government to the destruction of the Commonwealth Bank, the removal of its name and their general approach to this section of the banking legislation. When all is said and done, the Commonwealth Bank did not require any change of the drastic nature that is proposed by the Government. At whose request did the Government engineer these changes? The people did not ask for them. We have heard of no demands from the people who might be interested in this proposal in a national way. There have been no demands from those who deposit money in the Commonwealth Bank. Where is the pressure coming from? Undoubtedly, it is comming from the opponents of the Commonwealth Bank - the private banking interests - who seek to remove all free competition so that they can put what I might call a chained bank in opposition to the private banking interests. No doubt the board that is to be established will be under the same dominant control of those vested interests who held the Government of this country to ransom in days gone by. In this modern atomic and nuclear age, we find this Government taking backward steps in banking, at least on the surface, in order to destroy completely the Commonwealth Bank as we know it. Their position cannot be defended. I am surprised that many Government supporters are prepared to debate these measures because surely they must be ashamed of them. The reason why the Government has had pressure to bear is apparent in another fact. This Government was elected in 1949 to give effect to legislation of this nature. For nine years they have sat here and re fused to do it, because they realized the tremendous opposition of the average Australian to the destruction of the Commonwealth Bank. And it shows the power and the influence of the private banking institutions of this country, the power of money behind this Government, when the people's bank can be completely destroyed almost at the whim of these private banks despite the fact that the vast majority of the people know little of this legislation and seek no change in the banking structure. The Government's proposals are nothing short of scandalous, and I think it would be justifiable at this stage to have another royal commission into the activities of this Government in respect of banking, in order to bring to the surface for all to see the real interests behind this change, and the identities of those who have made possible the implementation of this legislation in the interests of people who seek to serve the motives of profit rather than the general well-being of the people of Australia. When Labour introduced changes in the banking structure it did it in ways that were clearly outlined. In regard to the 1945 and 1947 banking legislation of the Labour Government, **Mr. J.** B. Chifley outlined clearly the position in regard to banking as it affected reserve banking, central banking, savings banking and banking generally. He outlined clearly Labour's attitude, which was that money in this country should serve the nation and not be used for the express purpose of making profits for a few shareholders in the private banks. The members of this Government have always been opposed to that. They seek profit above all else, because they serve banking interests exclusively - and banking and money are powerful. Whilst honorable members opposite criticize the policy and platform of the Labour party in respect of the nationalization of banking and matters of that nature, in their own way they have nationalized banking for the benefit of the private interests that control the destiny and the lives of thousands of Australians to-day. Honorable members opposite are controlled by people who are not answerable to this Parliament. It is for that reason, amongst others, that the Labour party opposes this legislation, and also because of the way the Government is tying things up on behalf of the private banks. The Government has criticized Labour's attitude. As I have said before, the honorable member for Mallee **(Mr. Turnbull)** in opposition was like a roaring lion, but in government is like an old tomcat. In other words, he has gone to water, and the fact of the matter is that to-night he put over the same story as he has been putting over for years. He complained about what would happen to the staffs of the banks under nationalization. I heard the banking legislation speech made by **Mr. Chifley** in 1947, and in that speech he undertook to protect to the full the staffs of the private trading banks as well as the staff of the Commonwealth Bank. The most elaborate precautions were taken to see that they were protected. Their rights in every way were protected, and their service in a private bank, when taken over by the Commonwealth Bank, would be counted in reckoning continuity of service. {: .speaker-K7J} ##### Mr Cramer: -- You did not tell the people you intended to nationalize the banks. {: .speaker-6V4} ##### Mr DALY: -- All those facts were in the speech **Mr. Chifley** made. The Minister for the Army would not know what he is talking about. At that time he was dealing with blackouts and had no connexion with this Parliament. The fact of the matter is that under this legislation we will not, to a great extent, know what is going to happen to the staff of this great institution, the Commonwealth Bank, and who is to be placed in charge. Many members of the Commonwealth Bank staff can look around and see the private banking interest putting in their nominees in preference to men who have had a lifetime association with the Commonwealth Bank. This legislation is of a scandalous type. The Government is ashamed of it. Its members will not come into the House to defend it. I do not blame them, for the simple reason that this is legislation which nobody could proudly defend. Except for the fact that the private banks paid the full cost of the Government's election propaganda in 1949, this legislation would not have been introduced. The fact that the Government has sold out to the private banks is something for which it should be eternally ashamed. With other members on this side of the Parliament I oppose the legislation and hope that a Labour government will be elected to give effect to Labour's policy, to repeal this legislation and control banking in the interests of the nation. {: #debate-36-s12 .speaker-KMD} ##### Mr OSBORNE:
Minister for Air · Evans · LP -- I rise in this committee only to make a brief answer to certain charges made against me personally by the honorable member for Grayndler **(Mr. Daley).** While he was on his feet a moment ago the honorable member said, I think, that I had represented private banking interests in this House and that I had associations with substantial financial interests, or something to that effect. These statements, **Sir, are** untrue. I believe that the honorable member for Grayndler knows them to be untrue. In any case, after these remarks of mine, he will no longer have any excuse for not knowing them to be untrue. Before I came into the Parliament I was a member of a legal firm which acted for one of the private banks. Shortly after entering this Parliament I left that firm, largely because of the political content of banking at the time, and joined another firm which has no association with any bank. I did that, I believe at considerable cost to myself. I have no associations with any private bank other than as a customer. The ony people I represent in this House, **Mr. Chairman,** are the 45,000 electors in the electorate of Evans, whom I am proud to represent. {: #debate-36-s13 .speaker-JSU} ##### Mr BRYANT:
Wills .- It is significant that whenever any charge is levelled that honorable members opposite are associated in any way with the private banking system, they take umbrage at it and get very terse about it, and regard themselves as having been insulted. {: .speaker-10000} ##### The CHAIRMAN: -- Order! An honorable member who considers that he has been misrepresented has a perfect right to rise and explain the position. {: .speaker-JSU} ##### Mr BRYANT: -- T was not referring particularly to the Minister for Air. {: .speaker-KMD} ##### Mr Osborne: -- To whom were you referring? {: .speaker-JSU} ##### Mr BRYANT: -- To the people opposite who regard as almost insulting statements that they are associated with the private banking system. That is a contradiction of the rather high tone that you apply to the private banking structure itself. The particular reason why I rose at this moment, apart from the fact that I want to make it clear that we- on this side of the House have a mandate from our electors to oppose this legislation to the ultimate, as well as a similar mandate from a large proportion of the electors of the people opposite, is to discuss clause 10b of new Part 111a., which reads - >The expenses necessary for the purpose of bringing the Commonwealth Banks Act 1959 into operation immediately upon its commencement (including any remuneration referred to in paragraph (b) of sub-section 4 of the last preceding section) shall be paid by the Commonwealth Bank of Australia. This is surely the unkindest cut of all - that the bank should be responsible for financing its own execution. This is symbolic of the whole attitude of the people on the other side. They come here claiming that they have a mandate from the people, but during most of this debate very few of them have been here to take any part in it. We have in this clause what is clearly the expressed will of the private banking structure of Australia. If there are any expenses to be met, the private banks should foot the bill. If the legislation is so important to the continued survival of the private banks, they should be the ones to foot the bill. This provision is symbolic of the whole approach of the Government to the procedure. This is not just a matter of changing certain parts of the public banking system. This is a matter of setting up a completely new structure, the control of which will be exercised from an ivory tower somewhere at the other end of Martin-place, away from the present Commonwealth Bank offices. The honorable member for Wentworth **(Mr. Bury)** painted a very rosy picture. He talked about the new vista of opportunity that was to be offered to the members of the Commonweath Bank staff as a result of this special procedure of breaking the staff into two separate parts. That is clearly ridiculous. I belonged to the Victorian teaching service for many years. My experience was that in any section of that service the closer we got to co-operation between three or four sections of the service, the greater were the opportunities open to many members of the service. I suppose that exactly the same would apply normally to the Commonwealth Bank staff. Here we have people placed in the position of having to choose whether they will work in the central bank or in a bank in the Commonwealth Banking Service. Some - the greatest mass of them - will be allotted to ordinary banking work. The others will go to the central bank. So we will have a case of their actual removal physically from one building to another at the far end of the street. We are proceeding to create a group of people who will have very little association with general banking procedure. The honorable member for Wentworth said that there were fundamental differences in the techniques1. What will be the final effect of this separation on the Commonwealth Banking Service itself? In any other large organization, it is the duty of the people in control to see that members of the staff obtain the greatest possible opportunity in every field. This applies in the armed services, where people are moved from posting to posting. The Minister for the Army has a system inside the Army under which people are continually being moved from one place to another. {: .speaker-JSY} ##### Mr Buchanan: -- What about the Navy? {: .speaker-JSU} ##### Mr BRYANT: -- There is nowhere to go in the Navy any more. The " Hobart " is lost. In any particular field of private enterprise, an attempt is made to give people who will finally manage and lay down policy the greatest possible experience in that work. The honorable member for Wentworth **(Mr. Bury)** appears to be the final spokesman for the doctrine that has been preached here in this matter. Indeed, he is the only spokesman. We have to hand him that. He holds the field when all the others have fled. He said that the policy-making people must be kept apart. I should have thought it fundamental to producing correct policy decisions in the end that the persons who make the policy should have had experience in every part of the banking system. This breaking up of the banking staff, this separation of the people who are to take part in policy decisions from those who are to take part in ordinary banking procedure could have a serious effect on the efficiency of the service and, finally, upon the effectiveness with which the will of this Parliament is carried out by the people who make the policy decisions. So, I oppose the bill on this ground and on the ground that it will have a serious effect on the opportunities of members of the banking service. They have to choose, in the next few months, where they will work or they will be directed to one service or the other. That will be, finally, their chosen path, probably for the rest of their banking career. Nothing that honorable members opposite can say will convince me that this can do anything else but limit opportunities, particularly for members of the central banking staff. Some of my colleagues on this side of the chamber have expressed surprise at the change of the name to Reserve Bank of Australia. What can one expect but a continual change of name from the members of a party which changes its own name every half generation? An examination of this legislation reveals the very limited field in which the Reserve Bank will be operating. As time goes on and the Reserve Bank staff is removed further, both physically and in experience, from the actual practice of banking, the whole banking structure will be affected. But the time will come when we, on this side of the chamber, will return to the very important duty of re-erecting the whole structure. Members on the opposite side have been shouting about the 1947 act. If they had not sought to counter the 1945 act as far as they possibly could, there would have been no 1947 act. The Opposition will oppose this bill as far as it is able to do so. We hope, **Mr. Chairman,** that the very generous spirit in which you have interpreted the Standing Orders for our opponents will be carried on throughout the evening. {: .speaker-10000} ##### The CHAIRMAN: -- Order! Is that an implication that I have not interpreted them correctly for the Opposition side? If the honorable member means that, he will withdraw and apologize. {: .speaker-JSU} ##### Mr BRYANT: -- I would not suggest such a thing. {: .speaker-10000} ##### The CHAIRMAN: -- I shall take the honorable member's word this time that he did not intend such a reflection. Amendments agreed to. Question put - >That the bill, as amended, be agreed to. The committee divided. (The Chairman - Mr. G. J. Bowden.) AYES: 44 NOES: 32 Majority . . 12 AYES NOES Question so resolved in the affirmative. Bill reported with amendments; report adopted. Bill read a third time. {: .page-start } page 884 {:#debate-37} ### BILLS RELATED TO BANKING Audit Bill 1959. Christmas Island Bill 1959. Commonwealth Employees' Furlough Bill 1959. Crimes Bill 1959. Income Tax and Social Services Contribution Assessment Bill 1959. National Debt Sinking Fund Bill 1959. Northern Territory (Lessees' Loans Guarantee) Bill 1959. Officers' Rights Declaration Bill 1959. Re-establishment and Employment Bill 1959. Sales Tax (Exemptions and Classifications) Bill 1959. In committee: Consideration resumed from 17th March. Bills, as a whole, together, agreed to. Bills reported from committee without amendment or debate, report adopted. Bills read a third time. {: .page-start } page 885 {:#debate-38} ### ADJOURNMENT {:#subdebate-38-0} #### Hobart Waterfront Case - Communism - Standing Orders Committee Motion (by **Mr. Davidson)** proposed - >That the House do now adjourn. {: #subdebate-38-0-s0 .speaker-1V4} ##### Mr CAIRNS:
Yarra .- Yesterday I suggested, in a question to the Attorney-General, that a member of another place, **Senator R.** C. Wright, might know something-- **Mr. SPEAKER (Hon. John McLeay).Order!** The honorable member will not be in order in alluding to any debate or proceedings of the current session in the Senate. {: .speaker-1V4} ##### Mr CAIRNS: -- I was referring to circumstances in which false swearing had taken place in two cases in which this senator had taken part as counsel. {: #subdebate-38-0-s1 .speaker-10000} ##### Mr SPEAKER: -- Order! {: .speaker-1V4} ##### Mr CAIRNS: -- I hope that what I have to say on this matter will be given as much space by the Melbourne " Age " as it devoted to-day to what was said last night. The answer I received was precisely what I expected in the circumstances. If I were not attacked by an arrogant, reactionary politicianlike the one concerned in this case, I would not be properly representing my electorate in this Parliament. This attack consisted mainly of a series of adjectives and nouns which only a frustrated and highly ambitious mind could produce. The fact is that my question merely sent the person away growling, grumbling and cursing. {: .speaker-KWP} ##### Mr Turnbull: -- I rise to order. On the motion for the adjournment, is the honorable member for Yarra in order continuing night after night to speak *on* the same subject? {: .speaker-10000} ##### Mr SPEAKER: -- Order! I think the honorable member for Yarra is in order provided he confines his remarks to the subject-matter without referring to any member of another place. {: .speaker-1V4} ##### Mr CAIRNS: -- I would not attempt to answer the attack in the terms in which it was made, because I have not come from a frustrating background like the person who made this attack. He has intimidated many people in the State of Tasmania, but he will not intimidate me. {: .speaker-KDY} ##### Mr Joske: -- On a point of order. Is the honorable member in order in making a charge of intimidation against an honorable senator? {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member is in order so far. {: .speaker-1V4} ##### Mr CAIRNS: -- This counsel in the two cases of which I am speaking took up a brief last night from the Australian Democratic Labour party and from a few other reactionary persons. In fact, the allegations he made are not new. They were circulated in my own electorate on official notepaper and over the signature of the present Minister for the Navy **(Senator Gorton)** just one week before the last election. But in spite of that, my majority rose by 3,400. This is because the people in my electorate are not afraid to support candidates who are prepared to work to prevent war, to reduce international tensions and to see that peace is maintained if it is humanly possible. I make no apology for being on the side of the negotiators for peace and for being against war. I have no intention of being forced to come out of that position by a reactionary person who speaks from reasons of frustration and ambition. I am not concerned that this person and his gestapo were able to discover three meetings which I addressed during the last eleven years, going back to March, 1948. I say that the person concerned here is seeking to answer my suspicions of him, that he knew something about the false swearing in the Hursey and Orr cases to which I am referring, by making an attack on me instead of trying to answer my charges. He did not succeed nor did he try to answer in any other way. In his concern to shift attention to me- {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member will resume his seat. He is continuing to refer to a debate in another place and under the Standing Orders he is out of order in doing so. {: .speaker-KYC} ##### Mr Pollard: -- On a point of order: In a certain place last night a certain individual referred to a member of this particular section of Parliament. He was able, under the Standing Orders of another place, to proceed with his remarks freely and without interruption - a course of action of which I entirely approve, although I disagree with the tenor and the purpose of his remarks. Surely, in these circumstances, it is anomalous, if your ruling is correct, that a member of this section of the Parliament of Australia should be prohibited from adopting a like course of action to that adopted by a member of another section of the Parliament, lt does not seem to make sense. I suggest that, as the honorable member for Werriwa **(Mr. Whitlam)** has said by way of interjection, this is not a matter of the merits of the argument or the subject-matter under discussion at all. Tt is a matter of sheer common sense. Surely, as the honorable member for Werriwa has said, if we can be attacked by a member of another place, of whatever political affiliation, we should be given an opportunity to counter-attack. It appears that we are denied that opportunity. If a height of absurdity such as that can be imagined by rational individuals, well, I am perplexed! {: .speaker-10000} ##### Mr SPEAKER: -- Standing Order 72 provides - >No member shall allude to any debate or proceedings of the current Session in the Senate, or to any measure pending therein. I suggest that the honorable member is referring to a debate that occurred in another place, and he is therefore out of order. {: .speaker-1V4} ##### Mr CAIRNS: -- **Mr. Speaker,** certain statements have been made- {: .speaker-10000} ##### Mr SPEAKER: -- Order! If the honorable member is pursuing that line I must ask him to resume his seat. {: .speaker-KYC} ##### Mr Pollard: -- I raise another point of order. **Mr. Speaker.** I suggest that unless you have read the report of the proceedings in another place - and I do not know whether you have or not - you have no means of determining whether the honorable member is in fact referring to the proceedings in another place. {: .speaker-10000} ##### Mr SPEAKER: -- The honorable member made reference to a member of another place and to remarks that he made in a debate. {: .speaker-009MC} ##### Mr Harold Holt: -- I think the substance of the matter is this - and I am trying to be quite fair to the honorable member and to uphold the position of this House: There is no question that the honorable member for Yarra, in the course of questions directed in this place, cast very grave imputations upon a member of another place in his professional capacity. In response to that, the member of the other place took action which seemed to him to be appropriate, not merely to deny the allegation, but also, in the course of doing so, to make some allegations himself or to state some facts in relation to the honoroble member for Yarra. The Standing Order of this House is quite clear, and you have read it to the House, **Mr. Speaker.** I suggest that we would be bound by our own Standing Orders. But if the honorable gentleman believes that he has been misrepresented by what has been said in another place, it is open to him to ask for leave to make a personal explanation. It is then for the House to decide whether leave should be granted. {: .speaker-1V4} ##### Mr Cairns: -- In that case I ask for leave to make a personal explanation. {: .speaker-10000} ##### Mr SPEAKER: -Does the honorable member claim that he has been misrepresented? {: .speaker-1V4} ##### Mr Cairns: -- Yes. In making a personal explanation upon this matter I desire to say that the statements made on the occasion in question were made by the person concerned in an attempt to explain some criticism that I had offered of him. He endeavoured to answer my criticism by offering criticism of me. He alleged that on three occasions during the last eleven years T had addressed meetings on questions of peace. Let me say that I make no aDO,0.v or explanation for being so associated. I have always worked, and always will work, for negotiation, for understanding, for the relief of tensions, for peace and against forces which might be leading to war. If in this case the persons concerned, through the methods that they use, can find only three occasions in eleven years about which to criticize me. then they are sorely pressed to find an answer to my criticism. The position is that this answer was made in an attempt to divert attention from particular criticisms that I was making. {: .speaker-009MC} ##### Mr Harold Holt: -- **Mr. Speaker,** I suggest that the honorable member is no longer making a personal explanation with regard to the matter concerning which he claims to have been misrepresented. The House gave him leave to say how he had been misrepresented. I suggest he is now proceeding to debate an entirely different matter and that he goes beyond the indulgence that the House has granted him. {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member will confine his remarks to matters on which he claims to have been misrepresented, and he will not continue to debate the subject-matter. {: .speaker-1V4} ##### Mr Cairns: -- Well, I have been misrepresented in two ways. First, it is suggested that because I was associated with three meetings on questions of peace, this demonstrates in some way a fault on my part, and in some way represents an answer to the criticisms I had made of the person who preferred these accusations. I suggest that I should be entitled to deal with these two aspects, to explain them both, and not be confined only to one. Having explained the first aspect, I think I am also entitled to explain why this question was raised. It seems to me that in order to make an explanation I shall have to show the reasons why this matter was brought up. Instead of answering my criticism, out of which this matter arose, the person concerned forgot altogether to deny the allegations- {: .speaker-10000} ##### Mr SPEAKER: -Order! I must ask the honorable member to resume his seat. {: #subdebate-38-0-s2 .speaker-DB6} ##### Mr WENTWORTH:
Mackellar -- I ask the House to direct its attention for a moment to the way in which the honorable member for Yarra **(Mr. Cairns)** persistently takes the Communist line in his speeches in this House- I refer to two recent events. On 18th February last the Communist " Tribune " published a long article about the security service having planted a microphone in Communist headquarters. The author of the article demanded that all supporters of the Communist party should get together and protest against this. I ask the House to com pare that report with question No. 39 on the notice-paper standing in the name of the honorable member for Yarra. If honorable members will look at that question they will find that it follows exactly the article that I have just mentioned. {: .speaker-BV8} ##### Mr Calwell: -- I raise a point of order. There is a question on the notice-paper dealing with this matter. It has not yet been answered by the Government. Is the honorable gentleman entitled to canvass a matter which is the subject of a question on notice? {: .speaker-DB6} ##### Mr Wentworth: -- On the point of order, **Mr. Speaker,** I am not referring to the question itself, but to the congruence between that question and the article in the " Tribune ", I am not in any way endeavouring to canvass the question or to influence the answer to it. In these circumstances I think I am in order. {: .speaker-10000} ##### Mr SPEAKER: -- The question is - >That the House do now adjourn. {: .speaker-DB6} ##### Mr WENTWORTH: -- I desire to make one short observation. {: .speaker-10000} ##### Mr SPEAKER: -- I assumed that the honorable member for Mackellar had resumed his seat. {: .speaker-DB6} ##### Mr WENTWORTH: -- I was waiting for you, **Mr. Speaker,** to decide on the point of order. {: .speaker-BV8} ##### Mr Calwell: -- I raised the point of order that there was a question on the matter on the notice-paper. {: .speaker-10000} ##### Mr SPEAKER: -- The honorable member for Mackellar will be in order if his remarks do not bear on the subject-matter of the question on the notice-paper. {: .speaker-DB6} ##### Mr WENTWORTH: -- I refer the House to an article which appears in the "Tribune" of 18th February last, in which the Communist party protests against microphones being allegedly planted, and asks all supporters of the Communist party to question this and to make protests about it. I further refer to an article in the " Tribune " of 4th March, which reads, " Judge says Hurseys swore false evidence ". In this regard, it is important to realize that the article in the " Tribune " is biased and prejudiced because what the judge found was that a man associated with the Communists, namely Gold, was an unmitigated liar. He also found that the Hursey's evidence wai in some respect questionable but that the fact stated by the Hurseys on which the case turned was truly stated, and that the Communists had in fact assaulted the Hurseys. Anybody looking at this fairly and in a non-Communist way would have asked for the prosecution of Gold rather than the prosecution of the Hurseys. This peculiar bias, which is in the " Tribune " article, appears also in the speeches made by the honorable member for Yarra on this point and it is therefore, I think, of some interest to refer to a circular which was placed in the electorate of the honorable member with which he is, I think, perfectly familiar. It records some of the pro-Communist activities of the honorable member in the years 1948 and 1949. The significance of that date I shall bring out in a moment. For example, on 7th September, 1949, he was chairman- {: .speaker-JWX} ##### Mr J R FRASER:
ALP -- I raise a point of order and a point of decency. I ask whether this portion of the sitting time of the House should be devoted to attacks of this kind by one member on another. {: .speaker-10000} ##### Mr SPEAKER: -- I think that the honorable member for Mackellar is in order. {: .speaker-DB6} ##### Mr WENTWORTH: -- On that date the honorable member for Yarra was chairman of a meeting which the Australian Labour party itself described as being a Communist front. All the details are here. I shall put them on the table of the House if they are required. Would honorable members like this paper tabled? It is a most peculiar thing. The significance of the date is this: The honorable member for Yarra at that time had not been associated with the Labour party, but sometime in 1950 the present honorable member for Melbourne Ports **(Mr. Crean)** brought him along to the A.L.P. and suggested that he be used as a member of the A.L.P. brains trust. {: .speaker-JAG} ##### Mr Crean: -- If we are to have fairy tales on the adjournment, it is time that a bit of decency was introduced. That statement is entirely incorrect. You had best sit down and shut up. {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member for Melbourne Ports will have an opportunity to speak when the honorable member for Mackellar resumes his seat. {: .speaker-DB6} ##### Mr WENTWORTH: -- Later on, sometime in 1950, the honorable member for Yarra was enrolled in the Toorak branch of the A.L.P. That branch was declared bogus by the A.L.P. itself. When its books were examined it was found that the only meeting it had had for a long time was one to protest against the Communist party referendum. However, as I say, the branch was declared bogus, and the honorable member for Yarra subsequently went abroad. While he was abroad, he made endeavours to join the A.L.P., but those endeavours were not successful. He came back and in 1954, it will be remembered, a certain **Mr. Lovegrove,** who had been a Communist and had gone through an antiCommunist interlude, became proCommunist again and got control of the A.L.P. He admitted the honorable member for Yarra, who subsequently was endorsed by the executive of that peculiar A.L.P. and became the honorable member for Yarra at the 1955 election. These things are rather significant in view of the dates I have given. During 1948 and 1949 the honorable member for Yarra was openly active in the Communist cause. After he tried to join the Labour party, he was no longer so active in the open Communist cause, but since he has come into this House - and this is on record in " Hansard " - he has espoused the Communist line at every point. I have given two examples of this in the last two or three weeks, but they are not the only examples. Here you have a person who was openly associated with the Communists, who suddenly finds a desire to join the A.L.P., gets into the A.L.P., becomes a member of this House, and in this House acts as a representative of the Communist party would act in this House. These are things which cannot entirely be ignored, and whose significance might well be pondered by honorable members. **Mr. CREAN** (Melbourne Ports) [10.581- - I claim the right to participate in the debate because I have been misrepresented. If, as the honorable member for Mackellar **(Mr. Wentworth)** claimed, there is a significance in the dates, I would point out that one date at least is incorrect. I am supposed, in the words of the honorable gentleman, to have taken the honorable member for Yarra **(Mr. Cairns)** along to the Australian Labour party office to join. That is absolutely incorrect. At no time did I take the honorable member along. 1 would have been perfectly willing at any time to take him, but at no time did I do so. I suggest that this simply indicates the character of documents that are sometimes circulated under the names of people who are apparently prepared to give their names to them without ever substantiating whether the statements contained are true in fact. This particular statement is false. My knowledge of the honorable member for Yarra goes back over a considerable number of years. I would hate to be quizzed - and I hope I never will have to be quizzed - on the date and time when I first knew a particular person. I nail categorically as a lie - and if this be a lie, very little credence can be attached to the other statements^ - the allegation that at any time I took the honorable member for Yarra, as he now is, along to the A.L.P. office. He certainly would need no taking, in the sense of leading the blind, as apparently the honorable member for Mackellar would imply. Whether a date is given or not given, the event did not occur, and I ask honorable members to draw their own conclusions about the rest of these fabrications. {: .speaker-1V4} ##### Mr Cairns: -- **Mr. Speaker,** I have been misrepresented, and I desire to make a personal explanation. {: .speaker-10000} ##### Mr SPEAKER: -- The honorable member for Yarra claims to have been misrepresented and seeks leave to make a personal explanation. Is leave granted? Leave granted. {: .speaker-1V4} ##### Mr Cairns: -- I regret the fact that it should be necessary for me to make a personal explanation about a misrepresentation by the honorable member for Mackellar- Everything that the honorable member said was false. I joined the Australian Labour party in 1947. not in 1950. That can be proved. The Toorak branch of- {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member is getting into a general debate. He must confine himself to the passages in the remarks of the honorable member for Mackellar in which he was misrepresented. {: .speaker-1V4} ##### Mr Cairns: -- I am giving you the passages in which I have been misrepresented, **Sir. Everything** that the honorable member said was a misrepresentation, and I am trying to take each representation separately. It will not take me very long. The first misrepresentation was in the honorable member's trying to establish a connexion between something which I have done in this House recently and the Sydney " Tribune ". I have not read the Sydney " Tribune " for months and months. I have not seen it for months. I have never seen the articles to which the honorable member has referred. My questions on the Hursey case were derived solely from reports in the Melbourne " Age ", and were not in any way related to the Sydney " Tribune ". The next point which the honorable member for Mackellar made was that I joined the Toorak branch of the Australian Labour party in 1950. I joined it in 1947. The next point which he made was that the Toorak branch of the Labour party was declared bogus. It was never declared bogus. It was suspended in 1951 while I was absent in England, where I had been for seven months- I had nothing whatever to do with the circumstances of the suspension of the Toorak branch of the Labour party, having been in England for seven months before it was suspended. I did not try to join the Australian Labour party while I was in England. I sent a cheque for continuity of membership. The position is, as the honorable member for Melbourne Ports said, that he never introduced me to the Australian Labour party. I joined the party in 1947 quite independently of him. There are the three points on which the honorable member was quite wrong, **Mr. Speaker.** {: .speaker-L0V} ##### Mr Wight: -- What about the Peace Council? {: .speaker-1V4} ##### Mr Cairns: -- I have already made an explanation about that. I was the first chairman of the Peace Council. I was very proud to be chairman of that body, and I am quite ready to work in any organization which functions freely in the interests of peace and negotiation. The final point which I want to make, **Mr. Speaker,** is that these matters which have now been brought up in this House by the honorable member for Mackellar have been circulated against me before, and have been denied by me on many occasions in the way in which I deny them now, but they still continue to be brought up by people who know that they have been denied. I would say that this denial that I am making now is made as clearly as I can make it. Everything that the honorable member for Mackellar said was false and a misrepresentation. {: #subdebate-38-0-s3 .speaker-BV8} ##### Mr CALWELL:
Melbourne **.- Mr. Speaker,** I only want to suggest to you that it is time the Standing Orders Committee was assembled to deal with quits a number of matters of which we ought to take cognizance. Events in this chamber this evening, **Sir, I** suggest, prove the need for an urgent meeting of that committee. The committee did not meet once in the last Parliament. I doubt whether it met more than twice in the previous Parliament. If we do not do something about attacks on honorable members in this place and on members of another part of the Parliament, grave harm can be done to the character and dignity of the Parliament. The extraordinary antics of the honorable member for Mackellar **(Mr. Wentworth)** this evening possibly have some connexion with the New South Wales and Queensland general elections, which occur on Saturday. {: .speaker-KCA} ##### Mr Davidson: -- There are no elections to be held in Queensland on Saturday. {: .speaker-BV8} ##### Mr CALWELL: -- In Western Australia. The antics of the honorable member for Mackellar so disgusted the Prime Minister **(Mr. Menzies)** that he left the chamber almost immediately the honorable member rose. Those antics are testing the tempers of honorable members very severely. This extraordinary, peculiar, eccentric gentleman has given many evidences of more than small instability. The Parliament, **Sir, must** preserve its dignity against outrageous attacks such as we have heard to-night. In this attack to-night, an honorable member has been subjected to the most abusive terms which Opposition members feel can be hurled at them, by having it hurled in his face that he is a Communist and a sympathizer with communism, and that he always follows the Communist line. I think that the Government, too, ought to have some regard for the dignity of this chamber and should refrain from permitting by default the continuation of this vile abuse to which the Parliament has been subjected almost from the day on which the honorable member for Mackellar, unfortunately, entered it. {: #subdebate-38-0-s4 .speaker-ZL6} ##### Mr HASLUCK:
Minister for Territories · Curtin · LP -- **Mr. Speaker,** it is very interesting to hear the Deputy Leader of the Opposition **(Mr. Calwell)** put forward a proposition that the Standing Orders Committee should give attention to the problem that is presented by the fact that, on occassions, members of this chamber say unpleasant things about one another, and possibly make against one another allegations which have little substance. As the Deputy Leader of the Opposition has put forward that proposition, I would expect him and all those for whom he speaks to deplore also a tendency which is growing up equally noticeably in this chamber - a tendency for certain honorable members, not to attack one another, but to indulge in the vilest form of charges and allegations against people outside this chamber. I think that that is a matter more serious even than that to which the honorable member has drawn attention, and it requires even more the notice of the Standing Orders Committee. Whereas it is possible, as we have seen demonstrated this evening, for a member on one side of the House to say something unpleasant about a member on the other side, and for the member who has endured the unpleasantness to give his version of the affair, either by way of a personal explanation or by intervention in the debate, the unfortunate thing about people outside this chamber who are attacked is that the attacker inside this place speaks under privilege and is completely protected from any legal proceedings on the basis of the vile accusations which he makes. The person outside this chamber who is attacked cannot reply to the attack in this House or anywhere else, and cannot take any measures to protect himself. I think that, in this sessional period, something much more reprehensible than anything to which the Deputy Leader of the Opposition has drawn attention has been the way in which charges - which, in their very nature, are almost criminal charges - have been made against people outside this House who are not in a position to defend themselves. {: #subdebate-38-0-s5 .speaker-KYC} ##### Mr POLLARD:
Lalor **.- Mr. Speaker,** the Minister for Territories **(Mr. Hasluck),** of course, has endeavoured to sidetrack this discussion from its subjectmatter. The honorable member for Mackellar **(Mr. Wentworth)** who has indulged in innuendoes and has cast reflections on the character of the honorable member for Yarra **(Mr. Cairns),** has now disappeared from the chamber. He said that the honorable member for Yarra had been indulging in pro-Communist activities, and that he had chaired the Communist front meetings. The honorable member for Mackellar said that in 1948 and 1949 the honorable member for Yarra had been openly active in the Communist cause. He said that the honorable member for Yarra had acted in this House as a representative of the Australian Communist party. Let us have a look at the facts. There was an Authority who once said, " Blessed are the peacemakers ". If the honorable member for Yarra at any time in his career stood on a public platform or amidst an assemblage of men who were advocating the cause of peace, he was only following the line of the Great Master, who said, " Blessed are the peacemakers ". The motives of the people with whom the honorable member happened to be in association at that time are of no consequence. The honorable member for Lyne **(Mr. Lucock),** who once wore the cloth, is interjecting. Does he deny the truth of what I have said? If it is true that communism is something treacherous, I point out that the Minister for External Affairs **(Mr. Casey)** has only recently been in association on the Gold Coast of Queensland with a representative of the nation that is the very heart and core of communism. In fact, the Minister has openly admitted that he has drunk vodka with the representative of the Soviet. Within recent months. **Mr. Macmillan,** the United Kingdom Prime Minister, has visited Russia - God bless him. In the cause of peace and with a desire to further the doctrine of the Great Master - " Peace to all Mankind " - **Mr. Macmillan** has actively associated with the Russian leaders. Honorable members opposite are laughing! Let them laugh! {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member will resume his seat. Motion (by **Mr. Harold** Holt) proposed - >That the question be now put. {: .speaker-KYC} ##### Mr Pollard: -- What, in the midst of my speech? You can't take it. You are a lot of mongrels; a pack of humbugs. {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member for Lalor will withdraw that remark. {: .speaker-KYC} ##### Mr Pollard: -- That is all you are. When it hits home and it hits your own people, you can't take it. You are dirty mongrels. {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member will withdraw his remarks. {: .speaker-KYC} ##### Mr Pollard: -- I withdraw, but I still believe it. {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member will withdraw unreservedly. {: .speaker-KYC} ##### Mr Pollard: -- I withdraw unreservedly. {: .speaker-10000} ##### Mr SPEAKER: -- The questionbefore the House is - >That the question be now put All those in favour say, " Aye "; the contrary, " No ". I think the " Ayes " have it. Opposition members. - No. {: .speaker-10000} ##### Mr SPEAKER: -- The House will divide. Ring the bells. {: .speaker-KYC} ##### Mr Pollard: -- The Treasurer proposed the motion when I was on my feet. Does he deny that? If he does, he is a liar. Does he deny it? The Treasurer is silent. {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member for Lalor will withdraw his remark. {: .speaker-KYC} ##### Mr Pollard: -- I withdraw it. {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member will apologize to the Chair. {: .speaker-KYC} ##### Mr Pollard: -- I apologize. The House divided. (Mr. Speaker - Hon. John McLeay.) AYES: 43 NOES: 30 Majority . . . . 13 In division: AYES NOES Question so resolved in the affirmative. Original question resolved in the affirmative. House adjourned at 11.18 p.m. {: .page-start } page 892 {:#debate-39} ### ANSWERS TO QUESTIONS The following answers to questions were circulated: - {:#subdebate-39-0} #### Northern Territory Leases {: #subdebate-39-0-s0 .speaker-JVU} ##### Mr Nelson: n asked the Minister for Territories, upon notice - {: type="1" start="1"} 0. How many applications have been made under the Northern Territory (Lessees' Loans Guarantee) Act 1954? 1. How many have been approved? 2. What is the total amount of approved loans? {: #subdebate-39-0-s1 .speaker-ZL6} ##### Mr Hasluck:
LP -- The answers to the honorable member's questions are as follows: - {: type="1" start="1"} 0. One. 1. Nil. 2. Nil. {:#subdebate-39-1} #### Judiciary Act {: #subdebate-39-1-s0 .speaker-6U4} ##### Mr Whitlam: m asked the Attorney-General, upon notice - {: type="1" start="1"} 0. Does the Attorney-General propose to introduce during the current sessional period the amendments to the Judiciary Act which the Prime Minister promised on 9th September last in answer to a question by me? 1. Will the Attorney-General give instructions that in the meantime, when the Commonwealth is sued for damages arising from the negligence of the drivers of its vehicles, it shall not enter or continue a defence which is not also available to other owners of vehicles? {: #subdebate-39-1-s1 .speaker-126} ##### Sir Garfield Barwick:
LP -- The answers to the honorable member's questions are as follows: - {: type="1" start="1"} 0. Yes. 1. This matter of policy is receiving consideration and will be resolved by the legislation. Imports from Papua and New Guinea. {: #subdebate-39-1-s2 .speaker-6U4} ##### Mr Whitlam: m asked the Minister representing the Minister for Customs and Excise, upon notice - >On what imports from the Territory of Papua and New Guinea does Australia impose customs duties? {: #subdebate-39-1-s3 .speaker-KMD} ##### Mr Osborne:
LP -- The Minister for Customs and Excise has furnished the following answer to the honorable member's question: - >The Customs Tariff (Papua and New Guinea Preference) 1936-1958 provides that, except for goods listed in the schedule to the Act for which exemption from duty is generally provided, goods the produce or manufacture of the Territory of Papua and New Guinea shall be dutiable at the rates in force under the British Preferential Tariff of the Customs Tariff 1933-1958. I have arranged for the honorable member to be supplied with a copy of the Papua and New Guinea Preference Tariff wherein is set out the duties applying to specific goods the produce or manufacture of the Territories. > >Consequent on the honorable member's question I arranged for the import clearance for the years 1956/57 and 1957/58 to be examined in relation to goods the produce or manufacture of the Territories of Papua and New Guinea andon which Customs Duties were actually paid. > >These goods, together with the current rate of duties, are as follows: - > >Fruit juices, syrups and substitutes, nonspirituous - Is. lid. per gallon. > >Passionfruit juice - 8s. 3d. per gallon. > >Fruit pulp - 2s. 3d. per gallon. (However passionfruit juice and pulp to a maximum of 25,000 gallons annually are admitted free, any excess being dutiable under the appropriate rate.) > >Fish, smoked or dried -1d. per lb. > >Oil cake - 9d. per cental. > >Non-ferrous alloys in blocks, pigs or ingots - £3 per ton. > >Reptile leathers - 10 per cent, ad val. > >Tobacco, unmanufactured, unstemmed - 7s. 2d. per lb. > >Ale and other beer -11s.1d. per gallon. > >Grain and Pulse -1s.1½d. per cental. > >Curtains and blinds (not containing wool) - 12½ per cent ad val. > >Plywood, not exceeding 3/16 inch thickness - 3s. 9d. per 100 square foot or32½ per cent, whichever returns the higher duty. (Highly moisture resistant plywood to the extent of 16 million square yards is admitted free of duty annually, any excess being dutiable as indicated.) {:#subdebate-39-2} #### Lung Cancer {: #subdebate-39-2-s0 .speaker-JSU} ##### Mr Bryant: t asked the Minister representing the Minister for Repatriation, upon notice - {: type="1" start="1"} 0. How many applications for the acceptance of lung cancer as a war-caused disability were received in each of the last five years from (a) servicemen of the 1914-18 War, (b) servicemen of the 1939-45 War, (c) servicemen of the Korean War and (d) widows of deceased exservicemen of each of these wars? 1. How many applications have been accepted in each case and at what level of decision? {: #subdebate-39-2-s1 .speaker-JU8} ##### Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP -- I am advised by the Minister for Repatriation that statistics are not maintained of the number of applications for acceptance of lung cancer as a war-caused disability and the manner in which they have been disposed. {: #subdebate-39-2-s2 .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP n asked the Minister representing the Minister for Repatriation, upon notice - >Do the Repatriation Boards or the Repatriation Commission know the cause of lung cancer; if so, what is it? {: #subdebate-39-2-s3 .speaker-JU8} ##### Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP -- I am advised by the Minister for Repatriation that members of the Repatriation Boards and of the commission are laymen. It is their duty to determine claims and appeals in accordance with the provisions of the Repatriation Act and in the light of all available evidence including medical evidence.

Cite as: Australia, House of Representatives, Debates, 19 March 1959, viewed 22 October 2017, <http://historichansard.net/hofreps/1959/19590319_reps_23_hor22/>.

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