18th Parliament · 1st Session
The President (Senator the Hon. Gordon Brown) took the chair at 3 p.m., and read prayers.
australian BROADCASTING COMMISSION - Position of Mr. McCarthy.
– On the 20th November, Senator Amour asked a question with reference to the dismissal of Mr. M. J. McCarthy from the Australian Broadcasting Commission by the general manager. As promised, I have given careful consideration to the request of the honorable senator that papers relating to the hearing of the Appeals Advisory Committee of the Australian Broadcasting Commission of the appeal against the dismissal of Mr. M. J. McCarthy, should be laid on the table of the Senate, and have reached the conclusion that such a course would not be in the public interest. I regret, therefore, that I am unable to accede to the wishes of the honorable senator. The replies which I gave in this chamber to the questions asked by the honorable senator on this matter are in accordance with the facts as I know them, but I shall be glad to consider any further representations he may wish to make if he will indicate where he considers my replies did not fully reflect the true position.
– I desire to inform the Senate that I have received from His Excellency the GovernorGeneral His Majesty’s reply to the joint address from the members of the Senate and the members of the House of Representatives on the occasion of the marriage of Her Royal Highness the Princess Elizabeth, as follows: -
The Queen and ] Bend to the Members of the Senate and House of Representatives of the Commonwealth of Australia out warm thanks for their message of greetings on the occasion of the marriage of the Princess Elizabeth with the Duke of Edinburgh. We greatly appreciate this expression of your loyalty and goodwill towards us.
– I am informed that there is a shortage of insulin at Kalgoorlie, Western Australia. If so, will the Minister for Health take the necessary steps to ensure that supplies of this drug shall be made available?
– I understand that there is a shortage of one type of insulin at Kalgoorlie, namely, the product of the Commonwealth Serum Laboratories, Royal Park, Melbourne, conducted by the Australian Government. The shortage arose owing to a strike of meatworkers in Queensland in December, 1946, making it impossible for the serum laboratories to obtain adequate supplies of pancreas glands. At the time the Australian Government took steps to import insulin of a different type. I can assure the honorable senator that adequate supplies of insulin are available throughout Australia. The serum laboratories are accumulating stocks of their own products in order to build up a reserve. There are adequate supplies of insulin at Kalgoorlie to meet all needs, but there is some natural dissatisfaction because of the fact that people there cannot get the brand which they have previously obtained from the Commonwealth Serum Laboratories. However, we must get rid of the imported article at an early date, because insulin has a comparatively limited life and must be used before a certain expiry date. Accordingly, the department is disposing of the stocks of insulin that have been imported to meet shortages that occurred through the lack of pancreas glands earlier in the year. I can assure the honorable senator that no diabetic need have any misapprehension at all about obtaining supplies of this drug.
– Some days ago it was reported in the press that prefabricated houses were available from overseas. I ask the Minister representing the Minister for Works and Housingwhether the Government has given consideration to the importation of these homes. If so, what progress has been made, and will the Senate be informed before the conclusion of the present sessional period whether or not these houses will be imported ?
– This matter was brought to the notice of the Senate several days ago, and on that occasion I promised to discuss the proposal with the Minister for Works and Housing. I am now awaiting a report from the Minister. When I receive it, I shall make it available to the honorable senator.
asked the Minister representing the Minister for Works and Housing, upon notice -
– The Minister for Works and Housing has- supplied the following answers: -
cornsacks - Inquiry into Cost of Production.
– Has the Minister for Customs seen a newsreel now being screened in Victorian theatres depicting the growing of wheat in New South Wales, and containing a scene in which a farmer says that wheat-growers answered the call to grow more wheat, but the authorities let them down, because only five bags per acre are available for a 16-bushel per acre crop? Will the Minister ask the Minister for Commerce and Agriculture to issue a statement through the press and over the radio contradicting this lying propaganda?
– I saw the film to which the honorable senator has referred in Canberra on Saturday night and it rather astounded me. The Minister for Commerce and Agriculture ridiculed the statement about the shortage of bags and advised me that “the matter was receiving the urgent attention of the Australian Wheat Board and other responsible authorities. Undoubtedly the film exaggerated the situation. However, I shall bring the honorable senator’s question to the notice of the Minister for Commerce and Agriculture.
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
– The Minister for Commerce and Agriculture has supplied the following answers: -
– Last week I drew the attention of the Minister representing the Minister for Immigration to statements made by the Premier of South Australia, Mr. Playford, that that State was not receiving its quota of immigrants and that immigrant vessels were coming to this country half empty. I understand that the Minister now has a further statement to make on this matter.
– The Minister for Immigration sent urgent telegrams to the Premier of South Australia seeking the cause of the complaint and the names of the vessels involved. In reply Mr. Playford advised that the ships were SS. Stirling Castle and R.M.S. Orontes, which arrived in Australia in June, 1946, and January, 1947, respectively. The Premier raised the question of Stirling Castle on the 4th July, 1947, and a full reply was despatched over the signature of the Prime Minister (Mr. Chifley). The report obtained from the Chief Migration Officer, London, on the particular voyage of this vessel embodied the following information: -
It must lie remembered that, as a troop ship, the Stirling Castle was fitted to carry a considerable number of troops under war-time conditions. She lias since been converted to a civilian trooper and the number of passengers she may carry is governed by the amount of accommodation in the life-boats. I am assured by the Ministry of Transport that the Stirling Castle, on the voyage in question, carried her full complement of civilian passengers.
Tt is a fact that a. good deal of temporary troop-deck accommodation, known as “ standee “ accommodation, is still in existence on some former troop transports.
Occasionally a limited number of berths of “ standee “ type is offered to ns, but we have the greatest difficulty in persuading any one to accept it. A typical example was that of the Orbita which recently sailed from Liverpool. At short notice the Ministry of Transport offered us 40 troop-deck berths, but only a very few were actually rilled. “ Standee “ accommodation is referred to by the Ministry of Transport as “ Grade 3 “ accommodation. lt is usually fitted up in large spaces accommodating up to some 200-300 persons in three tiered berths. Occupants are not allowed access to the dining saloon, but dine at troop muse-deck tables.
Following our recent talks with the United Kingdom Ministry of Transport regarding the de-control of shipping, I discussed this particular type of accommodation with the United Kingdom Minister, who has expressed the opinion that it would be most undesirable to consider this for the use of migrants, particularly when a long voyage through extremes of climate is involved.
The Premier brought the question of Orontes to notice on the 19th June, 1947, and he was favoured during the Minister’s absence overseas with a complete reply in July from me as acting Minister for Immigration. It was explained to him that, when the vessel made the voyage referred to, it was still a troop transport and was controlled entirely by the United Kingdom Ministry of Transport. It was sent out specially to transport from Australia German and Italian prisoners of war who. as a war precaution, had been interned in Australia. Apart from the unsuitability of the major portion of the accommodation, the number of passengers carried, on Orontes was also limited by its messing capacity, which was for 484 persons, and the United Kingdom Ministry of Transport decided that this number could not be exceeded.
As the Premier is completely aware, both the vessels cited by him sailed from the United Kingdom long before the Government’s free and assisted passage schemes commenced to operate on the 31st March, 1947, and could not, therefore, even if the “ standee “ and hammock accommodation had been suitable, have been used for the transport of migrants under those schemes. Moreover, the ships were entirely under the control of the United Kingdom Ministry of Transport which laid down the conditions of their operation and insisted upon, for perhaps good reasons, limiting the number of passengers to those actually carried. The accommodation made available to Australia House on both these vessels was used to its maximum capacity for the carriage of returning Australians, servicemen’s dependants and fiancees, and for bona fide business men. In searching for a basis on which to ventilate his unfounded complaint the Premier has harked back to ancient history but has trodden on unsafe ground. His charges, as I have pointed out, have very little foundation.
– In view of the wide publicity given in South Australian newspapers to alleged interference with grazing properties in the Rocket Range head area, will the Minister for Munitions take steps to ensure that those people who are carrying on pastoral pursuits in that area shall not be unduly interfered with?
– Every effort is being made by the Australian Government to protect pastoral interests in the Long Range Area in South Australia, and to ensure that interference with the industry shall be reduced to a minimum. Discussions are now taking place to consider the best means of ensuring both the safety of people who might be in the range area, and at the same time permit to the maximum extent the continuance of the grazing industry over the area affected. As was announced when the establishment of the range was first mooted, it will be necessary for the Commonwealth to acquire a certain area adjacent to the range site and ancillary establishments at Woomera, but even here the Government is confident that some restricted form of pastoral activity can be arranged. The honorable senator can rest assured that I am taking a keen personal interest in these matters, and that the interests of all concerned will be safeguarded.
Men’s Suitings - Exports
– Has the Minis ter for Supply and Shipping a reply to the question which I asked last week with respect to reports published in the Melbourne Herald and other newspapers concerning supplies of men’s suiting materials ?
– I have seen the statement, the sub-leader and the cartoon referred to, and I have no hesitation in informing the Senate that they are untrue, and that there is not the slightest semblance of evidence to support such reckless statements.
As to the statements regarding export of materials, the real position is revealed in the following tabulation : -
Those figures show that the exports fall far short of the quotas approved by the Government. Exports represent a very small percentage of the Australian production, which, for the year 1947, will beas follows: -
Suitings, 7,100,000 square yards; others. 11,200,000 square yards; total, 18,300,000 square yards.
The position with regard to the importation of suits is that during the twelve months ended the 30th June, 1947, 600 overcoats and suits were imported from Canada, and twelve overcoats and suits from New Zealand. During the three months ended September, 1947, no overcoats or suits were imported from New Zealand or Canada. New Zealand imposes a complete embargo on the export of suits, and the small quantity shown as being imported into Australia during 1947, probably represents excess luggage brought by visitors to Australia.
Press reports also allege that some tailors are expected to close their businesses on account of shortages of material. I arranged for officers of my department to canvass ten representative Melbourne tailoring firms selected at random. In not one instance was any of those firms able to supply a suit before the end of January. The majority of them could not deliver until March next, and in other cases deliveries were extended as far ahead: as August, 1948. In not one single instance was an offer made to make up the customer’s own material ; in fact, three of the firms declined to consider making up customers’ material. This is clear evidence that tailors are well stocked with material, because, otherwise, they would have been willing, and even anxious, to make up customers’ material, and thereby keep their employees occupied. However, even clearer evidence of the availability of material was evident from the fact that all firms visited’ had reasonable stocks on view, and in some cases 35 to 40 rolls, 50 yards in length were counted on the shop shelves. In addition to that material there would, of course, be rolls held under counters and in the tailors’ stores.
The production of tailor-made suits, combined with factory-made suits, amounts to over 700,000 suits per annum. In addition, Australia produces some 600,000 sports coats and 1,500,000 sports trousers. That represents an all-time record for Australian production of men’s civilian outerwear garments.
In making its statement, the Melbourne Herald has shown fiendishcunning and has obviously gone as near as possible to what it believes to be the borderline without actually committing a breach of the law of libel. However, the Government is determined to protect the reputations of its officers, and I have asked’ the Government’s legal officers to examine the statement with a view to determining whether a writ should he issued against the Herald. In the sub-leader of the 14th November, the Melbourne Sun NewsPictorial has proved itself to be an outandout Fascist publication, and has outstripped anything ever done by either Hitler or Mussolini. The first sub-leader, which bears thecaption “ Parliamentary Poison”, refers to a recent incident in the House of Representatives, but in publishing the next sub-leader, under the heading, “ Those Missing Suits “, the newspaper is blatantly guilty of the very tactics which it condemns in its first sub-leader.
I think that I have made it abundantly clear to the Senate that the Australian public cannot possibly have the slightest confidence in anything that it reads at present in some sections of the Melbourne press. It is bad enough for those newspapers to be guilty of misrepresenting the acts and policies of the Government, but all decent citizens will deplore the present tendency of the press to attack public officers, whose only aim is to serve to the best of their ability whatever government happens to be the current choice of the Australian people.
– Recently I asked the Postmaster-General whether he would inquire into the possibility of securing suitable sites for the erection of post offices in the rapidly expanding residential areas of Adelaide. I was promised that the information would be available at the earliest possible date, and I now ask him whether it is forthcoming ?
– As the honorable senator is. no doubt aware, the Postal Department has recently embarked upon a three-year programme involving anexpenditure of £42,000,000 for the rehabilitation of postal services. In this connexion, the department is keeping under careful and continuous review residential developments in the metropolitan areas of all capital cities in the Commonwealth, including Adelaide. The department is fully alive to the desirability of securing sites required under long-term plans with a minimum of dislocation to established interests and on the most favorable terms in respect of purchase price and location. Action is being taken to acquire suitable sites for the erection of official post offices in anticipation of future requirements wherever such a course is justified. However, in order to avoid speculative buying, purchase is not recommended until a thorough examination has been carried out in respect of the rate of population growth, current land values and availability of sites in the light of the probable date of utilization.
The investigations made in Adelaide reveal that marked residential development has occurred recently atWoodville Gardens, Greymore, Albert Park, South. Plympton, Ascot Park, Terrydene and
Kilburn. These areas are being given close attention. Where investigation in these districts has shown that the density of population is not as yet sufficient to justify the erection of official post offices, action is proceeding to establish nonofficial post offices on a liberal basis in order to bring postal facilities within convenient reach of as large a proportion of the public as possible.
Transport OF Motor Bodies.
– Recently, I directed a question to the Minister for Supply and Shipping in regard to a matter which is agitating the minds of South Australians at the moment, namely, the accumulation of motor bodies awaiting shipment and other means of transport. I now ask the Minister whether h& has anything to add to the statements he has already made as to the. removal of these motor bodies from the wharf s of Port Adelaide ?
– This matter was raised yesterday by Senator Finlay. Honorable senators will recall that on that occasion I queried the number of bodies alleged by the press to have accumulated. I understand there is some variation in that statement to-day. I have seen the statement in the newspaper referred to by the honorable senator and know it was stated that 3,000 bodies were awaiting shipment from South Australia. There must have been a very sudd.en increase of the number, because in a letter dated the 17th November, addressed to me by Mr. G. W. Griffith, procurement manager of General MotorsHoldens, he wrote as follows : -
To give you some idea of the overall position, T can tell you that as at this date we have 1950 bodies- awaiting, shipment for various capital cities, which is an even worse situation than in June, when, the Prime Minister and yourself took special measures in an endeavour to relieve’ the position-.
It therefore apears that the statement in the Adelaide Advertiser is, to say the least, exaggerated.. The position in relation to1 the- transport of motor bodies between Adelaide and Melbourne is that General Motors-Hold’ens Limited has been given permission by the Victorian Transport Regulation Sound to operate from ten- to twelve road transport units between Adelaide and Melbourne during the period from the 1st July, 1947, to the 30th May, 1948. For thi9 purpose a special petrol licence of 4,500 gallons a month has been granted. General Motors-Holdens Limited has also been issued with a permit by the New South Wales Transport Regulation Board to operate a fleet of similar transporters between Adelaide and Sydney from the 1st December, 1947 to the 1st December, 1948. The quantity of petrol involved is 12,700 gallons a month. No petrol licence has been issued to the company, which has been informed that, to the degree that it is necessary for it to use motor transport on that route, in order to avoid disorganization of production at its Woodville body works and the Sydney assembly plants, the necessary petrol licence will be granted. General Motors-Holdens Limited has an application before the Victorian Transport Board to operate from twenty to 24 transporters for a time, and ultimately from 30 to 36 transporters, from the 1st January to the 30th September, 1948. That number is additional to the figures already given. That will involve 4,500 gallons a month, rising to 9,000’ gallons a month. A decision on this application has not yet been given by the Victorian State Transport Board, but, should it be approved, a petrol licence will be granted to the degree that it is necessary to maintain production at the Woodville and Melbourne plants. It will be noted from what I have said that the petrol requirements of General Motors-Holdens Limited range from 4,.500- gallons a month to 26,000’ gallons a month, commencing on the 30th September, 1948.
In the past, difficulties have been experienced in- handling motor bodies by sea transport. They have arisen largely from congestion in the Port of Adelaide, contributing causes to which are labour and berthing shortages. The labour shortages are being remedied to a degree, which can. be proved only by experience, through- the authorization by the Stevedoring. Industry Commission of the addition of 250 waterside workers to the previous authorized total of 1,250 for the Port of Adelaide.. In his letter of the 11th November, Mr:. Griffith, of General Motors-Holdens Limited, advised me that the cost of transporting a motor body by rail was £23 4s. 2d., compared with £8 4s. 6d. by road. I cannot escape the conclusion that much of the present propaganda is for the purposes of cheapening the cost to General Motors-Holdens Limited rather than for the purpose of having the bodies transported. Whilst the present critical world position regarding petrol exists, it is not possible for me, as the responsible Minister, to allow the use of petrol for long road haulage where alternative arrangements can be made for carriage by sea or rail.
asked the Minister representing the Minister for the Interior, upon notice -
– The Minister for the Interior has supplied the following answers: - 1. (a) Under the normal time-table, passengers from Melbourne are scheduled to arrive in Canberra at 10.52 a.m. The train arrived approximately half-an-hour late on both days mentioned. The time taken for the journey from Melbourne was approximately seventeen hours. I am advised that the reason for the delay is the shunting operations carried out en route from Goulburn, particularly at Queanbeyan. The train from Goulburn to Canberra is a mixed one.
It is not possible at this stage to give the figures of the arrivals by the train on the 11th November. Some passengers travelled by car from Queanbeyan. Those who travelled in the train to Canberra arrived there about 11.30 a.m.
asked the Minister representing the Acting Minister for Post-war Reconstruction, upon notice) -
– The Minister for Post-war Reconstruction has supplied the following answers : -
The Graziers Federal Council was notified of this by letter on the 14th November.
– On the 21st November, 1947, Senator Critchley asked a question without notice concerning the inferior quality of power kerosene at present on the market.
I have had this matter investigated and find that there has been a slight deterioration in the quality of kerosene now on the market. This is due to the fact that Australian oil companies have not a free selection of their source of supply. I am assured, however, that the deterioration in quality is not very great and would be unlikely to give lower efficiency to any great extent. The position is being closely watched and the Government will continue its efforts to obtain for Australia at the earliest practicable date, the highest possible quality of both power and lighting kerosene.
In committee: Consideration resumed from the 24th November(vide page 2559).
Clause 1 (Short title).
– Members of the Opposition are strongly opposed to the principle of this bill and we firmly believe that its short title, namely, the Banking Act 1947, is a misnomer. The bill deals with matters other than banking. For instance, it provides for the constitution of a Federal Court of Claims. Admittedly, the Minister for Supply and Shipping (Senator Ashley) stated in has second-reading speech that such a tribunal was necessary to deal with compensation claims made by the banks, but it is obvious that the court will be used for other purposes at a later date. As there are only three members of the Opposition in this chamber and 33 Government supporters, the Opposition has not had an adequate opportunity to deal with all the matters that have been raised by Government speakers. Therefore, we desire so far as possible to express our disapproval of the bill during the committee stage. As this clause does not properly describe the bill, we shall vote against it.
– I agree with the remarks of tie Leader of the Opposition (Senator Cooper). The short title of the bill is a misnomer. There is already on the statute-book a very comprehensive banking act which was passed in 1945. That measure places in the hands of the Treasurer complete control over the entire banking structure of the Commonwealth. The operations of the trading banks are subject to the Treasurer’s most minute scrutiny and he has full authority over the mobilization of credit, and the currency of the Commonwealth. This measure could be more aptly described as the “Socialization of Banking Act” or the Destruction of the Private Banks Act “, because its aim is to eliminate the competitive element from our banking system. The short title does not give a proper indication of the purposes of the bill.
Question put -
That the clause stand as printed.
The committee divided. (The Chairman - Senator T. M. Nicholls.)
Majority . . . . 27
Question so resolved in the affirmative.
Clause agreed to.
Clause 2 -
This Act shall come into operation on the day on which it receives the Royal Assent.
– I move -
That, at the end of the clause, the following proviso he added: - “ Provided that it shall not be presented to the Governor-General for the Royal Assent unless -
Supporters of the Government in this chamber and in the House of Representatives have claimed that the Government has a mandate for this legislation. The Opposition parties have refuted that claim. The object of my amendment is to afford to the people an opportunity to say whether or not they approve of the Government’s proposal to nationalize the private banks. I again point out that owing to the Government’s great majority in this chamber ministerial supporters, during the second reading debate, virtually drowned the voice of the opposition. They made full use of their advantage in numbers to stress their claim that the Government has a mandate for this legislation. But what are the facts? In one State, at least, the people have had an opportunity to voice their opinion on this proposal and they have shown their disapproval of it by an overwhelming majority. I refer to the State electionsheld recently in Victoria when the Labour Government in the State was defeated by a majority of approximately 130,000 votes. Notwithstanding the fact that voting for candidates for the Senate in that State at the last general elections heldin September last showed a majority of 122,000 in favour of the Labour candidates. Thus, within the last twelve months the people of Victoria have completely reversed their vote, and there cannot be the slightest doubt that they have done so in order to express their absolute opposition to the Government’s proposals to nationalize the private banks. Members of the Opposition believe that the only fair thing that the Government can do, particularly in view of the result of theVictorian elections, is to afford some opportunity to the people, not only of one State but also of every State, to express their opinion by way of referendum. I appeal to the Government even at this late hour, and notwithstanding its huge majority in this chamber, to reconsider its decision in regard to the holding of a referendum. We realize, of course, that the Government has an overwhelming majority of supporters in this chamber to ensure the passage of the bill-
– Then, why waste time?
– My vociferous friend from South Australia, Senator Ward, appears to think that honorable senators are wasting their time in this chamber. I remind him, however, that we have been sent here to decide most momentous matters, and in doing so we are certainly not wasting time. He may feel that he is wasting his own time in attempting to discharge the duty which he has been elected to perform and that he would be better off at home doing nothing. However, honorable senators are elected by the people of Australia to give their attendance at meetings of the Senate at Canberra and to carry out their duties as faithfully as they can. The present bill is one of the most important which has ever been introduced into the Australian Parliament, and it is clear that Senator Ward, who is a newly elected representative of South Australia, does not realize the dignity of this chamber, otherwise he would not assert that, by giving their attendance here, honorable senators are wasting time. Our duty to the people of Australia requires not only that we should attend all debates which take place in this chamber, but that we should also make ourselves thoroughly familiar with the Government’s administration and all legislation introduced into Parliament. We must give careful consideration to the probable effects of any legislation, not only upon the people but also upon their children. As I say, the present measure is one of the most important ever to be introduced into the Australian Parliament and although it is our duty to scrutinize its provisions minutely, we have not been allowed sufficient time to do so. The measure is being rushed through with unseemly haste. Honorable senators were called together to debate this measure on a Monday, something which is unheard of.
– The reason why honorable senators were summoned was to do a little work, which the Leader of the Opposition said was their duty.
– The Minister for Supply and Shipping (Senator Ashley) has advanced no reason, either in his second-reading speech, or in his speech in reply, to explain the necessity for the unseemly haste with which the Government is endeavouring to enact this measure. Members of the Opposition are only small in numbers, but they are resolved to expound their views and to obtain the maximum information in regard to this measure from the Government. I ask the Government to accept the amendment which I have moved, although I realize that I may be asking too much. However, even at this late stage, I again urge members of the Government in this chamber to give it their most careful consideration, particularly in view of the outright expression of opinion of the electors of Victoria.
– The Government cannot accept the amendment (proposed by the Leader of the Opposition (Senator Cooper). The argument advanced by him in support of it is no different to the criticisms made of this proposal ever since the Government gave notice of its intention to introduce the measure. The Leader of the Opposition stresses the fact that his supporters are few in number, but although the Government is blamed for almost everything, it cannot be blamed for the result of the free choice exercised by the electors of Australia at the last elections. However, the fact that electors returned to Parliament only three senators of the Opposition parties as against 33 senators nominated by the Australian Labour party indicates that the people were clearly of the opinion that Labour should continue to govern the country. However, I have no objection to supplying any relevant informa tion on any aspect of the bill which members of the Opposition may require. In fact, the policy of the Government is to afford all possible information to honorable senators.
With regard to the contention of the Leader of the Opposition that the Government has acted with undue haste in proceeding with this legislation, it is true that the Government was responsible for the Senate being summoned to sit on a Monday. However, that was done only after I had conferred with the Leader of the Opposition and, through his courtesy, had reached agreement on the time to be allotted for discussion of the bill. I remind the Leader of the Opposition of an occasion during his term as a member of this chamber during the regime of a previous government, when the Senate was- summoned to sit on a Saturday afternoon. At that time there were only four Labour senators in this chamber, and the anti-Labour parties, which were in a substantial majority at the time, summoned us to meet on a Saturday afternoon in order to prevent a vote being taken on a certain matter after the senators who had been recently elected had taken their seats. That was done deliberately to prevent duly elected senators from exercising their vote. I mention that in order to refute the suggestion that the summoning of honorable senators on a Monday established a precedent. As I have already undertaken, the Minister for Health (Senator McKenna), my other colleagues and I will readily supply any information sought by members of the Opposition, but I insist on the arrangements made in regard to the passage of the bill by to-morrow evening being honoured. Because of the arrangements made, instructions have been issued to departments concerned in the preparation of this legislation, and a time schedule has been prepared for the convenience of all concerned. That was, of course, the reason why the Senate was summoned to meet yesterday.
– I did not speak on this measure during the second-reading debate, but I do so now in order to indicate not only my approval of the clause, but also my general support of the principles of the bill. The amendment proposed by the
Leader of the Opposition (Senator Cooper) -would delay the implementation of the bill, and would have the effect of preventing the formation of plans in connexion with the administration of its provisions. I think every honorable senator now realizes that the day of haphazard legislation and uncoordinated planning has gone. No government can now afford to allow important functions of the nation to be exercised without a definite plan. For that reason, if for no other, the Government must be free to make adequate plans, having regard to the future care of this nation, and the passage of this measure will have that effect on our economic life.
The Leader of the Opposition has contended that the Government has no mandate for the introduction of this measure. I suggest that the line of argument which he has adopted shows very clearly that the Government possesses a definite mandate. I recollect very vividly the vehement protests made by the Leader of the Opposition in the House of Representatives (Mr. Menzies), when the Banking Bill 1945 was being considered. The purpose of the previous Labour Government which introduced that measure is almost identical with that of the Government in bringing forward the present bill. During the passage of the Banking Bill 1945 the right honorable gentleman undertook to make the principles embodied in that measure one of the issues at the 1946 elections. The Labour Government accepted that challenge, and the last elections were fought on that issue. The Prime Minister (Mr. Chifley) made no secret of his intention in regard to reform of the banking system, with the result that there are 33 Labour senators in this chamber to-day, and only three members of the anti-Labour parties. The very fact that Labour senators were returned with such an overwhelming majority proves that we have a clear mandate to enact a measure which is in the interests of the nation. Many issues of tremendous importance have come before the parliaments of this nation. I take as an example the issue of free education. The Opposition no doubt opposed it at that time, and argued that it was an encroachment upon the liberty of the subject, be- cause it dragged the children away from their mothers and compelled them to attend the State schools to be educated. That is the kind of argument which is put forward by the Opposition in opposing every piece of progressive legislation brought before this Parliament. There is evidence that another great depression is likely to descend upon the world in the course of the next few years. We know what happened last time and, like a wise captain, we are beginning to prepare the ship to meet the storm. By means of this bill we are shortening sail in anticipation of the storm that may arise.
– It will arise at the next elections.
– It did not come upon us very strongly last time, and I suggest that if the same thing happens at the next elections as happened at the last, there will be no honorable senators supporting the Opposition in this chamber. Honorable senators on this side are prepared to do what the Labour party has done over the last five years. We are determined to do for the people of Australia what we believe should be done. When this Government assumed office five years ago it adopted that policy. It was not deterred by pressure groups or by newspaper propaganda ; it did what it thought was best in the interests of the people of Australia, and the result to-day is that there are 33 of us sitting on this side and only three honorable senators on the other side of the chamber. Provided this Government has the courage to do the things that should be done in the interests of Australia, it has nothing to fear at the next elections. Honorable senators opposite should not comfort themselves with the thought that although there are 33 senators on this side of the chamber, they may win more seats at the next elections. If the Government acts in the interests of Australia, if it is not deterred from doing what it feels should be done, by press propaganda and by pressure (groups sponsored by people with privileged positions in this nation, and if it is prepared to do what is right, it has nothing to fear from the people.
I do not want to be side-tracked. I believe that by submitting this amendment, the Opposition is attempting once again to delay the implementation of this bill, and I strongly .protest against it. I regard this measure as overdue, for I believe that now is the time at which to prepare the nation for the shocks it may have to absorb. For many years I have felt it was wrong for this Government to care for the people in their times of stress and yet to leave the control of the life blood of the nation to a small group of persons generally unknown to the public. It is ludicrous to say that the Government should care for the people in sickness, unemployment and old age and yet that it should not be allowed to take charge of the nation’s credit. In what better authority could such a responsibility repose than in this National Parliament? As I have said, I think that this bill is overdue, and for that reason I have much pleasure in supporting it.
. -I support this amendment. It is most desirable that the clause should be amended, so as to provide that none of these powers shall be exercised until the Australian people have been given an opportunity to express their views at a referendum. It may be that this will he one of the last opportunities we shall have to register our disapproval of the Government’s action in not giving the people such an opportunity. The Victorian elections have proved that the Government has not a mandate to do as it proposes. The people, from one end of the country to the other, have protested against this proposed legislation, and I say they should be given an opportunity to express their views on it by way of a referendum.
– I support the amendment. Much eloquence has been expended in this chamber and in the House of Representatives on every provision in this bill. Some of the points raised have ‘been answered, but the question as to why the people should not be allowed to vote at a referendum has not been answered satisfactorily. It is significant that the legal representatives of the Government have not. put forward the excuse which has been advanced by well-wishing private members of the Labour party, in whom probably the wish is father to the thought. The policy of the Labour party, which is much better known to honorable senators opposite than to me, includes the principle of the referendum. In the Constitution, as it now stands, there is express provision whereby the only means by which a change can be made in the Constitution is by way of referendum, but that is not the be-all and the end-all of the concept of the referendum. Honorable senators know better than I do that what is implied and expressly stated in the policy of the Labour party is not restricted merely to a change in the Constitution. The whole concept of the referendum is to keep the elected representatives of the .people in close touch with the people who elect them. It preserves a very proper perspective - a perspective of which unfortunately this Government has entirely lost sight. By its conduct, by its contemptuous attitude and by the arrogance with which it is conducting the affairs of the country, the Government shows clearly that it has no desire to consult the people as to the wisdom or otherwise of this measure. It cannot be seriously argued - in fact, I say it has not been seriously argued - that this is not a fit and proper question to be put to the people by way of referendum.
– Where is the power to do it?
– This is a constitutional issue. It is not my duty to instruct honorable senators opposite in the matter, because they have brilliant colleagues in this chamber and in the House of Representatives, who are competent to instruct them. There is nothing whatever to prevent this matter being submitted to the people, because a referendum is to be held early next year. If the Government is sincere in its solicitude for the people, if it is in any way mindful of the wishes of the people, it will not force this measure through without first ascertaining whether or not it is in accord with the will of the electors.
This is essentially a constitutional matter; in fact it is ‘much wider than a constitutional matter. It could easily be submitted to the people at the referendum to be held early next year and not one good reason has been put forward as to why that should not be done. On the question of expense, I submit that it would be much less expensive to have this matter tested by the proper tribunal, namely, public opinion, than it would be to have the validity or otherwise of the legislation tested by long and protracted proceedings in the High Court, and possibly, before the Privy Council.
– Does the honorable senator anticipate that?
– It will be a case of win, lose or draw on both sides. As to the time factor, I submit that the matter could he more quickly determined by way of a referendum early next year than by the course which the Government has chosen to follow, namely, protracted litigation. Clause 6 contemplates that the Government itself is in doubt as to the constitutionality of this measure, because that clause provides that, in the event of certain portions of the act being found to be ultra vires the Constitution, the rest of the measure shall prevail. Obviously, the question of the constitutionality or otherwise of this legislation must have occurred to the draftsman. I repeat my strong objection to this measure being brought forward before the people have been consulted, and I charge the Government with a cold, contemptuous and deliberate betrayal of its own policy in regard to the holding of referendums.
– The Leader of the Opposition (Senator Cooper) said that the voice of the Opposition had been drowned in this chamber - I take it that he was referring to this measure - but I can find no justification whatsoever for that comment.
– I was thinking in terms of quantity only.
– The honorable senator did not make that point clear earlier. I remind the committee that after the Leader of the Opposition had spoken for one hour, the time allotted under the Standing Orders, during the second-reading debate, he was granted an extension of time of half an hour - an extension of which he took full advantage - and that no negative voice was raised on this side of the chamber to deny him that further half hour. Not one supporter of the Government tried to prevent the honorable senator from saying all that he had in his mind to say. The Leader of the Opposition was accorded every courtesy by honorable senators on this side. His colleagues, who were also entitled to speak for an hour, did not take their full time, but they spoke until they had presented the whole of the case for the Opposition. Now that the Leader of the Opposition has made it clear that he was speaking in terms of quantity only, I realize what he meant, but I thought that I should make it clear to the people who listen to the debates that there was no restraint of the freedom to which he and his colleagues are entitled in order to express their views.
Reference has been made by Opposition speakers to the result of the recent Victorian elections. They have claimed that result as a clear indication to the Australian Government that the people of Australia are opposed to the proposals contained in this bill. I am not so rash as to pretend that I can look into the minds of the majority of 1,000,000 people in Victoria and can gauge the reasons that influenced them to record their votes as they did. Indeed, I challenge the Leader of the Opposition to say that he can, with confidence, .pronounce upon all the factors that influenced the minds of the electors of Victoria. I say, further, that he does not pay a great compliment to the intelligence of the people of that State when he puts forward a proposition that they determined the fate of the State Government upon an issue over which it had no control whatsoever, never has had control, and never will have control. I suggest that the Opposition is rating the intelligence of the electors of Victoria exceedingly low.
– The contrary is the position.
– The surmise of Opposition senators as to what influenced the electors of Victoria is purely a matter of wishful thinking. Let us reflect on the broad considerations. This Government took drastic action in 1945 in regard to banking. All the bank economists and advisers who have been here during the passage of this legislation in order to advise the Opposition were here in 1945 in even greater numbers. The legislation then before the Parliament was fought even more bitterly than this bill has been fought. That legislation effected major reforms which were accepted by the people of Australia at the elections which took place in the following year. Despite the magnificent effort of the Leader of the Opposition in the House of Representatives (Mr. Menzies), when he went to the people and told them that if he was returned with a following sufficient to enable him to form a government, the Commonwealth Bank Board would be restored, and that the legislation of 1945 would be reviewed - a point that he made quite clear - it is extraordinary how silent both he and his colleagues were on that point when before the people. It is true that Mr. Menzies has since said that he did mention the subject on the hustings. I have no doubt that he did so, but I am also completely sure that lie did not let anybody hear him. The Opposition is entitled to draw from the result of the Victorian elections what comfort or consolation or hope it may bold out for them. One side only of the banking proposal was put to the people of Victoria. The matter was not argued. [ have no doubt that the flood of propaganda put forward, with all the backing of the financial resources available to those who put it forward, had some effect. I am equally confident that that propaganda will be resented and, indeed, is already resented. The truth, as always, has come out. In the course of the debates in this Parliament, some of the phantasies that were presented by the Opposition on behalf of the banks were unmasked. I have complete faith in the common sense and wisdom of the people if they are given time to learn the facts. All that they need is to know the facts. Opposition senators have said that they desire the people to know exactly what is being done. I assure them that they are not alone in that desire, because it is the most earnest wish of the Government and its supporters that the people shall know exactly what is being done. We know well that if they understand, they will approve.
– Give them the chance.
– In all ages distortion and suppression of the facts have prevented the people from reaching clear conclusions. That is the history of politics, referendums, and of every proposal that has ever been put to the people. In the midst of so much conflicting propaganda, with its distortion and suppression, the people give up.
Senator O’sullivan said that this is a constitutional issue. I am afraid that I do not follow him in that statement. Constitutional issues alone are determined’ by referendums of the people under section 128, as the honorable senator indicated. There is no machinery under the Constitution foi1 a referendum on matters that are within the Constitution, or which even appear to be within it and there never has been, except under the extraordinary defence powers of the War Precautions Act during the war of 1914-1S. Colleagues of the present Opposition took the stand in 1929 that there should be no reference to the people on matters that were properly before the Parliament. Honorable senators will recall that in 1929 the Maritime Industries Bill was before the Parliament and that the Government of the day - the Bruce-Page Government - was defeated in committee on a particular clause. The then Prime Minister, Mr. Bruce, wrote to the Governor-General in September of that year. At that time the present Chief Justice of the High Court of Australia, Sir John Latham, was Attorney-General, and immediate adviser of the Government of the day. In writing to the Governor-General, Mr. Bruce made the following comment : -
The Constitution makes no provision for a referendum of this description, and the Commonwealth Parliament has no power to pass effective legislation for the holding of such a referendum.
As to the accuracy or otherwise of that opinion I do not express any view. I merely record the fact, as a matter of history, that when a contentious measure, which the Maritime Industries Bill certainly was, came before the Parliament, the colleagues and predecessors of the present Opposition strongly resisted the proposal for a referendum. I ask the
Opposition: What principles should guide a government in determining whether any particular matter should go to the people? Would it be a sufficient reason to submit a proposal to the people at a referendum, that the Opposition or the press has made a loud noise about it through the press or over the radio? Who shall assess public demand? Who is to say that because a number of petitions, signed by some thousands of people, came into this Parliament that that is a true reflex of the views of the people at large? What must be the guiding and underlying principle? If the Opposition can put forward some sound principle which it believes should determine these matters, the Government will consider it ; but so far we have not heard anything of the kind from honorable senators opposite. I remind the committee that when a Labour government is appointed to govern, it does govern. It has the courage to go ahead with its proposals because it believes in them. The Government has a mandate expressed in the most explicit terms to go ahead with legislation for the control of monetary and banking policy. In such circumstances it will go ahead with its programme without regard to its political life. It has the courage to act. (Senator O’Sullivan. - Not on the waterfront.
– It is extraordinary that the moment the Opposition is pressed in a matter of this kind, it skates away from the real issue.
– The Gov does not govern on the waterfront.
– It would appear that we have turned from banking to conditions on the waterfront. That Ls quite a sudden jump. I shall not, however, pursue the honorable senator so far as the waterfront in the course of a debate on banking.
– as the Government admits that it does not govern on the waterfront, I am satisfied.
– In my secondreading speech, I pointed out that as the result of an attack on this legislation a large hole has been rent in it. As I intimated last night, the Government realizes that there may be repercussions in Australia from economic developments abroad, and, therefore, it will not risk the attack that the banks foreshadowed in 1945 when they handed over certain deposits to the Commonwealth Bank under protest. The signs are that, the first hole having been rent in the banking legislation, other attacks are pending. Clouds are already looming on the economic horizon outside Australia. The Government will not be recreant to its obligations to the people of Australia and let the worst happen first. It has already moved out to meet the attack. Those in opposition to the Government say that it is not democratic to give to the people of this country an opportunity, through their elected representatives, to determine the nation’s banking and monetary policy. Does any Opposition senator say that it is democratic for monetary and banking policy to be exclusively in the hands of bankers ? In going ahead with this proposal, the Government is serving the cause of the people. It is moving into a position in which it will be able to meet circumstances as they arise.
Before he left the chamber to attend to important business the Minister for Supply and Shipping (Senator Ashley) suggested that I should say something about the arrangement made for testing this legislation. I assure the Opposition that the opponents of this measure in the commercial sphere - the private banks - are equally as anxious as is the Government to have the matter go to the High Court to be determined. That is a process which suits the banks as well as it suits the Government. The banks have been most willing to co-operate in shortening proceedings so that proceedings in the High Court may be taken this year. This matter, having been raised, should be determined without delay, so that all concerned may know where they stand as speedily as possible.
– It is evident that the Government is not prepared to accept this amendment. The Minister for Health (Senator McKenna) has given a lucid explanation of why the Government should proceed with the nationalization of banking, but he has not given any valid reason for the refusal to consult the people on the matter at a referendum. The Minister spoke vaguely of developments that the people -would, have to fear if this legislation were not passed, but, so far as I am aware, those fears are imaginary. What are these things that the people should fear? The Minister also said that during the Victorian election campaign only one side of the banking nationalization issue was put to the people. Did the Labour supporters not put their case fairly and squarely before the electors? How can we believe that the Victorian electors voted under a misapprehension, or that they did not know the issues upon which they were voting?
– It was a State election.
– Yes; but, undoubtedly, the Australian Government’.” banking proposals were the main issue. 1 remind the committee that Gallup polls taken in the past have always .proved a reliable guide to public opinion. Such a poll taken quite recently indicated that the people of this country were very much in favour of a referendum on the banking issue.
.- Much has been said by opponents of this legislation, both in the Parliament and in the community generally, about thu Victorian elections. I agree with the Minister for Health (Senator McKenna) that those who argue that the Victorian elections determined a federal issue show a very limited understanding. Let us examine the position that obtained in Victoria at the time of the elections. The second-reading speech of the Prime Minister (Mr. Chifley) on this measure had been delivered, as had the second-reading speech of the Leader of the Opposition in the House of Representatives (Mr. Menzies) ; but no general discussion of the bill had taken place. In fact, as soon as the Prime Minister intimated the Government’s intention to nationalize the banks, a barrage of propaganda was let loose upon the people of Victoria, and all sorts of fears were engendered in the minds of the people of that State. In the course of the election campaign it was my privilege to address a meeting in a country district. After the meeting, I was discussing matters with a few people when one of them said to me, “Look, I shall vote for your candidate on this occasion because he is a good rural representative, but, for goodness sake, don’t nationalize the banks “. I asked him why, and he said, “ Because I believe the Government will change the note issue if the banks are nationalized “. The Government has the power now to change the note issue if it so desires. Undoubtedly, many people, as a result of this wave of prosperity, have accumulated savings that they have not deposited in the banks. Probably, as some one else has suggested, they have a few notes hidden away under the bed. These people, of course, may entertain the fear that the nationalization of the banks will interfere with their little private hoards.
How can it be argued that, in effect, at the Victorian elections a referendum was taken on a proposal which had not become law? I point out that the Government proposes to make certain amendments to the bill while it is before this chamber. When the Victorian elections were held, the measure had not been debated in the House of Representatives, therefore the people of Victoria had had only one side of the case presented to them. No opportunity had been given for the presentation of the other side. The Victorian Labour Government endeavoured to fight the elections on an. issue that really mattered to the people of” that State, namely, the reform of theUpper House. The Legislative Council’ of Victoria is elected on a limited franchise, only about one-third of the adultpopulation of that State being able to vote. The twelve anti-Labour members of the Council decided that they would refuse supply to the Victorian Government which had a majority in the Legislative Assembly. A tradition of British parliamentary practice is that so long as a government has control of the Lower House, it is not the prerogative of the upper chamber to deny finance to that Government. Thus, a .great constitutional issue had been raised in Victoria. Because of the antagonism of certain individuals, who feared the loss of their control of the finances of this country, the right of the Victorian Government to continue in existence had been denied. A great crime had been committed against democracy, and some day the people of Victoria will rue their decision at that election. The move in the Upper House was instigated by Sir Frank Clarke who, only a few months previously, had warned the council against taking that very action. Sir Frank Clarke did not change his opinion, but he changed his voice. Deep in his heart he knew that the action that he asked the Legislative Council to take was contrary to the principles of British government, but he knew also that ‘his own personal interests were likely to be prejudiced by the nationalization of banking. So, for personal gain, he asked the Legislative Council to take action that can be regarded as unethical, if not unconstitutional, and I repeat that the people of Victoria will live to regret the day when they ignored the grave constitutional issue that was at stake. I am not a lawyer, but I believe that the opinions that I hold on many matters are just as well founded as those of lawyers. It has been argued that the Government should submit its banking proposals to the people at a referendum, but I believe that the Commonwealth has all the constitutional power necessary to deal with banking in the manner proposed in this measure. The Chief Justice of the High Court, Sir John Latham, has pointed out that, even although a referendum were held, the High Court would still have the right to decide whether or not the legislation was constitutional. That is the opinion of one eminent lawyer. But lawyers differ on many questions. We have a difference of opinion between two lawyers in this chamber. In the House of Representatives, also, the lawyers fail to agree on this matter. The Government’s legal advisers no doubt held the opinion that the Banking Act of 1945 was constitutional, and would withstand a challenge in the High Court. A government must always bear in mind the possibility that its legislation will be tested in the High Court. When the Banking Act of 1945 came before the High Court, eminent counsel, appearing for the Melbourne City Council, argued that the legislation was ultra vires the Constitution and equally eminent counsel, appearing for the Government, argued that it was constitutional. The matter then rested with the lawyers who had become members of the High Court
Bench, and even they could not reach a unanimous decision. Therefore, just because a man is a lawyer he is not necessarily the possessor of great wisdom. If the laws themselves were to he regarded as the last word upon the issues that they seek to determine, there would be little employment for lawyers. Legal issues are always open to debate. Therefore, even the holding of a referendum on the banking issue would not determine the validity of the Government’s proposal. I believe that it is cowardice on the part of those who are elected to Parliament not to give effect to the desires of the people. We are prepared to do what we believe to be within our constitutional power. We are prepared to give effect to proposals which we believe to be- in the interests of the nation by protecting our people in the economic sphere. When the time comes, we shall be prepared to go to the people and justify our actions. I believe that, as time goes on and the people have an opportunity to experience the benefits of this legislation, we need not fear the result of that referendum which counts most so far as members of Parliament are concerned, that is, when we appear before the .people and ask for a renewal of their suffrages. The plea made by the Opposition for the holding of a referendum is just waste of time in order to conserve for a few days longer the power of those who now control the financial institutions of this country.
– I have listened attentively to honorable senators opposite, particularly to the reasons they gave why a referendum should be held. Naturally, they want a referendum to-day, because they have the press misleading the people as it has never misled them before. I am not one of those who squeal. My life has been sufficiently hard, and I do not want the press to say anything good about me. Probably, if it did it would do me more harm’ than good. I am quite impersonal in this matter. However, Senator O’Flaherty, in my view, delivered one of the best speeches yet delivered in this chamber or in the House of Representatives; but the only reference made to his speech by the Sydney Morning Herald was that the honorable senator got the call for the next sitting. I spoke on the second’ reading of this bill. Perhaps I spoke too loudly for many of my hearers to digest what I said. But I gave the subject some consideration. The press did not even record that I had spoken on the measure. However, on the following, day Senator O’Sullivan spoke in this chamber and- simply reiterated what had’ been said about the Government’s proposal from the time it was announced. Bight from the moment the Prime Minister (Mr. Chifley) announced the Government’s intention to nationalize the banks the press of this country laid down the points of attack from No. 1 to No. 7. It said, in effect, “ This is the line of attack : First, the Communists are at the hack of this proposal; secondly, this is what Hitler did - of course, those two statements are contradictory, but that does not worry the press - and, thirdly, this will do away with our liberty “.
– I ask the honorable senator to connect his remarks with the question before the Chair.
– I am showing what the opponents of this legislation are doing and why they want a referendum. The press is stampeding the people, and the people, perhaps, have not had the Labour side of the case put before them. Naturally, owing to the misrepresentation on the part of the press many people may want a referendum. I shall be brief; eventually, we come to point No. 7, namely, that nobody knew anything about this proposal except the Prime Minister. In my speech I endeavoured to show that the Labour party unanimously endorsed this proposal; but not one word of my speech was reported in the press. Yet the reremarks of an honorable senator opposite were recorded in a report consisting of 58 lines in the Sydney Morning Herald, although, I repeat, he did not say one word that had not been said again and again, just as the Leader of the Opposition (Senator Cooper) has said again to-day, “ There is unseemly haste “. I am sure that the Leader of the Senate (Senator Ashley) is prepared to arrange with the Opposition to sit all night to-night if any member of the Opposition has anything new to say. But honorable senators opposite continue to put on the same record, “ Tell me the old, old story”. We have heard it for the la9t three weeks, and the press is filled with their reiterations.
– It has not been put on for the last three weeks in this chamber.
– It has been put on for the people over the air. Yesterday, Senator O’Sullivan made his speech on the second- reading, and the Sydney Morning Herald reported his remarks under double-column headlines. That report stated -
Senator O’sullivan (Queensland), the only Opposition speaker, commented, “ Woe betide the trade union movement if this legislation goes through. Its fate will be the fate of the trade union movement in Germany, Italy and Russia. Its funds, which have been accumulated over the years, could be frozen by a hostile government.
The honorable senator said nothing of the sort. He said a bit of it. I was going to comment at the time and point out to him that the right honorable member for North Sydney (Mr. Hughes) closed on the funds of the engineers, and whether those funds were in the Commonwealth Bank or any other bank would not have made any difference. But there was a conspiracy with the press to put that down. I repeat that the honorable senator did not say it at all. I listened attentively to him, and other honorable senators who did likewise will agree with me. But the press descends to so low a level that it refuses to give one line to the speech of an honorable senator from New- South Wales, whether it be I or anybody else, yet, at the same time, it gives a report consisting of 58 lines to an Opposition senator who said nothing new; and it put that speech at the top of the bill alongside the very fine address given by the Minister for Health (Senator McKenna). J challenge Senator O’Sullivan to prove that he said what was attributed to him in that report; - “Its fate will be the fate of the trade union movement in Germany, Italy and Russia. Its funds which have been accumulated over the years could be frozen by a hostile government “.
– the effect of it.
– The honorable senator’s effect is not very successful. I repeat that the honorable senator did not use those words. My point is that the press has got to a point, in collaboration wilh the Opposition, to report what was never said. It asks us to have a referendum. Let us see how sincere honorable senators opposite are about holding a referendum. Sir Frank Clarke Ls a director of the National Bank of Australasia Limited. His chief, as I pointed out in a speech over the air, is Lord Hutchison of Montrose. Montrose is in Aberdeenshire, but Lord Hutchison was a member of the Anglo-German Fellowship. I point that out because honorable senators opposite tell us that we are doing what Hitler did. “When Sir Frank Clarke led the opposition in the Upper House in Victoria in throwing out a supply bill, it was suggested that a referendum should be held on the abolition, retention or reform of the Upper House in that State. Members of the Opposition parties have talked about the British way of life. They say that we should preserve it. The Leader of the Opposition in the House of Representatives (Mr. Menzies) said that this measure did not represent the British way of life. He would have proved his sincerity in speaking about the British way of life had he said, “I have gone to Victoria, and I have opposed this action which has been declared by our greatest of all jurists, Sir Isaac Isaacs, to be unconstitutional. I have refused to stand by it, because I believe in the British way of life. I want a referendum to be held not only on the Bank Bill but also on the abolition, retention or reform of the Upper House in Victoria “. But did the right honorable gentleman or the press say that? No! They are fighting to-day because banking and finance are interwoven with heavy industry. They are fighting for their lives. When honorable senators opposite speak about competition they should realize that any one who applies to the private banks for funds with which to start an industry will not be given funds should any director of a private bank be interested in that industry. That shows where the competition exists and where it does not. I believe that I have shown that all this talk about a referendum is sheer hypocrisy.
– “ bluff “ and give it to us.
– I did not hear the honorable senator say that he wanted a referendum in Victoria on the Upper House.
– 1 arn not an elector in Victoria.
– The honorable senator has been talking about Victoria all along. If only the people of Victoria were allowed to talk, why talk about Victoria? The honorable senator is the most illogical person who has ever been a member of the Senate. He should listen more and talk less. I believe that I have driven home ray point sufficiently.
– What was it?
– It is useless to tell the honorable senator, because, as Omar Khayyam says, “ You ever more go out the same door as in you went “. My two points are these: First, the opponents of this legislation want a referendum, and the press is stampeding the people. The Leader of the Opposition in the House of Representatives wrote a book in which he dealt with pressure politics at a time when advocates of Douglas Credit were stampeding him with petitions. I shall not quote his remarks. They were effectively dealt with in the House of Representatives by the Minister for Information (Mr. Calwell). My second point is that it is hypocritical to suggest that there should be a referendum because of the result of the Victorian State elections when, at the same time, every member of the Opposition parties opposed a referendum being held in that State on the question as to whether the Upper House in Victoria should remain, or be abolished or be reformed. For the last month no one here or elsewhere has said anything new about the Government’s proposal to nationalize the banks. As I said at the beginning, the banks and the press have laid down the programme of attack, item by item, from No. 1 to No. 7. We know all that honorable senators opposite are going to say before they rise in their places. It is they, not supporters of the Government, who are wasting time.
Question put -
That the proviso proposed to be added (Senator Cooper’s amendment) be so added.
The committee divided. (The Chairman - Senator T. M. Nicholls.)
Majority . . . . 26
Question so resolved in the negative.
Clause agreed to.
Clause 3 (Objects).
– Clause 3 states -
The several objects of this Actshall include -
The expansion of the banking business of the Commonwealth Bank as a publicly owned bank conducted in the interests of the people of Australia and not for private profit;
Those words imply that the private hanks are being taken overbecause they are conducting their businesses for private profit. I do not assert that that is the only reason for the Government’s proposal, but it is specifically mentioned in this clause as one of the reasons. Does that imply that other businesses carried on for profit throughout Australia are at some later stage to receive similar treatment to that accorded to the private banks under this proposal? There is not the slightest doubt that Australia has achieved its present prosperity largely because of the policy followed by the private trading banks throughout the last 130 years. During that time they have certainly supplied most of the capital expended to develop the country. The Prime Minister (Mr. Chifley) and his Ministers have repeatedly eulogized the progress made by this country during the last 130 years in comparison with that made by other countries, and undoubtedly the progress made in Australia from the beginning of settlement to the present day, particularly that made by primary and secondary industries, is extraordinary. Since the enactment of the Banking Act 1945 the trading division of the Commonwealth Bank has had a fair opportunity to compete with private trading banks in securing the business of those engaged in primary production. Although most of the branches of that bank are situated in the capital cities, where most of the secondary industries are concentrated, that bank has not made the headway even in regard to secondary industries which one would have expected of it. One after another supporters of the Government have repeated that the Commonwealth Bank has 3,800,000 accounts, but I have already pointed out in my second-reading speech that the number of trading accounts is only approximately 120,000, the balance of 3,680,000 comprising Savings Bank deposits. The only fair comparison of the business of the Commonwealth Bank with that of the trading banks is obtained by considering the activities of the trading division of that bank. The greater portion of the business of the trading banks is concerned with supplying the financial needs of firms and individuals which seek to develop some particular industry. The trading banks of this country hold approximately 1,500,000 accounts, which indicates that the majority of the people concerned in production prefer to do business with the trading banks which the Government now proposes to obliterate. Enactment of this clause will result in customers of the trading banks being driven, without any alternative, to transfer their business to the Commonwealth Bank, and members of the Opposition most strenuously object to the element of compulsion entailed in that proposal.
– It is amusing to listen to the excuses put forward by opponents of the present measure. The Leader of the Opposition (Senator Cooper) asserted that it is a terrible thing to compel traders to utilize the service of only one bank. I remind him that in 1911, when the Fisher Government introduced legislation to establish the Commonwealth Bank, the moat violent opposition to that proposal was encountered from the same section as that which is protesting so vehemently to-day. Notwithstanding its propaganda, the bill to establish the Commonwealth Bank was passed through both Houses of this Parliament. From 1912 to 1924 the trading banks of this country conducted a continuous campaign to induce the Government to take away from the Commonwealth Bank the power to function as a trading bank. Eventually they succeeded in persuading a former Prime Minister, Mr. Bruce, to sacrifice the Commonwealth Bank and to compel the people who had accounts with that bank to transfer them to the trading banks.
– The Deputy Governor of the Bank of England visited Australia on the same vessel as that on which Mr. Bruce returned to this country.
– Th at is so. Supporters of the Government agree that the Commonwealth Bank has not made the progress since the passage of the Commonwealth Bank Act 1945 that we should have liked ; but the probable reason for that is not that members of the community did. not wish to do business with that bank, but rather that the bank’s facilities were too limited to accommodate new business. The bank has been limited not only in regard to office space, but also in regard to staff, and many people who wished to transfer their accounts from the trading banks to the Commonwealth Bank have been unable as yet to do so, because they are so deeply involved in the clutches of the private banks. The propaganda disseminated by opponents of the Government and the criticisms directed against each clause of the bill are almost identical with those advanced against the Fisher Government’s proposal to establish the Commonwealth Bank in 1911. Irrespective of whether a referendum is taken or not, I feel confident that when this legislation is implemented, supporters of the Government need have no fear that the people of Australia will not endorse its actions. I support the bill.
– Clause 3 sets out the objectives of the bill, which include the acquisition by the Commonwealth Bank of the businesses and property of the private banks. Some of the most objectionable features of the measure are embodied in this clause, and the Government (should certainly supply more information, with regard to the implications of this clause than it has done. The acquisition by the Commonwealth Bank of the real property owned by the trading banks will result in that bank securing millions; of pounds’ worth of property at present occupied as bank premises. Once the Commonwealth Bank becomes the legal owner of that property, it will, presumably, not be liable for the payment of State land tax. The Premier of Queensland has already stated that his Government expects to lose £22,000 revenue which it has formerly received in land tax, although he hopes that generous compensation will be paid in lieu of it. Other States are doubtless similarly affected. It is probable that municipal councils throughout Australia will lose amounts they cannot afford to lose through the Commonwealth Bank perhaps not being liable to pay municipal rates on its premises. Doubtless the Government will offer generous compensation here, too. Or is it the intention to make the over-burdened, ratepayer carry this load? There are many questions wrapped up in this clause. For instance, is the Commonwealth Bank a government instrumentality? To the layman it seems that it is, but the lawyers may have their own interpretations, particularly since the passing of the 1945 act. If it is, what is the position with regard to State stamp duties? Are fixed deposit receipts liable for State stamp duties? Do the receipts for the rents of the many premises have to be stamped? Are drafts and bills of exchange issued by the Commonwealth Bank liable for stamp duty? Is there to be any compensation of State governments for the loss of this revenue?
Then there is the question of government priority. Is the Commonwealth Bank, as a government instrumentality, entitled to rank as a preferential creditor, and so on? A thousand and one issues are bound up in this clause and in respect of none of there has the Minister given any explanation. How does the Government propose to deal with State governments and the municipalities; to what extent, if any, does it propose to make Commonwealth Bank transactions subject to State law; and to what extent is the bank itself subject to State and municipal statutes?
.- In the course of his speech, the Leader of the Opposition (Senator Cooper) gave a perfect demonstration of the manner in which the propaganda directed against this legislation has been conducted. He picked out a clause with no substantive operation at all ; it merely sets out the objects of the act in general terms and does not achieve a single thing of itself. Clause 3 states -
The several objects of this Act include- (a) the expansion of the banking business of the Commonwealth Bank as a publicly owned bank conducted in the interests of the people of Australia and not for private profit.
The mere fact that the term “private profit” was mentioned provoked him to ask whether it was the intention that all private enterprise in the community was to be eschewed and that there was to be no private profit. He repeated, in fact, what every Opposition speaker has said about this measure in this chamber.
The honorable senator was present last night when I made my second-reading speech, but apparently he did not listen to the extracts I read from the speeches of the Prime Minister (Mr. Chifley) and the Minister for Supply and Shipping (Senator Ashley), delivered during the second-reading debates on this bill in the House of Representatives and in this chamber respectively. I repeat them because they are very important to the people of this country. The Prime Minister, himself, said -
The proposal totake over the banks is being condemned in some quarters in recklessly extravagant terms; all sorts of hidden purposes are being wrongly ascribed to it from the same sources. The simple truth is this - the reasons and the motives for this measure and the uses to which it can and will be applied are no more and no less than I have stated.
The Minister for Supply and Shipping said -
The truth is that the measure proposes the transfer of a vital public utility to public ownership - and has no aim beyond this.
When I remarked last night that that meant that private enterprise would not be affected and that it would go on under the Commonwealth Bank in exactly the same way as that in which it had always done, without any kind of discrimination, one honorable senator interjected, “ Nevertheless they will say it again “. His words were very prophetic. Last night I gave the most explicit undertaking on behalf of the Government that there would be no nationalization of any industry, apart from banking, pursuant to this measure, and that if it were proposed to embark upon activities in any other field - and I explained to the Senate that that field was exceedingly’ limited - it would be done openly and the Government would come to this Parliament with the proposal. I think it was Senator Grant who interjected, “ They willsay it again “. I was hopeful that, having regard to the very clear and emphatic pronouncement made last night, that would not be so. However, I was disappointed, and we shall hear it again, I dare say. It will again be said to the people, “ They will take your homes ; they will take your farms “ ; all the absurd canards with which the country is being flooded will no doubt be repeated. They are ridiculously untrue and I take this opportunity to say so.
The Leader of the Opposition commented upon the lack of headway made by the Commonwealth Bank during the last two years. I propose, therefore, to examine the position of this people’s bank - a bank that has had the brakes clamped down upon it very tightly from the time of its inception until two years ago, when certain controls were removed by this Government. It started with a loan of £10,000 from the Treasury of this country and it repaid that amount. What are its assets to-day? In its general trading bank division, its assets total £730,000,000 and in its savings bank division, they total £443,000,000. It has, of course, liabilities to depositors and others, but it has grown from, one may say, nothing to a body which controls over £1,100,000,000 of assets.
The honorable senator says that the Commonwealth Bank has not developed in the last two years. The truth is that it gathered in 54,S76 new customers between June, 1945, and June, 1947. It has opened 118 new branches for general banking business. Its industrial finance department - a section which commenced operations only in January, 1945 - has already approved 7,586 advances, totalling £7,500,000. In the last six months, it has approved 5,919 advances, totalling £5,250,000. Therefore, its business is showing a vast expansion and is, in fact, giving great cause for concern to a number of financial institutions in this country.
– If this expansion is so vast, there is no need to bring in this legislation, because the Commonwealth Bank will take over the private banks without paying for them.
– I am surprised that the honorable senator should advocate such a course. It was suggested to the Government that that could be done, but on the grounds of morality and fairdealing the suggestion was rejected. Quite frankly, I am surprised at the suggestion that the Government should act in such a high-handed fashion - that it should, merely by competition, drive ihe private banks and the private financial institutions out of existence. That is not the Government’s proposal. The Government realizes that it is fair, if it is going to take over the private banks or any other financial institutions, to pay proper compensation to the companies, the shareholders and the directors, and to take adequate care of the staffs. Our feeling is that it would be criminal to go ahead on a basis that would literally assassinate these institutions.
– Not if the competition was fair, and I emphasize the word “ fair “.
– There has always been doubt as to what is fair. Generally speaking, if one wins by following a certain course, it is said that it is fair, but, if one loses, it is said that it is unfair. I think that is the only rule governing that matter.
Senator Rankin referred to certain aspects of taxation as they affected State Governments. So far as land tax is concerned, the Commonwealth Bank does not pay land tax to the States. So far as municipal rates are concerned, the Commonwealth Bank, although under no obligation to do so, does, as a matter of fact, pay municipal rates for services rendered. So far as stamp duties and the other items to which the honorable senator referred are concerned, once the Commonwealth Bank, in fact, owns all these properties, and has under its control the whole of the banking business of the Commonwealth, it will not be any more liable to pay these items than it is today; but the people who are using these means of exchange and these documents will not be any less liable to pay duty to the States. The mere fact that the Commonwealth Bank takes over the whole field of banking activity does not mean that the citizens of, for instance, Queensland will be absolved from their State duties. The Commonwealth Bank today, is not liable to taxation at the instance of the States, but it voluntarily pays municipal rates. Therefore, I suggest that, apart from land tax, the revenues of the States will not be grievously affected. As to land tax, it is certain that if the Commonwealth Bank proceeds, as I think it will, to take over the shares of the private trading banks, the status quo will not be altered for a number of years. The mere fact that shareholders in a corporation are changed does not mean that there is any change in the identity of the corporation or in its status. As Senator Fraser reminds me, the shareholders change every week. It is certain that it would not be physically possible, even if it were desirable on other grounds, immediately to integrate these various banks into the Commonwealth Bank. They will continue foi1 some time. I do not want to foreshadow what the Commonwealth Bank may do, but it may well be that, as a matter of policy, it may say that it has acquired the shares and appointed the directors, and, therefore, it will allow these institutions to exist as separate entities, performing special functions. Various banks develop various classes of business, and it may be the policy to let those banks continue for a fairly long time in order to develop their particular classes of business. That is a possibility.
I point out again to honorable senators opposite that this clause achieves nothing. It sets out the several objects of the act in very broad terms, but it could, in fact, be deleted entirely from the act without affecting the substantive provisions.
– Although it was not necessary, I was very glad to hear the assurance given by the Minister for Health (Senator McKenna) as to what it is intended to achieve through the medium of this bill. I. would not want such assurances from him or the Prime Minister (Mr. Chifley). I do not think that they personally ave out to wield the tremendous powers contemplated by this bill, but if they are not going to wield them, why take them ? Once they are on the statute-book people less scrupulous than themselves and people less mindful of their obligations might well exercise these tremendous and terrifying powers contemplated here, lt is of no avail to have an assurance - and I accept it without qualification - such as that which the Minister has given, namely, that the Government in which ho is a Minister does not intend to do anything other than that which is stated in terms in this bill.
– I will go further, and say that it could not be done.
– The Minister interjects to say that it could not be done. I accept the proposition that it could not be done constitutionally, but the powers being taken by the Government in this measure put into its hands the means, indirectly, of destroying or ‘ taking over any industry it cares to take over, merely by the withholding of banking accommodation and facilities. I challenge the Minister to deny that, used unscrupulously, these powers could achieve that end. I have no objection to the general proposal contained in the provision of sub-clause 3 (a), relating to the general expansion of the operations of the Commonwealth Bank, provided, of course, that such expansion is done in the correct way and not unfairly to the detriment of competitors. The main objection to these provisions is that they put into the hands of the Commonwealth a complete monopoly over finance - a monopoly which gives to its holder power over every human endeavour.
– That is the power that the banks now have.
– It is a power which is no less dangerous in the hands of a government, because governments are composed of individuals who are subject to the frailties to which man is heir. There is no guarantee in the bill that these terrifying powers will not, at some future date, be exercised to the detriment of the people by a government less scrupulous than the present Government.
– Whom is the honorable gentleman trying to frighten?
– No one ; but if this power is not to be used, why leave it in the bill, to be exercised by a less scrupulous government which may come along?
– The honorable senator admits that the bankers now have this power.
– There is no reason why the Government, which already has full control over banking, should not permit the trading banks to carry on.
There are a lot of euphemisms in the bill - a lot of silly words. The bill has been drawn more politically than legally. For instance, the term “private profit” is used in this clause. Is it suggested that private profit is something which by its very nature is an abuse of common morality ? That interpretation of private profit is far from the truth. The term “private profit” is used provocatively. In paragraph (6) of clause 3 the term “ private banks “ is used. I submit that the banks trading in Australia are not private banks, but public companies, publicly owned. Their shares are on the market and any one who has the wherewithal - which I have not - oan huy shares in such companies. They are not private companies, but public companies. The word “ private “ also is used provocatively.
– Does the honorable senator say that they should be public banks ?
– They are public companies. Also thrown in for good measure, and to give an aura of sanctity and virtue to this atrocious legislation, are the words “ on just terms”. The Government may not acquire the property of any bank on any other basis than “ on just terms “. That is already provided for in the Constitution. Why be so unctuous as to include such a term in this bill when the Constitution itself prevents any property from being acquired by the Commonwealth on other than just terms ? It is well for the people of Australia that they are protected by the Constitution. But is it just that 1,250,000 members of the public who, throughout the years and despite the fact that they have had ample opportunity to avail themselves of the excellent service rendered by the Commonwealth Bank - in saying that I do not speak sarcastically - have preferred to carry on their business transactions with the competitive trading banks should be forced to place their business in the hands of a monopoly bank ? The bill envisages that, regardless of their wishes in the matter, people who have deposited their money with the private banks are to give up their associations with such institutions at the behest of a government which should be the servant of the people. Is it right that any government should issue peremptory orders that citizens and associations of citizens must henceforth transact their banking business with no other institution than the Commonwealth Bank?
– That is democratic.
– Does Senator Hendrickson believe that it is democratic for freedom-loving citizens to be told how, when, and with whom, they shall conduct their business? His inter jection shows that there is dynamite in this bill. Legislation of this kind is not my idea of democracy. I dissociate myself from the sentiment expressed by the honorable senator. The same theme has been advocated by other honorable senators on the Government benches. Senator Arnold said that there was some time ago a great uproar when the Government dared to legislate in regard to education. That is the very thing of which I am afraid. Apparently Senator Arnold and others think that in controlling education a government undertakes all phases of educational work. Does he suggest that the State should not only prescribe the age at which a child shall attend school, the minimum age at which he may leave school, and the standard of his education, but also that the only institution which may undertake the education of the child shall be one conducted by the State? Does he advocate a State monopoly of education? Does he believe that the Government should take over all private schools ?
– I hope that day will soon come.
– The honor.a.ble senator’s interjections reveal the dangers inherent in this bill. After banking, the next function to be taken over by the Government may be that of education. There are people who believe that the State should carry dwt every phase and function of human endeavour and experience. Yesterday, when I made a quotation from the writings of Professor Hayek, Senator Grant asked who he was. The honorable senator may be interested to know that Henry Hazlitt, writing in the New York Times, says that -
In The Road to Serfdom Friedrich A. Hayek lias written one of the most important books of our generation. It restates for our time the issue between liberty and authority. It is an arresting call to all well-intentioned planners and socialists, to all those who are sincere democrats and liberals at heart, to stop, look and listen. The author is an internationally known economist. An Austrian by birth, he was director of the Austrian Institute for Economic Research and lecturer in economics at the University of Vienna during the years of the rise of fascism in Centra] Europe. He has lived in England since 1931, when he became Professor of Economic Science at the University of London, and is now a British citizen.
Those who are sincerely actuated by high ideals, and earnestly desire that the masses shall be given a better deal, should take care that they do not go off the deep end. We may find ourselves in the position indicated by Senator Hendrickson, in which all authority and power, affecting every phase of human activity, shall be planned, controlled and supervised by a tyrannical state.
– I take this opportunity to explain my attitude as revealed by my interjection while Senator O’Sullivan was speaking. I believe that it is democratic for any body of people to have control of their own affairs. I take strong exception to the action of Senator O’Sullivan in trying to seize on to my interjection to enable him to compare legislation introduced by the Australian Government with the actions of Hitler. The Australian Government believes that the people are the best judges of who should control the monetary affairs of the nation. I admit that under this legislation the Commonwealth Bank will have a monopoly, but every one of the 7,500,000 citizens of Australia will be a shareholder in that monopoly. Moreover, the control will be in the hands of people living in the Commonwealth, and not, as in the case of the private hanks, largely in the ‘hands of shareholders living overseas and drawing dividends from banking transactions in Australia.
– The private banks have paid dividends at the rate of “less than 4 per cent, since 1939.
– It is true that dividends have been restricted since the present Government has been in office, “but prior to 1939 the shareholders if trading banks received more than 4 per cent, interest on their investments. I remind the honorable senators that, although he and his colleagues describe this legislation as monopolistic in effect, it did not take Mr. Bruce long, when he was Prime Minister in 1924, to take power away from the Commonwealth Bank when instructed, to do so by the money magnates in this country, who, in turn, were forced, by money power -overseas, to do things which brought ahoutabout the depression.
As to my interjection regarding the control of education, I do look forward to the day when governments will control schools, and when each pupil, whether he be the son of rich or poor parents, will be given every opportunity to develop his talents. Such a system would be in the interests of democracy, and would be far removed from the policy adopted by Hitler in Germany. I remind Senator O’Sullivan that the Leader of the Liberal party in the House of Representatives (Mr. Menzies) once said that there was no more progressive country in the world than Germany, and that Germany’s position in the world was due to the statesmanship and leadership exhibited by Hitler. People with those ideas are the kind of people who enabled Hitler to rise to power. Labour will legislate along truly democratic lines. I am confident that in two years’ time, when this legislation is in operation, the people will be satisfied that the Commonwealth Bank is indeed operating in their interests. Control by the Australian Government of the finances of the nation and the means of exchange will be a step in the direction of democracy. I trust also that the day is not far off when all children, regardless of the means of their parents, will have the same educational opportunities.
– I have listened with interest to Senator O’Sullivan expressing his conception of democracy. I am inclined to think that we have in this chamber the makings of a new “ quiz kids “ session, the “ kids of course, being the three honorable senators opposite. Senator O’Sullivan has confessed that he knows all about democracy and has not hesitated to give us the benefit of his knowledge. The remarkable thing is that his opinions on this subject differ from those of his leader, the Leader of the Opposition in the House of Representatives (Mr. Menzies).
– We are not all slaves.
– The right honorable gentleman has made some interesting statements at times in regard to democracy and I commend them to Senator O’Sullivan. He should read them, because he will gain from them an appreciation of democracy from a true blue Liberal point of view. Senator O’sullivan raised the matter of the sanctity of the banks. He said that the word “ private “ was incorrectly applied to the trading banks.
– The honorable senator should confine himself to the truth. I made no mention of the sanctity of the banks.
– The honorable senator claimed that the Government used the word “ private “ in relation to the banks for political propaganda purposes. So far as I am aware, the trading banks in this country are companies whether they be joint stock companies, limited liability companies or no-liability companies and, considered in relation to the democratic State, they are private concerns. The Leader of the Opposition in the House of Representatives agrees that there is no sanctity about the trading hanks. I remind the Senate of the right honorable gentleman’s statement in his book The Forgotten People. On the 24th April, 1842, he also said that even the direction of man-power was democratic if the interests of the nation required it. We know, too, that he was also very fond of quoting Hitler. On the 5th June, 1942, he made a broadcast in which he dealt, amongst other things, with the principles of democracy. On that occasion he quoted a French sovereign as having said, “The State! I am the State!” Commenting upon this, the right honorable gentleman said -
In his (the King’s) mouth it was an expression of despotism, in the mouths of a million .people it could become the very expression of democracy.
The aim of this measure is to take the control of financial policy from the private banks and place it in the hands of not 1,000,000 people, but approximately 7,000,000, whose voting strength is at least 2,000,000. In this case, democracy means just what the right honorable gentleman said it meant. To place the control of the destiny of the people in the hands of the people themselves is surely of the very essence of democracy. Senator O’sullivan apparently disagrees with his leader. I suggest that they should hold a conference and in future speak with one voice, at least, on democratic principles.
– I do not propose to discuss the play on mere words upon which Senator O’sullivan embarked, nor do I propose to follow him into the foreign field of education. We should all remember that we are debating banking and that a discussion of other matters may stir up feelings and provoke words that are better left unsaid.
– Senator Arnold was the first to mention education.
– I am not directing my remarks to anybody in particular. I say to all honorable senators that it would be wise to confine this debate to matters that are really at issue, and not to be drawn into realms where matters of conscience may be involved. We are now in the realm of hard business, and it is wise that we should remain there. Senator O’sullivan asked what safeguards there would be against discrimination when this vast power was in the hands of a monopoly bank. I point out that the ;power to discriminate is in the hands of the trading banks to-day, and that it is a very simple and clear proposition that this power would be very much safer in the hands of a government in strumentality.
– There is a choice of eight banks now.
– I suggest that when the Commonwealth Bank is the only bank, the interests of customers will not be prejudiced in any way. Clause 11, paragraph b, imposes a specific obligation on the Commonwealth Bank. It provides that it shall be the duty of the Commonwealth Bank to conduct its business without discrimination except on such grounds as are appropriate in the normal and proper conduct of banking business.
– Who is to decide whether or not the grounds are proper ?
– Who makes these decisions under the present banking system? When this hill becomes law, the decisions will be made by officers of the Commonwealth Bank, and I point out to the honorable senator that not all the honorable bank managers are employed by the trading banks to-day. The Commonwealth Bank, too, has honorable managers and their ranks will be reinforced by the honorable managers from the trading banks when this measure becomes law. In view of the restricted scope of operation that was permitted to the Commonwealth Bank in the general banking field, it will a good blood transfusion for the Commonwealth Bank to have the benefit of the experience and advice in the wider banking fields of officers of the trading banks. The traditions that Senator O’Sullivan admires so much - and properly so - in the business of the private banks, can be carried into the activities of the Commonwealth Bank itself.
– I am glad to have the Minister’s assurance; but supposing the Treasurer does not like it.
– Again I point out that the Treasurer is not concerned with details of administration. He is responsible primarily to the Parliament and through it to the people. His only power under this legislation will be to direct the Commonwealth Bank on broad questions of monetary and banking policy. Thebill positively prohibits interference with particular industries or particular accounts. We recognize that that should be so, and the Government has made adequate provision to that end. There will be as little discrimination between businesses and between individuals as there is when an electricity undertaking dispenses its services amongst the people of a particular locality. It is not concerned with a customer’s type of business, his religion, or the colour of his hair or his eyes, and the Commonwealth Bank, too, will observe this strict impartiality.
Question put -
That the clause stand as printed.
The committee divided. (The Chairman - Senator T. M. Nicholls.)
Majority . . . . 26
Question so resolved in the affirmative.
Clause agreed to.
Sitting suspended from 6 to 8 p.m.
Clause 4 agreed to.
Clause 5 (Definitions).
. - The definition of “ assets “ includes “ books, books of account and records “. From that definition it would appear that the principle adopted in the bill is that compensation is to be determined subsequent to the assets being acquired. This leads to the extraordinary situation that the acquiring authority has complete access to, and, indeed, ownership of, all the records and accounts of the ‘business which is to be acquired and in respect of which claim for compensation is to be made. This would appear to infringe every propriety of commercial practice. It may lead to abuse of privilege; it may even tend to concealment and to restriction of the right of freedom of action of the business to be taken over. “ Australian private bank “ is defined as “ a private bank which was formed within the limits of the Commonwealth and the name of which is set out in Part I. of the First Schedule This enables the acquisition to be made of a branch in Australia of any trading bank, whether privately-owned or governmentowned, and whether Australianowned or foreign-owned, with the exception of banks owned by the Government of one of the States comprising the Commonwealth. For example, there are branches in Australia of the Bank of New Zealand, which I undersand are now owned solely by the Government of New Zealand. Such banks could be compulsorily acquired by this Government. On the other hand, the bill empowers the Commonwealth Bank to acquire the branches in New Zealand and elsewhere of an Australian private trading bank. Thus, whilst the bill will preclude a foreign government bank from operating in Australia, it will enable the Commonwealth Bank to operate branches outside Australia. This situation seems likely to cause action on the part of a foreign government to acquire the local branch of - the Commonwealth Bank operating within its jurisdiction, or, alternatively, to occasion some disagreement between the Australian Government and a foreign government concerning the disposition of Commonwealth Bank property situated in that foreign country. There are three banks, in Australia operated by foreign countries - the Bank of New Zealand, the Bank of France and the Bank of China. I ask whether any arrangements have been made with the governments of those countries, or whether they have been consulted with regard to their carrying on their business in this country. Is there any likelihood of their taking action with regard to the banking facilities we may have in their country?
– The Leader of the Opposition (Senator Cooper) has been dealing with matters which, at the moment, are merely matters of definition. Under the heading “ assets “ he referred to “ books, books of account and records “ which could be acquired as part of the business of a private trading bank. That is perfectly true. He expressed some fear that in those circumstances the bank whose assets were -acquired might be at a disadvantage in preparing its claim and prosecuting its claim before the Federal Court of Claims. That position would not arise for two reasons : First, although the books of account are taken over by the Commonwealth Bank, when it puts through the acquisition, the moment any proceedings were begun in the Federal Court of Claims the original bank would be entitled to the fullest discovery ill respect of all papers and documents that would help it. There is not the slightest doubt that the private bank, which would be a claimant in the Federal Court of Claims, with the Commonwealth Bank as defendant, would be given the fullest discovery and access to the books belonging to it. Another reason why there would be no difficulty is that it would be perfectly certain that the Commonwealth Bank would co-operate most generously and fully without need of force with the private bank to enable it to carry on its claim. The honorable senator need have no misgivings on those points.
He referred also to the definition of “ Australian private bank “. That means a private bank which was formed within the limits of the Commonwealth and the name of which is set out in Part I. of the First Schedule. Those names relate to the eight Australian banks; they are incorporated in this country. Some of them have branches in New Zealand. I doubt if they are operating branches in any other country. It is perfectly true, as the Leader of the Opposition has said, that it may be competent for the Government of New Zealand itself to acquire the branch of an Australian bank operating under its jurisdiction. Then, of course, the Commonwealth, or the Commonwealth Bank, would take no exception whatever. One might reasonably expect that that would follow. So far as the three foreign banks trading in Australia are concerned, the Bank of China, the Bank of France and the Bank of New Zealand, informal discussions are proceeding with their representatives. I cannot put it at any higher level than to say that we are hopeful that amicable arrangements will be made with those institutions. As I said last night, two of them are wholly government-owned and the third is owned almost wholly by the Chinese Government.
– I support the remarks made by the Leader of the Opposition (Senator Cooper). There is a fear of the possibility that under this definition we might be inviting some retaliatory measure by a government whose nationals, or banking institutions, are affected by this legislation. It might possibly call for action by them to prevent the Commonwealth
Bank itself from operating in the particular countries. We commend that matter to the consideration of the Government.
With respect to the other point mentioned by the Leader of the Opposition, and to which the Minister for Health (Senator McKenna) replied, it is quite true that the Commonwealth Bank, when the dispute as to the determination of value comes along, will be entitled to discovery; but there are two points which the Minister did not elaborate. One is that discovery is granted only after the pleadings have been closed. The second is that the bank whose assets were being taken over would be required to produce for inspection by the Commonwealth’s attorneys documents and records relevant to the matters in dispute in respect of the determination of value. The personal, confidential, private records of the customer, as between customer and bank, would not be required to be disclosed, and, in fact, would not be disclosed; but, when this bill is passed, the Commonwealth Bank will have at its disposal and under its control all of the information upon which the trading bank will be expected to build its case ; in fact, the entire material upon which the case of the claiming bank will be built. It is unheard of in British legal proceedings that the whole case of one party is placed antecedently in the hands of the other party. The question of discovery does not meet this point, and it is not completely fair to pass it over in a cavalier way and say that that would be so in any case, because the Commonwealth Bank would be entitled to discovery. The Commonwealth Bank would not be entitled to the intimate, personal details which, under this bill, will be available to it.
Clause agreed to.
Clause 6 agreed to.
Clause 7 (Act not to apply to State banking).
– We understand that the general purpose and principle of this bill is to clothe the Commonwealth Bank with more effective control over the credit of the country. Indeed, complete control is the Government’s objective. State banking is excluded from this legislation; but, in the event of the tradingbank activities of State govern ments being expanded, as they well might be, in order to provide some alternative to the proposed Commonwealth Bank, the result of such action by a State bank could be to loosen rather than tighten Commonwealth control over credit. This possibility assumes some significance in relation to the fact that, in the terms of the Banking Act of 1945, control over credit policy covering trading banks is already adequate, or more than adequate. Thus, this measure could prove very undesirable in that it could result in less effective control over credit than exists at present. Hence, if the Government genuinely believes that more effective control is essential, it will be placed in the position of seeking extended control, not merely over private banking activities, but also over other forms of banking, including State banks and State savings banks and pastoral finance companies. I should like some information from the Minister with respect to that point.
– As the Leader of the Opposition (Senator Cooper) has intimated, the Commonwealth Parliament has no power over State banking, that is, banking which is conducted as a business by a State. I am afraid that no action on the part of the Commonwealth Parliament can alter that position, because it is embedded in the Constitution. We cannot legislate in the field of State banking. That position does not worry the Government at all. It desires that the control of credit shall he in public hands, and it willbe quite happy ifState-owned banks expand. The expansion of their operations would be in the interests of the people of the States concerned, and would not benefit some mere sectional interest. For that reason the development of State-owned banks would accord completely with the Government’s outlook.
Clause agreed to.
Clause 8 agreed to.
Clause 9 -
The powers specified in Divisions 2 and 3 of this Part are conferred for the purpose of enabling the banking business of private banks to be conducted by or on behalf of the Commonwealth Bank and for the purpose of furthering the expansion of the banking business of the Common wealth Bank.
[S.15J. - I move -
That the words “enabling the banking business of private banks to be conducted by or on behalf of the Commonwealth Bank “ be left out with a view to insert in lieu thereof the following words: - “facilitating the control by the Commonwealth Bank of the banking business in Australia of private banks “.
This is purely a drafting proposal. The clause itself has no particular operative power; it simply seeks to link divisions 2, “ Acquisition of Shares in Private Banks “ and 3, “ Management of Private Banks “, with the power conferred by the Constitution. The Government believes that the amendment proposed will achieve that purpose more specifically than the present words of clause 9. As the clause stands at present if the Commonwealth Bank were to acquire something less than the whole of the shares of a private trading bank it would not be able to comply with the clause because it would not enable the business of private banks “ to be conducted by or on behalf of the Commonwealth Bank “. For that reason the Government proposes that those words shall be omitted and the words embodied in its amendment substituted in lieu thereof. The clause, if amended as proposed, would read -
The powers specified in Divisions 2 and 3 nf this Part are conferred for the purpose of facilitating the control by the Commonwealth Hank of the banking business in Australia of private banks and for the purpose of furthering the expansion of the banking business of the Commonwealth Bank.
– I appreciate the explanation furnished by the Minister for Health (Senator McKenna), but it occurs to me that the same old bushranger is still to lie presented to us, with this difference, that he will be disguised as a beautiful prince. Certainly, the words included in the proposed a mend ment are “softer’1 than those of the clause as it now stands. However, their effect will be the same. I had hoped that, if an amendment were to be made to this clause, it would be in (he direction of affording some protection to the community in regard to the manner in which the banks’ operations are to be conducted. It is quite true that the general administration of the law of the land is carried out at the direction of theAttorneyGeneral of the Commonwealth, or of the several States, who is, in each case, the chief law officer of the Government. However, it cannot be contended that the whole of the law of the country is under the control or direction of theAttorneyGeneral. In actual practice the Minister occupying that office merely refers to the courts for decision disputes between subjects and States, or between citizens of States, and it is not for him to determine the rights or wrongs of” parties. This bill contemplates that theTreasurer shall determine disputes which arise throughout the wide ambit of banking operations. It has been pointed out many times in the course of this debatethat banking operations cover every phaseand endeavour of human activity which involve a citizen’s livelihood. Down the centuries we have deemed it wise in erecting our democratic structure to ensurethat “ star chamber “ methods shall not obtain in the administration of the law. The law is applied by a body of men, appointed by Parliament for that purpose, and, although they are answerable to Parliament, they are removed entirely from political control. I commend that fact to the Government’s consideration,, and I deplore the absence of a provision, to ensure that the control proposed to be exercised by the Treasurer shall, in its intimacies and details, be guided, directed, watched over and administered by a body of the status of the High Court of Australia or of the Supreme Courts of the States. The justices appointed to those tribunals are not subject to the whim? and fantasies of the Treasurer or the Attorney-General for the time being, and are not susceptible to pressure of any kind. In administering the provisions of this bill, they could be relied upon to observe faithfully their oath of office and to carry out their duties according to the traditions of our judiciary, without fear, favour or affection.
– I was pleased to hear Senator O’Sullivan assert that the effect of the words proposed to be inserted will be similar to that of the clause as it now stands, because that means that there is no controversy on that aspect. I agree with the honorable senator that money is required at every point of our lives. Money is required even for us to be born ; it costs a considerable sum of money to go bankrupt; and it even costs money to be interred when we die. Therefore, one may say that money does rule us from the cradle to the grave, and it is because of the vital part that money, credit and currency play in our lives that webelieve that they should be placed in the control of governments rather than left in the control of private individuals.
With regard to the honorable senator’s suggestion that there should be some one appointed to “sit over” the Treasurer to exercise an overriding jurisdiction over the directive power conferred on the Treasurer in regard to the policy of the Commonwealth Bank, my reply is that such a step would result in the creation of a super-legislature not responsible to any one or elected by the people. It would represent a distinct blow at the foundations of democratic government. Although the suggestion made is an interesting one, it cannot be entertained by the Government because it is, as I say, quite foreign to our conception of democracy.
Amendment agreed to.
– The acceptance of the Government’s amendment does not alter the purpose of the clause in any way; it simply alters the form of the clause by removing a number of words and substituting other words of “ softer “ impact. The fact remains that the clause is a misleading one. It definitely conveys the suggestion that a number of private trading banks will be left much as they are at present, and that the only change to be effected will be in regard to the personnel of their directorates. That is quite at variance with the intention of the Government, which has chosen to adopt the form of words embodied in the clause as a matter of convenience. The appointment of government nominees to operate certain trading banks is likely to be purely a temporary measure, since they will be empowered to dispose of the business of those banks through the Commonwealth Bank. For that reason, I perceive grave danger in the clause. It pro poses to confer power to dispose of the private trading banks on the Commonwealth Bank.
– The clause is not misleading, and the amendment was designed for the express purpose mentioned by the Leader of the Opposition (Senator Cooper). For one reason or another, the Commonwealth Bank may not be able to acquire the whole of the shares of a particular trading bank, and it would not then be in a position to control or direct the operations of that bank. Because of that the Government decided to move the amendment which has just been accepted, which provides that the powers specified in Divisions 2 and 3 of Part IV. are conferred “ for the purpose of facilitating the control by the Commonwealth Bank of the banking business in Australia or private banks . . . “ The honorable senator is completely correct when he suggests that a period oftime may elapse before the Commonwealth Bank absorbs particular trading banks. How long that period may be I am not prepared to say, but it will probably be a very considerable one. During that period private banks will carry on as they do at present, except that their directorates and shareholders will be changed. Apart from that, the banks will preserve their separate identity and carrry on in much the same way as they did prior to the acquisition of their shares. In those circumstances, some provision must be made such as is embodied in the clause. As I intimated earlier, the matter of the transfer of the assets of trading banks to the Commonwealth Bank will remain to be determined by the Commonwealth Bank, and during that interim period those banks will continue’ to function as they do at present.
Question put -
That the clause, as amended, be agreed to.
The committee divided. (The Chairman - Senator T. M. Nicholls.)
Majority . . 26
Question so resolved in the affirmative.
Clause 10 agreed to.
Clause 11 (Commonwealth Bank to observe customary practices and usages of bankers).
– I draw the attention of the Minister (‘Senator McKenna) and of the public to the fact of the mandatory nature of this clause and ask for some information on it. The clause states -
It shall be the duty of the Commonwealth Bank -
to provide, . . . adequate banking facilities for any State or person requiring them.
What do those words mean? Is any person, no matter where he is located, entitled to demand banking facilities at his centre? It is said that profit is not the motive; therefore it does not matter if there is no profit to be made at that centre. In the event of any person requiring banking facilities, .a ‘branch must be opened. Who is to judge whether or not he needs facilities? Who is to decide whether or not there is any justification, or whether the remote facilities are adequate? What is the remedy if the Governor of the bank refuses? Is there any appeal or any redress? In view of the mandatory nature of the clause, can the Governor refuse? “ Adequate banking facilities “ is just an empty phrase. Who is to define what is adequate? This is just another instance of the folly of entering into a complex business such as banking and of trying to cover the presentation of the case with high-sounding words that do not mean anything. If this bill passes in its present form, every little hamlet, every railway station and every siding will become entitled to its bank; and if they demand it, I am afraid they will not all be able to get it. Therefore, the clausewill become meaningless.
– Senator Rankin has raised two points. The first dealt with the mandatory terms of the opening words of the clause, which are, “ It shall be the duty of the Commonwealth Bank “. It is intended that that shall be a mandatory duty, particularly in view of the fact that private banking will be prohibited. Since the carrying on of business by private banking corporations is to be prohibited, as the honorable senator will see by paragraph c of clause 3, it would he leaving the public unprotected if the obligation to provide adequate banking facilities were not imposed elsewhere. Ear from that being in dereliction of a duty to the public, it is in complete fulfilment of it.
The answer to the second point raised by the honorable senator is contained in the words of sub-clause a, a portion only of which she read. If I read the clause, including the words she omitted, the whole matter falls into its proper perspective. The honorable senator read it in this form -
It shall bc .the duty of the CommonwealthBank -
to provide . . . adequate hanking facilities for any State or person requiring them.
Read in that way, it is perfectly clearthat any “ Mulga- Jackie “ out in themiddle of Central Australia could demand a little post office bank for himself out there. Let me read all the words in this sub-clause -
It shall bc the duty of the CommonwealthBank -
to provide, in accordance with theconditions appropriate in the normal and proper conduct of banking business, adequate banking facilitiesfor any State or person requiring them.
Once the full context of the stub-clause ispresented, the honorable senator will see- that it is only intended to provide banking facilities where common sense dictates that they should be provided. They would not be provided for one settler in a remote part of Australia. That would not be a common-sense provision, and I am sure the honorable senator accepts that view. I invite her to consider more carefully the words she omitted when she read the sub-clause, and I think that if she does so she will find that her difficulty will disappear.
– I quite appreciate the Government’s reason for including these provisions. After depriving over 1,250,000 customers of the right to choose between eight or nine banks for the conduct of their banking business, it says in effect, “I shall reform immediately I have done this dastardly deed. I shall clothe myself in an aura of respectability. I shall behave in accordance with the tenets of decency and humanity after I have despoiled these institutions which were built up over a period of a hundredodd years. After I have despoiled them, I shall reform; I shall be decent and respectable”. But even in that promise there is a qualification, because the word “ appropriate “ appears. Who is going to be the arbiter of what is appropriate or what is inappropriate? It will not be any independent person; it will be the Treasurer for the time being. According to his one-eyed political view, the appropriateness or otherwise will finally be determined.
Then sub-clause b says there shall be no discrimination “ except on such grounds as are appropriate”. Appropriate to whom? Appropriate to the victim who is refused all the conveniences at present existing? No. It will be appropriate to the man who for the time being occupies the position of Treasurer. I can quite appreciate, therefore, the desire of the Government to clothe itself with this aura of respectability.
– Two points arise from the comments made by Senator O’Sullivan. On many occasions he has referred to the 1,250,000 customers of the private trading banks, as though they were separate individuals, but affidavits filed very recently by those banks have intimated that in many cases the same customer is duplicated again and again.
– That is inevitable.
– If he is aware of that fact, I suggest that the honorable senator should not emphasize the 1,250,000 so often. There are, for instance, trust accounts run by solicitors, who may have fourteen or more accounts in one bank. There are all sorts of church bodies ami societies. Therefore, I would ask the honorable senator, if he emphasizes the 1,250,000 customers again, to qualify his statement.
– Even a bare 1,000,000 customers are entitled to their rights.
– As to his second point, the honorable senator was seeking information, and, of course, he is entitled to it. He inquired, as to who is to determine whether the conditions are appropriate in the normal and proper conduct of banking business. I suggest that the interpretation of statutes is a matter for courts, unless the statute itself imposes an obligation on somebody else. I am putting it to the honorable senator that it is not suggested here, either directly or impliedly, that it is for the Treasurer of the Commonwealth to determine whether the conditions are appropriate in the normal and proper conduct of banking business. It is left at large and, as the honorable senator well knows, in those circumstances it is a matter for a court to determine. I suggest that the mandatory nature of this obligation upon the Commonwealth Bank is such that, if any person or body of persons considered the circumstances were appropriate for the establishment of a branch of the bank in accordance with this duty, they could apply to the courts; they could set out the facts and they could have the Commonwealth Bank compelled to establish a branch. My answer to the honorable senator is that it will be for the courts, and not for the Treasurer, to determine whether the conditions are appropriate for the establishment of a bank.
– I was interested to hear the Minister’s explanation, but I am nol sure whether I understood him correctly. 1 should like him to state categorically whether, in his opinion, a person denied accommodation, or considering himself to be aggrieved, would have a sustainable claim to bring before the appropriate court under this clause.
– That is my view.
– I disagree with the Minister.
– I am very pleased that Senator O’Sullivan was so persistent in his legal duel with the Minister (Senator McKenna). I feel that this clause is one of the most important clauses of the bill. The fact that we have had this point elucidated will allay the fears of quite a number of people. The opponents of this measure have indulged in propaganda suggesting that the Commonwealth Bank would not fulfil the requirements of people desiring banking accommodation.
Senator Rankin was rather apprehensive about what would happen in the out-back parts of this country. This clause ensures to the people of Australia better banking facilities than they have enjoyed since banking business was first undertaken in this country. At the present time no private bank is compelled by law to render banking facilities to the people. The report of the Royal Commission on Monetary and Banking Systems shows that Mr. Letch, the then general manager of the Union Bank of Australia Limited, stated, in reply to -a question by a member of the commission as to what facilities were provided in various parts of the country -
In that case, if you pay regard to the Union Bank, you will find that we have not gone out into the highways and by-ways, out into the wilderness to such places as Ouyen and Walpeup-
Those are two places in the Mallee district of Victoria- but we have reserved our operations for places where settlers have a chance of doing some good. We have not gone out into the wilderness, and we don’t intend to.
That has been the attitude adopted by these institutions which are so highly prized by some people to-day. Throughout the length and breadth of Australia there are many centres which could well do with banking facilities which have been denied to them by those who have been in control of the private banks, because it did not pay them to go there. Private banks are run for profit, not to serve the people. If there is no chance of a profit being made, no branch of a bank will be found in a town. Until 1945, the Commonwealth Bank was prevented by those who controlled it from rendering those facilities to the people. That was because of conditions imposed on the bank by legislation introduced by the BrucePage Government. Since 1945 the Commonwealth Bank has been empowered to expand its activities, but like other organizations and industries, it has been hindered by shortages of man-power and materials. In those centres where temporary premises for the conduct of banking business have been provided by the Commonwealth Bank, the buildings have been ridiculed in the press, and the Commonwealth Bank has been criticized for not erecting more commodious buildings. This legislation lays it down that when the banks come under the control of the Commonwealth Bank, people who need banking facilities will have an opportunity to get them. That is a complete answer to the propaganda that persons wishing to transact business will not be permitted to select their own bank. In this connexion it is interesting to reflect on the situation which exists to-day in many outback districts of Australia. What choice have people living, in such places as to the bank with which they shall deal? In scores of towns scattered throughout Australia, there is only one bank. In the event of a settler being refused a loan by his local bank, what chance has he of getting accommodation elsewhere? Should he apply to a bank operating in an adjacent town, one of the first questions he is asked is whether he has applied to any other bank for assistance. When that bank learns that his application has been refused by his local banker, it is likely to be treated with indifference. I am pleased that Senator O’Sullivan persisted with his argument which led the Minister to make so effective a reply to it.
– The general principle of the clause, that the Commonwealth Bank shall observe the customary practices and usages of bankers, is one with which we can all agree, but it does not disguise the fact that when this bill becomes law a person who is not satisfied with the treatment that he has received from a bank will have no opportunity to go anywhere else, as has been the case in the past. Nothing that the Minister has said or can say can get away from that difficulty. If a person is not satisfied with the treatment given to him by the Commonwealth Bank, he will not be able to change his banker, unless there is a State bank functioning in his State. There is not such a bank in every State. There is also ground for the fear that the business of the customers of banks will not be treated so confidentially as in the past. Honorable senators will recall that in the House of Representatives recently an honorable member disclosed that information regarding a customer’s bank account had been made available to a Commonwealth department. It was said during the discussion that similar action had been taken by certain private banks, but the manager of one of the banks concerned has denied that that is so. There is some justification for the fear that the accounts of customers will not be treated with the respect and care exercised by the trading banks.
– The Leader of the Opposition (Senator Cooper) expressed the fear, apparently on behalf of sundry persons, that secrecy in relation to the accounts of customers will not be preserved by the Commonwealth Bank. I dealt with that subject last night, when I said that, apart from the statutory duty now imposed on the Commonwealth Bank, secrecy in relation to the accounts of customers is required by common law. A banker is under a strict obligation not to disclose the financial affairs of his customers, except in restricted classes of cases in which such disclosure is permitted by law. I shall not cover the same ground again. The rejection of an application for financial assistance will not preclude the applicant from applying to another branch of the bank, nor will it prevent him from submitting an appeal to the regional authorities. At the present time, chief State officers are established in each State in order to avoid reference to the head office of the bank in every case. The Prime Minister (Mr. Chifley) has intimated officially that when this scheme is in operation regional authorities will be set up to hear appeals made by customers who are dissatisfied with their treatment. There will be many opportunities for a customer who may be unhappy about his treatment to have his case heard until he receives justice. I anticipate questions as to whether there are any safeguards in the bill in this connexion. It is true that the bill contains no such specific provision, but the bill now before the committee would not be the most appropriate place to insert such a provision. It is a matter for the Commonwealth Bank Act. The Prime Minister has already intimated that when this legislation is in operation, the Commonwealth Bank Act will be reviewed in an attempt to improve it by covering the staffs of the various banks. I assure the honorable senator that no person in Australia need have any fear on that score.
– We are indebted to Senator Sheehan for his remarks concerning the necessity for providing banking facilities in sparsely settled localities. The same thing has happened in connexion with railways. Governments have developed railways to serve districts, even though they may not run at a profit. That is true also of airways and schools. If the erection of schools were left to individual capitalists or philanthropists there would not he many schools in outback districts. Governments, however, have opened up schools for the benefit of children in such places. The same remark applies to the Government’s policy of full production and full employment. Plans will be prepared to facilitate the turnover of commodities in places where, according to Mr. Letch,, the banker referred to by Senator Sheehan, banks would not be established. Private banks exist to make profits. They have no interest apart from their own interest. This clause shows that the main, reason “for this Government doing what it is doing is that it realizes that a tremendous amount of developmental work must take place and that bankingmust be used to help that development.
As I have said, the committee is indebted to Senator Sheehan for his explanation. If, for instance, agriculture is more urgent than transport, banking facilities will be provided for those engaged in agriculture. On the other hand, .should banking facilities be required for transport services, they will be provided. This clause ensures that banks shall be established where they are required rather than be established primarily for profit. I am pleased that such a clause is included -in the hill.
Clause agreed to.
Clause 12 (Commonwealth Bank may purchase shares in private banks).
– This clause is an enabling provision which does two things. It empowers the Commonwealth Bank to purchase the shares of certain trading banks and it sets a minimum price which the Australian Government must pay for them. It plays an important part in the taking over of such banks. The Opposition believes that this is the main clause in the hill relating to the acquisition of the banks and will oppose it.
– This clause is related to the other clauses dealing with the method of acquisition. Broadly speaking, the bill contemplates four methods :by which the Commonwealth Bank may acquire the undertaking of the trading banks. It may acquire shares, either voluntarily or compulsorily, and it may acquire the business of a bank either voluntarily or compulsorily. As the Minister pointed out the other night, it is quite true that proceeds arising from shares surrendered either voluntarily or compulsorily are not liable to taxation unless the person or the company involved is a dealer in shares. I subscribe to that view, but a different position arises in regard to the acquisition or disposition of the businesses. Taxes are payable on profit arising from the disposition of a business, whether it be surrendered voluntarily or acquired compulsorily. The Government has not frankly or fully explained precisely why those who “ go quietly “ - in other words, people who “ play ball “ with the Government - are to be given a taxation concession which is being denied to others who, as a matter of principle or for some other reason, defy the Government, saying, “You cannot do this; we still live in a free country “. In both the House of Representative.s and this chamber this vital discrimination against the man who fights, as distinct from the man who submits to the Government’s’ will, has been glossed over as merely a machinery provision conceived for the purpose of adjusting anomalies. There is no anomaly at all. The fact is that those who stand on their rights, and refuse to be a party to what they consider to be a highly improper piece of legislation, are to be victimized.
.- Senator O’Sullivan is a rather exacting pace-maker. Earlier to-day he invited me to follow him down to the wharfs, and then to pursue him into the field of education. Now I find him jumping from clause 12 to clause 23. His comments are quite relevant to clause 23, but certainly not to the provision under consideration. I have come to the conclusion that the honorable senator likes to hear me repeating things. Last night, I dealt at length with the taxation provision, and I thought that I had made it quite clear that it applied to very few companies and that, even in relation to them, it had very little scope. Generally speaking, it does no more than place shareholders in English banks, who voluntarily dispose of their assets to the Commonwealth, on the same footing as the shareholders in the Australian private banks.
– That is not an answer to my objection.
– I am afraid I shall have objections from the honorable senator no matter what I say; but if the honorable senator cares to raise this issue when we reach clause 23 I shall be happy to give him any further information that he desires.
Question put -
That the clause stand as printed.
The committee divided. (The Chairman - Senator T. M. Nicholls.)
Question so resolved in the affirmative.
Clause agreed to.
Clause 13 (Compulsory acquisition by Commonwealth Bank of Australian shares in Australian private banks).
– This is a very important clause, because it is the first of a series that are designed to enable the scheme of the bill to be carried out. This clause empowers the Treasurer to issue a notice of acquisition on any date after the bill has received the royal assent. There is, I understand, no provision for the lapse of any time between when the bill becomes an act, and when, by the simple act of the Treasurer in issuing a notice, the shares of a trading bank become vested in the Commonwealth Bank. Control by the trading bank of its assets and business transactions could thus pass out of its hand overnight. There is no compulsion on overseas shareholders to dispose of their shares to the Commonwealth Bank, but dividends could be withheld in an attempt to induce disposal. I have given notice of an amendment that I intended to move to this clause providing that shares in a trading bank shall not vest in the Commonwealth Bank until at least one month after this measure comes into operation. I should like to know whether an agreement was reached by all parties who appeared before the High Court last week that would render the moving of this amendment unnecessary. I have no wish to delay the work of the committee and if there is any such agreement I shall not move the amendment.
– I thank the honorable senator for the opportunity to make an explanation which I think will obviate the need for his amendment. As the committee will recognize, the bill was drawn so that it would provoke the announced attack by the private trading banks at the earliest possible moment. The Government felt that it was not desirable that there should be any doubt about the validity of this legislation, the effects of which will be far-reaching. The plan has succedded beyond my wildest expectations, because the trading banks have actually reached the High Court on the issue before the bill has become law and while it is still being discussed in the Parliament. Counsel for the banks and for the Commonwealth have discussed the matter and we find that the desire for a speedy determination of litigation is completely mutual. The private trading banks have co-operated readily with our counsel, and an agreement has been reached whereby no notice will be issued within two days of the royal assent being given. Council for the banks . have undertaken that a new writ will be issued within two days of royal assent being given. It would appear that all parties concerned, including the High Court itself, are co-operating to enable the hearing to take place in the near future. I understand that the Opposition amendment foreshadowed by the Leader of the Opposition is designed to ensure that an opportunity shall be given to the hanks to intervene with an injunction before the Treasurer issues a notice of acquisition. There is not the slightest need for that now, because an agreement has not only been reached on the matter but also filed in court. The date of the hearing, of course, is a matter entirely within the competence of the court. It must consider its own convenience and that of other parties engaged in litigation, and whilst I cannot give an assurance as to when the case will be heard, we are hopeful that the hearing will commence before the end of this year.
– Clause 13 provides the machinery for acquiring the Australian shares in certain banks. Some of these banks have branches outside the Commonwealth in other British countries, including, for instance, New Zealand and Fiji. I ask the Minister how he proposes to meet this problem. The Commonwealth Bank will acquire all Australian shares, and then the private bank will pass into the control of the Commonwealth Bank. Presumably the directors appointed by the Commonwealth Bank will, in one way or another, organize to transfer the Australian business to the Commonwealth Bank plus such assets as the Commonwealth Bank wants. I presume that we shall have a banking company, say the “ A “ bank. The Commonwealth Bank will own all the Australian shares. The Australian business will have been transferred to the Commonwealth Bank and compensation paid. The company will then have two classes of shareholders - (a) Commonwealth Bank, and (b) the overseas shareholders. It will have, presumably, a lot of cash and a banking business and premises in, say, New Zealand, and a dwindling business and some premises in London. What happens in those circumstances? Does the board of directors proceed to sell the New Zealand business ? Must the London premises be handed over to the Commonwealth Bank despite the fact that the London office handles a lot of business with New Zealand or what happens? Does the Commonwealth Bank, through the branches of the Australian bank there, exercise the same control of New Zealand fiscal policy as the trading banks are supposed to do here? Will the Minister enlighten the committee on those points?
– I congratulate Senator Rankin on the number of questions she has been able to ask in such a brief period. So far as the Australian private banks are concerned, in the case of the Australian incorporated banks which have branches outside Australia at the moment, the shares are acquired by different shareholders, in other wordsby the Commonwealth Bank. The position of that bank does not change at all. The same company and directors will own the bank branches inside and outside Australia. If, later, it is decided that the business of that company is to be wound up or transferred to the Commonwealth Bank, the only one to be reimbursed will be the Commonwealth Bank. It will pay the money over to bank “ A “, and bank “ A “ will pay it to its only shareholders, the Commonwealth Bank, which will promptly pay it back to itself. So, once the Commonwealth Bank becomes the owner of all the shares it really does own the business whether it he inside, or outside, Australia. I put that completely in a technical sense. So far as banks incorporated outside of Australia are concerned, such as the Bank of Australasia, the English, Scottish and Australian Bank and the Union Bank, one of them has branches in New Zealand as well as in England and Australia. All we can do in that case is to acquire the Australian assets. We do not touch the shares. We do not interfere with the directors. They are English directors and English shareholders, largely. We simply look at the assets in this country and take them over less the liabilities. We cannot in that case interfere with whatever assets they have in New Zealand, Fiji or England. We have no jurisdiction in any of those countries. I hope that those two broad comments answer all the questions raised by the honorable senator.
Question put -
That the clause stand as printed.
The committee divided. (The Chairman - Senator T. M. Nicholls.)
Majority . . . . 27
Question so resolved in the affirmative.
Clause agreed to.
Clause 14 (Holding and transfer of shares by Commonwealth Bank).
– This clause provides for the Commonwealth Bank, from the date of acquiring shares, to become a member of the private bank having the majority of shareholding. As from that date, the Commonwealth Bank, by force of clause 17 (1), may appoint a new board of directors, thereby achieving, indirectly, full power to manage the trading bank despite the fact that as yet it has not achieved full ownership of either all the shares, or assets. Subclause 2 of this clause empowers the Commonwealth Bank to transfer its newly acquired shareholding to any person who, thereupon, becomes the holder of the transferred shares. Thus, the shares in the trading bank could be transferred by the Commonwealth Bank to a single person nominated by the Commonwealth Bank. This provision to place that power in the hands of any one individual nominated by the Commonwealth Bank, in effect, by the Treasurer, is very wide, and such power is open to abuse.
– The purpose of the clause is simply to overcome difficulties which arise from the articles of association and deeds of settlement of the various private trading banks. For instance,’ the deed of settlement of the Bank of New South “Wales provides that no one shareholder may hold more than one twenty-fifth of the total share capital ; and certain other memoranda articles of association provide that no corporation may be a member of the company. The Commonwealth Bank, of course, is a corporation. It is necessary to override those provisions in the memoranda or articles of association of private trading banks so that the Commonwealth Bank may come in and be the holder of shares. It is also purely a matter of convenience to enable the transfer of the shares into the hands of nominees. Those nominees will certainly be obliged to execute a deed of trust. They will not have freedom, but will ; be the agent of the bank. They will be appointed for and on behalf of the bank and proper deeds of trust and transfer of share forms will be executed in order to preserve the interests of the Commonwealth Bank. Provision is also made to ensure that they shall be under the control of the bank ; and I think that it is quite certain that they will be officers of the bank.
Clause agreed to.
Clause 15 (Fair compensation to be paid for shares compulsorily acquired).
.- This is a very important clause. Under the Constitution, special provision is made for just and fair compensation to be paid for the assets which the Government is preparing to take over; but certain aspects should be brought to the notice of the committee. The assessment of just compensation and the making of the payment are to be fixed subsequently to the shares having been acquired. In the interim, such shareholders wall not, apparently, have the full use of either the shares, money or bonds payable in that consideration. It would appear to be necessary to make some provision to preclude hardship arising in the event of the time lag between the acquisition and the payment of compensation being considerable. It may be some considerable time before the compensation is determined, and during that period, the capital, which it is said amounts to approximately £100,000,000, will be lying dormant and not earning anything for the individuals who are the shareholders of the private banks. 1 also point out that the bill does not set out the sources of Commonwealth Bank funds to bc used for this purpose, which, it is estimated, will amount to, approximately, £100,000,000. That money is to be expended without the Parliament being consulted about the sources, or method, of finance to be employed or the propriety of such expenditure, and without the Parliament having an opportunity to express its views as to the likely effect of different methods of financing the acquisition. There is a danger that the executive government may expend the people’s money, directly or indirectly, through its instrumentality, the Commonwealth Bank, without the characteristic safeguard employed in all democracies of placing the details of any such expenditure before the people’s representatives for discussion and review in the parliamentary forum. Government by regulation has now extended far beyond mere physical control, and has become a form of government interference.
The budget did not provide for an appropriation of revenue to carry out the purpose of this measure, nor did the loan estimates contain any provision to meet the expenditure involved. The position, therefore, i3 that the public knows nothing of the method of financing the huge transactions involved, apart from a statement made by the Prime Minister (Mr. Chifley), which has not been incorporated in any statute, that the purchase of the private banks is to be financed from the resources of the Commonwealth Bank. What is the nature of the resources of the Commonwealth Bank? Can they comprise anything but money entrusted to it for investment and safekeeping?
For the first time the Commonwealth Bank is to indulge in extensive investment in commercial securities other than governmental loans. This represents a fundamental change in the practice followed .by the Commonwealth Bank since its inception; a change which is to be made without consultation with the people whose money is to be used in this novel fashion. This procedure offers unlimited possibilities to a government which is anxious to avoid the gamut of parliamentary discussion; indeed, it opens the way to serious concealment of transactions in public finance, and in Government administration. Budget* will become nothing more than a mere presentation of such financial activities as the Government wishes to be made public. My contention acquires more force, when one realizes that the method of presenting the accounts of the Commonwealth Bank is not such as to reveal clearly the nature of the financial activities which it has undertaken on behalf of the Government. For example, it does not disclose the purchases of private bank shares which have already been made by the Commonwealth Bank. Since the Government’s proposal represents an entirely new departure, ] think that the Minister for Health (Senator McKenna) should furnish some explanation as to the exam method which is to be employed in the purchase of the stocks of trading banks, and that he should give an assurance that details of such transactions shall be shown in the statement of the activities of the general hanking division of the Commonwealth Bank.
.- The Leader of the Opposition (Senator Cooper) raised two points. First, he referred to possible difficulties in which shareholders may find themselves after their shares have been acquired and before they have been compensated. However, that position has been completely provided for by the Government, and if the honorable senator will refer to Part VI. of the bill he will find that it contains an elaborate set of clauses which specifically provide that a shareholder’s equity is to be regarded as an assignable asset. Shareholders will be able to dispose of their equities on the stock exchanges, or in any way in. which shares could be disposed of on the stock exchanges. A series of clauses commencing with clause 37 covers the matter raised by the Leader of the Opposition.
The other point raised by the Leader of the Opposition concerns the fund which will be required to pay out the shareholders of private trading banks. The assets of those banks aggregate approximately £900,000,000 in value, but they have liabilities of approximately £800,000,000. Those liabilities must also be taken over by the Commonwealth Bank as part of the businesses acquired, which means that the purchaser, the Commonwealth Bank, will have to find the remaining £100,000,000. I have already indicated that at the 30th June last, the Commonwealth Bank had assets in its general banking division totalling approximately £730,000,000, and approximately £440,000,000 in its saving bank department. In addition, we have the assurance of the Prime Minister (Mr. Chifley) that the bank will be able to finance the transactions involved from its own resources, so that there is no real mystery about the method of financing the acquisition of the private banks. The Commonwealth Bank has at its immediate disposal assets totalling much more than £1,100,000,000. Its balances show that at the 30th June last, gold and balances held abroad by the general trading department totalled approximately £186,000,000.
– That is gold and balances held on behalf of the trading banks.
– Not necessarily. Commonwealth Government securities held by the bank total approximately£470,000.000, whilst something less than £300,000,000 is held on behalf of the trading banks. If one completely disregarded the latter item, the Commonwealth Bank still holds assets of approximately £800,000,000. Having discussed the matter with the Governor of the Commonwealth Bank and the Prime Minister. I can assure honorable senators that that bank will not have the slightest difficulty in discharging its liabilities from its own resources.
Clause agreed to.
Clause 16 agreed to.
Clause 17 (Directors to retire from office).
– This is the beginning of a series of clauses dealing with the management of private banks, and includes provision for the retirement of the present directors of those banks. Subsequent clauses deal with the appointments to be made by the Governor and deal with the power to be exercised by the directors appointed. Clause 17 does not contain any provision as to how the emoluments to be paid to the retiring directors shall be determined ; that is to be decided by a single judge of the court of appeal, and not by the full court. Again the maximum sum which a judge may award is mentioned, but no minimum sum is prescribed.
Question put -
That the clause stand as printed.
The committee divided. (The Chairman - Senator T. M. Nicholls.)
Question so resolved in the affirmative.
Clause agreed to.
Clause 18 (Appointment of directors).
– This cause deals with the appointment of new directors of a trading bank after it has been acquired. It provides that the Governor of the Commonwealth Bank may appoint a new board of directors, and I regret the fact that no provision is made for the possession of any particular qualifications by the persons to be so appointed. No provision is made for consulting with such private shareholders as may remain, despite the fact that they may continue to have a considerable equity in the bank’s property. Any person may be appointed, irrespective of his capacity to manage responsibly the moneys entrusted to the bank by the people. In this connexion it is well to remember that instead of appointing to the Commonwealth Bank Board men with long practical experience in industry and commerce, the present Government appointed men such as Dr. Coombs, who may be an excellent civil servant but who has nothing but a theoretical knowledge of banking and business. Other appointments have been made on somewhat similar lines. I ask the Minister to indicate whether the Government means to insist that the men who are appointed to these very responsible positions, which call for considerable experience, will be men with experience in the banking world.
– The intention of this clause is to enable the Governor of the Commonwealth Bank, and nobody else, to initiate the appointment of these directors of Australian private banks. The clause provides that the Governor of the Commonwealth Bank may, with the approval of the Treasurer, appoint directors of an Australian private bank. The honorable senator will see that the Governor must initiate these appointments first, and he must get the approval of the Treasurer second. The initiation does not rest with the Treasurer; he may merely approve or disapprove. The Governor makes the selection. Quite certainly the position will be that the Governor will select his own officers and it may be that he will retain one or more of the existing directors of the private banks to preserve liaison or some continuity for the time being. T can assure the committee that it can rely upon the Governor of the bank to do what is in the best interest of banking and not of anything else.
– I accept the explanation of the Minister that the Governor of the Commonwealth Bank can be relied upon to exercise a wise discretion in the appointment of these directors, but I ask whether it would be practicable and possible for the Treasurer of the day, by a process of veto, to have his own nominees put on the board, although the initiation is left in the hands of the Governor.
– The answer to that would be, technically, “ Yes “ and, practically, “ No “.
– There seems to be no minimum or maximum number of directors laid down in the bill, and no provision regarding dismissal, retirement, remuneration or length of service. Will the Minister give me some information on those matters?
– The number is not indicated. That is left entirely to the discretion of the Commonwealth Bank. There is certainly no particular provision for removal. The reason for that is that the power to appoint, under the Acts Interpretation Act, includes the power to remove. Therefore, the Governor of the bank would have the power to remove directors who were so appointed.
Clause agreed to.
Clauses 19 to 22 agreed to.
Clause 23 (Provisions with respect to taxation).
Senator O’SULLIVAN (Queensland) [9.50 1 . - I understand that the Prime Minister (Mr. Chifley), in introducing the bill in the House of Representatives, said, in dealing with the taxation concessions - and, they are clearly referred to a,? concessions - applicable to those who voluntarily surrendered their rights to the Government, that such concessions would not be available to those who resisted the Government. The words he used were - lt is further provided that shareholders nf the hank will lie exempt from taxation on any dividend nr distribution which directly results from the payment received from the Commonwealth Bank under the agreement. These concessions will not apply in the <;n<e of a compulsory acquisition.
T ask the Minister for Health (Senator McKenna) whether the position is such that, regardless of any anomaly or alleged anomaly, the procedure will be that, where businesses have been voluntarily acquired, the banks concerned will not be subject to any taxation arising out of or incidental to that transaction, and that banks in all respects similarly situated. who may resist this grab by the Commonwealth, will not enjoy the same concessions as are given to those who acquiesce.
– The simple answer to that question is, “ Yes “, but T feel I owe it to the honorable senator to go a little farther. I take it we are agreed that the eight Australian trading banks are outside the scope of this particular clause. I assume there is no contest between us on that point.
– I do not concede that.
– Clause 23 provides -
Notwithstanding anything contained in ;i ny other Act, but. subject; to this section, where an agreement has been made under the last preceding section, there shall nut he taken into account for thu purpose of any Act imposing a tas upon incomes or profits . . .
And then it refers to certain amounts of compensation. Clause 22 deals solely, as the honorable senator will see, both according to its terms and according to the heading immediately above it, with the taking over of the businesses of the private banks. In the case of the Australian private trading banks, what will happen will be that their shares will he acquired. That is not the acquisition of » business; that is the acquisition of shares from private individuals and not the acquisition of assets from a bank. Therefore, the eight private trading banks in Australia are altogether outside the scope of clause 23, which contains the taxation concessions.
We come now to the remaining banks, namely, the three English banks - those with directors, shareholders and share registers in England. They are the Bank of Australasia Limited, the English, Scottish and Australian Bank Limited and. the Union Bank of Australia Limited. If any of these banks make a voluntary agreement with the Commonwealth, those which do so will receive the benefit of the taxation concessions, but those which do not will not receive such benefit. What is involved in that? As T pointed out last night, profit arising from the sale of capital assets is not taxable. Therefore on the acquisition of assets, such as land, plant, equipment. &c, whether acquired voluntarily or compulsorily, any profits made would, in any event, not he taxable. That disposes of a great portion of the compensation to be paid, whether the acquisition proceeds voluntarily or compulsorily. That narrows the field to a very limited class. Three types of case are covered. Profits on the sale of trading stock would be taxable, and trading stock would be. as I previously indicated, where a bank had bought securities for the. purpose of resale. As to the taxation depreciated value of assets, if an amount was received for those assets in excess of that depreciated value, that would be profit, and that would be taxable. As I also indicated, difficult questions arise with regard to accrued interest.
Because of the time f aci or and the difficulty of assessing with accuracy the amount of compensation involved in these dealings, it was realized that if it was necessary to wait until all factors were known, all accounts prepared and proper assessments made by :he taxation authorities, people who wanted to make a voluntary arrangement would be delayed for an unconscionable time in the settlement of their transactions. It was realized that tha: would militate against speedy negotiation, and accordingly that concession has been made available for consideration by those banks which, agree to negotiate for the voluntary transfer of their assets. It is simply a factor that will facilitate and speed up negotiations. I venture to say that all that will happen will be that the parties will look at the position and will make some broad determination about the amount of tax that otherwise would he involved, and they will have regard to that factor in assessing the compensation upon which they are prepared to agree. That is the main purpose.
This is confined to the English banks, and is confined to a very limited part of their compensation in any event. Where section 23 applies, it simply has the effect of putting the shareholders of the English banks which come in voluntarily into exactly the same position as the shareholders of the Australian private trading banks which are already outside the scope of the clause we are considering. Is there anything further upon which the honorable senator would like information?
– I am substantially influenced by the remarks made by the Prime Minister (Mr. Chifley) in introducing the bill. He said that if a private bank entered into a voluntary agreement for the acquisition of its business by the Commonwealth Bank it would be entitled to receive exemption from taxation on compensation paid to it in pursuance of the agreement. That has nothing to do with shareholders. I presume the Prime Minister meant what he said when he said that. There arc really four ways in which the Commonwealth Bank can acquire the businesses of the banks referred to in the schedule. It can proceed by way of voluntary acquisition of the shares, compulsory acquisition of the shares, voluntarily acquisition and disposition of the business and compulsory acquisition and disposition of the business. What I want from the Minister is an admission or a denial that in the event of a bank refusing to negotiate with the Commonwealth, it will be denied the concessions that will be extended to those banks which agree to negotiate with the Government. The Minister has said that in respect of Australian banks it is intended that the shares, but not the businesses, shall be acquired. That may be so, but my point is that, in the ‘bill as drafted, there is no obligation on the Commonwealth Bank to proceed along those lines. There are no assurances. On the contrary, there is every indication that if a bank “ plays ball “ it will receive concessions and considerations which will be denied to banks which fight for their rights. It is all very well to say that the Commonwealth Bank will acquire the shares, but not the businesses of the private banks, but the clause makes it clear that those who fight will be unfairly discriminated against, whereas those who “ go quietly “ will be granted concessions. If the Minister will give assurances that all Australian banks will be put on the same footing, whether they act voluntarily or are compelled to do certain things, and will be given the same taxation consideration, I shall be happy. I do not want the Minister to indulge in an interesting discourse in which he tells us there are shareholders in both England and Australia, and that some banks are incor porated in one country and others in other countries. I want to know whether the same taxation concessions will be given to banks which resist as will be conceded to those who “ go quietly “.
– I can, in effect, only repeat what I have already said. I certainly am not prepared to commit the Commonwealth Bank to a statement made here that it will proceed by the acquisition of shares only in respect of the Australian private banks. Having regard to the physical difficulties of taking over assets, assessing liabilities, &c., it is my belief that that is the obvious course which would suggest itself to the bank - to acquire shares and to move into possession by the simple expedient of becoming all the shareholders and all the directors. I think that the position to which the honorable senator is seeking to pin me down will, in fact, not arise. As I do not wish to be evasive, I say to him that, if the other procedure were adopted and the Commonwealth Bank were to proceed by the acquisition of businesses of Australian private trading banks, unquestionably clause 23 would apply, for the good reason that I have already given. It would be confined to a narrow field. Even supposing that the whole of the banks resisted, and that their assets had to be acquired compulsorily, any profit made on the taking over of their capital assets would he exempt from taxation and would not be touched. We get back to the three fairly narrow fields that I indicated. In respect of banks which come in voluntarily, the purpose is, as I explained, simply to smooth the way for negotiations to speed up matters in the interests of shareholders.
Question put -
That the clause stand as printed.
The committee divided. (The Chairman - Senator T. M. Nicholls.)
Question so resolved in the affirmative.
Clause agreed to.
Clause 24 agreed to.
Clause 25 (Fair compensation to be paid for property compulsorily acquired) .
– Will this clause have any different effect from the provisions of section 51 (xxxi.) of the Constitution in regard to a fair price?
Clause agreed to.
Clause 26 (Federal Court of Claims).
.- The establishment of a Federal Court of Claims should be the subject of separate legislation. This bill deals with hanking, whereas the matter of setting up a special federal court, which would probably have to do other work besides settling claims in respect of banking, should be brought in under separate legislation. The proposed court need not necessarily be associated with the nationalization of banking. In view of its permanent nature, there is every foundation for the contention that its establishment should be the subject of a separate bill. I ask the Minister whether the new court would be fully occupied with matters of compensation arising from the nationalization of banking and/or other industries. Does its establishment as a permanent and continuing body foreshadow impending moves for the nationalization of other sections of industry in Australia? In the past there have been many claims for compensation and decisions in regard to them have been made without undue delay. There are different courts in existence to deal with compensation matters. So far as I know, no request has been made by the Attorney-General (Dr. Evatt) for an extra court to be set up to deal with the additional work associated with compensation matters. It seems to be unnecessary to establish this court permanently merely to deal with matters of compensation in respect of the taking over of the trading hanks. I admit that a big and difficult job lies ahead of the court, but if it is to be established as a permanent court, it would appear that it will have other work to do besides the settlement of claims arising out of the nationalization of the banks.
– It is true that a court of claims might have been set up under separate legislation, but it was convenient to do it in this bill because such large sums of compensation are involved. I say specifically to the Leader of the Opposition (Senator Cooper) that there will be full-time work for the court . There are a great many claims against the Commonwealth for compensation under various acts. The need for a special court has been long felt, and its establishment has been considered for some time. Similar steps have been taken in both Canada and the United States of America. We believe that there will be enough work to keep at least one judge going full time. Under clauses 28 and 29, judges of other Federal courts or State courts may be appointed to this body. Last night I gave an instance of a judge acting in two jurisdictions - the Arbitration Court and the High Court. So, it is quite conceivable that this proposal will not mean the appointment of a number of new judges. The Leader of the Opposition implied, in the course of his remarks, that this court was being set up to deal with this nationalization project and whatever others came along. I assure him specifically that the Government has no other proposals in mind of that nature.
– I view with grave apprehension the setting up of a Federal Court of Claims. Exactly what its status will be in comparison to that of the High Court has not been indicated, Jet alone clarified. Certainly the qualifications necessary for appointment are set out clearly, but the manner in which the court will work in relation to the High Court is something on which I should like some further information. In view of recent developments, we should not be alive to our responsibilities if we did not guard very jealously the status and dignity of our courts. In the House of Representatives, an honorable member occupying a responsible position has used the cover of parliamentary privilege to make a most unwarranted attack on the High Court. Another, the Minister for Transport (Mr. Ward), is reported in the Sydney Daily Telegraph, of the 30th June as having said-
– Order! The honorable senator is not entitled to refer to anything that took place in the House of Representatives.
– The remarks to which I wish to refer were made in the Sydney Domain at an Australian Labour party rally. The Minister said that, although the Government could not put the present judges of the High Court out of office, it could add to the bench men sympathetic to the people. That reported statement has not been repudiated by the Prime Minister (Mr. Chifley), or by any one else on behalf of the Government.
– Did the honorable senator not hear a repudiation last night?
– I have heard several dignified statements by the Minister for Health (Senator McKenna) of his own attitude and that of his Government towards the judges of the High Court and the institution of the High Court, but we cannot lose sight of the fact that certain men still occupy responsible positions in the Government after having made unwarranted attacks upon the institution and the personnel of the High Court. Glad as we were to hear the statements by the Minister for Health, we are still rather uneasy when we know that men are able to express- the mo%t reprehensible views about our judiciary. rand . still retain their responsible” positions in the Government.
I should like a further explanation of why the Federal Court of Claims is being constituted. From recollection, section 71 of the Constitution provides that the High Court shall consist of a chief justice, and such other justices in number as the Parliament may determine. Parliament may, therefore, create whatever number of justices of the High Court, it may believe to be necessary. Subsequent provisions of the Constitution deal with the jurisdiction of the justices of the High Court, and I challenge the Minister to say that, it is not competent for them, exercising their original jurisdiction, to entertain any claim that may arise under this legislation.
– What i3 the honorable senator afraid of?
– I am afraid of the possibility that the advice of a man like the Speaker of the House of Representatives (Mr. Rosevear), or the Minister for Transport will be heeded by the Government when considering the appointment of judges. I do not know what influence they wield, but they occupy responsible positions. I cannot see any necessity for the creation of another court when, under the Constitution, the High Court vested with all the jurisdiction necessary to entertain any claims that may be made under this measure. I point out, too, that whereas decisions of th, High Court, exercising its original jurisdiction. are subject to appeal, this measure does not contemplate any appeal from the Federal Court of Claims. T urge the Minister to allay whatever misgivings may be abroad by stating the full reasons for the constitution of this court, and explaining why the personnel of th, High Court could not be increased for the purposes of this measure.
– Again I announce that I am not prepared to follow Senator O’Sullivan’s track all the way. On this occasion, I do not propose to pursue him to the Sydney Domain, nor do I intend to deal with newspaper accounts of what is supposed to have taken place there. It is clear that the court provided for in this bill will be a specialist court. There is a special field of law relating to the assessment of compensation. Compensation cases usually involve a great deal of technical evidence, and when it comes to the assessment of compensation for the banks, because of the colossal nature of the undertakings, the matters to be considered will be technical to a high degree. The hearings will require a great deal of time. The court will have to consider claims by directors and by shareholders, and I am sure that Senator O’Sullivan will appreciate that this type of work is not suitable for decision by the High Court. It is not a question of the competency of that court. It has ample competency, but I assure the honorable senator that it would not have the time. The High Court is better occupied in higher spheres of legal jurisprudence than in worrying about assessing compensation for assets. That is a matter that can be determined at a different level and in a different sphere. Otherwise, the High Court would be completely cluttered up with cases of that kind. The appointment of a Federal Court of Claims is completely in line with modern developments, and whilst I concede that the High Court has all the jurisdiction that any court in Australia would need, the Constitution provides that there shall be a High Court and such other Federal courts as the Parliament determines. Strictly in accordance with the Constitution, and in the light of modern practice, the Parliament is determining that there shall be a new court with a distinct and separate function to perform in the community. It will have no relation to the High Court. Because of the importance of the compensation claims that will be made under this legislation, it was deemed desirable to have three judges so that there could he no suggestion that a judge who might possibly be deemed to be partial had been selected. I repeat that there is no need to appoint three or four additional justices. It may even be possible and practicable to utilise the services of judges in present federal jurisdictions.
I expressed myself very strongly last nighton the question of “stacking” the High Court. Senator O’Sullivan knows what I said then on my own behalf and also on behalf of the Government, and I do not propose to repeat it now.
Question put -
That the clause stand as printed.
The committee divided. (The Chairman - Senator T. M. Nicholls.)
Majority . . . . 26
Question so resolved in the affirmative.
Clause agreed to.
Clauses 27 to 32 agreed to.
Clause 33- (1.) The Court shall have jurisdiction to hear and determine claims for compensation arising under this Act.
– I move -
That, at the end of the clause, the following sub-clauses be added : - “ (6.) Where the members of the Court are divided in opinion on any question, the question shall be decided according to the decision of the majority, if there is a majority, but if the members of the Court are equally divided in opinion the question shall be decided according to the opinion of the Chief Judge, or, if the ChiefJudge is nota member of the Court or there is a vacancy in the office of Chief Judge, according to the opinion of the next senior Judge present. “ (7.) For the purposes of the last preceding sub-section. the Judges of the Court shall have seniority according to the dates of their commissions.”.
I suggest that the proposed new subclauses are comparatively formal. In the absence of such provision, it would be necessary in the case of three judges to have them all in agreement. It may not be that only three judges will be appointed. It is practicable that four may be appointed ; and it is necessary to resolve the position in the event of their being equally divided. Proposed new subclause 7 is consequential. These new provisions are not matters of great moment, but are designed to implement the easy functioning of the court.
Amendment agreed to.
– I should like some information on the clause as amended. Is it intended that the court shall exercise exclusive jurisdiction with respect to claims for compensation? “Will any discrimination be exercised against claimants who consider that they have a right to make their claims under section 76 of the Constitution, that is, in the original jurisdiction of the High Court?
– There is no cause for any discrimination ; but it is proposed that claims for compensation arising under this bill must go to this particular court.
– It is intended to be exclusive?
– Yes, regarding claims arising under this bill, or any other acts that are nominated in this respect by the Governor-General.
Clause, as amended, agreed to.
A judgment of the Court - («-) shall be final and conclusive;
– I move -
That, at the end of the clause, the following sub-clause be added: - (2.) A judgment or order of the Court shall be enforceable as if it were a judgment or order. of the High Court.”.
Lt was proposed to leave this matter for determination by Rules of Courts provided for under clause 36, but the Government believes that it is better to elevate this provision to a substantive provision of the bill itself. Every one will recognize the need for this provision. In short, the regulation - making power of the judges has been elevated to the dignity of a separate clause.
Amendment, agreed to.
– This clause is most arbitrary, because it closes to claimants under this legislation every avenue of appeal. It is quite an innovation in a democratic country to disallow any appeal against a decision of a court of this kind. Undoubtedly, the three judges who will be appointed to constitute the Federal Court of Claims will be fully qualified individually. I do not question their honesty of purpose, integrity or knowledge; but even with three judges an injustice may sometimes be done. Therefore, provision should- be made for appeal. The Government may have some very definite reason for this provision, which denies common justice to possible claimants under the measure. I should like to know why this arbitrary provision is made.
– It is believed that the appointment of at least three judges to handle these claims will be a sufficient safeguard to the parties. It is consistent with the creation of a court especially to deal with these claims for compensation that such a. court should be able to deal with claims finally and without appeal. Another element, which is not a major one, is that because of the court’s very habit of being consistent, especially a court of this nature, it will be able to apply its principles more consistently than one which deals with its subject-matters only intermittently. The tendency is to eliminate appeals from specialist courts. For instance, when amending the Commonwealth Conciliation and Arbitration Act recently, the Government took very definite steps to obliterate any question of appeal to the High Court from decisions of the Arbitration Court. I believe that it is reasonable that the decisions of a body set up for a special purpose and staffed by men with special qualifications should not be subject to appeal when the number of judges constituting the court is sufficient safeguard of the interests of the parties.
– I admit that there is some substance in the proposition that appeals from specialist courts should not be encouraged ; but the relevancy of that principle varies having regard to the particular specialty. However, in all circumstances, the general underlying principle inherent in the right of appeal to the highest court of the land on questions of law should be preserved. The proposition advanced by the Minister for Health (Senator McKenna) could, in substance be given effect, and, at the same time, provision could, and should, be made for the right of appeal in respect of questions of law. It is quite conceivable that judges in the first instance might wrongly advise themselves on a vital principle of law, and in such an event the litigants should have the right - it is not a privilege - embodied in this legislation of appeal on matters of law to the highest court of the land, the High Court.
Question put -
That the clause, as amended, be agreed to.
The committee divided. (The Chairman - Senator T. M. NlCHOLLS.)
Majority . . . . 23
Question so resolved in the affirmative.
Clauses 35 to 38 agreed to.
Clause 39 (Notification of interests in compensation) .
– This clause provides that claims must be lodged within a period of two months after the shares have become vested in the Commonwealth Bank. It would appear that, in the case of overseas claimants at least, the time proposed to be allowed is too short and that some longer period should be provided.
. -This matter was carefully considered by the Government, and, having regard to the widespread publicity given to the measure, the Government believes that limitation of the period in which notice of claims for compensation must be lodged to two months will not impose any real hardship. Every one is watching with interest the progress of the measure through Parliament, and will follow, with equal interest, the course of the subsequent litigation. Because of that, shareholders at home and abroad will have ample notice of the Government’s intention. I also point out that holders of shares in trading banks will be automatically recorded as such in the compensation register as soon as the acquisition of the shares of a particular trading bank takes place. This clause really applies to people who have an interest in shares in a hank acquired by the Commonwealth Bank, apart from the registered holders of the shares.
– “What is the position with regard to persons who are unable, for good reason, to prosecute their claims within the times specified, such as, for example, persons involved in litigation in regard to the ownership of bank shares?
– They would still be able to appeal to the Federal Court of Claims, and will be subject to any order which that court may make in the distribution of compensation. Special provision is made in another clause of the bill to deal with such matters.
Clause agreed to.
Clause 40 (Payment of compensation).
– It would appear that where shareholders of a trading bank make an agreement with the Commonwealth Bank on the amount of compensation to be paid to them, notwithstanding the fact that any such agreement is concluded voluntarily by the parties, the Treasurer may intervene and insist upon the matter being referred to the Federal Court of Claims. Apparently the Government can ensure that in all cases the amount of compensation to be paid shall be determined by the court, although the parties concerned agree between themselves on the amount of compensation to be paid. The power of the Treasurer would appear to extend even to upsetting a voluntary agreement made between contracting parties. Furthermore, the court is empowered, not only to determine the amount of compensation to be paid, but also to fix the basis of determination of the amount to be “ distributed between shareholders, including determination of the actual amount to be paid to each shareholder. I should be glad if the Minister would furnish some explanation of this provision.
– I understand that the Leader of the Opposition objects to this clause on the ground that it provides that any agreements made for the payment of compensation are subject to review by the Treasurer. However, that is a perfectly normal procedure and is intended to protect the public revenues by preventing the making of unconscionable agreements.
– That, means that an agreement entered into- voluntarily byparties can be upset by the court?
– Yes. However, in practice, I should imagine that there will be very little intervention by the Treasurer, ‘whose approval of transactions will be something in the nature of a formality. This provision has been included to protect the revenue, and also to prevent people being defrauded. For that reason I should have imagined that it would have received the support of the Leader of the Opposition.
– Sub-clause 5 of clause 40 provides -
The amount, of compensation payable, and the amount payable to each person, shall be determined by the court and not in any other manner and “ payment shall be made accordingly.
Evidently the court is to be empowered not only to determine the amount of com pensation to be paid to the company concerned, but also to fix the basis on which compensation is to be paid to individual shareholders. 1 should appreciate some elucidation of this provision.
– Where there are intervening claims the matter will become one for determination by the court. One person may claim to have an equitable interest in another’s shares or in the proceeds of another’s shares. Where a person gives’ notice of claim that notice will be recorded in the compensation register. Sub-clause 4 provides -
Where a notice is given under the last preceding section in relation to any shares, the persons entitled to payment of compensation in respect of the acquisition of those shares shall be determined by the court and not in any other manner.
That is simply a safeguard to protect the interests of those who hold shares or interests in shares.
Clause agreed to.
Clauses 41 to 43 agreed to.
Clause 44 (Settlement, of compensation by the court).
– This clause deals with the settlement of compensation by the court, and it seems to me to be an extremely unfair one. Sub-clause 3 provides -
Where a notice under sub-section ( 1 . ) of this section is served on a private bank, the notice shall be deemed to be an offer made by the Commonwealth Bank to pay the amount of compensation specified in the notice iti full satisfaction of the claim and unless, within two months after service of the notice, the private bank requires the Commonwealth Bank, by notice served on the Commonwealth Bank, to refer the claim to the court, that offer shall lie deemed to have been accepted by the private hank and compensation shall be payable to the private bank by the Commonwealth Bank according to the tenor of the notice.
In such a highly complicated matter as the determination of the reasonableness or otherwise of an offer made for the purchase of a large bank, a period of two months is far too short. The provision in respect of the period of acceptance to be given to the private banks contrasts strangely with the time allowed to the Commonwealth Bank, namely, six months, to decide whether it will accept offers made to it by trading banks. The discrimination seems so extraordinary that 1 shall be glad to have an explanation by the Government.
– The Government believes that any private bank will have a clear knowledge of the value of its assets. All private banks have had ample notice of what is to happen, and I am perfectly pertain that the directors of those banks already have a nice appreciation of the value of their assets, and the amount which they contend should be paid to them by way of compensation. After all, the matter of compensation is to be the subject of discussion between the Governor of the Commonwealth Bank and the directors of trading banks, and every avenue of settlement will be explored. I have no doubt that the Commonwealth Bank will act fairly, a.nd that when it makes an offer to acquire the business of a private bank it will do so only after examination of the books of the bank concerned. That bank will have had ample warning, and when it receives an offer from the Commonwealth Bank it will not be obliged to accept: or reject it within two months. This provision really means that if a private bank does not accept an offer made to it by the Commonwealth Bank within two months it must refer the matter to the Federal Court of Claims within that period. This is really a right conferred upon the private bank to require the Commonwealth Bank to act if it does not move within six months. Therefore, the second provision referred to by the honorable senator is in favour of the private bank rather than against it. Sub-clause 4 provides -
If a notice under sub-section (1.) of this section is not served on the private bank within six months after it makes a claim under the last preceding section, the private hank may, by notice served on the Commonwealth Bank, require the Commonwealth Bank to refer the claim to the Court.
Tt confers a right upon the private bank to oblige the Commonwealth Bank either to move and make that offer, giving itself two months in which to consider it, or, alternatively, to refer the claim to the court. I say that those provisions are reasonable and adequate.
Clause agreed to.
Clause 45 agreed to.
Clause 46 (Prohibition of banking business by private banks).
– This clause is designed to achieve the prohibition of private ‘banking within Australia, including the possible formation of new banks in the years to come. It appears to me to’ .lie a very severe clause, because it gives full power to the Treasurer to require any private bank to cease trading upon any date specified by him, while at the same time requiring the same bank to continue a full banking service up to the date on which it must cease to operate. The clause places in the hands of one man an unqualified power to prohibit any free enterprise at any time in the sphere of banking operations, by trading banks other than State banks. The establishment of new private banks would be conditional upon a licence being granted by the Treasurer as set out in clause 7 of the Banking Act of 1945.
This clause places a most powerful weapon in the hands of the Government with which to force nationalization of the trading banks should other methods of acquisition set out in the bill fail. Every precaution seems to have been taken to ensure that there shall be no loophole which might allow this nationalization scheme to fail. In the event of the other methods failing it will be simple for the Treasurer to notify ,a trading bank that it must cease operations upon a certain date. By clause 12, the Commonwealth Bank is empowered to offer any price at all .for the acquisition of the shareholding of a bank, and by clause 22 (5) it is empowered to make agreements with private banks for the taking over of their businesses in Australia. Faced with the prohibition of its business operations, a private bank would be impelled to come to an agreement with the Commonwealth Bank for the sale of its business or its shareholding to that bank in an endeavour to save the value of its assets and business goodwill, and thus it would be nationalized through the operation of this clause. Perhaps the
Minister will be good enough to offer some explanation of the reasons why this clause is included.
– I am cheered to hear the Leader of the Opposition express the view that no loopholes have been left in this bill from the legal viewpoint. I can only hope that the High Court of Australia will be in agreement with him at the conclusion of the litigation now pending.
It is, of course, the view of the Commonwealth Government - and there is no disguising this - that private banking should be prohibited in the interests of the national bank it is proposed to create. We have explained that very fully and no attempt has been made in the bill to disguise that purpose. In fact, if one refers back lo clause 3, where the objects of the bill are set out, one sees that one of the objects is the prohibition of the carrying on of banking business in Australia by private banks. There is no disguising the fact that the Treasurer may, pursuant to this bill, give notice to a bank to cease trading. It is also true that the bill imposes upon those banks whose shares are acquired in particular an obligation to continue their business until such time as directors are appointed to supplant their own directors or until their business is eventually sold out to the Commonwealth Bank. The Treasurer, however, no matter whoever it is who is holding office at the time, must take a very responsible view of his position and must act in a responsible manner because he is accountable immediately to the Government and to the Parliament.
Clause agreed to.
Clause 47 - (I.) For the purposes of this Part there -hall he. in respect of each private bank, a committee consisting of - («) a person who is, or is qualified to be, a Judge of the Court, who shall be appointed by the Treasurer and shall bc the chairman of the committee : (ft) an officer of the Commonwealth Bank, who shall be appointed by the Governor of the Commonwealth Bank: and
– The committee that is to be set up will consist of three members, but there is no assurance given that there will be proper representation of the staffs of the trading banks. The chairman and one member of the committee of three cannot be a trading bank employee, and there is no guarantee whatever in paragraph c of sub-clause 1 that the person appointed to represent the trading bank employees will ever have been employed by a trading bank or that he will be in any way familiar with their interests.
The jurisdiction of this committee is confined merely to three conditions of employment, sick leave, long service leave and retiring benefits. Significant omissions include house- allowances and a wide range of other amenities of great material advantage at present afforded to officers. The protection afforded by the bill is confined to the three matters I have mentioned, and to salary, which appears to be defined and used in its narrowest sense. In many cases of trading bank officers the distinction between, for example, a manager and an officer one rank below, lies in the fact that the manager’s real income is built up as a result of house allowances, &c. It has been generally conceded that those who represent employees should have had some knowledge of the difficulties encountered and the general service conditions enjoyed by those they represent. I think that this paragraph c would be very much improved if an amendment were made to it. Accordingly, I move -
That, in sub-clause (l.j. paragraph (c). after the word “ prescribed’ “. the” following words be inserted : - “ by a majority of the persons who are, at the commencement of thi* Act, employed bv that private bank in Australia.”
The Minister will probably agree with me that that will ensure that the representations of employees shall be improved and made more secure. At the present time this individual is merely appointed, and those he is to represent have no say at all in who shall be elected. The individual appointed may have no knowledge at all of the class of work performed by those he is representing.
– The amendment proposed by the Leader of the Opposition is completely in Une with Government thought on this matter. It is intended that this committee shall consist of three persons, the first two being a judge, or person qualified to be a judge, who will be appointed by the Treasurer, and an officer of the Commonwealth Bank. It is intended that the third person shall be an employee of the private bank concerned. We do not want to lay it down rigidly that it shall be an employee of the private bank for the reason that it might work an injustice to those persons. They might like to select somebody outside their immediate field to represent them and we do not want to negative that. We are completely happy with the thought that they will have a say, and the intention is to provide for it in the regulations. That is why it has been expressed in this way - “ A person who shall be appointed as prescribed “ - that will be as prescribed by regulation - “ and shall represent the persons who are or who have been employed by that private bank “.
There is no doubt at all about the intention of the bill as it is drafted at the moment; that person is to be the representative of those employees, past or present. The reason for leaving certain matters to regulation is to enable the employees to say whether they want one of their own number or someone outside - to determine the method that will be employed in selecting the person who is to be their representative. These are largely matters of detail and are better left to regulations. However, I give the honorable senator the assurance that whilst I should oppose a substantive amendment to the bill itself, the real intention of his amendment will be incorporated in the regulations.
– I appreciate the assurance given by the Minister, and ask leave to withdraw the amendment.
Amendment - by leave - withdrawn.
– I should like some information from the Minister in charge of the hill with regard to paragraph c of sub-clause 1, which limits the selection of a person to represent the employees of the private bank concerned. Is it the intention of the Government that thai person “must represent only one private bank or can banks collectively be represented by him?
– It is intended that there shall be a separate committee in respect of each bank. Clause 47 provides -
For the purposes of this Fart there shall bc, in respect of each private bank, a cornmittee ….
There would be nothing to prevent several hanks from coming together and agreeing upon a common representative on each of the committees, but I think that that would be an unwise proceeding because the conditions in the several banks differ. I agree with the Leader of the Opposition (Senator Cooper) that people who have knowledge of the conditions in each bank should be members of the committee. Although it is possible that one representative could be appointed to several committees, I doubt, that that would be desirable.
– I have with me a letter from the Civil Service Association of Western Australia asking whether it is possible for certain persons who had been employed by the private banks but have left their employ, and were contributors to superannuation funds conducted by the private banks, to get back moneys paid by them to such funds. They claim that they are entitled to a refund. The banks have been negotiating with the association on this subject for some time. The banks do not recognize any obligation to repay the contributions of men who left their employ to join the State bank before the 3rd September, 1939, but any bank officer who resigned from a private bank since then will be able to get back, as an ex gratia payment, moneys paid by him to a superannuation fund conducted by the banks. The Civil Service Association, acting on behalf of persons working for the State bank, fears that if the Australian Government takes over the whole of the assets of the private banks it will not be able to negotiate further with the private banks. As those persons have contributed to the fund, even though at the present time they are not employed by the private banks, they believe that they ‘have a moral right to something from the fund to which they contributed. I should like an assurance from the Minister for Health (Senator McKenna) that the Government will protect the interests of persons who have contributed to superannuation funds.
I have been requested by bank employees to ask for information as to whether it would be competent for a bank or its employees contributing to a superannuation or benefit fund to have that fund wound up on the taking over of the assets of the private bank? Would the committee consider any proposal on those lines as un alternative to the Government taking over the liabilities of the fund and permitting officers to participate in the benefits of the superannuation fund of the Commonwealth Bank, which may be superior? They ask whether it would be possible for those funds to be wound up, and for them to contribute to the Commonwealth Public Service Superannuation Fund by paying an amount, actuarily assessed, which would be the equivalent of their premium over the period of their service?
Senator McKENNA (Tasmania - Minister for Health and Minister for Social Services) *11.20’. - As to the first point raised by Senator Cooke, I express my sympathy with the idea that persons who had contributed to a bank superannuation fund should, on retirement, have refunded to them at least their contributions. If, on the case presented by the honorable senator, there are persons who, prior to the 3rd September, 1939, retired from the service of a bank, and did not receive back their contributions, and are now negotiating with the private banks for repayments, that would not be a common practice.
– They want interest on their contributions.
– If the claim is conceded they should be paid interest on the amount contributed by them. Subclause 4 of clause 47 will not cover that position. It permits something which has been the practice of the private banks, but it does npt confer legal enforceable rights in relation to such payments once the banks are taken over. We may find that bank officers are entitled to certain privileges as a matter of practice, even if not as a matter of right. Those practices will be preserved on a permanent and legally enforceable basis. That will not apply to the case presented by the honorable senator; it would be a matter for arrangement between the individual and the bank. Discussions could continue between the parties even if the Commonwealth Bank had taken over the assets of the private banks. Those banks would still be able to continue their negotiations with the persons concerned, and to do justice to them. The bill contains a provision whereby the Commonwealth Bank may take over liability for superannuation payments to private bank employees, and also a proportionate part of the provident fund. Those funds will be applied to the same purposes as when they were in the hands of the private banks. It will be competent for the transferred officers to contribute to the superannuation fund associated with the Commonwealth Bank.
– I should like some further clarification of the point that I have raised. Would it be possible for members of the staffs of the private banks to elect to have their fund wound up on the taking over of the banks, rather than continue such funds under existing conditions ?
. -On the taking over of the staffs of the private banks by the Commonwealth Bank their superannuation funds would come under the Commonwealth Bank. At present, private bank employees, who are the victims of circumstances which force them to resign, lose the whole of the amount^ paid by them into their superannuation funds. We do not want that to occur when the Commonwealth Bank takes them over. I understand that their superannuation rights will be preserved; that their period of employment with the private banks will be taken into consideration; that they will automatically enjoy the same conditions as employees of the Commonwealth Bank. They will not be liable to lose the moneys that they have paid in should they be forced to resign.
– In reply to Senator Cooke, I point out that there is no power to compel a private superannuation fund to be wound up and distributed. The Government has had to be careful that certain things do not happen. A man who will acquire pension rights under this legislation should pay to the Commonwealth Bank superannuation fund whatever amount he collects from the fund of the private bank that has been wound up. If the Government takes over the liability of the superannuation funds of the private banks, it should also take over the resources from which the trustees of those funds would have discharged that liability.
It is true that those who contribute to the superannuation fund of the Commonwealth Bank will enjoy benefits that they do not enjoy under the superannuation schemes of the private banks. All members have, if not legally enforceable rights, certain rights to therepayment of their contribution on retirement. I prefer to say that those who join the Commonwealth Bank will, generally, be in a better position than they would be under the private tradingbanks.
Clause agreed to.
Motion (by Senator Ashley) agreed to-
That the Senate, at its rising, adjourn to to-morrow, at2.30 p.m.
The following papers were pre sented : -
Arbitration (Public Service) Act - Determinations by the Arbitrator, Ac. - 1947 -
No. 88-Amalgamated Engineering Union, and others.
No. 89 - Commonwealth Postmasters’ Association.
Commonwealth Bank Act- Appointment - R. E. Pitman.
Commonwealth Public Service Act - Regulations - Statutory Rules 1947, No. 154 (Parliamentary Officers).
Defence (Transitional Provisions) Act - National Security (Shipping Coordination) Regulations - Orders - 1947, Nos. 48-56.
Regulations - Statutory Rules 1947, Nos. 157, 159.
Interim Forces Benefits Act - Regulations - Statutory Rules 1947, No. 156.
Lands Acquisition Act- Land acquired for Commonwealth office accommodation purposes - Melbourne, Victoria.
Meat Export Control Act - Regulations - Statutory Rules 1947, No. 160.
Re-establishment and Employment Act -
Regulations - Statutory Rules 1947, No. 155.
Senate adjourned at 11.29 p.m.
Cite as: Australia, Senate, Debates, 25 November 1947, viewed 22 October 2017, <http://historichansard.net/senate/1947/19471125_senate_18_195/>.