Senate
26 November 1947

18th Parliament · 1st Session

  1. Senate
  2. 18th Parliament
  3. 1947

The President (Senator the Hon. Gordon Brown) took the chair at 2.30 p.m., and read prayers.

page 2678

QUESTION

COAL

Senator ARNOLD:
NEW SOUTH WALES

– Has the attention of the Minister for Supply and Shippingbeen drawn to the scare headlines in the Sydney Daily Telegraph of to-day over a report thatcoal production in Australia is such that Victoria in particular is likely to have a transport hold-up? Is the position as set out in that newspaper? Is it true that Mr. Brown, who represents the Victorian Coal Commission, has authority to speak for this Government, and is it a fact that a statement is to be made this week?

Senator ASHLEY:
Minister for Supply and Shipping · NEW SOUTH WALES · ALP

– I have seen the statement in the Sydney Daily Telegraph and had the honorable senator not asked this question Ihad intended, with the concurrence of the Senate, to make a statement in regard to the matter. The report published in the Sydney Daily Telegraph is consistent with similar statements that have been made in other sections of the press for political propaganda purposes. As usual, the report has no foundation. It is another example of calamity howling in an endeavour to strike fear into the minds of the people merely to gain some political advantage. There is no intention to ration coal supplies in New SouthWales as the newspaper report implies, nor is it intended to reduce coal shipments to Victoria, South Australia and the other States. It is expected that the present high rate of production will be at least maintained. For instance, to-day there are only two mines idle, and that is typical of conditions on the coal-fields in recent weeks. I emphasize once again not only to members of the Senate, but also to the people generally, that not all stoppages in coal mines are due to industrial discontent. However, the newspapers seldom make any distinction between stoppages due to mechanical failuresin the mines and those due to industrial trouble. They just state that, say, seven or ten mines are idle, although in four or five instances the stoppages may be due not to discontent amongst the miners, but to mechanical breakdowns. The supplies of coal that will be forwarded to the other States as the result of the continued working of the mines will not be less than has been arranged. On the contrary, they will be increased where practicable. I am not averse to sections of the press exercising their right to criticise the Government on political matters, particularly when those attacks are as inept as the one referred to. However, I object strongly to the incorrect statements which they make regarding the work performed by industrial employees. The press, of course, pretends th at its real desire is to assist the production of coal, and to improve the lot of those engaged in the coal industry. Because of its profession of concern for the community it has never been backward in giving expression to its opinions as to the way in which the coal industry should be operated and as to the way in which the Government should manage its affairs generally. However, its criticism of the conduct of governmental business contrasts strangely with the fact that newspaper proprietors have : been unable to agree amongst themselves on such a simple matter as the rationing of newsprint consequent on the shortage of dollars. Although we read in the press day after day the gratuitous advice which they offer to the Government on the conduct of national affairs, I have not seen the slightest reference to the fact that newspaper proprietors cannot agree amongst themselves as to how rationing of newsprint shall be applied. Because of their disagreement they have had to refer the matter to the Government for determination. I mention that because newspaper proprietors and publishers are constantly disparaging the efforts of those engaged in the production of coal.

Senator SHEEHAN:
VICTORIA

– In view of the statement which the Minister for Supply and Shipping has just made, in which he pointed out that the efforts of those engaged in a vital industry are constantly being misrepresented, can the Minister inform me of any way by which the Government could place before the people the facts in regard to the press position? Does he not feel that the comments published in the press in the hope of bringing about the downfall of the Government may destroy the morale of Australians? Can any effective steps be taken to put an end to criticism of that kind ?

Senator ASHLEY:

– I cannot suggest any method by which publication of such comments could be prevented. I do not advocate the placing of any impediment in the way of the press, which is free to publish propaganda of any kind, but I do deplore the fact that, in its efforts to discredit the Government, it unfairly criticizes the workers in a particular industry and constantly maligns them. As I have already said, those are the very people who, when they are unable to solve their own problems, fall back upon the Government to solve them for them. Yet, they give advice daily to the Government as to how it should run the country. I shall ask the Prime Minister what steps can be taken to ensure that the facts shall be told. Nothing does more harm to our vital industries, such as the mining and waterfront industries, than the publication in the press of incorrect reports regarding them. The work of the coal-miner and waterside worker is most arduous, and is by no means pleasant. Indeed., the difficulty to-day is to attract sufficient man-power to those industries. While we are trying to encourage more men to enter those industries, sections of the daily press throughout Australia publish incorrect reports of the kind mentioned by the honorable senator. The duty of the press at all times should be to help benefit the nation. It should not attempt to disrupt industry.

page 2680

AUSTRALIAN NATIONAL UNIVERSITY BILL (No. 2) 1947

Assent reported.

page 2680

QUESTION

PETROL RATIONING

Senator AYLETT:
TASMANIA

– In view of the enormous quantity of petrol used in the operation of tourist buses throughout Australia, will the Minister for Supply and Shipping assure the Senate that should the petrol supply position become more acute, priority will be given to primary industries, business people and essential users of motor transport? For example, Ansett Airways Limited operate tourist buses on a very large scale. Will the Minister ensure that supplies now made available to essential users shall not be reduced while supplies are made available for tourist traffic?

Senator ASHLEY:
ALP

– The Government is giving serious consideration to the maintenance of adequate supplies of petrol. Next week, I expect to be able to make a statement setting out the Government’s decisions in the matter. Petrol is one of the commodities directly affected by the dollar shortage, and some survey of supplies must be made. I assure the honorable senator that the Government will continue as it has done in the past to ensure that the needs of primary industries and essential users shall be given priority in the distribution of petrol. However, I point out that many private cars are now being used by their owners to convey not only themselves but also other people to and from work; and in view of our present transport difficulties such motorists are making a. valuable contribution to the needs of the community. I mention that aspect simply to point out that it must not be overlooked in any review of the present position. The point made by the honorable senator dealing with tourist traffic will be fully considered in the survey which is now being conducted.

page 2680

QUESTION

TROPICAL MEDICINE AND MALARIA

Fourth International Congress

Senator O’SULLIVAN:
QUEENSLAND

asked the Minister for Health and Minister for Social Services, upon notice -

  1. Has the Government yet received from the United States of America an invitation to send a delegation to the Fourth International Congress on Tropical Medicine and Malaria at Washington next May?
  2. In view of the importance to Australian ex-servicemen, in particular, of having the advantage of the most modern methods of treatment, will the Minister ensure that Australia is adequately represented?
Senator McKENNA:
Minister for Health · TASMANIA · ALP

– The answer to the honorable senator’s question is as follows : -

  1. An invitation to attend the Fourth International Congress on Tropical Medicine and Malariahas been received through the Embassy of the United States of America.
  2. Consideration is now being given to Australia’s representation at the congress.

page 2680

QUESTION

ROYAL AUSTRALIAN NAVY

Visit to Tasmania

Senator MURRAY:
TASMANIA

asked the Minister representing the Minister for the Navy, upon notice -

In view of the fact that before the war it was customary for ships of the Royal Australian Navy to visit southern Tasmanian waters for training purposes during the summer months, and that this visit usually coincided with the holding of the Royal Hobart regatta in which ships and men of the Royal Australian Navy took a prominent part, willthe Minister inform the Senate whether, in view of the widespread interest in this matter, favorable consideration has been given to the resumption of training cruises of Royal Australian Navy ships to Tasmania; if so, what ships and approximate number of men of the Royal Australian Navy will be visiting Hobart during the regatta next February?

Senator McKENNA:
ALP

– The Minister for the Navy has supplied the following answer : -

According to the present plans it is intended that the following ships will visit southern Tasmanian waters arriving 12th February, 1948, and will be present at Hobart for the regatta : - Australia, flying flag of Flag Officer Commanding, Australian Squadron; destroyers Bataan, Quickmatch and Quiberon; frigates Shoalhaven, Culgoa and Murchison. Quickmatch and Quiberon will be leaving southern waters for Sydney on 27th February, 1948, the remainder will leave Hobart on 1st March, 1948. Approximately 1,500 officers and men will be manning these ships.

–

page 2681

DEPARTMENT OF INFORMATION

Employment of Journalists

Senator O’SULLIVAN:

asked the

Minister representing the Minister for Information, upon notice -

  1. How many journalists are at present employed in the Canberra office of the Department of Information?
  2. What are their (a) names, (b) duties, (c) previous journalistic experience, (d) present salary and/or allowances, and (e) war service ?
Senator ARMSTRONG:
Minister for Munitions · NEW SOUTH WALES · ALP

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

  1. Twenty-three.

page 2683

BANKING

Nationalization : Petitions; Statement by Senator Sandford.

Senator SANDFORD:
Victoria

- by leave - Duringmy second-reading speech on the Banking Bill last Friday, I quoted from a letter received from an elector in which the writer said -

My young sister, who turned fifteen recently, as wellasfive or six others, was compelled to sign a petition of protest. At first she refused, and immediately she was told she was a “ Commo “.

I then went on to say, “ This indicates that there might be some truth in the statement that agents of the private banks were visiting the schools at playtime getting children’s signatures on petitions of protest. That was followed by a prominent article in the Melbourne Herald on Saturday,the 22nd November, under the heading “ Bank Staffs’ Challenge to Senator “. A self-appointed judge of a person’s worthiness or otherwise in the person of Mr.G. W. Sneddon, who is reported to be the chairman of the Bank Employees Protest Committee, challenged me to support my statement in theSenate that agents of the private banks were canvassing the schools for signatures to protest petitions. The newspaper report of Mr. Sneddon’s challenge says: -

There was notan atom of truth in Senator Sandford’s statement. Recently the senator had broadcast a foolish untruth that a trading bank had foreclosed on a customer and made a profit of £4,000 - a legal impossibility.

The latter statement is also a distortion of what I said. The newspaper report of Mr. Sneddon’s statement continues -

His latest outburst is equally stupid, and we again challenge him to produce one shred of evidence to support his remarks. Failing that, the senator will remain irresponsible and unworthy of the public position he holds.

Last Sunday I delivered a broadcast address through station 3KZ, in which I answered the challenge of Mr. Sneddon. I also made a statement to the Melbourne Herald and the Melbourne Sun on Monday, but neither of those papers published my reply to Mr. Sneddon.

Senator Ashley:

– Did the honorable senator expect them to do so ?

Senator SANDFORD:

– In order to make clear what has been going on, I shall quote from a letter which I received this morning from a resident of East Brunswick, Victoria, who listened to my broadcast speech on Sunday. The writer states -

Listening to the Labour Hour, of which I always do, in reference to teen-agers signing the bank petitions, I heartily support you. To tell you the details I was waiting for a tram at the corner of Collins and Queenstreets. I was going to St. Vincent’s Maternity Hospital to see my sixteenth grandchild. I didn’t know there was a bank there. I turned round, and this is what I saw - three kids, two girls and one boy, signing the list. I nearly went mad. These are the wordsI roared out: “What, b—– kids signing, you ought to be in jail “. I told him I have sixteen grandchildren. I will bring the b—– lot down. You might let their sleeping-doll sign, too. This is the truth. Carry on the good work.

As the press would not publish ray reply to Mr. Sneddon, I want to place on record my opinion that Mr. Sneddon’s reference to stupid remarks and irresponsibility can best be applied to Mr. Sneddon as he obviously did not bother to ascertain what I had said before he rushed in to print.

page 2683

BANKING BILL 1947

In committee : Consideration resumed from the 25th November (vide page 2615).

Clause 48 (Continuation of employment of employees of private banks the shares in which are acquiredby the Commonwealth Bank).

Senator COOPER:
Queensland Leader of the Opposition

– This clause deals with the continuation in employment of employees of private banks, the shares in which are acquired by the Commonwealth Bank. I can find no guide as to the meaning of the phrase “ competent authority “ at the end of the clause. The clause provides - . . the persons employed upon that date by that Australian private bank shall continue to be so employed upon the terms and conditions applicable at that date or as subsequently varied by competent authority.

Do the words “competent authority” include the employer who, for practical purposes, willbe the new board of directors nominated by the Commonwealth Bank according to clauses 17 and 18, or do they mean some industrial authority such as that suggested in subclause 3 of clause 49? The words are distinctly ambiguous and I should be very glad if the Minister for Health (Senator McKenna) would give some explanation of them. I should think that “ competent industrial authority “ would be a better description.

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

.- The Leader of the Opposition (Senator Cooper) has supplied his own answer. The words “ competent authority “ are intended to relate to the industrial tribunals. Certain bank officers in Victoria and Tasmania have come together in a bank officers’ association and have obtained an award from the Commonwealth Arbitration Court, but in the other States awards have been obtained by separate bodies of bank officers from the State industrial tribunals, and the reference in this clause is to industrial authorities. Where there is any other authority that has power in the field it would have reference to that also. I have particular recollection of the appearance of the Australian Ba nking Officers’ Association in the Commonwealth Arbitration Court in Melbourne. My late friend and partner, Mr. Albert Ogilvie, a former premier of Tasmania, was counsel in that case and I remember how bitterly the banks fought the application by the association. There were many counsel engaged on the side of the banks, but I think that Mr. Ogilvie was the sole representative of the Australian Banking Officers’ Association, the funds of which were limited, and I place on record my belief that the strain of that case was possibly the largest factor that led to Mr. Ogilvie’s untimely death not long afterwards. So, I have a very keen appreciation of the fact that industrial tribunals are open to bank officers who are not amalgamated in one association throughout Australia. Only Victoria and Tasmania have amalgamated, and thebank officers of the various other States have their separate organizations. The competent authority referred to both in this clause and in clause 49 sub-clause 3 is intended to be the industrial bodies that already have made awards in relation to bank officers.

Senator NASH:
Western Australia

– In the early stages of the Government’s banking proposals, the bank officers’ associations throughout Australia adopted the attitude that they were non-political and were concerned not with themerits or demerits of the proposed legislation but with the protection of their members. Clause 48, and the other clauses related to it, go as far as it is possible for any government to go to protect the interests of the employees of the private banks who will be assimilated when the nationalization of banking is accomplished. I consider that it is worth while to place on record in this chamber certain correspondence that I have received in connexion with this measure. Honorable senators will recall that when I made my second-reading speech I said that the result of an election held in this country a few weeks ago was due to deliberate misrepresentation by the press. I have received a communication, dated the 28th October and signed by a person named D. M. Arnold, who claims to be chairman of the “ Joint Staff Anti-Nationalization Committee of the Trading Banks “. This letter sets out a resolution which apparently was adopted at a public meeting of the combined staffs of the trading banks held in Perth on Monday, the 27th October. It is claimed that there were approximately 600 bank officers present. The resolution conveys that the meeting viewed with grave concern the proposal of the Government to nationalize the banks, and condemned the action of the Government in bringing down legislation of this kind without a specific mandate from the people. The resolution further indicates that, in the opinion of the meeting, the only democratic method of deciding the issue is by referendum. It has been my practice since I have been a member of this Parliament to endeavour to reply to all correspondence that I receive. I indicated previously that I had received approximately 530 communications protesting against this measure, and that I had answered all of them. In my replies, I have endeavoured to express my own opinions on the matter, and to indicate the necessity for this legislation. In accordance with that practice, I sent a letter to Mr. Arnold stating -

Much false and erroneous propaganda has been disseminated, designed to stampede the public mind against the proposal of the

Government and it is to be regretted that the employees of the private banks have allowed themselves to be brought within this sphere. When the nationalization of banks takes place, employees of the private banks will have nothing to fear as far as their employment and conditions of service are concerned in all probability, they will find themselves better off under the change.

I received a. further communication from Mr. Arnold stating that my letter was amazing. I can only say that his was astounding. To give an indication of the line of argument that has been adopted by individuals who allegedly are acting in the interests of the people that they represent - in this case the bank employees - I shall quote portion of Mr. Arnold’s letter -

Apparently it is inconceivable to you and to the other representatives of the Labour party that a body of men such as that which I havethe privilege to represent should consider the interests of the nation above their own interests.

Honorable senators may place their own interpretation upon that sentence. Mr. Arnold continues -

You say that “ There is no need for employees of the banks in Western Australia to view with grave concern the proposal to nationalize the “banks “. In other words, because the proposed act provides some protection for bank employees it should cause those employees no concern irrespective of its effects on the remainder of the community.

I am endeavouring to indicate the change of attitude adopted by bank officers since the dissemination of propagandaby their association in Sydney in the early stages of the present campaign, and their present contention that it is inconceivable that honorable senators, as the elected representatives of the people, should be placing the interests of the nation before their own interests. I consider that that is a most insulting manner of addressing any member of the Parliament, and constitutes a complete misrepresentation of the motives actuating supporters of the Government in a dvocating the passage of this measure. In reference to the portion of my own letter which I have just read, Mr. Arnold’s reply states -

You speak of the dissemination of false and erroneous propaganda and its influence on bank employees. The influence, if any, which has contributed to the moulding of the bank officers’ thoughts has at least enabled them to view the proposals in true perspective and to consider its broader implications, rather than the mere sectional interests involved. Perhaps you would have us believe some of the really spurious and destructive propaganda which blames the banks for the 1930 depression. In your eyes, the bankers are apparently devoid of intelligence and moral qualities.

In my letter I made no suggestion concerning the intelligence or the moral qualities of any person associated with banking. However, that has not prevented their spokesman endeavouring to justify something which is unjustifiable by using language of the kind which I have just read. The letter continues -

I have no hesitation in saying that the standard of business morality and national ethics is higher in the banking world than in any other sphere.

He implies that the ethics and standards of membersof the National Parliament are apparently lower than those of bank managers. I certainly do not agree with his contention. Then he goes on to make a statement which is the “daddy of the lot”.

The CHAIRMAN (Senator Nicholls:
SOUTH AUSTRALIA

– The honorable senator must connect his remarks with the clause under discussion.

Senator NASH:

– With respect, I believe that I am doing so, because this measure deals precisely and explicitly with the employment of officers of private trading banks by the Commonwealth Bank at a future time. I have communicated to Mr. Arnold, the writer of the letter to which I have referred, my views in reply to his circular, and he endeavours to counter them by writing -

And now I come to the achievements of the Chifley Labour Government. Its record, since 1 941, has certainly not been equalled. We have never before in the history of Australia, seen such a spate of black markets, high prices, goods in short supply, strikes and industrial stoppages, bottlenecks and hindrances to production of all types. And all of this in a period of so-called full employment. How many man hours are being worked per annum? What is the quantitative and qualitative output of those man hours?

The CHAIRMAN:

– Order ! The honorable senator must connect his remarks with the clause under discussion.

Senator NASH:

– I accept your ruling, sir, and I shall leave the matter at that.

Senator O’SULLIVAN:
Queensland

– I have read clause 48 in conjunction with the following one, but I am not clear as to the precise position in which employees of the present trading banks, which are taken over by the Commonwealth Bank, will be placed. I understand that the Commonwealth Bank lays down certain rules and forms of procedure in regard to promotion and other staff matters. What treatment is to be given to employees of trading banks taken over by the Commonwealth Bank in comparison with that given to its own employees? Will any preferential treatment be extended to the present employees of the Commonwealth Bank in regard to promotion and other matters? Although I do not propose to mention the name of the gentleman concerned, not withstanding that it was men.tioned in the House of Representatives, it is a fact that an employee of the former Yokohama Specie Bank Limited, Sydney, who enlisted in the Army in January, 1942, was unable, on discharge from the Army after the war, to obtain employment in the Commonwealth Bank. Although his former employers had ceased business at the direction of the Government during the war, he was ineligible for appointment to the Commonwealth Bank because he had not passed the necessary examination to qualify for appointment to that bank. Are the 20,000 employees of Australian trading banks, which are to be absorbed, to be viewed hi the same light? In the very nature r>f things, they will not have passed the entrance examination of the Commonwealth Bank. Will the fact that they have not done so militate against their prospects of promotion and preferment? Does the Government intend to mitigate the provisions of the Commonwealth Bank Act 1945, so as to allow them to obtain entrance to the service of that bank?

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

– The clause at present under discussion does not deal with the matters raised by the honorable senator. It deals solely with persons who are employed by a trading bank at tho time the Commonwealth Bank acquires its shares. However, in order to save time later, I shall deal with the honorable senator’s question now. I refer him to sub-clause 3 of clause 50, which provides -

After a person is appointed to a position in the Commonwealth Bank Service under subsection (1.) of this section, the provisions of Part XIII. of the Commonwealth Bank Act 1945 shall apply to and in relation to him.

In other words, any such person is entitled to take his place in the queue for promotion, and he is entitled to a right of appeal to the promotions appeal board. Generally, the whole of Part XIII. of the Commonwealth Bank Act 1945 will apply to him.

With regard to the second portion of the honorable senator’s question, although the Commonwealth Bank Act 1945 provides that admission to the service of that bank shall be only by examination, that has been found to be a disadvantage to the bank. Because of its vast and rapid expansion in the last two years, it requires the right to employ highly qualified personnel. The Prime Minister (Mr. Chifley) has already announced that the Government is considering a complete review of Part XIII. of the Commonwealth Bank Act 1945 to facilitate this. Many matters, including the right of employees of the bank to obtain loans from it, will be reviewed. The bank’s right to admit to its service persons who have not passed, the qualifying examination will relate particularly to the engagement of senior officers. Perhaps the picture will be clearer if I put it this way: In. the case of the employees of any bank whose shares are acquired, clause 48 of the bill requires that the employment of those persons must be continued. Then, we come to clause 49, which says that when the business of a bank in Australia is acquired, rather than the shares, the staff is to be employed ; and towards theend of that clause, we find the provision, that every one’ who comes over to the employ of the Commonwealth Bank Service, as distinct from coming in as an officer of the service, has to be found an appropriate position as an officer, except in the case of certain casual persons.

Senator SHEEHAN:
Victoria

– This clause is very important from the point of view of employees of the private banks; and a number of questions has been asked as to what will be the ultimate position of those officers when they are transferred to the Commonwealth Bank.

I greatly regret that it has been necessary to rais;; these questions in the Senate. I thought that all matters affecting the transfer of employees of the private banks might have .been amicably agreed upon between the Bank Officers Association and the Minister in charge of the drafting of the measure. Honorable senators have quoted correspondence which they have received concerning the position of employees of the private banks. I know that the bank officers are organized; but I thought that they were efficiently organized. As one who has spent a considerable part of my life among industrial workers, I should think that it was the prerogative of an industrial organization to have had this clause under discussion between the employees concerned, and the Minister in charge of the bill. It would have been much better had the Bank Officers Association spent some of its funds in order to send representatives to Canberra to discuss this matter, and thus obviate the necessity for these questions to be asked in this chamber. The Bank Officers Association, so the press alleges, has expended a lot of money in opposing the main principles of the bill. Instead, it should have been looking after the interests of its members by sending representatives to Canberra to discuss the Government’s proposals as it affected them. Had they devoted only a quarter of the time spent in sending bank officers from, door to door seeking signatures to petitions asking the Government to hold a referendum on this legislation, in ascertaining their rights under the proposed legislation, there would have been no necessity for Senator O’sullivan, or Opposition members in the House of Representatives, to query the effect of this legislation upon them. I have seen certain bank officials going from door to door seeking signatures to petitions of protest. It was always the practice of my organization, which consisted of government employees, whenever legislation affecting their interests was being considered in the Victorian Parliament, to ensure that an officer of the association was present in the Parliament to hear the full debate on. the legislation. Through that representative we were able to advise members and Ministers in the Victorian Parliament of the requirements of our members. Had the bank officials instructed the officers of their organization to pay more attention to looking after the interests of members of the organization when this measure was introduced, there would have been no necessity for these questions.

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

– In view of what Senator Sheehan has said, I should point out that certain discussions have taken place; I do not feel at liberty to say with whom, or the nature of those discussions. One must also have regard to the fact that, bank officers as a class owe their present, loyalty to their present employers. My own feeling is that their loyalty to their present employers in the present circumstances is the best guarantee the Commonwealth Bank can have of their loyalty when, in due course, they become employees of the Commonwealth Bank. One feels that life is made up of loyalties - loyalty to family, school, employer, State, country and to Creator, and the rest; and one cannot help but feel sorry for the rather difficult position in which bank officers find themselves at present. They have their present masters, and they have their prospective masters ; and they are placed in a somewhat difficult position until the impending .litigation on this measure is disposed of. Whilst some bank officers have not been .very active in ascertaining the Government’s mind, it may well be that others have. I should not like Senator Sheehan to feel that his remarks would apply to all members of the Bank Officers Association. The absence of complaint regarding the provisions in this measure dealing with the staffs of the existing private banks is the best evidence that those provisions are not only adequate but also generous, and in the great majority of cases will give better conditions to those officers in the employ of the Commonwealth Bank than they now enjoy in their present employment. They will have greater security, better superannuation rights and a guarantee of continuity. Senator O’sullivan referred to the Yokohama Specie Bank Limited. That bank was liquidated under a court order in 1942. It was not taken over by the Commonwealth Bank.

Senator O’Sullivan:

-i did not suggest that.

Senator McKENNA:

– I take it that the honorable senator was merely indicating that there was an official in charge of that undertakingwho, despite his professional qualifications, could not qualify under the examination provision of the Commonwealth Bank Act?

Senator O’Sullivan:

– Yes.

Senator McKENNA:

– The Government has that aspect in mind. It has in contemplation amendments of the Commonwealth Bank Act in quite a number of particulars following the passage of this legislation.

Senator SHEEHAN:
Victoria

– I am pleased to hear the statement just made by the Minister for Health (Senator McKenna) that there has been some discussion between the Minister and certain employees of the private banks, because it fortifies me in the belief that press reports alleging opposition of the staffs of private banks to this legislation are simply part of the spurious propaganda against the Government’s proposal.

Senator COOKE:
Western Australia

– Before I came to Canberra, members of the staffs of private banks in Western Australia discussed with me certain provisions of this measure. They were not concerned so much that they would not obtain better conditions in the employ of the Commonwealth Bank but rather with certain definitions which they believed might not enable them to aline themselves effectively in preserving their terms and conditions of employment. What will be the “ competent authority “ mentioned in this clause? I should like that definition to be clarified. In Western Australia, officers of the private banks are represented in court by an advocate, whose services are made available to them through the Trades Hall. That advocate was made available when they obtained their first log of working conditions.

Senator Sheehan:

– Apparently, the employees of private banks in Western Australia have no fear of the Trades Hall.

Senator COOKE:

– No.

Senator Sheehan:

– They would not object to becoming public servants?.

Senator COOKE:

– No. Later, when their second log was being reviewed the Trades Hall, in Perth, made available another advocate to appear on their behalf in court. They have not had an extensive training in industrial court matters. Some of their representatives may have had, but it has always been our pleasure to be able to supply properly trained industrial advocates for them. They are, no doubt, concerned to know whether the competent authority referred to in the bill will be some court to which they can send a trained industrial advocate. If the Minister can explain wha t is intended, the officers of the private banks will be relieved.

Senator ARNOLD:
New South Wales

– This clause states that the employees of the private banks shall continue to be employed upon the terms and conditions obtaining now, but I should like the Minister to assure the Committee that the Government does not intend to provide that those terms and conditions cannot be varied to bring them into line with those applicable to Commonwealth Bank employees.For some considerable time there has been a tremendous agitation by employees of the private banks to have their terms and conditions of employment raised to the same standard as those of Comomnwealth Bank employees, and I believe the great bulk of the employees of the private banks are anxious for this bill to be passed so that that may be achieved. I understand that for the last twelve months their journal has continually published articles pointing out the miserable treatment they have received, and asking that they be given at least the same conditions as those enjoyed by employees of the Commonwealth Bank.

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

– I have been asked whether the employees of private banks in the State of Western Australia and in other States will still have access to their industrial tribunals. Where the shares of a private trading bank are acquired, the officers of that bank will remain in their present employment until such time as the bank decides to transfer the whole of its business to the Commonwealth Bank. During the period when the Commonwealth Bank is merely the owner of all the shares in that bank, these officers will continueto have the same full access to industrial tribunals as they have to-day. If and when, in the fullness of time, they are transferred to the service of the Commonwealth Bank, their access will be, according to the present law, to the Commonwealth Public Service Arbitrator. It is a very significant fact that, although that provision has been in existence since the Commonwealth Public Service Arbitrator was appointed, the officers of the Commonwealth Bank have never seen fit to have recourse to him. Their requests have been met so adequately by the management of the Commonwealth Bank that they have never filed one claim. As a matter of fact, the excellent conditions extended by the Commonwealth Bank to its employees have been used through the years by officers of the private trading banks as a stepping-stone to improve their own conditions.

The Prime Minister (Mr. Chifley) has indicated that Part XIII. of the Commonwealth Bank Act will be reviewed. There will be a complete metamorphosis when in due course some 20,000 trained officers of the private trading banks infiltrate into the Commonwealth Bank service. It will be necessary to make a great many readjustments in the outlook of the Commonwealth Bank regarding its staff.

Senator Lamp:

– And in the outlook of its officers, too.

Senator McKENNA:

– There may, of course, as the honorable senator says, be a change in the outlook of the officers of the Commonwealth Bank, but I point out that they were discharging somewhat restricted functions until their hands were freed in 1945.

Senator Lamp:

– I was referring to a change of outlook of the officers of the banks to be taken over.

Senator McKENNA:

– I confess that I have very little knowledge of their outlook, but their very wide experience in every field of commercial activity will be of great advantage to the Commonwealth Bank. There will be a great strengthening of the staff of the Commonwealth Bank when these officers enter its service.

Senator Arnold:

asked whether it was the intention that the conditions of employment of the private trading bank employees should not be too rigidly adhered to. First of all, we have left room for their variation by a competent authority in the meantime. Secondly, the Commonwealth Bank directorate has met the requests of its employees so well throughout the years that the employees have not seen fit to file a single plaint or log, although they have had access to their own industrial tribunal.

Senator O’Sullivan:

– Is that because they think it is hopeless?

Senator McKENNA:

– I assure the honorable senator that that is not so. In fact, the conditions applicable to the officers of the Commonwealth Bank have been used by the officers of the private trading banks as a stepping-stone to secure improvements in their own conditions.

Senator Sheehan:

– It has been suggested that the officers of the private trading banks will resent being turned into Commonwealth Government employees.

Senator McKENNA:

-Senator O’Sullivan has himself paid tribute to the merits of the Commonwealth Bank employees, as I have done on more than one occasion. Perhaps it will be a solatium to the officers of the private trading banks to know that they will not be taken into the Commonwealth Public Service, but into the Commonwealth Bank service, which is entirely separate.

Senator Devlin:

-When there are five or six private banks operating in a particular town, can the Minister say what will be done with their staffs under the new arrangement?

Senator McKENNA:

– That will be a matter entirely for the Commonwealth Bank. The question will be considered on its merits. The honorable senator may be assured that there will be no employees of the private trading banks who will not be able readily to be absorbed by the Commonwealth Bank, which today has grave difficulty in securing the staff, and particularly qualified staff, necessary to enable it to expand its business. As I intimated yesterday, in future the community will have a right to force the Commonwealth Bank to establish a: branch of the hank in cases where it is normal and proper that that should be done. There need be no concern about what will happen to the staffs of the private banks that are taken over. In most oases they will be Australian banks whose shares will be acquired, and the banks will continue to operate for quite a period in exactly the same way as they are operating at the present time. There are various means of approach to the question of the acquisition of the business of a private trading bank, and before I could answer the honorable senator with any degree of accuracy. I should require to know all the conditions obtaining in the town on which his mind is centred.

Clause agreed to.

Clause 49 - (2.) The Commo ii wealth Bank may agree with a person employed outside Australia by a private bank the business of which in Australia is to be, or has been, taken over by the Commonwealth Bank under this Act that that person shall be employed by the Commonwealth Bank and any person with whom such an

Agreement is made shall be employed accordingly.

Senator COOPER:
Leader of the Opposition · Queensland

– This clause provides for the continuation of employment of employees of private banks whose business is acquired by the Commonwealth Bank, but there seems to be no obligation upon the Commonwealth Bank to take “over men who may be employed overseas. As the Commonwealth Bank is not required to take into its service persons employed outside Australia by private banks, the position of officers employed in the London and New Zealand branches of private banks appears to be uncertain. They are not given the right to elect whether they shall be employed by the Commonwealth Bank, and so they must depend for their future as bank officers on the Commonwealth Bank choosing to enter into an agreement for their employ ment. Should the Commonwealth Bank not so choose, these officers must accept their fate philosophically, because there seems to be no remedy open to them. Even continued employment by their existing employers in connexion with such emasculated business as may remain to those banks is not assured. In order to make the position clear, and to assist those officers of banks who are employed in overseas branches, I move -

That, after sub-clause (2.), the following new sub-clause be inserted : - “ (2a.) When any person employed outside Australia by a private bank the business of which outside Australia is to be, or has been, taken over by the Com mon wealth Bank under this Act o.v otherwise, elects to be employed by the Commonwealth Bank, he shall be employed accordingly as from the date of such election “.

I ask the Minister to accept the amendment.

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

– Notice of this amendment reached me only just prior to the meeting of the Senate at 2.30 p.m. to-day, and therefore, I have had little opportunity to consider its full implications. I point, out, however, that there is ample provision in sub-clause 2 of this clause to meet such a case as that covered by the amendment. That sub-clause reads -

The Commonwealth Bank may agree with a person employed outside Australia by a private bank the business of which in Australia is to In-, or has been, taken over by the Commonwealth Bank under this Act that that person shall be employed by the Commonwealth Bank mId any person with whom such an agreement is made shall be employed accordingly.

In other words, there is power for the Commonwealth Bank to take over an officer who is employed outside Australia by one of the banks whose business has been acquired. It would not be desirable to confer that privilege as an absolute right under all conditions, because one condition of entry to the service of the Commonwealth Bank is that a person must be a British subject. Among the employees of banks in other countries are persons who are not British subjects. The bill is drawn along lines which indicate clearly that it is the policy of the Government that officers employed by private banks shall not suffer any loss of employment. It is better than the engagement of staff not resident in Australia should be left as a permissive matter to the Commonwealth Bank than that it should be obligatory.

Senator O’SULLIVAN:
Queensland

– The explanation given by the Minister for Health (Senator McKenna) is all right, so far as it goes. I do not know to what degree the trading banks have non-British employees on their overseas staffs, but the trading banks incorporated in Australia have a. number of Australian citizens in their London offices and in other offices outside Australia. I expected the Minister to say that the absence of provision for these officers was a drafting oversight, and that it was not intended that .Australian citizens employed outside Australia should be at a disadvantage compared with their fellow officers who are employed within Australia. I strongly support the amendment of the Leader of the Opposition (Senator Cooper), and urge the Minister to accept, it. The difficulty mentioned by the Minister can easily be overcome by confining the privilege to Australian citizens who are employees of banks, wherever they may be situated at the time of the proclamation of this legislation. They should be given the same consideration whether then inside or outside Australia.

Senator COOPER:
Leader sf the Opposition · Queensland

– Although I appreciate the explanation given by the Minister for Health (Senator McKenna), I point out that the very fact that this legislation provides that an employee of the Commonwealth Bank shall be n British subject destroys his argument. As only British subjects may be employed by the Commonwealth Bank, the amendment would not affect that situation at all, because persons who are not British subjects would still be debarred from employment with the bank. The amendment would, however, place those Australians who are employed in banks overseas on an equal footing with those in Australia. The fact that there may be non-British subjects among the employees nf private banks overseas does not cause any complication because the Commonwealth Bank Act debars such persons from being employed by the Commonwealth Bank.

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

.- The Leader of the Opposition (Senator Cooper) is embarking on a discussion which belongs to the field of law with which the Deputy Leader of the Opposition (Senator O’sullivan) is more familiar. Senator O’sullivan will know the meaning of the legal term generalia specialibus non derogant. In plain English it means that a general provision in an act of parliament does not affect a special provision that is made later. The provision to which the Leader of the Opposition has referred is already in the Commonwealth Bank Act, and is part of our statutory law. Here is a special provision contained in a particular clause. There would be legal difficulties in embodying in the bill a clause of this nature without full and proper consideration of what is involved. As the honorable senator knows, I had no opportunity to consider his amendment until just before the Senate met to-day. There is power in this bill to take over the officers employed by private banks, and there is also the clear and unequivocal statement that the Government intends that they shall be taken over. But it wants to put them through a screening process. I shall not accept at this stage an amendment which would tie the hands of the Government and of the Commonwealth Bank when there is complete power to give effect to the spirit of the amendment. The Government acknowledges the principle underlying the amendment, and the honorable senator can be assured that the interests of bank officers will be protected, and that generally the officers to whom he has referred will be taken over by the Commonwealth Bank. I am not, however, prepared- to commit the Government and the Commonwealth Bank to the taking over of every officer outside Australia, without knowing who he is and in what capacity he is employed.

Senator O’SULLIVAN:
Queensland

– I sympathize with the Minister for. Health (Senator McKenna) in his statement that he has had very short, notice of this amendment. However, in. view of the implications of this clause - it affects the economic liberty of Australian citizens - I hope that he will consider postponing it until adequate consideration can be given to it. I do not go so far as to say that all employees of the trading hanks, regardless of their racial origin and other circumstances, should be employed in Australia by the Commonwealth Bank, but I do think that all Australian citizens who are to be affected by these proposals should be adequately protected. The bill provides only that they may be protected. Again I urge the Minister to give the matter further consideration.

Senator McKENNA:
Tasmania Minister for Health and Minister for Social Services · ALP

– I regret that I cannot delay the passage of this measure by adopting the honorable senator’s suggestion. There are legal proceedings pending and certain understandings have been reached between the parties concerned. I point out also that although the bill has been available since the 30th October, I received notice of this amendment just prior to the meeting of the Senate to-day. There is a good deal more to this proposal than appears on the surface, and 1 draw the attention of the committee to two things: The Government intends that these people shall be protected. It has included in subclause 2 of this clause power enabling that purpose to be achieved, and in these circumstances I feel that there is no reason for the amendment. The Australian citizens with whom the honorable senator is concerned need have no fear about their future.

Amendment negatived.

Clause agreed to.

Clause 50 - (1.) As soon as practicable after a person (being a British subject) becomes employed by the Commonwealth Bank under sub-section (1.) or (2.) of the last preceding section, the Commonwealth Bank shall (unless the duties performed by that person in the private bank by which he was employed immediately prior to his becoming employed by the Commonwealth Bank were such that, if he had been employed by the Commonwealth Bank performing similar duties, he would have been employed as a temporary or casual employee) create a position in the Commonwealth Bank

Service which the Commonwealth Bank considers to be appropriate and appoint him to that position. (3.) After a person is appointed to a position in the Commonwealth Bank Service under sub-section (1.) . of this section, the provisions of Part XIII. of the Commonwealth Bank Act 1945 shall apply to and in relation to him.

Senator RANKIN:
Queensland

– This clause relates to the appointment to the Commonwealth Bank of employees of the trading banks. It is concerned, therefore, with what is to happen to the 20,000 employees of those banks. In my opinion, this proposal is little short of industrial conscription. Twenty thousand people, who chose this occupation, are to be taken, against their will, out of their present employment and transferred to other employment. They had positions of security in their chosen careers, and they are to be taken from their present employment and given an extremely precarious tenure in the employment of a government bank which they did not select. Under clause 49 of the bill, persons employed in Australia by private banks are tobe employed by the Commonwealth Bank. Then, under clause 50, the Commonwealth Bank is to be under an obligation to create positions in its service, which it considers to be appropriate, and to appoint the transferred employees to those positions. Clause 50 provides further that once a person is appointed to a position in the Commonwealth Bank, the provisions of Part VIII. of the Commonwealth Bank Act 1945 shall apply to, and in relation to, him. I shall read section 169 of the Commonwealth Bank Act, which is part of the provision to be made for bank employees who will be forced to transfer to the Commonwealth Bank - (1.) If at any time the Bank finds that a greater number of officers is employed than is necessary for efficient working, any officer whom the Bank finds is in excess may be transferred to such other position of equal classification as the officer is competent to fill, and, if no such position is available, the officer may be transferred toa position of lowerclassifica- tion. (2.) If no position is available for the officer, the Bank may retire him from the Service of the Bank. (3.) An officer shall not be retired from the Service of the Bank under this section unless lie has been given one month’s notice or is paid salary in lieu of notice.

Honorable senators will note the provision that if at any time the Commonwealth Bank finds that a greater number of officers is employed than is necessary for efficient working, any officer whom the bank finds to be in excess of its requirements may bc transferred to such other position of equal classification as the officer is competent to fill; that if no such position is available, the officer may lie transferred to a position of lower classification; and that if no such position is available for this officer the bank may retire him from the service of the bank at one month’s notice. I say again that this means loss of security. Many of these officers have, for many years, been in a service in which they have felt secure, and have had considerable prospects of advancement. The Government now proposes to transfer them from their chosen place of occupation against their wishes. Under this dictatorial dictum they may be transferred to another classification, or to a reduced classification, or dismissed from the banking service altogether. I repeat, Mr. Chairman, that these transferred officers, who are to be in effect conscripted into the service of the Commonwealth Bank, may be dismissed at a month’s notice, and that they will have no appeal and no redress. This to me is a most alarming state of affairs. We see 20,000 bank officers who, by their efforts, have done much to build up the excellent banking system of this country, taken away from the employment that they chose, and transferred, by a process of industrial conscription, to an employment that they did not choose. Nominally they have the right to elect not to transfer, but, in actual fact, what is the worth of that right? They have spent years acquiring knowledge and skill al banking, and there will be only one bank, so, unless they transfer to the Commonwealth Bank, they must seek different employment from that at which they are skilled. If they do transfer they will face a loss of security which is most disturbing. To eliminate this state of affairs, I. move -

That, after sub-clause (3.) the following proviso be added: - “ Provided that a person appointed to a position in the Commonwealth Bank Service under sub-section (1.) of this section shall not be transferred to a position of lower classification under section one hundred and sixty-nine of the Commonwealth Bank Act 1945 nor retired under that section for a period of five years after his appointment to that position.”

If the Government believes that th-j officers are going to secure regular employment in the Commonwealth Bank, then a guarantee of five years will not cause it any concern. But if the Government will not accept the amendment, then I say a great injustice will be done to these men and women at present employed by the trading banks.

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

– ‘Senator Rankin has said that these men would be brought into the Commonwealth Bank service against their will. Obviously, the honorable senator is overlooking sub-clause (1) of clause 49, which gives them complete power of election in the matter. There is no compulsion, and I can assure the honorable senator that the great majority of bank officers will be exceedingly glad to join the service of the Commonwealth Bank. The honorable senator also claimed that private bank employees would have no measure of security in the Commonwealth Bank. But what measure of security do they have in the private banks to-day? Their pension rights are not legally enforceable; they are discretionary payments. In the Commonwealth Bank, however, there is no question of discretion ; the employees enjoy superannuation benefits as a clear legal right.

The aim of the honorable senator’s amendment is to ensure that the transferred officers shall have at least five years’ tenure in the Commonwealth Bank service. But what about private bank officers who are transferred at the age of 64 years and are due to retire at 65? Again I suggest that this is a matter not for fresh legislation but for an amendment of the Commonwealth Bank Act. If I were to advise bank officers on the proposition that the honorable senator has put forward, I should urge them, with all my power, not to accept any fixed term. As the result of long experience, I have advised client after client against accepting an employment contract for a fixed period of years. This is a dangerous practice because when the fixed period has elapsed the employer has to examine the position and, under the agreement, he is quite entitled to dispense with the employee’s service without any further argument. On the other hand, in the absence of a specified period, an employee will usually continue in the service until he dies or decides to retire. As a matter of ordinary psychology, a business arrangement is very much better left without a fixed term being specified. Acceptance of this amendment would mean that transferred officers would be guaranteed employment for five years; but no such guarantee would operate in respect of officers of the Commonwealth Bank. That is an unfair disparity which would probably provoke a good deal of dissatisfaction between the two groups. I point out also that section 169 of the Commonwealth Bank Act is identical with a provision that has been in the Commonwealth Public Service Act since 1923. Ask any Commonwealth public servant to-day whether he has security in his employment. He realizes that although he can be retired or dismissed if there is no work for him and no other position to which he can be appointed, he has substantial security of employment. I have already indicated that the banking facilities of this country are completely inadequate and could be improved substantially. All the banks require more staff. New branches are needed in many parts of the Commonwealth. I believe that it would be a mistake from the point of view of the officers themselves if the limitation suggested by Senator Rankin were inserted. I greatly regret that I cannot meet the honorable senator by accepting an amendment from her, but I am afraid that this proposal must also be put into the category of the discards.

Senator HARRIS:
WESTERN AUSTRALIA · ALP

– I agree with the views of the Minister for Health (Senator McKenna) with regard to this amendment, the proposer of which, I am sure, has never conferred with any of the employees of the private banks. The Minister has spoken of the advice that he would give to private bank employees as the result of his industrial experience. I too have had industrial experience extending over a number of years, and I say that by moving for a guarantee of five years’ employment for transferred officers, Senator Rankin has revealed a complete lack of knowledge of the matter. I am confident that the employees of the private banks would not agree to the proposal. Acceptance of the amendment would be very dangerous indeed.

Senator COOPER:
Leader of the Opposition · Queensland

– I strongly support the amendment that has been moved by Senator Rankin. There is considerable merit in the proposal. The Minister for Health (Senator McKenna) has said that private bank employees would not be conscripted. Perhaps “ conscripted “ is rather a strong term, but the Minister cannot deny that the 20,000 employees of the private banks will not have any other avenue of employment. Certainly many of the employees of the private banks will elect to continue in their profession by accepting employment in the Commonwealth Bank. Of course, the plain fact is that they will have no real choice, and the majority of them will be compelled to enter the service of the Commonwealth Bank. All that Senator Rankin’s amendment seeks is a guarantee of security of tenure for five years for employees of trading banks taken over by the Commonwealth Bank. It has been suggested that no discrimination will be made in the treatment to be given to employees taken over from private banks and that enjoyed by the present staff of the Commonwealth Bank. Obviously, that will not apply in regard to many important matters, including seniority. At the present time the Commonwealth Bank determines the seniority of its employees on the length of their employment in its service. The seniority of members of the trading banks taken over by the Commonmonwealth Bank will date from the time they commence duty with that bank, and even if provision were made in this bill that their seniority is to date from the enactment of this measure they would still suffer substantial injustice. No provision as to the time which is to elapse before they are taken into the service of the Commonwealth Bank is included in the clause, sub-clause 1 of which merely states, “ As soon as practicable . . . “.

The very wording of the clause conveys the idea that some lengthy period must elapse before the transfer of officers of private banks to the Commonwealth Bank takes place.

Senator McKenna:

– ‘Could anything be sooner than “ as soon as practicable “ ?

Senator COOPER:

– A more satisfying provision could certainly have been included in the clause, such as the mention of a specific time or a particular date. Every one dislikes uncertainty, and it would be infinitely preferable to mention a specific period, such as six months or twelve months. Employees of trading banks are already experiencing considerable anxiety as to their future, and the added uncertainty implied in the words “ As soon as practicable “ will not help them. Senator Rankin’s proposed amendment will, if accepted, at least allow the 20,000 employees concerned to know where they stand, because it guarantees to them security of tenure for at least five years. If the Government is not prepared to accept the amendment proposed it should, at least, indicate the approximate length of time which will elapse before the Commonwealth Bank will take into its employment employees of the present trading banks. Inclusion of a guarantee of employment for five years would be only a small compensation to people who are to be compulsorily transferred to the Commonwealth Bank. Many of them may lose the seniority which they at present enjoy in their respective banks after many years’ service. I support the amendment.

Senator O’SULLIVAN:
Queensland

– The remarks of the Minister for Health (Senator McKenna) were more reassuring than convincing. The choice presented to employees of the present trading banks is no better than “Hobson’s choice”, and men who have spent their lives in the service of financial institutions will have no alternative, if they do not accept transfer to the Commonwealth Bank, than to seek new careers. The Minister was stretching the import of the amendment proposed by Senator Rankin when he referred to the provision in the Commonwealth Bank Act 1945 for retirement at the age of 65 years. It is not suggested that the pattern of the act should be mutilated; all that is suggested is that those who are taken over by the Commonwealth Bank should be guaranteed a minimum term of employment. Section 168 of the Commonwealth Bank Act 1945 . provides that the retiring age of females shall be 60 years and of males 65 years.

If my understanding of clause 50 be correct, its provisions will apply only to employees of banks acquired by the Commonwealth Bank under clause 22 of the bill. The present clause does not specifically refer to the employees of banks acquired under clause 12 or 13, or compulsorily acquired under clause 24. Although four methods of acquisition of private banks by the Commonwealth Bank are provided in the bill, the present clause deals only with employees of a bank whose business is acquired in a particular way. What is to be the position of employees of banks which have been otherwise acquired? Axe they to occupy the same position as those contemplated by clause 50? This is a matter of economic life or death to many thousands of Australian employees, and there should be no equivocation. On the contrary, the provision made for them should be expressed as plainly as English will permit.

Senator AYLETT:
Tasmania

– Because of the innocent way in which Senator Rankin moved her amendment, I am impelled to draw attention to the fact that the word “ conscription “ is not mentioned at all in the clause, or for that matter, in the bill. Senator Rankin endeavoured, quite deliberately, to suggest that, the Government intends to conscript the services of 20,000 bank employees. I repeat that the word “ conscription “ is not mentioned anywhere in this measure. That leads us to inquire, exactly what her amendment does propose. It proposes to bind some 20.000 persons to service with the Commonwealth Bank for a minimum period of five years.

Senator O’Sullivan:

– Be sensible!

Senator AYLETT:

– Every one knows that a guarantee imports an agreement on both sides. If employees are to be guaranteed employment for five years, in the nature of things, the bank would require them to remain in its service for that period. Therefore, it is plain that

Senator Rankin wants to conscript the people concerned. However, that is not the real point of this amendment. Some employees of the trading banks, in particular one named Breheney, have been making lying statements concerning the effects of this measure, and they have gone out of their way to circulate malicious and false propaganda. Is it suggested that people of that type should be guaranteed employment with the Commonwealth Bank for five years? Obviously, they would continue making trouble during that period. As the clause stands at present, any bank officer who accepts employment with the Commonwealth Bank is free to leave at any time. If the proposed amendment were accepted, the Commonwealth Bank would be obliged to retain people like Mr. Breheney in employment for five years, during which time they could continue to circulate malicious propaganda–

Senator Cooper:

– As an employee of the Commonwealth Bank, he would be subject to the disciplinary powers of that bank.

Senator AYLETT:

– He would be subject to the discipline of the Commonwealth Bank, but that would not matter because this bill would compel the Commonwealth Bank to retain him in employment for five years, irrespective of its disciplinary regulations.

Senator Cooper:

– His employment would depend on compliance with the terms of his engagement.

Senator AYLETT:

– But that was conveniently omitted from Senator Rankin’s proposal. The Leader of the Opposition (Senator Cooper) should not seek to defend Senator Rankin, because he himself suggested that the Government was trying to impose “ conscription “ on 20,000 employees.

Can the Minister for Health (Senator McKenna) inform me whether people who are at present employed by the trading banks will be at liberty to make lying statements after they have been transferred to the employment of the Commonwealth Bank? Will the Minister undertake to remove such people from the service of that bank?

Senator COOKE:
Western Australia

– I consider that the amendment proposed will not afford protection to em ployees of the trading banks, who will enjoy greater security of tenure in the service of the Commonwealth Bank than they at present enjoy in the service of the trading banks. The Minister for Health (Senator McKenna) has already referred to the assurance contained in sub-clause 3 of this clause, which provides that persons transferred to the Commonwealth Bank service shall enjoy the benefit of the provisions of Part XIII. of the Commonwealth Bank Act 1945. However, I should like the Minister to clarify the provisions of sub-clause 1 of the clause insofar as temporary and casual employees of trading banks are concerned. The relevant, portion of the sub-clause reads -

  1. . unless the duties performed by that person in the private bank by whichhe was employed immediately prior to his becoming employed by the Commonwealth Bank were such that, if he had been employed by the Commonwealth Bank performing similar duties, he would have been employed asa temporary or casual employee . . .

That portion of the sub-clause appears to strike at a section of employees who should be afforded the maximum protection. Although I believe that the Government desires to protect them adequately, there does not appear to be any special provision for them in the measure. I refer to messengers, attendants and so on, employed by the trading banks. I should like an assurance from the Minister that they are to be given at least the same consideration as that extended to similar employees of the Commonwealth Bank, and that any protection with regard to rights, or benefits, shall be available to them provided they are permanent employees with private banking institutions.

Senator GRANT:
New South Wales

– The statement made by Senator Rankin is extraordinary. The honorable senator read her speech; and it is about time that that practice was stopped.

Senator O’Sullivan:

– Be fair.

Senator GRANT:

– I am fair. The honorable senator cannot deny that Senator Rankin read her speech. Every one knows that she read it, and it is about time that practice was stopped.

Senator Rankin:

– I was using notes.

Senator GRANT:

– It is extraordinary how honorable senators opposite have behaved when driven from one point to another. After their arguments about Hitler and the Communists and the destruction of the people’s liberties have been refuted, they trot out their last point that under this legislation the 20,000 employees of the private banks will be out of a job. Now, when that argument has been answered they are “ kicking “ because those employees will be guaranteed a job. What does the Opposition want? Every single argument which the banks have put up has been refuted. From the time that the Prime Minister (Mr. Chifley) announced the Government’s intention to nationalize the banks, the press, particularly the Sydney Morning Herald, has engaged in a. point-to-point attack. We are still hearing the same arguments from point No. 1 to point No. 7 being reiterated. Senator Rankin argued that the 20,000 employees of the private banks will be thrown. on the scrap-heap; but now the Opposition is “kicking” because, it contends, those employees are to be conscripted. Senator Rankin says that that is a terrible thing to do, but she wants to make sure that it is done for five years.

Senator MORROW:
Tasmania

– In this debate the Opposition is following’ the attempt being made by the press to divide the people on this legislation. The press has endeavoured to line up the people into two camps, and to set one class at the throats of the other. The Opposition is now endeavouring to apply those tactics by dividing the employees of the private banks. Honorable senators opposite contend that the 20,000 employees of the private banks will be given only a precarious tenure when transferred to the Commonwealth Bank, ft is clear that those employees do not enjoy the security in their present employment which will be given to them as employees of the Commonwealth Bank under this legislation. The measure specifically protects their interests, and provides that they shall receive the same consideration as present employees of the Commonwealth Bank. Why is the Opposition endeavouring to divide the employees of private banks on this matter? The Opposition parties have not been concerned about preserving continuity of employment for employees of private banks in the past. At one time, there were over 50 private banks in this country, whereas to-day there are only eight. What happened to the employees of the banks which were absorbed in those amalgamations? They were not given any security. They were put out on the street and told to get jobs elsewhere.

Senator Cooper:

– They were paid compensation.

Senator MORROW:

– I know that they were not compensated; they were told to get out and look for jobs elsewhore.

Senator O’Sullivan:

– When was that?

Senator MORROW:

– Earlier Senator O’Sullivan suggested that the Government’s spokesman must be “Mandrake” to be able to do certain things proposed under the measure; one would have to be “ Mandrake “ to pin members of the Opposition down to what they say. I repeat that the 20,000 employees of the private banks will be given a greater measure of security in the employ of the Commonwealth Bank than they now enjoy.

Senator Cooper:

– What is the honorable senator’s authority for that statement ?

Senator MORROW:

– My authority for it is this legislation, and also the word of the Prime Minister (Mr. Chifley) that the Commonwealth Bank Act will be amended in order to provide those safeguards. When anti-Labour governments were in office they made no attempt to amend provisions of that act similar to provisions in this bill about which the Opposition parties complain to-day. It is clear that honorable senators opposite are merely indulging in propaganda on this point.

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

.- Senator O’Sullivan raised a question as to whether all bank officers were adequately protected under this legislation. I say in answer to that, “ Yes “. Take first the case of employees of private trading banks in Australia whose shares will be acquired.

Clause 48 ensures continuity of employment. That is irrespective of whether the shares in those banks are acquired voluntarily, or compulsorily. With regard to the banks whose businesses, in contradistinction to shares, are acquired, clause 48 (1) provides - ( 1 . ) Each person employed in Australia by a private bank -

  1. to which the Treasurer has given a notice under sub-section (1.) of section twenty-two of this Act; or
  2. which has made an agreement with the Commonwealth Bank under that section shall, unless he elects otherwise not later than the date upon which the business in Australia of that private bank is to be taken over by the Commonwealth Bank, be employed by the Commonwealth Bank as from that date.

That covers several classes of cases. Clause 22, under which the Treasurer (Mr. Chifley) gives notice to initiate negotiations, implies the obligation to employ the staffs of the private banks irrespective of whether, pursuant to that notice, the business is acquired voluntarily, or compulsorily, subject to paragraph b of clause 49 (1). That will apply to cases where the shares in a private trading bank have been acquired by the Commonwealth Bank, and that bank has, in due course, disposed of the whole of its assets to the Commonwealth Bank. Senator O’Sullivan will find the authority for that in clause 22 (5) which reads - (5.) The Commonwealth Bank may, subject to the approval of the Treasurer, make an agreement with a private bank for the taking over by the Commonwealth Bank of the business in Australia of that private bank.

So, I say without hesitation that whether a business is acquired compulsorily or voluntarily, every person employed by the private bank so dealt with will be entitled to employment in the Commonwealth Bank.

Senator O’Sullivan:

– But not necessarily subject to the Commonwealth Bank Act.

Senator McKENNA:

– I am coming to that point, because it was raised by Senator Cooke. Clause 50 states that as soon as practicable after a person becomes employed by the Commonwealth Bank under clause 49, it shall create a position in the Commonwealth Bank service which thebank considers to be appro priate and appoint the employee to that position. But there is a qualification to that : “ Unless the duties performed by that person in the private bank by which he was employed immediately prior to his becoming employed by the Commonwealth Bank were such that, if he had been employed by the Commonwealth Bank performing similar duties, he would have been employed as a temporary or casual employee “. The draftsman seems to have taken quite a long time to express this thought; but, boiled down, that qualification simply applies in a case where the Commonwealth Bank employs persons on a purely temporary, or casual, basis. I think of people, particularly in the category of cleaners, who may work for a month, a year, ten years or for life, but are not on a permanent basis, or part of what one would normally term the Commonwealth Bank service. The point is that if there are persons on a temporary, or casual, basis, the obligation is still there to employ them, but not otherwise than on a temporary, or casual, basis.

Senator Cooper:

– If they are employed on that work on a permanent basis by a private bank, will they be transferred only on a casual basis to the employ of the Commonwealth Bank?

Senator McKENNA:

– I believe that there are officers, such as attendants, in the Commonwealth Bank service who are employed on a completely permanent basis, and I should imagine that if there were an employee in that category on a permanent basis, and regarded as a permanent employee by a private bank, he would be regarded as a permanent employee and as part of the Commonwealth Bank service on being taken over. I am informed by my adviser that that is a correct statement of the position. Thus, honorable senators have the assurance, not from me, but from the bill itself, that every one employed will be taken over; and there may be persons engaged in temporary, or casual, employment who will still be taken over in that capacity.

Senator O’SULLIVAN:
Queensland

– If clause 50 says anything at all, it limits the employees who will be covered by clause 22. The Minister for Health (Senator McKenna) referred to clause 48. It is true that if the shares are taken over those employees will be taken over, but there is no indication in the bill that they shall continue in employment under the Commonwealth Bank Act. I wish to know whether there is to bc any differentiation between employees according to the various forms of acquisition, such as, the purchase of shares voluntarily, or compulsorily, or the acquisition of businesses voluntarily, or by compulsion. I ask the Minister to point out how clause 50 envisages bringing under the Commonwealth Bank Act any other class of employees except those covered by clause 49. That assumes that an employee becomes employed by the Commonwealth Bank under sub-clause 1 or 2 of clause 49. That deals only with those affected by the exercise of the power embodied in clause 22. What happens to the others? Under the bill, as drafted, there is a definite discrimination between employees engaged under claude 48 and those engaged under clause 50.

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

– There will be no discrimination, but there may be a difference. Under clause 48, which deals with cases where the shares of a private trading bank are acquired, the honorable senator will appreciate better than any one else in this chamber, the employer remains the same. It is company “ A “, despite the fact that its shareholders have been replaced by the Commonwealth Bank as shareholder; and it has the same employer with the same assets and liabilities. Clause 48 ensures that the conditions of the staff in that company “ A “ shall continue. So long as bank “ A “ is allowed to remain in that position, that can continue to be the position, and their conditions of. employment are safeguarded by clause 48. They will continue to be employed on the same terms and conditions applicable at the date of acquisition of shares, or as subsequently varied by the competent industrial authority. Nothing will alter that. When in due course the directors are appointed to that bank and enter into an agreement, as they will, to sell out to the Commonwealth Bank, the clause to which the honorable senator is referring will come into play. I invite him to consider clause 49 (1) (6).

Senator O’Sullivan:

– That applies to those affected by clause 22. I want to know what will happen to the others.

Senator McKENNA:

– Clause 22 is the clause providing for either the voluntary or compulsory acquisition of a business, and that is exactly what I am talking about. In either of those cases there is a guarantee of employment given by clause 49 (1). By clause 50 there is a guarantee of appointment to the Commonwealth Bank, subsequent to such employment, except in the case of certain casuals.

Senator O’Sullivan:

– I have no axe to grind in this matter, but, on behalf of those whose jobs are at stake, I want the position clarified. I presume they do not know what the banks are going to do. There will be a section of the employees engaged under the provisions of clause 48. Are they to continue under the logs approved already by the Arbitration Court?

Senator McKENNA:

– The answer to that is “Yes”.

Senator O’Sullivan:

– Those who are employed in contemplation of clause 50 will come under the provisions of the Commonwealth Bank Act, and their rights as to emoluments and so on will be preserved. One section of the employees will be covered by the awards of the Arbitration Court as far as hours, wages and general conditions are concerned, and the other section will be covered by the Commonwealth Bank Act.

Senator McKENNA:

– Until such time as those first-mentioned banks whose shares are acquired in fact have their assets transferred to the Commonwealth Bank. Then they will be in the same position as the employees of the banks whose businesses are acquired by virtue of the provisions of clause 22. They will all come together under the one heading. It is made very plain in the clause.

Senator O’Sullivan:

– That is precisely what the clause does not say. I am glad to have the Minister’s assurance that that Ls the ultimate intention, but a reading of clauses 48 and 50 must give rise in the mind of anybody who reads them to a doubt as to what the industrial future of the respective employees will be. It is unfair of the Government to allow such a doubt to linger in the minds of those affected.

Question put -

That the proviso proposed to be added (Senator Rankin’s amendment) be so added.

The committee divided. (The Chairman - Senator T. M. Nicholls.)

AYES: 3

NOES: 31

Majority . . . . 28

AYES

NOES

Question so resolved in the negative.

Clause agreed to.

Clause 51 (Preservation of certain terms and conditions of employment).

Senator MURRAY:
Tasmania

– Sub-clause 1 a. deals with the salary payable to a person to whom the provisions of clause 48 apply and provides that it shall not be less than the salary payable to that person immediately prior to the date referred to in that clause. Is provision made to cover the case of employees who are living in private bank premises or in dwellings owned by private banks and who receive such things as free fuel, light and water as part of their salaries? This clause deals only with salaries, but there are many appointments which carry with them privileges apart from salary.

Senator McKENNA (Tasmania - Minister for Health and Minister for Social refers back to clause 48, which deals with a case where the shares of a bank have been acquired. As I pointed out in the debate on the last clause, in those circumstances the conditions of employment will remain exactly as they are to-day, with the same employer. In a case where the business of a private bank is taken over voluntarily or compulsorily, as distinct from taking over the shares, there is no complete safeguard in this bill for every last detail of the conditions of employment of men and women within the service of that bank. All the important matters such as salary, long-service leave, sick leave and pension rights are covered The pension rights will be turned into legally enforceable rights, which is not the case at the present time. All the really important conditions of employment aresafeguarded, but details such as the honorable senator mentions are not referred to specifically in this bill.

It is appreciated that a home and furniture are very real assets to-day and there is no doubt that the Commonwealth Bank will have regard to those concessions that are now made to officers of the private banks. In fact, I am assured that the same practice obtains in the Commonwealth Bank service. The officers of the private banks need have no fear but that they will enjoy, if the bill is passed, the same amenities as they enjoy to-day. I cannot, however, point to anything in specific terms in the bill.

Clause agreed to.

Clause 52 agreed to.

Clause 53 -

For the purpose of calculating a benefit arising under the terms and conditions of employment of a person who becomes employed by the Commonwealth Bank under this Part, a period of employment of that person by a private bank (including a period of employment by a previous employer which was recognized by that private bank as being a period of employment by that private bank) which is continuous with a period of employment by the Commonwealth Bank shall be deemed to be a period of employment by the Commonwealth Bank.

Senator COOPER:
Leader of the Opposition · Queensland

– As seniority in the sense of length of service is at present important when promotions are being considered in the service of the Commonwealth Bank, a possible position affecting returned servicemen in this regard must be considered. Assuming clause 53 effectively provides for continuity of service as between the private bank and the Commonwealth Bank in the ordinary case, there appears to be a gap in the case of the ex-serviceman whose employment with the private bank ceased by resignation, as distinct from being granted leave, when he went into the forces. It will be realized that there were many men who did not think of asking for leave when they joined up. They were in general given a statutory right to reinstatement in their old positions under conditions no less favorable than those which would have applied had they remained in the bank’s employment. For certain limited purposes, such as longservice leave, the continuity of his service is deemed not to have been broken by his absence. That is provided for in sections 16 and 17 of theRe-establishment and Employment Act of 1945. There appears to be nothing in that act, or in section 118a. of the Defence Act, or in clause 53 of this bill which would, in the special case now under consideration, make his pre-war service and /or the period of his absence count as service with the private banks for the purpose of determining his length of service in his new employment with the Commonwealth Bank. It is probably an oversight, but it may have serious consequences to some exservicemen. I have circulated an amendment which I now move -

That the following words be added - “ The continuity of employment of any person in the service of a private bank shall be deemed not to have been broken by his absence from employment during any period between the date upon which that person left employment in order to commence war service as defined in the Re-establishment and Employment Act 1945 and the date upon which he was reinstated in or returned to that employment “.

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

– There is virtue in the amendment of the Leader of the Opposition (Senator Cooper), but it is an other matter which he has raised rather late. Notice of his amendment reached me this afternoon just before the Senate bells rang. I refer the honorable senator to Statutory Rule No. 8 of 1946 made under the Commonwealth Bank Act on the 10th May, 1946, and dealing with staff. They are known as amendments of the Commonwealth Bank Staff Regulations. Sub-regulation 3 of regulation 34 reads -

Where a person who is or has been appointed to the service of the bank has served as a member of the naval, military or air force of any part of the King’s dominions during the state of war which commenced on the 4th day of August, 1914, or the state of war which commenced on the 3rd day of September, 1939, he shall be entitled to havehis period of such war service taken into account in determining his relative seniority as if it were service as an officer of the bank.

I am informed by the advisors of the Commonwealth Bank that that subregulation has been given effect by the Commonwealth Bank in relation to all appointments that are made at any time to its service. The very point which the honorable senator makes in his amendment is already covered in regulations made under the existing Commonwealth Bank act.

Senator Cooper:

– Does that regulation deal also with persons who resigned, or does it cover only those who obtained leave to render war service?

Senator McKENNA:

– I appreciate the difficulty raised by the honorable senator. In certain instances men resigned and terminated their employment when they enlisted. They are entitled to reinstatement in the same way as are others who were given leave. The terms of the regulation are wide enough to cover both cases. I draw attention to the words, “ where a person who is or has been appointed to the service of the bank has served as a member . . . “ They do not refer to continuity of service. I am advised that the interpretation given to the regulation is that it covers both cases.

Amendment negatived.

Clause agreed to.

Clause 54 (Protection of existing pensions of former employees of private banks).

Senator COOPER:
Leader of the Opposition · Queensland

– This clause covers the position of former employees of a bank who have already retired from service, or have died, and who, or whose dependants, are enjoying pension rights.

There are two crucial dates to be considered: first, the date of vesting of shares, in respect of an Australian private bank under clause 13 (3), and, secondly, the date of transfer of business in the case of such a bank and also of any other private bank covered by the bill. Moreover, the place of residence of such pensioners is also a material factor. In the first case, pensions, whether payable directly by the bank or out of a provident fund, are continued until the transfer of the business of. the bank, irrespective of the place of residence of the beneficiary and also of the reasonableness of the conditions under which it is being paid. In this connexion, I am not unmindful of sub-clause 7, but it would not apply until after the date of taking over the business, as the Commonwealth Bank assumes no liability until that date. In the second case, namely, the period as from the taking over of the business, the right of the pensioner is that he shall be paid by the Commonwealth Bank the pension previously enjoyed by him. Two important qualifications are, however, attached to this right. In the first place, the recipient must be a person whose usual place of residence is in Australia, unless the Commonwealth Bank voluntarily chooses to assume liability to non-residents under sub-clause 6. However, for what it may be worth, a right against the private bank or the trustees of the provident fund is preserved, under sub-clause 8, in all cases in which the Commonwealth Bank has not assumed liability. In short, the position of the non-resident pensioner is as precarious as that of the non-resident existing employee. In the second place, the rights of pensioners are subject to limitation if the conditions under which they are payable differ unreasonably from the conditions applicable on the 15th August. The question of unreasonableness is not to be determined by the committee, as in the case of clause 52, but, in the first instance at least, would rest with the Commonwealth Bank. If dissatisfied, the pensioner then has to embark on litigation. I should like the Minister to say whether the position is as I have stated it.

Senator McKENNA (Tasmania - Minister for Health and Minister for of the Opposition (Senator Cooper) has put the position well. He acknowledges that, in respect of banks whose shares are taken over, there is no question of residence- or other qualification involved in the matter of pensions to former employees of the bank who are now in receipt of pensions. But, in respect of the acquisition of the business of a bank, there is difficulty because of the fact that the pensions are confined to persons resident in Australia who are receiving pensions. The difficulty arises in relation to the three banks which are registered in England, and have officers in Australia, and also in other countries, as well as shareholders both in Australia and abroad. All that we can do under those conditions is to take over the assets of the banks which are available in Australia. That is to say, their Australian business is taken over, but not the English assets or the New Zealand assets. When it comes to paying pensions, the Government takes over a certain proportion of the pension funds. A person who happens to be resident outside Australia still has his claims against his hank. He has his legal enforceable rights against the banks, but, in respect of a person resident in Australia, the Commonwealth Bank accepts that obligation, and it also takes a proper proportion of the superannuation fund to meet that obligation. That proportion will be determined by the Federal Court of Claims. The honorable senator need not be worried about the plight of a person residing abroad because the responsibility of his bank to him continues. The Australian Government will meet one class of claim and the bank will meet the claims of the other class. No injustice will be done to anybody, and no person will be deprived of a pension.

Senator COOKE:
Western Australia

– Clause 54 relates to pensions. Can the Minister give an assurance that a person who contributes to a superannuation fund or a pensions fund will be. able to vote as to whether the fund shall be wound up at the time that the banks are taken over, or will the Government acquire the funds regardless of the desires of the persons who contribute to them ? Is there any provision whereby contributors to such a fund can wind up the fund in order to contribute to the superannuation fund which is available to employees of the Commonwealth Bank by paying to that fund amounts which have been actuarially assessed ?

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

– The problem to which the honorable senator has referred was envisaged when the bill was drafted. Whilst there is provision to take over funds which may be actuarially unsound and give legal enforceable rights to beneficiaries under those funds, there is also a. provision in the bill that if the fund is dissipated, that is, paid out to the beneficiaries in a lump sum, the beneficiaries, on payment of that lump sum to the Commonwealth Bank, will have their rights guaranteed to them. It will not be impossible for the trustees of such a fund to wind it up and pay it to the beneficiaries. I trust, however, that that will not be done. It would not benefit anybody. It should be sufficient for the officers concerned to have a guarantee that the Commonwealth Bank stands behind the fund, even though it may not be completely on an actuarial basis. That strengthens immeasurably the position of the officers concerned.

Clause agreed to.

Clause 55 (Payments to Commonwealth Bank in respect of pension obligations assumed by Commonwealth Bank).

Senator COOPER:
Leader of the Opposition · Queensland

– I greatly appreciate the explanation given by the Minister for Health (Senator McKenna) in respect of clause 54. The clause which we are now considering deals with the payment to the Commonwealth Bank in respect of pension obligations assumed by that bank. This provides a means of determining the amount which is to be transferred from the various provident funds to the Commonwealth Bank in order to meet the obligations assumed by that bank under the bill. As regards transferred employees or pensioners resident in Australia, no comment is called for, but in respect of those in whose case the bank has assumed no liability a different position may arise. They are those who elect not to be employed by the Commonwealth Bank, employees of the trading banks serving outside Australia with whom the Commonwealth Bank does not choose to make an agreement, and non-resident pensioners such as those mentioned in the previous clause. In each of these cases, the person in question must look for his rights to what-1 ever balance of the provident fund is left in the hands of the trustees of the fund by the Federal Court of Claims. By reason of the appropriation of the assets of the trading banks, these banks may not be in a position to continue the contributions that they have undertaken to make, and> of course, the Commonwealth Bank does not acquire any liability to make contributions to this residue. So, the net result may be that these residual funds may become actuarially insolvent. I should like to have the Minister’s opinion on that matter.

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

– The Leader of the Opposition (Senator Cooper) has, in effect, confirmed what I said earlier, namely, that there is a danger that some of these funds may become actuarially unsound. He has instanced three categories of persons who will not be transferred to the Commonwealth Bank. Ineach of these cases, the individuals concerned will be entitled to whatever rights they have for the repayment of their contributions; but I point out that we have had regard to that fact, and that we have not left it arbitrarily to the Commonwealth Government or to the Commonwealth Bank to determine the appropriate and fair amount to be paid. That is a matter for decision by the Federal Court of Claims. Then, if a fund in the hands of the private trading bank trustees becomes actuarially unsound, all that the Federal Court of Claims can do is to give us a proportion of it. It would not be fair to give us the entire fund to meet only part of the liability. We should take what the court regarded as a fair proportion, and, in determining that matter, the court would have regard to the allocations that had to be made out of the remaining portion of the’ fund. So, there is complete provision for a fair allocation of the fund between those who come into the Commonwealth Bank service and those who do not. Certainly 11 those who transfer will be assured of their position because all the resources of the Commonwealth Bank and of the Commonwealth Government will be behind them. However, I am afraid that those who are outside the scope of the Commonwealth Bank Act, and those who do not elect to come into our service, cannot have any better bargain than they have made themselves. They must rest on their present rights.

Clause agreed to.

Clauses 56 and 57 agreed to.

Clause 5S (Rights of customers of private banks).

Senator O’SULLIVAN:
Queensland

– I represent a State that has no banking facilities other than those provided by the Commonwealth Bank and the private trading banks. When this measure becomes law, the people of Queensland will have only the Commonwealth Bank with which to deal, and I *m sure that they would have me seek iaa assurance that the Government is not being facetious when it provides in this clause that -

Nothing in this Act shall require a State or person, being a customer of a private bank, the business of which in Australia has been taken over by the Commonwealth Bank under this Act, to continue as a customer of the Commonwealth Bank.

I ask the Minister for Health (Senator McKenna) to explain what effect this provision is intended to have in Queensland and in the other States in which there are no State banks, other than to be merely a horrible piece of satire?

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

– I assure the honorable senator that the Government is not being facetious. The honorable senator should remember that under this bill the Commonwealth Bank is substituted as a party to all contracts to which the private banks have been parties. This clause is merely an indication that it is not intended to exercise compulsion on individuals to remain, in that situation if they wish to escape from it. It may well be that the Commonwealth Bank will be the only bank in Queensland. That is a position that will gladden the heart of the Government. I assure the honorable senator, and he in turn may assure the electors of Queensland upon his return to that State, that there is no humour in this clause.

Senator O’sullivan:

– Not even grim humour?

Senator McKENNA:

– No.

Clause agreed to.

Clause 59 (Examination of records of private banks).

Senator COOPER:
Leader of the Opposition · Queensland

– This clause deals with the examination of the records of the private banks. Presumably any private bank can be invaded by persons who are not necessarily officers of the Commonweal fh Bank. Surely that is a very arbitrary method of procedure. If such rights were confined to members of the Commonwealth Bank there might bc some justification for the provision, but, it would appear that inspectors will be able to enter bank premises and examine private records of the bank and of customers even before steps have been taken by the Government to acquire that bank. These inspectors could take extracts from the records of the bank, including the records of private financial transactions. The Minister for Health (Senator McKenna) will probably have some explanation of this matter and I shall be glad to hear it.

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

– It was necessary, in the first place, to enable the Commonwealth Bank to make an examination of the assets that were likely to be taken over. The need for this provision, however, is not now immediate because of the arrangement reached between counsel for the banks and counsel for the Commonwealth. Inspections will not be necessary while negotiations are proceeding, and until the litigation has ended, this clause will remain in abeyance. In justification of the clause, however, I would point out that its intention is merely to give the purchaser an opportunity to examine goods that he is buying. Surely that is quite reasonable.

Clause agreed to.

Clause 60 (Directors and officers to assist in respect of transfer of business).

Senator O’SULLIVAN (Queensland) 1 5. 10]. - This is probably the mo3t sadistic part of the whole bill. Clause 59 provides the ways and means for the Labour Government to destroy the banking system and traditions that have been built up in this country during the last century or more. This clause calls upon the present holders of office in the trading banks, not only to be the victims, but also to dig their own graves. An obligation is imposed upon them, under threat of very severe financial penalties, to do everything that is required of them by the Government to destroy themselves completely. If they were asked to provide their own flowers for their funeral it could not be more wicked than this masterly piece of sadism. The people most vitally affected by this measure - those whose business careers are being cut short and whose business associations and traditions are to be completely ended - are compelled by this clause to do all that is necessary to render it easier for the Government to trample upon their dead bodies.

Senator COOPER:
Leader of the Opposition · Queensland

– This clause provides extraordinarily heavy fines for those who do not comply with this legislation. The last few years have been far from free of industrial -trouble, and numerous industrial measures have been passed by the Parliament, prescribing penalties for breaches of the industrial laws. But these laws have been broken time after time and. the penalties have not been enforced. The Government has permitted strikes and “ go-slow “ tactics to continue unchecked. It seems extraordinary, therefore, that such severe penalties should be prescribed in thismeasure for any of the 20,000 law-abiding citizens - officers of the private banks - who do not comply with its provisions. It is true that employees of the private banks may accept or reject employment with the Commonwealth Bank, but I draw attention to the remarkable state of affairs that would be created if these people were to go on strike against the manner in which they are to be transferred. I do not suggest for a moment that such a thing would happen, but, apparently, the Government had something of that kind in view when it provided these heavy penalties. The fines are unnecessarily severe. The private bank employees are loyal Australian citizens, and, although they may object to what is being done - they have registered their objections most forcibly by signing petitions - I have no doubt that, for the good of the country, they will give of their best in the services of the Commonwealth Bank.

Senator COOKE:
Western Australia

– I have had a rather extraordinary duty imposed upon me by a deputation representing officers of the private banks of Western Australia. It has been claimed, in the course of this debate, that no influence has been brought to bear by the management of the private banks on the attitude of their employees to this legislation. But, now, at the request of officers of the private banks, I ask the Minister for Health (Senator McKenna) whether, if a private bank employee breaks the law under duress, he will have to suffer the penalties prescribed in this bill. If he can prove that be was instructed by his employers to do certain things, will he be liable ro punishment? If an instruction or direction be issued to any officer of a trading bank or duress be exercised upon him by his employers in any manner, how can he avoid being penalized by his employers at that time as an employee of the bank - by the carrying into effect of the provisions of this measure at a later stage, if the action he was directed to take prevented the Government implementing this measure if and when it becomes law? When I interviewed the members of the deputation which waited upon me they used the word “duress”, although they have now substituted another expression.

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

– I think that the words mentioned by Senator O’Sullivan were happily placed in the measure because they enabled him to make a fine peroration and to string together a great many condemnatory adjectives. In reply to his contention that the fines provided are most substantial, I point out that they are maximal, and that the court would not necessarily impose them. The court may impose penalties ranging from fi to £1,000, so that the determination of the amount of the penalties is left to the fairness of the court. With regard to possible cases mentioned by Senator Cooke, where bank officers may be compelled, because of duress exercised by their superiors, to disobey the requirements of clause 60, I have no hesitation in saying that in such circumstances the persons who will be held responsible will be the senior officers or the senior executives, and as long as there is any sanity left in the offices of the AttorneyGeneral’s Department, subordinate officers will not be prosecuted. Prosecution of subordinate officers in such circumstances would be not merely illegal but immoral.

Clause agreed to.

New clause 60a.

Senator McKENNA:
Minister for Health and Minister for Social Services · Tasmania · ALP

– I move -

That, after clause 60, the following new cla-use be inserted: - “ 00a. The Commonwealth guarantees the payment of all compensation payable by the Commonwealth Bank under this Act.”

The reason for the amendment proposed is that under the Commonwealth Bank Act 1945 the Government guarantees every payment due by that bank. It is desired to incorporate this guarantee in specific form in the present most important bill.

New clause agreed to.

Clause 61 agreed to.

First, Second and Third Schedules agreed to.

Title agreed to.

Bill reported with amendments; report adopted.

Third Reading

Motion (by Senator Ashley) proposed -

That the bill be now read a third time.

Senator O’SULLIVAN:
Queensland

– I move-

That the word “ now “ be left out and the following words added: “this day six months “.

As the Minister for Health (Senator McKenna) said during the course of this debate, this legislation is sudden and drastic, and the minds of legislators, apart altogether from those of people out side, are still probably in a state of flux and turmoil regarding it. There has been a lot of recrimination, and even the usually amiable, kindly and genial Senator Grant has indulged in an unfair accusation against me. He suggested that I collaborated with the press in concocting an account of my speech for publication. That allegation is not only grossly unfair, but is also quite unfounded. If it was said by Senator Grant iri the heat of passion and because of disappointment at the inadequacy of the report of his own speech, will he do the decent thing and withdraw? However, if it was said in calculated bitterness and wickedness I do not, of course, expect any withdrawal. A lot of wild charges have been made, many fantastic stories have been told, and a host of extravagant statements have been made by supporters of the bill. However, I accept the assurance of the Minister for Health (Senator McKenna), that the Government does not contemplate anything more than the implementation of the terms of the bill. I have a very high regard for the ability and integrity of the Minister-

Senator Critchley:

– The honorable senator is “ smooging “ now.

Senator O’SULLIVAN:

– I had not finished my sentence. I was about to say that I do not entertain the same regard for other members of the Government, who have shown by the statements that they have made, both outside and inside Parliament, that they cannot be trusted with the exercise of the tremendous power which this bill will place in their hands.

Senator Ward:

– That is nothing more than the honorable senator’s opinion.

Senator O’SULLIVAN:

– The tolerance of my youthful friend, who now interjects, does not extend to all his colleagues in this chamber. He would indict them and put them in gaol because they oppose the opinions of caucus.

Senator Ward:

– Try them first.

Senator O’SULLIVAN:

– No, shoot them first, and then try them.. However, the danger is that people like Senator Ward, and his namesake in the Government, might be taken seriously. Undoubtedly, there is an extremist element in Australia, and amongst the members of the Australian Labour party and of the Government. In spite of the assurance of the Minister there may come a time when the men comprising the Government will “ know not Joseph and it may not include amongst its members people like the Minister, who would be capable of exercising a restraining influence. Extremists may occupy the positions of authority, and if that happens woe betide the country because of the tremendous powers conferred upon future ministries by the present Government.

I offer no apology for my advocacy of the principle of free enterprise. By “ free enterprise “ I do not mean the unbridled exploitation of the community by a small . section ; I mean the continuance of a system which permits the individual to develop his talents to his own profit and the advantage of the community, provided always that the welfare of the nation is adequately safeguarded by the Government. There is no necessity for the Government to intrude unnecessarily, wantonly and arbitrarily into the conduct of individuals’ affairs: it has no reason, no duty, no mandate to enter into realms and spheres in which private enterprise is already catering adequately for the people without exploiting them. Cartels, monopolies, combines and other abuses of the system of free enterprise are not necessarily characteristic of that system. If a human body is afflicted with disease, we do not mutilate that body in order to destroy the disease; we excise the diseased part. Therefore, it is quite competent and proper for free enterprise to continue as part of the body politic and for its abuse to be prevented by government action. No better example of the advantage of a system of free enterprise is supplied than by the present might of the United States of America. Less than 100 years ago that nation consisted merely of a group of scattered states, which were barely recovering from the disastrous civil war in the course of which they had been crippled. To-day we know the might of that nation. Of course, some honorable senators profess to decry that country, but I tell the

Senate and the world that, but for the development of the United States of America by a system of free enterprise, the war from which we have just emerged would not have been won by us. In making that statement I have regard to the tremendous sacrifices made by our own British people. However, the fact remains that communistic Russia itself would have gone down before the Germans but for the power and strength, the force of armaments, and the courage and valour of the people of free America, and in this country the operation of free enterprise has resulted in our people enjoying a working week of reduced hours. In Russia, instead of reducing the hours of work, the totalitarian regime of that country has increased them.

In conclusion, I say that the history of human freedom down the years has been one of struggle between despotic power wielded by a few a.nd the rights of the majority. Whether undue power be concentrated in the hands of an absolute monarch, as happened in bygone days, or in the hands of an outright dictator, such as we have witnessed in more recent times, or in the hands of an arrogant and contemptuous government, the fight for freedom will continue until the people’s rulers are brought to realize that they are, after all, the servants of the people, and that they can exercise honestly, morally and decently only such powers as are expressly given to them by the people. Until the present Government realizes that, the fight for individual liberty and freedom will continue. I do not propose to go back into history as far as Senator Grant, but throughout the ages the people have had to wrest from despotic hands the authority which really belonged to them. To-day the people of Australia demand that the authority and the power which are theirs shall not be exercised fraudulently in their name by a government which has no mandate to do so.

Senator GRANT:
New South Wales

– I desire to apologize to Senator O’Sullivan, and I accept his assurance that he did not collaborate with the press to concoct the report of his speech which appeared in a newspaper. That, of com se, is the worst possible interpretation that could be placed upon that report, and I accept his- assurance that he did not do so. However, I still maintain that he did not make the statement which appeared in the press-

Senator O’Sullivan:

– I have already told the honorable senator that I did not.

Senator GRANT:

– Excuse my saying so; but I can verify what I am about to say from my colleagues. The honorable senator began his account of his speech by repeating that if another government came into office the funds could be frozen, then he forgot his next remarks, and he certainly ‘did not make the statement which appeared in the press. Although J accept his word that he did not concoct the account, which .appeared in the press, j repeat that he did not make the statement which appeared in the Sydney Morning Herald. I am amazed at the outrageous statement made by Senator O’Sullivan. One. would imagine that he was a member of the Labour party. He is a member of the conservative party, which calls itself “ Liberal “ ; but the Gladstonian sense of the word has no application to it. Like the right honorable member for Cowper (Sir Earle Page), the honorable senator gave us a dissertation on the fight for freedom down the ages, and, seemingly, the conclusion we have to draw is that if those who waged that fight lived to-day they would be on the side of the private banks. He spoke of the United States of America as a. great land of free enterprise; but in the next breath he said that he did not stand for cartels. How he can stand for the free enterprise of America and object to cartels I fail to comprehend. Cartels are inevitable under the system of society existing in the United States of America. Governments in that country have been obliged to fight the cartels.

Away hack in the days of Theodore Roosevelt, the Rockfeller cartel which controlled oil, the Morgan cartel which controlled steel, and the Armour cartel which controlled meat, got to work and said to Theodore Roosevelt, when he was President, “ Your anti-trust law will have to be withdrawn. Through our banks we shall issue paper and not gold. We shall continue to issue paper.

Through our industrial organizations, we shall use our pressure directly, and indirectly, and, if needs be, close down our works until you withdraw this anti-trust act “. Yet Senator O’Sullivan says he stands for the free enterprise of the United States of America, but, at the same time, is opposed to cartels. I can say, at least, that from the first to the last clause of this measure honorable senators opposite have been consistent in their inconsistency. They found themselves driven back again and again to the points of attack laid down by the private banks. Now, when each of those points has been “ knocked “ they run for cover. Senator O’Sullivan ran to the United States of America, but his arguments in respect of conditions in that country were just as contradictory as his arguments in respect of conditions in Australia. The fact of the matter is that no one can remain a member of the Liberal party and at the same time stand for freedom. Many improvements in the banking system have been effected since the private banks were established over 200 years ago, but the interests which the Liberal party represents opposed all of those improvements.

I shall be very pleased when this measure is finally passed in this chamber. Legislation of this kind should have been enacted in this country 50 years ago. When Paterson founded the Bank of England he should have prevented the private banking system from ever gaining a hold. If Senator O’Sullivan knew something of the history of the Conservative party in Great Britain, which I do not think he does, he would know that a large section of that party opposed the establishment of the Bank of England, because they contended that money would pass into the hands of a monopoly bank, and that the very existence of England would be endangered. After the fight which has been waged for so many years against the private banking system, I am pleased that, at least, in this country we are now, at last, about to give it the coup de grace.

Senator ASHLEY:
New South WalesMinister for Supply and Shipping · ALP

– in reply - The Government cannot accept the amendment moved by Senator O’Sullivan. He has repeated the old argument that the Government is showing undue haste in proceeding with this measure. He has said that this legislation will adversely affect private enterprise. In his outburst, a few moments ago, he issued challenges to Government supporters in the House of Representatives. SenatorWard is quite able to defend himself ; but I suggest to Senator O’Sullivan that the Minister for Transport (Mr.Ward) would be only too delighted to debate with him any subject, including the nationalization of banking, on any platform in this country. It would be wiser for members of the Opposition in this chamber not to throw out challenges to members of the House of Representatives.

The honorable senator told us of the dangers that would arise under this legislation, and of the power that it would give to the National Government. If he is afraid that there may be a change of government in this Parliament as the result of the passing of this measure,I assure him that no honorable senator on this sides hares his fears, because I am certain that when this legislation has been in operation for some time the people of this country will rally to the support of the Commonwealth Bank under the new system, because they know that they will get a better deal from it than they have received from the private banks in the past. Senator O’Sullivan also contended that the Government had no realization of its obligations and responsibilities. The Government’s majority in the Senate is sufficient evidence of the people’s confidence in it, having regard to its record since it assumed office, particularly during the war period. This measure is of the greatest importance to the nation, and I am confident that it will usher in an era of prosperity unprecedented in our history.

Question put -

That the word proposed tobe left out (Senator O’Sullivan’s amendment)be left out.

The Senate divided. (The President - Senator the Hon. Gordon Brown.)

AYES: 3

NOES: 30

Majority . . . . 27

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Question put -

That the bill be now read a third time,

The Senate divided. (The President - Senator the Hon, Gordon Brown.)

AYES: 30

NOES: 3

Majority . . . . 27

AYES

NOES

Question so resolved in the affirmative,

Bill read a third time.

page 2710

AUSTRALIAN SOLDIERS’ REPATRIATION BILL 1947

Bill received from the House of Representatives and (on motion by Senator Cameron) read a first time.

page 2710

GOLD TAX SUSPENSION BILL 1947

Second Reading

Senator ASHLEY:
Minister for Supply and Shipping · New South Wales · ALP

– I move -

That the bill be now read a second time.

The object of this bill is to give effect to the decision to suspend the gold tax on and from the 20th September, 1947. The Gold Tax Act 1939 imposes a tax upon gold delivered to the Commonwealth Bank or to an agent of the bank. The tax so imposed is equal to one-half of the amount by which the proceeds payable by the Commonwealth Bank to the person delivering the gold exceed £9 per fine oz. The amount payable at present by the bank for gold is £10 los. 3d. per fine oz. and the gold tax was thus payable at the rate of 17s. 7 1/2 d. per fine oz. immediately prior to the 20th September, 1947. The tax was imposed in 1939, because it was considered by the government of the day that the gold-mining industry should ma.ke a contribution to the revenue required for war purposes out of the higher prices which were being obtained for gold as the result of wai- conditions. The tax is being suspended because it is desired to encourage the production of gold as a means of gaining dollars and thereby alleviating the present financial difficulties in regard to international trade. Rising costs of production in the gold-mining industry have also been taken into account in this regard. The bill provides that the suspension shall apply to gold delivered, on or after the 20th September, 1947, to the Commonwealth Bank or to persons to whom delivery of gold is authorized in pursuance of section 32 of the Banking Act 1945. It also provides that the suspension shall operate until such date as may be proclaimed, thus leaving it open to the Government to revive the tax, by proclamation, should it consider such action desirable at any future time.

Debate (on motion by Senator Cooper) adjourned.

page 2710

WAR-TIME (COMPANY) TAX ASSESSMENT BILL 1947

Second Reading

Senator ASHLEY:
Minister for Supply and Shipping · New South Wales · ALP

– I move -

That the bill be now read a second time.

This bill to amend the War-time (Company) Tax Assessment Act has the effect of discontinuing the war-time company tax as from the close of the financial year which ended on the 30th June last. Accordingly, the last year of company profits which will be subject to the tax is the year ended the 30th June, 1946, or the accounting period substituted for that year. The War-time (Company) Tax Assessment Act was enacted in 1940, and provided that the tax should be levied and paid for the financial year which commenced on the first day of July, 3940, and for each financial year thereafter, “ up to and including the financial year next succeeding that in which the war terminates “. Had the war legally terminated upon the cessation of hostilities in August, 1945, the financial year which ended on the 30th June last would automatically have been the last one from which war-time company tax would have been levied.

As part of its general review of taxation, the Government has carefully examined the incidence of this tax and has found that it contains many features which render its continuance in the period of post-war reconstruction inappropriate. As a war-time measure, the tax was necessary to ensure that companies, which made high profits in relation to the capital employed, made a further contribution to the revenue over and above the ordinary income tax payable in respect of their profits. Apart from the revenue needs of the country, there was every justification for reclaiming a substantial portion of the profits brought about by business expansion under extraordinary war-time conditions. In the post-war period, the circumstances which gave rise to these profits will cease to exist. With the return of industry to peace-time production, competition in most fields of production is rapidly being restored. Under normal peace-time conditions, this tax operates inequitably.

Like all taxes which are graduated according to the relation which profit bears to capital, it is unequal in its incidence in that it strikes more heavily at the newly established business, which have little or no reserves, than at the older businesses, which have been able to build up reserves employed in the business. The abolition of the tax should provide a stimulus for new industries. The discontinuance of the tax follows the trend in other countries in regard to similar forms of tax. The United Kingdom repealed its excess profits tax as from December, 1946. Canada, South Africa and New Zealand have also announced the repeal of their excess profits taxes. The act will continue in operation for the purposes of assessments for the financial years 1940-41 to 1946-47, inclusive, to enable assessments for those years to be finalized, and also to enable original assessments to be made in the future in respect of those years. Moreover, it is necessary to preserve the operation of those provisions in the act under which the Board of Referees is constituted, as provision is made in the Income Tax Assessment Act for certain matters arising thereunder to be referred to the Board of Referees for decision. The annual cost to revenue of the withdrawal of the tax is approximately £3,500,000. For the present, it has been decided to make no change in the super tax which is imposed on public companies at the rate of ls. in the £1 on the taxable income in excess of £5,000.

Debate (on motion by Senator Cooper) adjourned.

page 2711

WAR-TIME (COMPANY) TAX BILL 1947

Second Reading

Senator ASHLEY:
New South WalesMinister for Supply and Shipping · ALP

.- I move-

That the hill be now read a second time.

The bill before honorable senators is complementary to the measure amending the War-time (Company) Tax Assessment Act, the second reading of which I have just, moved. The two acts operate in conjunction in order to impose the war-time company tax. The War-time (Com pany) Tax Assessment Act provides for the ascertainment of an amount of the profit upon which war-time company tax is payable, whilst the War-time (Company) Tax Act imposes the rates of tax to be applied to the amount so ascertained. The proposed amendment to section 13 of the War-time (Company) Tax Assessment Act will result in that section ceasing to have application beyond the financial year which ended on the 30th June last, whilst the amendment proposed by this bill will ensure that the tax imposed by the War-time (Company) Tax Act shall terminate with assessments for that financial year. The last year of company profits which will be subject to the tax is thus the year ended the 30th June, 1946, or the accounting period substituted for that year.

Debate (on motion by Senator Cooper) adjourned.

page 2711

TRADING WITH THE ENEMY BILL 1947

Second Reading

Senator COURTICE:
Minister for Trade and Customs · Queensland · ALP

– I move -

That the bill be now read a second time.

The object of this bill, which is a machinery measure only, is to continue in operation certain regulations which were found necessary during the war in the administration of the Trading with the Enemy Act 1939-1940 and which were promulgated under the National Security Act 1939-1943 as National Security (Supplementary) Regulations 14, 38 and 49. National Security (Supplementary) Regulation 14 removed any doubt which might have existed regarding the power of the High Court under section 13 of the Trading with the Enemy Act 1939-1940 to authorize payments for the sustenance and maintenance of persons, and their dependants, whose businesses were placed under controllers appointed by the High Court pursuant to that section. National Security (Supplementary) Regulation 49 extended the powers and functions of a body corporate, where necessary, to enable it to act as a controller under the Trading with the Enemy Act 1939-1940. It is now proposed that these two regulations be incorporated as sections of the act as the need for such provisions has not yet passed.

The bill is also designed to continue in operation, under the Trading with the Enemy Act 1939-1940, regulations for the control of enemy property which have been in force since the 27th September, 1939, under National Security legislation and the Defence (Transitional Provisions) Act 1946. The National Security (Enemy Property) Regulations, which, if this bill is passed, will become regulations under the Trading with the Enemy Act as from the 1st January, 1948, were first introduced to bring under control the property and funds in Australia of persons resident in Germany. With the subsequent extension of hostilities, the property of persons living in all enemy countries, and the areas occupied by the enemy, came within the scope of the regulations. These regulations will be needed until all property taken under Commonwealth control thereunder has been disposed of in accordance with the peace treaties or other intergovernmental agreements made in respect of these matters. There are many problems associated with the disposition of enemy property and the work of de-control, realization or liquidation, as the case may be, is likely to take a considerable time. So much so, that the Government does not consider it would be appropriate to carry the regulations forward under the Defence (Transitional Provisions) Act. Rather, in view of the close association that has existed in the prevention of trade with the enemy and the control of enemy assets, it has been decided that the regulations could be most suitably preserved by re-enacting them under the Trading with the Enemy Act 1939-1940 as from the 1st January, 1948.

It is not proposed that there should be any change in the administration of the regulations, and they will continue to be administered by the Treasurer. All appointments and other actions taken under the existing regulations will still bold good. The only additional provision it has been necessary to make is in respect of penalties for infringement of the regulations. These were provided for previously in turn in the National Security Actand the Defence (Transi tional Provisions) Act 1946. Clause 3 of this bill contains the machinery necessary for the imposition of penalties under the Trading with the Enemy Act 1939-1940.

The final provision of this bill is to ensure that the powers of the Controller of Enemy Property, in respect of the assets of unincorporated enemy bodies, s uch as chambers of commerce and clubs, which have already been brought under his control by declarations by the Minister for Trade and Customs, shall not he impaired by the lapsing of National Security (Supplementary) Regulation 38, under which those declarations were made.

Since the printing of the bill, it has been decided to insert provisions for the making of regulations to carry out or give effect to article 6 of the agreement on reparations from Germany, on the establishment of an inter-allied reparations agency, and on the restitution of monetary gold, to which agreement Australia is a party. The Government intends to amend the bill to give effect to this decision.

Debate (on motion by Senator Cooper) adjourned.

page 2712

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1947

Second Reading

Senator ASHLEY:
Minister for Supply and Shipping · New South Wales · ALP

.- I move-

That the bill be now read a second time.

The provisions of thisbill are, with one exception only, confined to the allowance of relief, byway of removing certain goods from the Third Schedule to the Sales Tax (Exemptions and Classifications) Act, thereby reducing the rate of tax thereon from 25 per cent, to 10 per cent., and also by allowing certain additional exemptions. A statement is being circulated for the information of honorable senators setting out particulars of the goods affected. The reduction from 25 per cent, to 10 per cent, applies to a considerable range of goods including confectionery and ice cream, advertising and other printed matter, paper products, photographs, cameras and photographic equipment, smokers’ requisites, and fireside furniture. Certain new exemptions are being granted in pursuance of special requests which have been made to the Government from time to time. For example, exemption is being granted in respect of water tanks for domestic use. The wide range of foodstuffs which is already exempt is being added to by an exemption of Australian products in the form of fish paste and of foods which consist principally of fish. The exemption of “ aids to manufacture “ is being extended to cover plant used by any person exclusively or primarily and principally in the cleansing or sterilizing of bottles or other containers to be used by manufacturers in the marketing of their products, as well as goods for use in scientific research on behalf of manufacturers. There is also a new provision for exemption of motor vehicles for the use of ex-servicemen who have lost a leg as a result of their service in the armed forces.

In November, 1946, the law was amended to allow exemption of paint and certain associated goods. In the light of experience in the administration of that provision, action is being taken to reexpress the relevant item, chiefly for the purpose of authorizing the unconditional exemption of lithopone, titanium, antimony oxide, barytes, whiting and goods marketed primarily as paint thinner, and also to allow conditional exemption of materials not elsewhere exempted when sold for use as ingredients of exempt paint. It is proposed that the amended terms of the item shall be effective on and from the date of commencement of the exemption of paint, viz., the loth November, 1946.

As stated earlier, the bill contains one provision which is not designed to allow relief. Since the 13th September, 1945, the law has provided for exemption of “ aids to manufacture “ in the form of machinery, implements and apparatus. The object of this concession was to obviate double taxation such as had previously occurred by virtue of taxing the cost of these “aids to manufacture” as well as the value of the manufactured goods which are produced with their aid. The value of the manufactured goods would normally take into account the cost of the “aids”. The exemption of “aids to manufacture” as previously in force would apply to master cuttings and matrices for use in the production of gramophone or broadcast records.Where a person contracts to make a record for another, it is first necessary for him to obtain or make a master cutting and a matrix, and the cost of these articles is far greater than the cost of producing the finished records from them. It is customary in the trade for the master cutting and matrix to be handed over with the finished records to the customer for whom they are made, and it has been contended that there is a sale of the master cutting and matrix. Some manufacturers adopted the practice of separately invoicing the master cuttings and matrices and the records, and of paying tax only on that part of the charge which is attributed to the records. Tax was not paid in respect of the charge for the master cuttings or matrices, on the ground that at that stage they were second-hand goods and secondhand goods are specifically excluded from liability to sales tax. The result of this procedure is that a tax was paid in respect of the records upon a value of a few shillings only, whereas the actual cost of production of the records was several pounds. The law has been open to similar loss of revenue in respect of blocks for use in the production of taxable printed matter. The procedure referred to is an abuse of the exemption of “ aids to manufacture”, which was granted on the understanding that tax would be paid on the full wholesale selling value of the manufactured goods, which value would normally reflect the cost of “ aids “ used in production. Provision has accordingly been inserted in the bill to exclude from the exemption of “ aids to manufacture” any “ aids “ which are to be sold to the purchaser of taxable goods made with them.

Debate (on motion by Senator Cooper) adjourned.

page 2713

STATES GRANTS (TAX REIMBURSEMENT ) BILL 1947

Second Reading

Senator ASHLEY (New SouthWales-

Minister for Supply and Shipping) [8.25].- I move-

That thebillbe now read a second time.

This bill provides for the payment of an additional tax reimbursement grant to the States under the uniform tax plan. For this purpose the bill provides for the insertion of an additional section in the States Grants (Tax Reimbursement Act 1946. Under the 1946 act a revised basis of tax reimbursement grants came into operation as from the 1st July, 1946. The main provisions of the 1946 act were -

Aggregate grant in 1946-47 and 1947-4S to be £40,000,000 distributed among the States in accordance with the first schedule of the act.

In 1948-4.9 and subsequent years, the aggregate grant to be increased in accordance with a formula, which takes account of the variations in the States’ populations and half the percentage increase, if any, in the level of average wages per person employed over the level in 1946-47.

In 1948-49 and subsequent years, the distribution of the aggregate grant among the States to be varied to an increasing extent in accordance with the adjusted populations of the States.

The grant to each State in any year to be not less than that received in 1946-47.

At the conference of Commonwealth and State Ministers held in August of this year, the Premiers maintained that the aggregate grant of £40,000,000 would be insufficient to enable them to balance their budgets in this financial year. In support of this contention, the Premiers indicated that, whilst, on the one hand, their revenues were relatively inelastic, their expenditures were rising sharply, principally because of factors outside their control, such as increases in costs and prices. In the field of administration and social services, State expenditures are showing an unusually rapid increase, partly because of the impact of rising costs and prices. Furthermore, the formula in the Tax Reimbursement Act providing for the aggregate grant of £40,000,000 to be increased in relation to variations in the populations of the State and half the percentage increase in average wages does not come into operation until the financial year 1948-49. Accordingly, although the aggregate grant was increased by nearly £6,000,000 as recently as last year, the Commonwealth Government considers that a further increase in the current financial year should be made in order to assist the States to meet, the impact of rising costs and prices. Aftercareful consideration of all the circumstances, the Government considers that an additional grant of £5,000,000 would be justified.

The Commonwealth Government doesnot desire to upset the basis of reimbursement provided in the 1946 act which, in. the absence of a major change in the- relations between the Commonwealth and any State or States having an effect on. the finances of that State or States, was to operate for at least seven years. On thisbasis the State governments are, in effect, guaranteed the reimbursement provided, in the act, irrespective of fluctuations in the financial position of the Commonwealth. Accordingly, the Government proposes that the States Grants (Tax Reimbursement) Act 1946 should continue in operation with the addition of a section to provide for the payment of an additional grant of £5,000,000 to the States in 1947-48 ; and the payment of an additional grant in subsequent years to cover any deficiency that might occur between the aggregate grant as determined under the present provisions of the act and the sum of £45,000,000. It is also proposed that, in each case, the additional grant is to be distributed among the States in the same proportions as the aggregate grant of £40,000,000 is distributed at present, i.e., in the proportions set out in the First Schedule to the 1946 act. The distribution of this additional grant of £5,000,000 and of the total of the reimbursement grants which would be payable in 1947-48 is as follows: -

As provided by the act, the grants which I have just mentioned will be reduced by the amount of any arrears of State income tax which may be received by the States. In 1947-48 it is estimated that these arrears will amount to £580,000. I commend the bill to honorable senators.

Debate (on motion by Senator Cooper) adjourned.

page 2715

INCOME TAX ASSESSMENT BILL (No. 2) 1947

Second Reading. “ Senator ASHLEY (New South Wales - Minister for Supply and Shipping) [S.33].- I move-

That the hill be now read a second time.

This bill will be of particular interestate salary and wage earners, since ite principal purpose is to authorize an improved system of crediting employees with the value of certificates or stamps representing tax instalments deducted from their earnings. Under the new system, the certificates or stamps are forwarded to the department by the employee when lodging his return of income. Where the value of the certificates or stamps forwarded exceeds the tax payable, the employee will receive a refund cheque for the, excess at the same time as he receives bis notice of assessment. Where, on the other hand, the value is less than the tax payable, the notice of assessment will set out the balance to be paid by the employee.

Under the former system, the certificates or stamps were required to be held by the employee until his annual assessment was received, when they were submitted to the department in payment of the tax assessed. The new system will therefore enable more expeditious payment of refunds to be made to employees. By providing for the earlier submission of certificates and stamps to the department, it will also reduce considerably the possibility of their loss and the inconvenience which that would cause. The new system will operate for the first time in respect of assessments based upon income’ derived during the year ended the 30th June, 1947.

Opportunity has also been taken to effect certain drafting amendments in other provisions of the division relating to the collection of income tax by instalments. Those amendments will not impose any further duties or responsibilities upon employers, but are designed to simplify the law for both employers and administration. As most of the present sections of the division are affected by the amendments, it is proposed that the whole of the existing division be repealed and a new division inserted in its stead. Other important amendments proposed by the bill relate to the taxation of members of the defence forces. Those amendments follow recommendations made by a special departmental committee which was appointed earlier this year to report on the pay and conditions of service of the post-war defence forces.

The first amendment proposed provides that all members shall be assessed on a fixed amount of 20s. per week in respect of the value of rations and quarters, whether provided in cash or in kind. This amendment is designed to ensure a uniform basis- of taxation as between members who are living in camp and those who are required to live out of camp. A further amendment proposes to allow a deduction of up to £120 to members of the forces who are serving overseas, including those serving in Japan. It was pointed out by the committee that, as from 1st July, 1947, members of the forces serving in the Northern Territory, Papua, and New Guinea, for not less than one-half of the year of income are entitled, in common with civilian taxpayers residing in those areas, to a deduction of £120 by way of zone allowance. These allowances are granted in recognition of the disadvantages of uncongenial climatic conditions, isolation and high cost of living in remote areas of the Commonwealth. The Government is in agreement with the committee’s view that at least two of those disadvantages are experienced in Japan, and the proposed deduction is designed to place members in both areas on an equal footing.

Another amendment which I desire to mention is that relating to friendly society dispensaries. At present, those dispensaries are wholly exempt from tax. However, following the enactment of the

Pharmaceutical Benefits Act 1947, the introduction of the free medicine scheme will confer upon many friendly society dispensaries opportunities for trading with the general public which they have not previously possessed. Thus, if the income of the dispensaries continues to be exempt from taxation, they will obtain a competitive trading advantage over other pharmacists who participate in the scheme. In order to overcome this anomaly it is proposed to levy tax upon the income of friendly society dispensaries to the degree necessary to ensure that no undue trading advantage i3 gained by them in consequence of the operation of the free medicine scheme.

Accordingly, the bill provides for the taxation of all friendly society dispensaries which are granted approval to supply free medicine under the scheme. The basis of assessment will be a taxable income calculated by way of a percentage of the dispensary’s gross receipts from the Commonwealth under the free medicine scheme and from its ordinary trading. Tax will be levied at the company rate, which is at present 6s. in the £1. The dispensaries will not, however, be required to pay undistributed profits tax.

The only other amendment of importance is that which proposes to increase the sum appropriated from Consolidated Revenue for payment of the remuneration and travelling expenses of the chairman and other members of the taxation boards of review. This amendment follows the Government’s decision to establish a second board of review with a view to facilitating the determination of taxpayers’ objections to assessments.

The proposed amendments are explained in detail in the printed memorandum which was circulated some time ago. I commend the bill to honorable senators.

Debate (on motion by Senator Cooper) adjourned.

page 2716

PARLIAMENTARY ALLOWANCES BILL (No. 2) 1947

Second Reading

Senator ASHLEY:
Minister for Supply and Shipping · New South Wales · ALP

– I move- -

That the bill be now read a second time,

The Parliamentary Allowances Act makes provision for the payment of annual allowances to the Leader of theOpposition in both Houses of Parliament as some recompense to them for their onerous duties as leaders. When this act was under consideration in June last, theTreasurer (Mr. Chifley) gave an undertaking that he would consider the submission to Parliament this session of a bril to provide for an annual allowance, payable from the 1st July,, last, for a similar purpose to the Leader of the Australian Country party. This bill is the consequence of that promise, and I submit it for the approval’ of the Senate.

Debate (on motion by Senator Cooper)’ adjourned.

page 2716

LOAN (HOUSING) BILL 1947

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator Armstrong) read a first time.

Second Reading

Senator ARMSTRONG:
Minister for Munitions · New South Wales · ALP

~ - I move -

That the bill be now read a second time.

This bill seeks parliamentary authority for further advances to the States of capital funds totalling £13,000,000 for expenditure in accordance with the provisions of the Commonwealth and StateHousing Agreement Act 1945.

From the commencement of the agreement in 1945 to the 30th June, 1947, advances totalling £17,810,000 were made to the States. During the same period parliamentary appropriations amountingto £25,000,000 were approved, leaving a balance of £7,190,000 available towards the current year’s expenditure. In August last, the Loan Council approved a works programme which included £12,900,000 for rental houses under the Housing Agreement. The provision of £13,000,000 will cover expenditure to the end of the current financial year, and, in addition, will enable the building programme to continue in the early months of 194S-49.

Debate (on motion by Senator Cooper) adjourned.

page 2717

PAPERS

The following papers were presented : -

Broadcasting - Composite statement of programme and technical service accounts of Australian Broadcasting Commission and Postmaster-General’s Department in respect of the national broadcasting service for year 1946-46.

Lands Acquisition Act- Land acquired for Postal purposes - Chelsea, Victoria.

Senate adjourned at 8.45 p.m.

Cite as: Australia, Senate, Debates, 26 November 1947, viewed 22 October 2017, <http://historichansard.net/senate/1947/19471126_senate_18_195/>.

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