19th Parliament · 1st Session
The President (Senator the Hon. Gordon Brown) took the chair at 3 p.m., and read prayers.
– Further to a question that I directed to the Minister representing the Minister for Supply last week, I ask the honorable senator whether he noticed a statement that appeared in this morning’s press to the effect that the United States of America is greatly expanding- its production of aluminium. I understand that the Australian Aluminium Commission contemplates, producing only 13,500 tons of aluminium this year. In view of the growing urgency of aluminium to Australia, will the Minister ask the commission to endeavour to double the projected production for this year, because I am informed that Australia will need at least 25,000 tons?
– I noticed the newspaper article mentioned by the honorable senator. I brought the question asked by the honorable senator last week concerning this matter to the notice of the Minister for Supply, but I shall again approach my colleague and ask him to furnish a considered reply to the honorable senator’s questions as early as possible.
– In the event of an ex-serviceman or woman dying- before receiving payment of war gratuity, can .the Minister representing the Treasurer say to whom is the payment made, and does it become part of their estate?
– As Senator Annabelle Rankin was good enough to inform me that she intended asking this technical question, I requested the Treasurer to supply me with a correct reply. The War Gratuity Act deals with this matter in sections 17 and 24. In respect of a member who dies before the date of entitlement, section 17 provides that war gratuity shall not form part of the estate, but may be credited to. or. for the benefit of any person who is a beneficiary under his will - or, if he died intestate^ i3 entitled to a share in the distribution of his estate - and is either the widow or widower, or a child, parent, step-parent, foster parent or dependant of the deceased member. The case of a member who died after the date of entitlement but before the date of payment, is dealt with by section 24, which provides that in such an event the amount of war gratuity and interest shall form part of the estate and may, subject to the act, be paid to his personal representative, or, if there is no personal representative,, to such person, or persons as a prescribed authority determines in accordance with the regulations.
– Will the Minister for Fuel, Shipping and Transport inform the Senate whether the commission ,to inquire into the change of route between Port Augusta and Leigh Creek has yet been appointed? If not, what progress has been made in broadening the gauge of this line?
– The chairman of the commission has not yet been appointed. The Government hopes to make an announcement in this connexion at an early date. Survey work has been commenced from the Leigh Creek end, and rails and other materials have been ordered.
– Will the Minister representing the Treasurer inform the Senate whether it is a fact that the exemption from federal estate duty granted to widows of men who were killed in World War II. does not apply to the estates of men who have been killed in Korea? If that is so, will the Government consider amending the present legislation ?
– I am sorry that I cannot say offhand whether the facts are as stated- by the honorable senator. I should think that if an exemption applies to widows of men killed in World War IL, in. accordance with legislation that the Government has passed, similar benefits or privileges would be given to the widows of men killed in the war in Korea. I should be glad if the honorable senator would place the question on the notice-paper so that I may refer it to the Treasurer.
– Will the Minister for Fuel, Shipping and Transport inform the Senate whether it is a fact that, following the lifting of the overtime ban by the Waterside Workers Federation, men who offered to work overtime at Port Melbourne last Friday and Saturday were refused employment? If the Minister is unable, to answer the question immediately, I should be glad if he would institute inquiries to ascertain whether there is any truth in the allegation.
– I should be very surprised if men offered to work overtime at Port Melbourne only to find that, no work was available for them. As I am not in possession .of the. facts, I shall cause inquiries to be made, and shall let the honorable senator know the result thereof as soon as possible.
– In view of the Government’s readiness to attach the label of communism to any one in or out of the Parliament who has expressed opposition to the Communist Party Dissolution Act, is it the intention of the Government to apply the same label to the six justices of the High Court who have declared the act to be wholly invalid?
– Apparently the honorable .senator regards the High Court’s decision as a Communist victory. The Government regards the decision not in that light, hut as a victory for tho rule of law. This Government is bound to that rule of law and in order to protect it-
– That is why the Opposition opposed the legislation.
– The Opposition did not oppose it at all. On the cctrary. the masters of honorable senators opposite told them to allow the bill to go through. This’ Government, in common with all properly constituted governments, bows to the rule of law. It is its intention to see that that rule prevails.
– I preface a question to the Minister for Trade and Customs by stating that many of the promises made to the people by the Government parties before the last election have not been fulfilled. One of the most important promises was that, if elected, they would promote harmony on the coalfields, and thus make more coal available. Another promise was that they would settle the industrial troubles on the waterfront, and so bring about a quicker turnround of ships. Neither of those promises has been honoured. The Government has been forced to leave the solution of those problems to members of the Australian Labour party - Mr. Monk, Mr. Broadby, Mr. King and others - who have persuaded the miners and wharf labourers to place their grievances before properly constituted authorities. Those workers have now returned to full-time production.
– What is the honorable senator’s question?
– Now that this matter has been dealt with for the Government will the Minister give an assurance to this chamber that the Government will attempt to honour its promise to halt the rising cost of living and to restore value to the £11 If he will not give that assurance, will the Minister admit that the problem of rising prices, as in the case of the other problems to which I have referred, must be left to the Australian Labour party for solution after the next election?
– In spite of the splendid record of the Menzies Government, it is unfortunately true that not all of the promises made before the last election have been fulfilled. Yon are well aware, Mr. President, I am sure, that some of those promises have not been honoured because of the obstructive tactics of the Labour Opposition in the Senate and of the wreckers and Communists, outside the Parliament, whom the Opposition is protecting.
– Is the Minister for Fuel, Shipping and Transport aware that a large portion of the Eyre Highway, connecting Western Australia .and South Australia, is in a bad state of repair and is useless as a defence highway? Is the Minister in a position to state how much of the federal grant under the Commonwealth Aid Roads Bill 1950 is being allocated to maintenance of that highway? Can the Minister also indicate what programme has been drawn up, in relation to construction and maintenance cf this roadway, in order to bring it to a proper standard for defence purposes ?
– I shall cause inquiries to be made and will furnish the honorable senator, as early as possible, with a statement of the exact position. The question of strategic roads is now being personally examined by the officers of ray department.
– I address a question to the Minister representing the Minister for Air, in relation to the recruiting campaign. Several persons ‘ have made representations to me after having been refused admission as volunteers to various branches of the Royal Australian Air Force. In one instance the Air Board replied to the effect that applications to fill the general duties branch of the service closed towards the end of 1950 and that as interviews had been conducted and successful candidates appointed, it was regretted that the application could no’! be considered at the present time. When young men decide to join the defence forces for service anywhere in the world, they make a vital decision in their lives. Will the Minister make it clear to the young men who make such an important decision that certain musterings of th” Royal Australian Air Force have been filled, and thus avoid disappointment and disillusionment to men who wish to serve their country?
– I shall discuss this matter with the Minister for Air, and get from him a considered reply.
– Is the Minister for Trade and Customs aware that exporters of crayfish from Australia are experiencing difficulty in obtaining moisture-proof cellophane for wrapping crayfish tails as required by Commonwealth export regulations? In view of the fact that this industry is a very considerable earner oi dollars for Australia, will the Minister do what he can to ensure that sufficient cellophane of the right kind is made available? Having regard to shipping difficulties, and to the fact that the fishing season has begun, will the Minister treat this request as a matter of extreme urgency ?
– I did not know that there was a shortage of the kind of cellophane used in this industry. When I was in Western Australia in January last I went to Geraldton and saw some of those who were engaged in the crayfishing industry, which is a great dollar earner for Australia, and merits the support and encouragement of the Government. If the honorable senator will supply me with more details, the Government will do whatever is possible to remedy the shortage.
– In view of the acute shortage of hardwood in Victoria, as a. result of which timber merchants are importing timber from overseas, will the Minister for Fuel, Shipping and Transport arrange for a ship to bring timber from Tasmania where, I understand, considerable quantities of hardwood are available?
– I shall forward the honorable senator’s proposal to the traffic committee which is doing its best with the ships available, and I shall let the honorable senator know whether it is possible to make available a ship for the special purpose of meeting the emergency to which he has referred.
– Will the Minister representing the Minister for National Development consider sending to the United States of America teams of Australian industrialists to investigate production methods so that they may become acquainted with the most advanced methods for use in Australia?’ Is the Minister aware that this plan has been tried by the Government of the United Kingdom with outstanding success?
– I have read something of the experiments conducted in Great Britain, but I shall leave the Minister for National Development to comment on the matter. For that reason, I ask the honorable senator to place his question on the notice-paper.
– Is the Minister representing the Minister for National Development aware that extensive sulphur deposits have been discovered in Nairne, in South Australia? If so, will the Government do what is necessary to develop this most important industry by cooperating with the State Government or with companies which are endeavouring to produce sulphur, and in that way help to relieve the present serious shortage of sulphur in Australia ?
– I am grateful to the honorable senator for “raising this matter, which I shall bring to the notice of the Minister for Supply. Offers have been received from companies in various parts of Australia to expand their production in order to overcome the shortage of sulphur.
-Some time ago, Senator Sheehan, Senator Sandford and I asked the Minister representing the Treasurer whether consideration had been given to a promise made by the Treasurer regarding officers of the Public Service who after having qualified for superannuation pensions, were continued in employment in the Public Service during the war years. After war had been declared many public servants who reached the age of 60 years and had contributed for superannuation pensions based on retirement at that age were asked to continue in the Service because of the shortage of man-power and their special skill in certain work. Those who did so received only the ordinary rates of pay, the Government .thereby being relieved of the payment of their superannuation pen sions. Had they left the Public Service and accepted employment, in private enterprise, they would have received the ruling rates of pay, plus the superannuation pensions to which they were entitled. We directed questions to the members of the previous Government regarding this matter, but at a time too close to the holding of the general election for a reply to be furnished. We have since made representations to the Minister representing the Treasurer on the subject on several occasions, but we have not received a reply. Has the departmental committee that was appointed to examine this matter yet come to any decision, and if so, what is that decision ?
– This matter was referred to a departmental committee consisting of representatives of the Department of the Treasury, the Government Actuary and one other department. The committee has concluded its enquiries and has presented a report to the Government. As so frequently happens, the matter is not so simple as was stated in the question. Examination of the committee’s report reveals that the persons concerned fall into a number of different categories. I shall not attempt to describe .the categories offhand; there are four or five of them. Those falling within some categories were paid superannuation pensions while they continued to be employed in the Public Service, while those falling in other categories were not. The committee presented a very lengthy report to the Government. After considering it the Government referred certain questions back to the committee. As the Government has not yet made a decision on the matter, it would not be proper for me to state what recommendations the committee had made or what further enquiries the Government had instituted.
– Will the Minister representing the Treasurer ask Cabinet to consider exempting invalid and age pensioners from the payment of sales tax?
– To give practical effect to the honorable senator’s proposal, it would be necessary to deduct the sales tax ingredient from the retail price of goods sold to pensioners. As the tax is paid before goods reach the retailer, I do not know how it would be possible to calculate the tax ingredient included in the price of any particular article. I am afraid, therefore, that the proposal is impracticable.
– Will the Minister representing the Minister for Health request his colleague to provide an early statement of his plans for a national health scheme ? There is widespread confusion to-day not only among the Australian people, but also among friendly societies because, so far, no one knows exactly what the Minister has in mind.
– I am not aware of any general dissatisfaction with the Government’s national health proposals. I suggest that instead of making a bald statement the honorable senator should have produced some concrete evidence in support of his claim. However, I shall be pleased to bring his question to the notice of the Minister for Health.
– Can the Minister representing the Minister for Health inform me whether the health authorities have investigated the success that has been achieved by the use of glutamic acid in the treatment of spastic children, with a view to placing this drug on the free medicine list.?
– I shall bring the honorable senator’s question to the notice of the Minister for Health and obtain a considered reply.
asked the Minister for Trade and Customs, upon notice -
– In reply to the honorable senator’s questions I furnish the following information: -
asked the Minister for Trade and Customs, upon notice -
– In reply to the . honorable senator’s questions I furnish the following information :-r-
asked the Minister representing the Minister for Health -
With regard to the free distribution of milk to children under the Government’s health scheme - (a) what steps are taken to ensure the quality and purity of the milk; (5) is the milk pasteurized; and (o) what steps are taken to ensure hygienic storage and distribution of the milk before consumption?
– The Minister for Health has supplied the following information.: - (o), (6), (o). Responsibility for the quality find purity of the milk supplied under the Federal Government’s scheme rests with the State governments. The State is also responsible for any standards relating to storage and distribution, and in all these matters the Commonwealth is prepared to rely on the State health and education authorities.
Debate resumed from the 8th November, 1950 (vide page 2063), on motion by Senator SPOONER-
That the bill be now read a second time.
– I am amazed at the action of the Government in this matter. I have listened, as also have the people of Australia, to the list of measures that have been brought forward by the Government in this chamber and declared to be urgent. The Commonwealth Bank Bill 1950 (No. 1) was passed by the Senate and returned to the House of Representatives, and that legislation is apparently still being considered by that chamber. The present measure, which is entitled. Commonwealth Bank Bill 1950 [No. 2], is apparently placed before honorable senators to-day as a matter of some urgency. Although we were previously assured by the Leader of the Government (Senator O’sullivan) that the National Service Bill 1950 was necessary anc! urgent, and the Opposition in this chamber was charged with obstructing the passage of that legislation, which hari been passed by the House of Representatives, it is most significant that the measure has been relegated to the second place in the order of Government business on the notice-paper for to-day. On the notice-paper that was first issued for to-day the National Service Bill was accorded first priority in the precedence of Government business. However, another notice-paper has since been printed, and the new order of precedence provide? that the Commonwealth Bank Bill 1950 shall take precedence over ,the defence requirements of the country. The measure that we are now discussing - the Commonwealth Bank Bill - and which, has been so long under discussion, now assumes the order of first preference. In common with the people of Australia, I want to know what the Government really wants. Has it any matters of real urgency to be considered by the Parliament? If the measures on which the Government has recently laid such great stress are really urgent, why has the Government not insisted on their discussion before other business is transacted? Every one knows that the National Service Bill could have been debated and passed by the Senate to-day. Apparently the Government does not now wish to go ahead so urgently with its defence policy. It was clearly stated in the joint policy speech of the Government parties that there would be a review of the 1945 and 1947 banking legislation. Why then has the Government dallied with this matter for over twelve months ? It was also stated in the joint policy speech that the Government would put value back into the £1 and thus balance the economy of this country. No steps have been taken in that direction. By allowing costs to continue to rise the Government has reduced the standard of living almost to depression level. It is evident that the Government’s desire to place the control of the Commonwealth Bank under a board is for the purpose of further reducing the standard of living of the people. We have been .told that the Government intends to appoint five public servants and five business men to the proposed bank board, and claims, therefore, that the board would be democratic and representative of people of all shades of industry and commerce, and able to act in the best interests of the people. Amongst the five public servants to be appointed are Professor L. G. Melville and Dr. Boland Wilson, the economist. Professor Melville might think that the Commonwealth Bank has done a good job in the past and that its present policy should be continued. So also might Dr. Roland Wilson, the Treasury representative, who is the other public servant on the board. But, Professor Melville might then be appointed to a position with the International Bank for Reconstruction and Rehabilitation, and replaced on the board by somebody who did not think that the policy of the bank was good. If the Treasury representative thought that the policy of the bank was good he might be sent to London, and be replaced on the bank board by somebody who considered that the policy of the bank was bad. Neither I nor the people of Australia will be hoodwinked into believing that the initial appointees to the proposed board would remain there permanently. History usually repeats itself, and a position might be reached where, if the Liberal party wanted to do something for big business, it would place on the board men who were prepared to act in conformity with the wishes of the private banks. At the time of the depression the Labour Government Was in a minority in this chamber. The Commonwealth Bank, which was then controlled by a board, stated that it had no authority to advance money to farmers to keep them on their farms. The Opposition in this chamber at that time comprised 22 members of the United Australia party, who refused to pass legislation to enable the bank to extend additional credit to farmers. Honorable senators are at present witnessing a willy-nilly economy in this country. Whenever I have occasion to go into a chemist’s shop or a grocer’s shop the assistant is at a loss to know whether the prices shown on the list are correct or not, because with each new delivery prices rise, lt is difficult to understand why the Government, whose supporters claim to possess business acumen, has made no effort to check rising prices and restore value to the £1. Honorable senators have not yet been afforded an opportunity to discuss this subject. It is well known that the proposed banking legislation does not suit all branches of the Liberal party. The New South Wales branch of the Liberal party is very much opposed to the measure that is now before this chamber. That branch claims that this measure does not go far enough. Many of the men and women who form the machine that works for the election of Liberal candidates to the Parliament consider that there should be appointed a board that would cripple the Commonwealth Bank by diverting much of its business to the private trading banks, as was done by the previous bank board. The Minister for Social Services (Senator Spooner), who is in charge of this measure, is not at present in thchamber. At a meeting of the Stat: Council of the Liberal party held in Sydney on the 27th March, 1950, he was reported to have stated -
If the Council debates this ill-informed motion it will not be doi n e the right thing for the Liberal party of Australia. This bill is before Parliament and has been approved by the Liberal and Country parties. We have introduced it because it is in the interests of the Australian people . . . Mr. Jago’S attack on Dr. Coombs is a. direct reflection on our own Parliamentary Leader, who made statements that Dr. Coombs would be made the Governor of the bank.
The Minister was referring to a motion criticizing this measure. It is futile for the Government to tell the people of Australia that the passage of legislation of an’ urgent nature is being blocked by the Opposition in the Senate when legislation, which has been declared by the. Government to be of an urgent character^ is relegated to a lower position on the businesspaper by the substitution of a new business-paper. That is what the Government has done by making consideration of the Commonwealth Bank Bill the first business of the day. If the Government proceeds with its banking legislation, a select committee will be appointed. That. committee should he able to obtain, from the best legal minds, advice as to how the legislation should be framed in order to protect the people and to prevent the Commonwealth Bank from taking the kind of action that it took in the ‘thirties. Every aspect of the bill should be examined. The committee should obtain evidence from those who will be most affected by the legislation, such as woolgrowers, industrialists, wheat-growers and persons engaged in commerce.
If the world turned towards peace, prices would fall. In the event of a fall in the prices of commodities that we export to overseas countries, there would be a depression. The Prime Minister (Mr. Menzies) and those associated with him have stated that the last depression was brought about by the loss of overseas markets. If the prices of commodities exported to other countries fell, what effect would a Commonwealth Bank board have on the people of this country? The matter should be examined by means of consultations with people who would be affected and who would probably lose not only their businesses but also their homes. Does this bill provide any pro*tection against the Commonwealth Bank operating in the future as it did in the past? I challenge the Government to point to that protection and to assure me that the personnel of the board could not be changed overnight. It is of no importance that Dr. Coombs is a financial wizard. The Government should not advance the statement that Dr. Coombs will be the governor of the bank and that there will be four public servants on the board with him, as an argument why this measure should be passed. I hope that this legislation will never become law while it contains provision to reintroduce a Commonwealth Bank board.
This measure is not really urgent, because it has been before the Senate for twelve months. I suggest that a select committee of nine or eleven honorable senators be appointed and that that committee examine the matter, because I believe that there is no better way to deal with legislation than by appointing a committee composed of members of all parties of the Parliament. In that way it is possible to secure the services of a number of well-informed men from both sides of the chamber. I trust that the clause dealing with the appointment of a Commonwealth Bank board will be shelved until such time as a committee of the Senate investigates the matter.
– The position of the Commonwealth Bank Bill 1950 [No. 2] on the business-paper now before the Senate illustrates the inconsistency of this Government in determining what legislation is of a major character. Last Thursday the Senate was discussing the National Service Bill 1950, and honorable senators were given to understand that that was a most important measure because of the possibility of a war taking place within three years. A statement to that effect was made by no less an authority than the Prime Minister (Mr. Menzies). On the passage of that bill, we were told, depended the future safety of the Commonwealth. We were informed that that legislation was essential. To-day the Government sees fit to put aside that bill and to proceed with legislation which is of no value whatever, either to the people of Australia or to the defence of the country.
Arbitration legislation has already been “ guillotined “ through the House of Representatives. From reports appearing in the press, it appears that that legislation is of the most vital importance to the economy of the country, if not to its defence, and that its enactment is necessary in order to assure that production is not impeded. If that legislation is of such tremendous importance to the people of this country, why is it not before the Senate at the moment?
– Because the Opposition has stated that it will reject, the measure.
– I believe that the Government is so hopeless in its legislative outlook that it is jumping about like a cat on hot bricks and does not know which piece of legislation is likely to register most effectively with the electors. It is trying to create the impression that this legislation is of great importance, and that if it is not agreed to there will be a double dissolution and a general election. The Government is saying, in effect, that it will show the Labour party where it gets off ! Of course, the Government has.no consideration for the welfare of the country. We know that before the last general election the leaders of the present Government parties made many promises, including one to restore value to the £1. Fifteen months have passed since then, and the Government has done nothing hut talk. Indeed, its capacity to talk and make promises exceeds that of any other government of which I have ever heard, but as a government it has achieved absolutely nothing. The economic situation in Australia is so bad that no one can say what the outcome will be. The housewife knows that the prices of such necessaries as food and clothing have increased by more than 50 per cent., and in some instances, by as much as 100 per cent, in the last twelve months. The Government has nothing to boast about to the people should there be a general election. It has been tried and found wanting.
– What has this to do with the bill?
– It has everything to do with the bill. The whole purpose of the bill is to effect a reorientation of economic policy so that, instead of that policy being determined by the Government, it is to be left to a board the members of which we do not know. It would be convenient for the Government to be able to hide behind a board that would have to take responsibility for the new economic policy. A great deal of interest, is being displayed by certain people in the future of the Commonwealth Bank. Since its inauguration in 1911, the hank has been of great value to the people by saving them from exploitation. That was particularly so before the appointment of the Commonwealth Bank Board by the Bruce-Page Government in 1924. Until then the bank, under the control of a governor, was operated, in the interests not of shareholders, but of the Australian nation. So great was the progress made under the management of a governor that the Bruce-Page Government, which was of the same political colour as the present Government, decided that no longer would it allow this publicly-owned instrumentality to interfere with the lucrative business of private banking in Australia. The Government appointed a Commonwealth Bank Board, and when the economic depression hit Australia, direction of the economy of Australia was in the hands of that board, which fell down on the job. Perhaps it could not help itself, because it had to deal with the effects of reckless borrowing overseas by anti-Labour governments. At the time of the depression, Australia was hopelessly in debt to overseas creditors. Prices for our exports declined, and Australia found itself in bondage to the moneylenders in the United Kingdom and the United States of America. The Bank of England which was not then nationalized as it is now - and we do not hear much complaint about the new state of affairs - sent representatives to Australia to advise us on our economy. One of them was Sir Otto Niemeyer and another was Guggenheimer, neither of which names sounds English to me. They told us that our standard of living was -too high, that we must tighten our belts and make sacrifices. A Labour government, led by Mr. Scullin, was in office, but the Opposition had a majority in the Senate, Hundreds of thousands of persons were unemployed, and the prices of primary products were in some instances less than the cost of production. No government in Australia had money with which to undertake big public works for the employment of the people. The Scullin Government approached the Commonwealth Bank Board for financial accommodation. It wanted £18,000,000, which seems a trivial amount compared with the amounts handled by governments to-day. This is the reply which Mr. Scullin received under the hand of the Lite Sir Robert Gibson, who was chairman of the board -
Subject to adequate reduction of wages, pensions and social benefits of all kinds, and other factors which affect the cost of living, the Bank Board will co-operate with the Government in maintaining industry and reducing unemployment.
That was an extraordinary reply to he sent to the Government of Australia by a body of persons who were responsible in large measure for the monetary policy of the country. The board could have made available sufficient credit to enable the Government to find work for the unemployed and to keep the farmers on their holdings, even if they had to produce at a loss. The properties would have been maintained. The Commonwealth Bank Board told the Scullin Government where it could “ get off “. As a result, that Government was not only forced to reduce wages, pensions, interest rates, and goodness knows what else, but it ako faced such great difficulties in attempting to relieve the unemployment situation that it was forced to relinquish office. Unfortunately, it was not re-elected at the ensuing general election. The Scullin Government was crucified by the Commonwealth Bank Board. We are determined that we shall not allow such a thing to happen again. In this legislation this Government seeks to re-establish a Commonwealth Bank board and to clothe it with powers similar to that possessed by the former board. It is possible that uncontrolled inflation may produce results similar to those that flowed from the depression. This country has already almost reached a state of uncontrolled inflation. No attempt has been made by the Government to control profits or to place our economy on an even keel. Owing to the inaction of the Government our economy, has gone “ phut “. The Government is hopeless and helpless, and it seeks to reestablish a Commonwealth Bank board so that it may hide its ineptness behind that body. If this bill be passed the Board will be be able to control the Commonwealth Bank in all its phases, and thus determine the economic policy of the country. The Government would then probably say, “ We do not propose to interfere with an instrumentality that has been established by us”. The Commonwealth Bank has become the greatest instrumentality of its kind in the world. Honorable senators would do well to remember that the Commonwealth Bank, under the control of a governor who acts upon the recommendations of an advisory council consisting of expert individuals, is more able successfully to shape the economic destiny of this country than it would be if it were under the control of a board which had been appointed solely for political purposes.
– Why is the Bank of England controlled by a board ?
– The Bank of England has been nationalized. All decisions by the Chancellor of the Exchequer relating to banking matters are regarded as determinations made by the Bank of England, irrespective of whether or not the board agrees with them. Further, when a determination relating to banking policy is made by the Bank of England all the private banks in that country accept it and follow suit without squealing. Similarly, there have been no squeak on the part of the Australian people about the conduct of the Commonwealth Bank and the Commonwealth Savings Bank under their existing administration.
The Government has no mandate from the people to interfere with the existing management of the Commonwealth Baninor has it a mandate to interfere with the Banking Act 1945, which was introduced by a Labour government. No complaint has been made by the people about either. Admittedly, the Government received a mandate to prevent the nationalization of the private banks; but it was given that, mandate as the result of a wrong psychology deliberately induced in the minds of the people by the non-Labour parties in respect of that very necessary reform in the economy of this country. Provision has been made in this bill to repeal the legislation relating to the nationalization of banking. Members of the party to which I belong do not propose to interfere with that provision in any way.
Under the existing management of the Commonwealth Bank that great institution has reached a position of preeminence in the banking world. The report and balance-sheets of the Commonwealth Bank of Australia and the Commonwealth Savings Bank of Australia for the year ended the 30th June, 1950, contains the following interesting paragraph under the heading “ General Banking Division “ : -
Demands on the facilities provided by the General Banking Division continue to grow with a resulting growth in deposit and loan accounts. A substantial portion of the recent increase of advance business reflects the assistance extended to home builders and to building societies. Over the year, the Bank has been called upon to provide finance for home building purposes to a.n increasing extent because other lenders have withdrawn from this field or curtailed their operations. When allowance is made for even restricted activity in meeting the needs of industry and commerce the demands for housing finance exceed the resources of the General Banking Division.
That indicates the excellent job which the bank is doing for the people of Australia. Apparently other financial institutions have not been prepared to meet the needs of industry and commerce and the demands of the people for housing finance. The paragraph which I have read indicates that, great as are the funds available to the bank, the development of industry, the extension of primary production, and the expansion of house building have reached such dimensions that the resources of even the Commonwealth Bank have been strained to the utmost in meeting demands.
During the financial and economic depression the private banks restricted credit and called up overdrafts at short notice. That was their way of meeting the effects of the depression. They were concerned not about the welfare of the Australian people but solely about the interests of their shareholders. To the person who owed money to them, they said, “You owe us so much; you must pay by the appointed date or you will be sold up”, “and in far too many instances the unfortunate borrower was sold up. At that time hundreds of thousands of Australian people lost their equity in their properties. A similar plight faces the young people of Australia to-day. In the depression years a well-built house could be bought for varying sums up to £1,000. To-day, a similar house costs between £2,000 and £3,000. Most young married couples who wish to become the owners of their own houses have to seek financial assistance to finance the deal. They have to pay very high prices. Perhaps the time is not far distant when they will find themselves in a situation similar to that of those who suffered during the depression period from 1929 to 1933. What consideration can they hope to get from the moneylenders or from the private banks? The merciless rule of the financial institutions that the -borrower shall pay or get out pays no regard to human distress and human suffering. Financial institutions deal only in hard cash and are concerned solely with the making of profits for their shareholders. The Government is prepared to fight an election campaign on the promise that the restoration of the Commonwealth Bank Board will save the economy of this country. The idea is too preposterous for words. To expect the average Australian to fall for dope like that is the height of absurdity. Admittedly, the average Australian has fallen for a lot of dope in recent months, but he is beginning to wake up. The Government does not knowwhere it is going. It cannot decide whether its compulsory military training proposals will be favoured by the majority of the people. Honorable senators opposite talk a lot about the dangers of communism. They also accuse members of the Australian Labour party of holding all sorts of heinous ideas. The Opposition said when the anti-Communist legislation was before this chamber that it was unAustralian, un-constitutional, and the first step towards a police state. The Government insisted that the bill was necessary to remove an ulcer from the community. The measure has since been rejected by the High Court, the highest tribunal in the land. We on this side of the chamber have said many times that subversive movements in this country should be dealt with under our present laws. If those laws are found to be inadequate, then special legislation should be introduced to deal directly with a specific issue. There is no need for dragnet measures which may constitute a danger to innocent people. That is not democratic government.
– The honorable senator ultimately voted for the Communist Party Dissolution Bill.
– I said that I would not oppose the bill. Since this Government has held office it has done nothing but camouflage its intentions and make promises that its supporters have no intention to keep and know very well cannot be kept. The Government’s legislative programme has been an utter failure. Successive measures have been introduced and then laid aside. Honorable senators opposite are actuated solely by political expediency in the hope of securing support in the electorate. Let the Government press this legislation and see what happens. The average Australian will be vitally affected by any interference with the Commonwealth
Bank. He has no complaint with that institution as it is managed at present. It has given him good service and it has given the nation good service - better service than has ever been given by any private bank. Why then does the Government want to sabotage the Commonwealth Bank? We are told that the Government’s aim is to remove the bank from political control and to entrust its administration to a selected few. Originally the .promise was that a small board would be appointed, but this measure provides for a board of ten members. If that is a small board I should not like to see a large one. Who are the ten members of the board to be? We know that they are to include the Governor, the Deputy Governor, and the Secretary to the Treasury. Labour has no objection to the appointment of any one’ of those gentlemen. They are members of the present Advisory Board which is rendering excellent service. I am confident that no one else in Australia could do a better job than those men are doing at present in the interest of the nation and in the interests of the people; but apparently the present administration of the bank is not good enough for the Government. Honorable senators opposite are determined to re-appoint the Commonwealth Bank Board, and, in fact, are prepared to fight an election on that issue. Let them go ahead. In spite of repeated inquiries by the Opposition the names of five members of the proposed board have not been disclosed. The Treasurer (Mr. Fadden) said in his second-reading speech -
In appointing these members, who will not be representative of any sectional interests within the community, and will not have any association with other banks, the Government will be fully conscious of the need for men of wide knowledge and experience. The inclusion of such men will bring to the board’s deliberations the views of men who are not directly associated with Government administration and policy.
Where is the virtue in that? Why is it necessary to appoint those people at all? Who would be more fitted to control the affairs of the Commonwealth Bank than would the members of the present Advisory Board ? Tinder their guidance, the Commonwealth Bank has done a job for this country that no private bank could possibly have done. They guided this country’s financial destinies throughout the greatest war that the world has ever known. I remind the Senate that, through the Commonwealth Bank, all the money that was required to enable Australia to make a full contribution to the allied war effort was obtained within this country, yet this Government has sabotaged Australia by arranging for a loan of 100,000,000 dollars from America, and further loans are to be raised in that country. The loan carries an interest payment of 4i per cent. The Government has placed Australia in pawn to America although it could have obtained from the United Kingdom and other sterling countries 90 per cent, of the goods that will be purchased with that dollar loan. Reports indicate that already the loan funds are almost exhausted. I should like to see a detailed statement of the purchases that have been made with those funds and I should like to know under what heading that money is being expended. However, I am more concerned with the report that the Government intends to approach the United States of America for the loan of more money at an interest rate of 4i per cent. The highest rate of interest paid in Australia on gilt-edged securities is only 3$ per cent. If the present Government intends to embark on a policy of reckless borrowing I have no doubt that we shall again be placed in the disastrous position in which we were placed by the BrucePage Government, which borrowed so much money overseas at ruinous rates of interest. We all know that the sufferings of the Australian people during the depression were largely caused by the reckless borrowing of that Administration. During the depression the pensions paid to aged, and invalid persons were callously reduced and the wages of the workers were reduced by from 18 to 22 per cent. The former board of the Commonwealth Bank could have averted all that suffering by making available the necessary credit. After all, the credit of £18,000,000, for which the Scullin Government asked the Commonwealth Bank Board, was a trifling amount judged by current values. What is credit, but short-dated treasury loans ? For years it has been the practice for governments to obtain credit on treasury-bills. Undoubtedly the duty of the former bank board during the depression was to make available the credit that the Scullin Government sought.
Unfortunately, the history of the former Commonwealth Bank Board proves that any such board will be influenced by the political colour of the government of the day. Politics enters far too largely into finance. We need only recall the attitude adopted by the Commonwealth Bank towards a former Premier of New South Wales, Mr. Lang, in the negotiations concerning the reopening of the former New South Wales Government Savings Bank. Contrast the attitude displayed towards that institution by the former Commonwealth Bank Board with the generous treatment that it accorded to the savings bank in Western Australia. I remember the occasion when that institution was supposed to be bankrupt. Even Ministers of the then Western Australian Government appealed, from the counters of the savings bank, to the people to leave their deposits in the bank. The trade union that I represented at that time had £1,100 deposited in the bank, and my union decided to leave its money in the bank. However, we naturally made inquiries about the security of our deposit, and those inquiries revealed that money that was paid into the Commonwealth Savings Bank by former depositors in the Western Australian Savings Bank, who had withdrawn their deposits from the State bank, was immediately passed over to that bank by the Commonwealth Bank in order that it might continue to function. Although the State bank continued to function, it had to pay a price to the Commonwealth Bank. The price was that the State bank had to agree to its assimilation by the Commonwealth Bank. Had similar consideration been extended to the New South Wales Government Savings Bank that institution need never have closed its doors.
We do not know who will be appointed to the proposed Commonwealth Bank Board, nor are we aware of the capabilities or experience of the individuals who will be appointed to that board. In defence of its proposals, the Government contends that it. is not sound to appoint to that board individuals who have been associated with government administration or the making of government policy.
However, I ask honorable senators, “ Who has not been affected, in some degree, by governmental action ? “ Every government has to enact legislation and to formulate a policy, particularly concerning economics and finance. Any Government must inevitably make far-reaching decisions, and every individual in the community is affected by those decisions. It is clear, therefore, that the individuals whom the Government proposes to appoint to the board will hold certain definite views concerning the financial policy of the present Government.
Another matter to which I direct the attention of the Senate is that under this bill any person who is not, at the time of his appointment to the proposed board, connected with the Public Service or a trading bank, will be eligible for appointment. That means, of course, that an individual who is at this moment the general manager of a large trading bank will be eligible for appointment to the proposed board if he resigns his position when this bill becomes law. Of course, it is absurd to suggest that an individual who terminates his appointment with a trading bank becomes immediately a fair and objective critic of banking and finance. Similarly, it is childish to think that an individual who has been taking an active part in politics can dissociate himself from his political beliefs as soon as he quits public life. I understand that immediately after the former Prime Minister, Mr. Bruce, lost his seat in the House of Representatives he returned to the board of directors of Paterson, Laing and Bruce Limited, of which he had formerly been a director. I also understand that another member of the former bank board resumed his connexion with the board of a trading bank with which he had formerly been associated.
It is humbug, therefore, to suggest that it is necessary in the interests of the people to re-establish a board to control the Commonwealth Bank. The present Government can please itself about what it does concerning its proposals in this direction. If it thinks that the reestablishment of a board to control the Commonwealth Bank will be a good issue with the electors, then the Government is welcome to it. I am certainly not afraid of the consequences of rejecting the present bill. After all, the present Government’s principal job is to redeem its promises to the electors, including its promise to restore value to the £1. Of course, I know that the Government cannot restore value to the £1 because the drift in our financeshas gone too far. However, I remindhonorable senators that in the course of the policy speech thathe delivered during the last election campaign the present Prime Minister (Mr. Menzies) said -
To provide some much-needed check to inflation of currency, we shall restore Parliamentary control over the Commonwealth note issue.
As we have already said, the Australian Banking system is vitally involved in this election.
In what way was the control of the Commonwealth Bank placed before the people as a vital issue duringthe last election? I admit at once that the people had been brought to a pitch of feeling concerning the previous Government’s proposals to nationalize banking, but nothing was said to arouse any controversy concerning the future of the Commonwealth Bank. I believe that in thrusting this bill on the Senate the present Government is merely playing with the dice. It does not know where it is going, nor where it is likely to end. In my judgment it lacks the courage to approach the people on this issue, because it knows that from a political point of view this bill is not worth twopence. As I have already said, it might have been able to work up some feeling amongst the people on the subject of nationalization of banking, because the people had already been hopelessly misled by the Government parties’ propaganda on that matter. Much more could be said about this bill, but I shall not delay the Senate further.
Government senators interjecting,
– I believe in using my right to speak in this chamber, and I do not care whether or not honorable senators opposite like what I have to say. My views are formulated as the result of sound experience and not because of some passing whim.
I shall never forget the attitude displayed by the Commonwealth Bank Board towards the people of Australia in their darkest hour, and I shall never be a party to the establishment of another bank board to control the Commonwealth Bank. In my view, the board that the present Government proposes to establish will be worse than the previous board. This bill proposes to give to the board complete control of the Commonwealth Bank of Australia. Of course, I know that the Government contends that the bill will safeguard the interests of the people against any wrong-doing by the bank and it is making much of the provisions in the bill under which disputes between the proposed board and the Government must be settled by the Government and, if necessary, by the Parliament. However, the alleged safeguard is not at all satisfactory, and I need only point out that if the Parliament is not sitting it will not be practicable for the Government to place any matter in dispute before the Parliament within the period of fifteen days prescribed in the bill. However, that is beside the point. I am firmly convinced that while an anti-Labour Government is in office there will never be any disagreement between it and the proposed board. The Government has a definite purpose in mind in proposing to establish a board to control the Commonwealth Bank, and undoubtedly it hopes that the proposed board will serve as a bulwark behind which it can hide in making decisions that will adversely affect the welfare of the people of this country. Important decisions will have to be made by the present Government in the near future. For one thing, it is obvious that the Government will have to take drastic action of some kind to check the current inflationary spiral, otherwise we will need a wheelbarrow to carry with us the currency to purchase even a bag of apples.
When the bill was previously under discussion by the Parliament the Opposition expressed its hope that a select committee of the Senate, representing all political parties, would be appointed to review the measure. It would have been possible then to make searching inquiries into the alleged necessity for the establishment of a Commonwealth Bank board, and also generally to consider matters relating to national credit and banking policy. The Government rejected our proposal. In conclusion, I say that irrespective of whether the Government chooses to challenge us now to an election on this issue, the control of the Commonwealth Bank is a matter of great public urgency because it affects the welfare of the community. The Government should realize that it has not a monopoly of intellect. The Parliament must be guided by expert knowledge, and it is the duty of the Senate to obtain the most complete information concerning these matters. I feel sure that, regardless of the decision of the Government, the Senate will ultimately appoint a select committee to consider this matter.
Motion (by Senator Robertson) put -
That the question be now put.
The Senate divided. (The President - Senator the Hon. Gordon Brown.)
Majority . . . . 2
Question so resolved in the negative.
. -In common with my colleagues I am amazed by the Government’s alteration of the order of business. In view of the intense propaganda by the press last week one would have imagined that the Government would be eager to continue the debate on the National Service Bill and thereby give expression to one of the mandates that it claims to have received from the people of Australia at the last general election. That bill was highly coloured politically by the propaganda that was broadcast during the sittings of this chamber last Wednesday. However, it is evident that during the week-end something has caused the Government to alter its programme, and we are now asked to dispose of this banking reform measure. We have been told that this is only a short bill to repeal the Banking Act 1947 and to amend the Commonwealth Bank Act 1945-1948. In their joint policy speech during the election campaign the Government parties stated that if returned to office they would repeal the legislation providing for the nationalization of banking. The measure now before the chamber is not connected with the bank nationalization legislation in any way. However, the Privy Council has already declared portion of that legislation invalid. Now the Government claims that it is a matter of great national moment that the control of the Commonwealth Bank should be vested in a board instead of in a governor, as at present. Surely it cannot be claimed that a bill containing eighteen clauses is necessary to transfer the control of the Commonwealth Bank from a governor to a board. Clause 4 provides -
Section three of the principal act is amended -
Division1. - The Governor and Deputy Governor.
Division 2. - The Advisory Council.” and inserting in their stead the words - “Part V. - The Commonwealth Bank Board and the Governor and Deputy Governorof the Bank.”
I consider that the management of the Commonwealth Bank is quite satisfactory under the present Governor, who is fulfilling all of the functions that he was appointed to fulfil. The Commonwealth Bank has given admirable service to the people of Australia. The Governor has had the benefit of the advice of the Advisory Council, each member of which is a qualified expert in a particular sphere of work, to which he has devoted a lifetime of training. The members of the Advisory Council were carefully chosen, so that the council as a whole would contain men well qualified to deal with financial matters, so that its recommendations to the Governor would be soundly based. Under the present constitution of the bank the Governor is subject to the Treasurer of the day, who represents the Government. Therefore, the people are adequately represented in the conduct of the affairs of the Commonwealth Bank. If there should be any conflict of opinion between the Treasurer and the Governor of the bank it could be brought before the Cabinet or the Parliament for decision. The Treasurer or the government of the day must accept full responsibility for any change of policy of the bank. The purpose of proposed new section 9 is to give effect to the intention of the Government to re-establish the Commonwealth Bank board.
The Opposition is at a loss to underst’and,.the need for any alteration of the constitution of a bank which has an excellent record of achievement in time of adversity. Honorable, senators will remember that it stood solidly behind projects essential to the prosecution of the last war. It is apparently necessary to delve a little below the surface in order to ascertain the reason for the establishment of a Commonwealth Bank board. If a business is carrying on successfully, why interfere with its policy and operations ? I suggest that this bill is intended to give effect to the pre-election promise of the Government that it would set up a small Commonwealth Bank board. I also suggest that the true purpose of such a board is to destroy the effectiveness of an institution that has rendered valuable service to all sections of the community. One may ask what constitutes a small board, in the same way as one may ask, in relation to the present political crisis, what constitutes failure to pass legislation. The hill provides that the small board to be established shall consist of ten members. One could be pardoned for thinking that the previous board of five members, together with the Governor of the bank, constituted a .small board. If the establishment of a board of ten members is not for the purpose of promoting greater efficiency, why is it necessary at all? The explanation that comes to my mind is that it is prompted by an ulterior motive - to destroy the people’s bank.
This measure also proposes to limit or to hamstring the operations of the Governor of the bank. Apparently, that is to be his compensation for the magnificent service that he has rendered to the people of Australia. It is proposed to subjugate his authority to the wishes of a board that is composed not of experts on banking, but of members of a phantom brigade, a committee of nondescripts. Proposed new section 9 (b)(3) reads as follows : -
In the management of the Bank, the Governor shall act in accordance with the policy of the Bank and with any directions of the Board.
That proposed new section contains no ambiguity. It is definite and it places an obligation upon the Governor of the bank to act in accordance with the directions of the board. In other words, the man who has rendered national service and who has great financial capacity is to be subject to the will of a nondescript phantom brigade. If the Government were sincere in introducing this bill it would recognize the ability of the Governor of the bank, the importance of the advisory committee of experts and the record of the bank itself.
Proposed new Part V. concerns “ The Commonwealth Bank Board and the Governor and Deputy Governor of the Bank “. Sub-section (1.) of section 23 of that part reads as follows : -
The Commonwealth Bank Board shall consist of - (a) the Governor;
the Deputy Governor;
the Secretary to the Department of the Treasury; and (<l) seven other members, who shall be appointed by the Governor-General in accordance with the succeeding provisions of this section.
The seven additional members could be persons without any banking qualifications whatever. Sub-section (2.) of proposed new section 23 provides that -
Of the seven members appointed under paragraph (d) of the last preceding sub-section at least five shall be persons who are not officers of the Bank or of the Public Service of the Commonwealth.
It is possible that the five persons appointed under that sub-section could be retired bankers. A director of a private bank could resign from the directorate of that bank and shortly afterwards be appointed to the Commonwealth Bank Board. He would still fulfil the stipulated requirements. Proposed new section 26 of the bill reads as follows : -
A person who is a director or an employee of a corporation (other than the Bank) the business of which is wholly ov mainly that of banking shall not be capable of appointment, or of continuing to act, as a member of the Board.
That is an example of class discrimination. An employee of a bank is not to be eligible for appointment to the Commonwealth Bank Board. I do not know how the bank officers’ organization will . view that stipulation. Surely it must be unconstitutional to take away the right of a person to apply for any position offering. The Government proposes to appoint a phantom board to govern the Commonwealth Bank, but stipulates beforehand that no employee of a private bank, or even of the Commonwealth Bank itself, may be a .member of that board. One would imagine that bank officers, being trained in the routine of banking practice, would be eminently suitable for appointment to the board, but they, by the terms of the bill, are specifically excluded from such appointment. It is no wonder that the official journal of the bank officers’ organization emphatically protested some months ago against the Government’s proposal to exclude bank officers. The action of the Government seems particularly ungenerous in view of the part played by employees of private banks during the last general election campaign when boards of bank officials were directed to attend Labour meetings for the specific purpose of trying to convince the public that if the Labour Government were returned to office nationalization of banking would become an accomplished fact. Now we see what a strange reward they are to receive for ‘their services. They have been thrown on the scrap-heap, and are to be deprived of the ordinary rights of citizenship.
The purpose of this bill is to destroy the admirable organization that has been established to direct the affairs of the Commonwealth Bank. The Government proposes to appoint a board to manage the bank, and five, perhaps seven, members of that board are to be persons of whose identity we are still ignorant. They may be professional men, representatives of insurance companies, wholesale merchants, members of the stock exchange, manufacturers or pastoralists. Obviously, they would not be rural workers, but some of them may well be prominent representatives of the pastoral industry. It has been suggested that the trade unions may be represented on the board, if a board is to be appointed. We want equal representation for the trade unions, but we know that the Government would never accept more than one trade union representative, and his voice could never prevail against the voices of the other members. The purpose of the Government in appointing a board would be to restrict the powers of the Governor of the bank. The board itself would become a tool of the private banks. We can all remember how the private banks directed the economic life of Australia in the past. There were then eight private banks operating in Australia, but recently two of the oldest-established banks have amalgamated. A process of consolidation is going on so that economic power may be more concentrated. The Commonwealth Bank Board, if appointed, would control economic policy, and it is obviously the intention of the Government that private banking interests should control the board. Up to the present, the Commonwealth Bank has rendered yeoman service to the people of Australia. Provision is made in the Commonwealth Bank Act of 1945 to safeguard the savings of depositors. That act also provides that surplus funds belonging to the private banks shall be deposited with the Commonwealth Bank at less than 1 per cent, interest. The purpose of that provision was to check inflation, but obviously it has not achieved its purpose. The Commonwealth Sank also exercises general supervision over the advances made by private banks, as well as the rate of interest charged by them. The central banking authority of the Commonwealth Bank provides for the application of a uniform policy by all bank branches throughout Australia. That policy has resulted in full employment and economic’ stability. In all respects the Commonwealth Bank has fulfilled the functions for which it was established, and it has rendered efficient service to the community. It has not behaved in an arrogant or domineering manner towards the private banks. For instance, in the annual report of the bank for the year ended June, 1950, the following passage occurs : -
In the administration of credit policy, the Central Bank has had the co-operation of the private banks whose extensive contracts and valuable experience have enabled them to make an important contribution. The Central Bank is, of course, responsible for policy, but consultations with the private banks has greatly assisted its formulation in respect of both the amount and direction of bank credit.
The report makes it clear that all phases of banking activity have expanded under the general direction of the Commonwealth Bank. Therefore, I am amazed that the Government should attempt to destroy the Commonwealth Bank, which has made a profit of £15,000,000 in the last two years. Part of that profit went into Consolidated Revenue, part of it was paid, under agreement, to State governments, and a large part was devoted to reduction of the national debt. Under the existing administration the bank has rendered yeoman service to the community, has assisted the Government to maintain its full employment policy and has enabled the private banks to make large profits for their shareholders. Why, then, should the existing administration be attacked, let alone destroyed or altered ? If, in fact, the people want to change the existing administration of the bank the matter is of such paramount importance that it should be thoroughly examined by a select committee representative of all political parties in this Parliament. I trust that on this occasion the Government will co-operate with the Opposition and agree to appoint representatives to a select committee to inquire into this most important subject. I do not know whether or not my plea will be in vain ; I make it simply because I have always been an optimist. I trust that the Government will join with the Opposition in appointing a. select committee to inquire into the whole of the ramifications of the Commonwealth Bank, so that should any change in the existing administration appear to be desirable it will be made only after the rights and privileges of all sections of the community have been considered.
– Like Senator Ryan, I am astonished that the Government should have decided to continue the debate on this bill when there remains to be disposed of a very important measure dealing with national service training which, we were told, should be passed as soon as possible. We have already indicated that, after we have given that measure the fullest consideration, we shall be prepared to give it our blessing. Now, apparently, the Government believes that its banking proposals are of more importance than is the training of our young men and women to defend their country. Obviously the Government has received its instructions from its masters, the private banking interests. During the general election campaign the leaders of the anti-Labour parties stumped the country and viciously attacked Labour’s proposals for the nationalization of banking and the growth of bureaucracy. They and their followers said that if the Menzies Government were elected to office the number of bureaucrats in Canberra would be reduced. What has been our experience since the Menzies Government has been in office? Since December, 1949, the number of Commonwealth employees has been increased by more than 5,000. During the general election campaign, the antiLabour parties told the people that if the Menzies Government was elected to office it would reduce the number of government boards. In this legislation, however, the Government proposed to establish yet another board, and on this occasion one which is representative of vested interests. Unlike Senator Ryan, I am not at all sure that the trade unions will appoint a representative to the Commonwealth Bank Board if it is established.
– The trade unions turned down a proposal that they should do so.
– I have been a member of the Parliament for many years and I have known of many similar invitations having been issued purely as a bait. We are concerned solely with the interests of the people of Australia. The Government will have to accept the decision of the High Court on its legislation to ban the Communist party just as we accepted the verdict of the High Court and the Privy Council on our legislation to nationalize banking.
– The honorable senator will admit that we received a mandate from the people to re-establish the Commonwealth Bank Board?
– Not at all. The Government received a mandate to repeal the act for the nationalization of banking, but not to alter the present administration of the Commonwealth Bank. During the election campaign not a word was said about the re-establishment of the Commonwealth Bank Board.
– That is not so.
– Let us consider how the former Commonwealth Bank Board was constituted. It consisted of Mr. J. J. Garvin, managing director of the Mutual Life and Citizens Assurance Company Limited; Mr. R. S. Drummond, manager of the New South Wales compulsory wheat pool ; Sir Samuel Hordern, governing director of Anthony Hordern and Sons Limited, the Permanent Trustee Company Limited, and the Royal Insurance Company Limited ; Mr. J. Leeds, general manager of the Bank of Queensland Limited, and chairman of the associated banks of Australia; Sir Robert Gibson, director of many companies ; Mr. R. B. H. McComas, wool-grower; Mr. J. H. Ashton, grazier; Sir Claude Reading, banker; and Mr. A. F. Bell, director of a trustee company. It will thus be seen that the former board was representative of only the wealthiest sections of the community. In spite of the fact that the Government has admitted that the management of the Commonwealth Bank has been all that could be desired, it now proposes to alter the exist ing method of control. Pressure has been placed on the Prime Minister to reestablish the board. My mind goes back to the report of a very heated meeting of the Liberal party of New South Wales when considerable pressure was exerted on the Prime Minister, and on the Minister for Social Services (Senator Spooner), who was present, in connexion with this matter. The following report of the meeting was published, not in a newspaper which supports the Australian Labour party, but in the Sydney Morning Herald of the 28th March, 1950:-
A motion criticizing the Commonwealth Bank Bill now before Federal Parliament was narrowly defeated after a heated clash at a meeting of the State Council of the Liberal Party last night.
Two delegates attacked the bill which, they said, gave control to a bureaucracy of members of the Commonwealth Bank.
The Minister for Social Services, Senator W. H. Spooner, said the Council would not be “ doing the right thing “ by the Australian Liberal Party if it accepted the delegates’ “ ill-informed statements “.
Mr. Spence (Neutral Bay) said if the motion was passed it would : be “ another McGirr Act “. “ It could ring the death-knell of the Liberal Party at the next State elections “ he said.
Mr. F. M. Hewitt (Mosman) moved that the Council view the bill with concern. “I would like to say to Mr. Spooner thatI esteem him very highly as a member of Cabinet “ he said.
The last Federal election was a fight of socialism against private enterprise. “ The Banking Act of 1945 was a major issue. “ During the elections, we were allowed to believe that the supporters of private enterprise would bring down an Act, if they were elected, which would give effect to the principles of private enterprise. “ The bill before the House does not do that. “ If this bill attempted to accord with party principles while appeasing the Socialists and a hostile Senate, then it was a very wrong bill to introduce.”
Mr. Hewitt said the appointments to the bank board were to consist of five members of the civil service, with the governor of the Commonwealth Bank, Dr. H. C. Coombs, as chairman, with a casting vote. “ By this set-up, the bill gives complete control to this bureaucracy “, he said. “The policy of the Liberal Party should be to squash bureaucrats as much as possible, rather than to put them in a position of supreme power. “By this bill, the members of the Commonwealth Bank Board will be able to exercise much more power than they could in their positions under the Chifley Government.” “ Cause on TRIAL:
Mr; A. H. Jago (Gordon) said he seconded the motion. “ I speak out because this is the State Council of the Liberal Party and things should be said forthrightly and not kept back for some whispering campaign he said. “This banking legislation is almost as big as the Communist issue. “ The Liberal cause is on trial. Let us stand up for what we believe in. “Now is the time for the Commonwealth Bank to be changed from a plaything of politics.”
Mr. Jago said Dr. Coombs was a .product of the London School of Economics-“ one of the most vile training grounds in the British Empire.”
Senator Spooner said, speaking against the motion: “This Bill is before Parliament and has been approved by the Liberal and Country Parties. “ We have introduced’ it because it is in the interests of the Australian people.”
A voice: Is this a policy speech?
Senator Spooner said : “ Mr. Jago’s attack on Dr. Coombs is a direct reflection on our own Parliamentary Leader, who made statements that Dr. Coombs would be made the governor of the bank.”
Mr. Sefton Cullen (Wollondilly): “This debate is such dynamite it should be dropped so that our Cabinet friends should not be embarrassed.” “No Confidence.”
Mr. Spence said : “ This motion is one of noconfidence in Mr. Menzies. “ As such, it is a shocking thing to come before this council.”
Mr. Hewitt said in reply that there was “ great danger “ of the .parliamentary representatives on the council becoming “out of touch “ with the liberal organization. “ I hope that members will take the pains to come along to the meetings so that we can say what is in our minds “, he said. “ I say this to Mr. Spooner because we still regard him as an organization man.”
Clearly that was an attempt, hy an outside organization which was opposed to so-called “ Canberra bureaucracy “ to dictate to the Government ; yet we on this side ‘of the chamber are accused frequently by honorable senators opposite of having outside masters! At least the Australian Labour party is democratic. Its election candidates are chosen democratically by ballot and not selected by an exclusive clique. On the other hand, only “top notchers “ of the Liberal party are eligible for party endorsement. We of the Labour party are chosen by our mates and every rank-and-file member has a chance to secure pre-selection if he so desires. Surely that procedure is of the essence of democracy.
The people of Australia were hoodwinked by the anti-Labour parties during the last election campaign, and I am convinced that. Western Australians at least have been brought near to revolt by the Government’s wool tax scheme and this proposal to reconstitute the Commonwealth Bank Board. As I indicated in a question that I asked last week, woolgrowers in Western Australia are hostile to the wool tax. The reconstitution of the Commonwealth Bank Board has been opposed by primary producers’ organizations, including the Wheat Growers Federation of Australia and the Farmers Union of Western Australia. Although some members of those organizations may belong to the Australian Labour party, the organizations as such cannot he said to have any Labour affiliations.
I invite the attention of honorable senators to the following newspaper report, which was published in Western Australia : -
A resolution opposing the creation of a new Commonwealth Bank Board of similar constitution to the previous board was adopted at the annual conference of the Australian Wheat Growers’ Federation in Perth yesterday.
It was agreed that, if a board were created, primary producers should have adequate representation on the board and that it should be subject to the control of Parliament at all times.
Clearly the Australian Wheat Growers Federation does not approve of this legislation, but, if the board is to be reappointed the federation believes that primary producers should have adequate representation on it, and that it should’ be subject to the control of the Parliament at all times.
– What about the Prime Minister’s policy speech?
– No mandate was given to the Government to re-appoint the Commonwealth Bank Board. So far, five members of the proposed board have not been named, but if the pattern of the last board is to be followed, vested interests will be substantially represented. It is all very well to say that no representative of private financial institutions shall be appointed to the board, but that does not exclude “ go-betweens “. The private banking institutions can be relied on to ensure that any person who may be elected to the board to represent them shall not lose his former interests.
Honorable senators opposite refer frequently to what they term the “ hangover “ Labour majority in this chamber. I recall the time when a Labour administration, which had perhaps the largest majority in the House of Representatives in the history of federation, was thwarted by a hostile senate and by the former Commonwealth Bank Board. Urgently needed legislation designed to assist primary producers was rejected by the Senate. To-day, the tables have been turned. However, by no stretch of the imagination can we be said to have rejected all the Government’s legislation. During the last sessional period, 50 or 60 bills were passed by the Senate. The bill now before us has been “ on the stocks “ for some time. Last week, we were told that, in view of the defence needs of this country, the National Service Bill was most urgent. Now, that measure has been deprived of its priority on the noticepaper in favour of this bill. The pressure has been put on the Government.
– Let us go to the people. They will tell us what to do.
– I have no doubt that they will tell the Government, in no uncertain terms what to do. Honorable senators opposite promised to put value back into the £1, but what has happened? Since the Menzies Government has been in office, cost-of -diving increases totalling £2 have had to be made to the basic wage. The Government has failed to fulfil its promises to the electors, with the result that considerable hardship is being experienced by people living on fixed incomes. It is true that pensions have been increased slightly and that a child endowment payment of 5s. is now being made in respect of the first child of each family.
– Why not talk about the Commonwealth Bank Bill?
– My remarks have a direct relation to that bill. I am not “ in the wood “ as Senator Scott is.
Sitting suspended from 5.53 to 8 p.m.
– Before the suspension of the sitting, I had dealt with the establishment of the proposed bank board. Strangely enough, one of the most consistent critics of the former bank board was the present Minister for Commerce and Agriculture (Mr. McEwen). He did not take part in the recent debate on this measure in this House, but his attitude towards this proposal is, of course, a matter for his own conscience. However, I think that it is important to remind the Senate of his criticism of the former bank board. In the House of Representatives on the 11th April, 1935,he submitted the following motion: -
That this House is of the opinion that it is desirable to appoint a royal commission to take evidence in public and report upon the operation of the Australian banking and monetary systems, with particular reference as to -
Whether the Commonwealth Bank is operating in its ordinary trading activities upon as fully competitive a basis as is compatible with sound financial practice; and
Whether it would he desirable to amend the Commonwealth Bank Act to direct that the Commonwealth Bank Board, when determining the exchange of Australian currency with respect to sterling, should confer with the Treasurer and give consideration to the need for maintaining Australia’s essential export industries.
Whilst we do not suggest that it is necessary to appoint a royal commission to inquire into monetary and banking policy, we do firmly contend that a select committee representing all political parties should be appointed to inquire into this matter.
In common with other members of the Opposition, I have had to put up with allegations by honorable senators opposite that the Opposition in this chamber is delaying the passage of important legislation and is refusing to co-operate with the present Government. That is not so.
– That is a fairy tale !
– The honorable senator is still in the wood. We have offered the Government our co-operation. I remind members of the Government that only a few years ago, when a former Menzies administration was on its trial during a most critical period for Australia, and when it was shown to be neglecting the defence of this country in lime of war, Labour did not refuse to co-operate with it. In order to escape its responsibilities, that government had set up the Advisory War Council. When Labour was asked to join with the then Government parties in being represented on that council it readily did so. I mention that matter now in order to show that Labour has always been prepared to accept its share of responsibility in national affairs. The only chance the Government has of convincing me, and many other people, that the appointment of a board to control the Commonwealth Bank is necessary is for a select committee that will be representative of all political parties to make such a recommendation after a thorough investigation. After all, we are not asking for as much as did the present Minister for Commerce and Agriculture on a former occasion. I repeat that we do not ask for the appointment of a royal commission; we ask merely that this matter shall be thoroughly investigated by a select committee.
Since the Banking Act 1947 was declared invalid by the High Court, and subsequently by the Privy Council, it is significant that a number of amalgamations of large trading banks has taken place. I invite the attention of honorable senators to the following pertinent and comprehensive comment that- was made on this matter by the financial editor of the Sunday Sun on the 21st January last, in the course of which he stated -
The Australia and New Zealand Bank Ltd. will soon be bankers for people who in the past have kept their cheque accounts at either the Bank of Australasia or The Union Bank of Aust. Ltd.
Identical statements by the chairman of “ A’sia “ and “ Union “ issued during the past week show that arrangements have almost been completed for making the two banks one.
Shareholders have the opportunity to approve or reject the scheme on February 16.
As investors, they are scarcely likely to reject it - if only because they will hold shares of the smaller and more popular £1 denomination in the bigger bank.
Then, after the English law court has given its sanction to the plan, the two businesses will start to be rolled together.
There will then be only seven recognized “ trading banks “ in Australia, although there were nine when the war ended.
How will this merger affect banking services available to the public?
If the Bank of Australasia and the Union Bank had not been actively competing against each other, there might be little to say,
Would the directors dare to admit that? 1 think not.
In any case, surely they cannot be justified in contending that “ more competitive banking services “ for Australians and New Zealanders will result from the amalgamation.
It’s difficult to accept the implication that neither of these two big banks was big enough to give as “ comprehensive “ a banking service as its rivals.
Admittedly, the governor of the Commonwealth Bank has recommended to the Federal Treasurer that this amalgamation be permitted to go through.
And the Federal Treasurer, exercising his power under the 1945 Banking Act, has granted his approval.
This must be the most puzzling aspect to the ordinary citizen, whose support was so recently evoked against the nationalization of Australia’s banks.
Chairmen of the “ A’sia “ and “ Union “ both tell how plans for their little merger were held up by Mr. Chifley’s decision in August, 1947, to merge all the banks.
They fought Mr. Chifley’s proposal, they say, because of the “ threatened elimination of competition by the creation of a Government monopoly “.
Are they now consistent in removing a large slice of the banking competition upon which their recent claims for survival were based?
The great point about having as many banks as possible is that it gives a “wide area of choice “ to private individuals and business organizations.
This “ right of appeal “ from the decision of any one bank was kept to the fore in the campaign against nationalization of banking.
Certainly, there will be one fewer alternative for customers of the ‘.” A’sia “ or the “ Union “ when they are refused an overdraft by the proposed new management.
Similarly, customers of the other banks will have one fewer “ right of appeal “.
Every bank amalgamation such as this is a blow to the defenders of private enterprise, because it weakens the case against bank nationalization.
Of course, Labour accepts the verdict of the courts that nationalization of banking is ultra vires the Constitution, and realizes that the nationalization of banking is a dead letter. However, although the present Government persisted in making the nationalization of banking a main issue during the last general election, it was significant that it did not emphasize its proposal to establish a board to control the Commonwealth Bank. For that reason it can hardly be said that the present Government has a mandate to ire-establish the Commonwealth Bank Board.
I remind honorable senators that the Government that now proposes to reappoint the Commonwealth Bank Board is of the same political complexion as the Government that appointed the previous board, which refused to assist the primary producers of this country in any way in their time of direst need. We ali remember that during .the depression the wheat-growers had to sell their wheat for as little as ls. 6d. a bushel, and that right up till the> commencement of the recent war we had 300,000 unemployed. That state of affairs was a direct consequence of the refusal of the former Commonwealth Bank Board to assist the people of this country during, and even after, the depression. Labour is particularly concerned that, in the event of another depression occurring, the livelihood and welfare of Australians should not again be subject to the whim of members of a board. I know that the Government contends that certain provisions in this bill will enable the Parliament to exercise authority over the proposed, board on major matters of policy. However, I suggest that the alleged protection of the people is more apparent than real. Does the Government seriously suggest that discussion of such vital and far-reaching matters as devaluation or appreciation of the currency will take place in the Parliament? Surely, the policy in respect of such matters will be determined in secret by the proposed board. Indeed, the formulation of policy in respect of such important matters should be one of the major subjects for inquiry by a select committee, and the appointment of such a committee would accomplish a great deal. I remind honorable senators that I was a member of a select committee that made recommendations which resulted in the establishment of the mortgage bank department of the Commonwealth Bank. That department would not have been established but for the recommendation of that committee.
I propose to repeat now an important point that I made in the debate on the first Commonwealth Bank Bill 1950. On that occasion I reminded the Senate of the great service rendered- to Australia by a Labour administration during World
War II. At the Outset of that war an antiLabour administration, of which the present Treasurer (Mr. Fadden) was the head for a period of a few weeks, had decided to allow the financial institutions full play in raising the finance for the war effort. That decision was probably due to the right honorable gentleman’s reported connexion with the associated trading banks. When the Curtin Labour Administration assumed office one of its first acts was to depart from the previous Government’s policy of erecting an expensive credit superstructure based upon the private financial institutions. It did so by proclaiming certain National Security Regulations, the effect of which was that all trading banks were compelled to deposit their surplus funds with the Commonwealth Bank. No doubt supporters of the Government will agree that that was the best thing that could have happened in this country. Of course the banks did not like it. When nationalization of banking was spoken about, shares in various associated or trading banks were purchased by the then Government. I was informed in answer to a question that I asked last week that all of those shares have since been disposed of. In effect, the Chifley Government made a profit of about £40,000 for the present Government. That was not a bad deal ! I urge the Minister for Social Services (Senator Spooner) to heed the request of the Leader of the Opposition (Senator Ashley) to appoint a committee to investigate this matter. In doing so, I am merely following the precedent established by the present Minister for Commerce and Agriculture, who, at the time to which I have referred, wanted a royal commission to be appointed to do the job. A parliamentary committee, representative of both sides of the chamber, should be appointed to investigate what can be done in respect of the setting up of this board. Until to-day the Government has regarded the National Service Training Bill as the most important business before the Senate. Now, this chamber is asked to debate the banking legislation. I think all honorable senators will agree that the Commonwealth Bank was one of our bastions during World War I., as, indeed, it was also duringWorld War II. It is generally conceded that it will be necessary for us to double the population of this country in order to save it, and I have no doubt that the Commonwealth Bank will play a most important part in the transference of population to Australia. As my colleagues have referred to incidents that happened during the financial depression of the ‘thirties, I shall refrain from again mentioning that unfortunate period. Despite the present full employment some governmental expenditure is being financed from the proceeds of the iniquitous tax that is being imposed on the wool-growers. As revenue from taxation is lagging, the Government may be considering imposing a further tax on the wool-growers. The Government’s proposal to reconstitute the Commonwealth Bank Board is its reward to the trading banks for assisting the present Government at the last general election.
At that time the Government parties promised the trading banks that if they were returned to power they would reconstitute the Commonwealth Bank Board to control the affairs of the Commonwealth Bank. We would then revert to the position that obtained previously, that is, that the government of the day would dictate the policy but that the bank board would decide whether that policy should be adopted by the bank. In the past the Commonwealth Bank has refused in many instances to accept business from individuals who had been dealing with the trading banks. I believe that the real substance of the proposed re-establishment of the bank board is to restrict the activities of the Commonwealth Bank. I urge the Government seriously to consider appointing a committee, along the lines previously suggested by the present Minister for Commerce and Agriculture. Although the Minister suggested at the time thata royal commission should be appointed, he may have changed his mind since then, because he did not enter the debate on this bill in the House of Representatatives. If the Senate does not pass this bill as itstands we will be confronted with a double dissolution.
– Perhaps !
SenatorFRASER. - I am prepared to take the risk. I do not want to see an enlargement ofthe bureaucracy, by the establishment of another board. Despite the present Government’s criticism of the growth of the Public Service when honorable senators opposite were in Opposition, according to the Treasurer the Public Service has been increased by about 5,000 officers since the present Government came to office. I do not suggest that that increase has not been warranted. However, it proves the lengths to which the present Government parties were prepared to go in order to gain office. The people were misled. All that the Government has done since coming to power has been to cause a tremendous amount of discontent in this country. It is futile for honorable senators opposite to say that Labour has refused to pass measures. As I pointed out earlier, about 60 bills were passed during the last sessional period. Nationalization of banking is now dead, because constitutional power in that respect does not exist. However, it is for the people to decide whether they desire another board to be established. Irecollect that when honorable senators opposite were on the hustings during the last general election campaign they told the people that half of the boards then in existence were useless. The Government has failed to honour its pledge to restore value to the £1, and in my opinion the Government does not intend to tackle the problem of rising prices. I consider that the cost of living has risen by about £2 a week since this Government came to office. The endowment of the first child in every family under the age of sixteen years by 5s. a week has proved of little value to the mothers, because of the increased prices. The aged and invalid, whose pensions were increased slightly, and other persons living on annuities and fixed incomes, are in a very bad way. The Government has already decided to re-institute capital issues control, and it has refused a request by this side of the chamber to seek power from the States, or hold a referendum, to obtain the necessary authority to control prices. At present, prices control is being administered by the States, not altogether effectively, at a cost of £600,000 a year. Instead of seeking to appoint additional boards, the Government should do something to check rising prices. Unless positive action is taken in this direction, the days of this Government are numbered.
– When this measure was being debated during the last sessional period, I made notes of some of the- remarks of honorable senators opposite., One Government supporter stated that the appointment of a- bank board was justified by reason of the fact, that we have a potato board, a meat board, a peanut board, and various other boards dealing with primary produce. That was a stupid assertion, made in an attempt to justify the appointment of a bank board. In addition to the boards that I have mentioned, there is a cabbage board, an onion board, an egg beard, a pineapple board, an apple and pear board, and other boards that function in the interests of the primary producers, who, themselves, constitute the boards, decide what the boards should do, and how they should function. The boards take an active interest in marketing arrangements.
– And also to make sure that there are shortages.
– The honorable senator would not know about that, in any case.
– I know that there are shortages, though.
– Perhaps the honorable senator has helped to produce some of those shortages. However, I do not know what shortages he has in mind at the moment. If he were to ask me what I have in mind concerning a shortage that he experiences, I could give him a prompt reply.
The proposed Commonwealth Bank board will function in a vastly different way from the other boards to which I have just referred, and I suggest that a board established to exercise control over the people’s bank will not function in the interests of the people. The establishment of a board must be for a definite purpose, and later on in my speech I shall endeavour to reveal the purpose behind the proposal. An honorable senator on the Government side of the chamber has stated that this bill has been discussed exhaustively and that it is impossible to present any new ideas in connexion with it. That may be true; but it is possible to. have old wine in new bottles, and I may be able to discuss this measure from an entirely new angle. What is the purpose of a Commonwealth Bank board, what will be its functions, and what lies behind all the trouble that has been taken to have it established ? It might also be profitable to ask what is the business of the Commonwealth Bank and what are its functions? If we examine its functions or duties we shall know why it is the wish of the Government to establish a bank board. It is the duty of the Commonwealth Bank, within the limits of its powers, to pursue a monetary and banking policy directed to the greatest advantage of the people of Australia and to exercise its powers in such a manner as, in the opinion of the bank will best contribute to the stability of the currency of Australia, the maintenance of full employment and the economic prosperity and welfare of the people.
The stability of the currency of Australia is most desirable. If we consider for a moment ho.w important it is to have a stable currency, we shall appreciate promptly just how important are the duties of the Commonwealth Bank. Could there be a more worthwhile duty than the maintenance of full employment in Australia? If the duties of the bank are directed towards the economic prosperity and welfare of the people, it is obvious that those duties are most important.. The bank is divided into departments and divisions. For instance, there is a general banking division, through which division it is the duty of the bank to develop and expand its general banking business. The bank is not to refuse to conduct banking business for any person, subject only to the proviso that to conduct such business would have the effect of taking away business from another bank. The bank is empowered, through its note issue department, to issue, re-issue and cancel Australian bank notes. The rural credits’ department makes advances upon the security of primary produce placed under the legal control of the bank or upon- such other security, associated with the production or marketing of primary produce, as the bank thinks fit. Such advances may be made to co-operative associations, marketing boards formed under a law of the Commonwealth, or of a State or territory of the ‘Commonwealth, and to such bodies, whether corporate or unincorporate. formed under a law of the Commonwealth, or of a State or territory of the Commonwealth, as are specified by proclamation.
The Commonwealth Savings Bank is a separate unit. The Commonwealth
Bank also operates a mortgage bank department. Loans may be made by the bank, through that department, to any person engaged in farming, agricultural, horticultural, pastoral or grazing operations, or such other form of primary production acceptable to the bank, upon the security of a mortgage to the bank of an estate or interest in land owned by the applicant, where the land is to be used primarily for the objects to which I have just referred. There is also an industrial finance department, the functions of which are to provide finance for the establishment and development of industrial undertakings, particularly small undertakings, to assist in the establishment and development of such undertakings, and to provide advice on their operations with a view to promoting their efficient organization and conduct. It is also well known that the bank advances loans for housing purposes. Loans may be made by the bank, through the general banking division, to individuals and to building societies for the erection or purchase of homes, or for the discharge of mortgages on homes. It is provided that, in making such loans, the bank shall give preference to applications for the erection of homes and for the purchase of newly erected homes. A study of those duties and powers of the bank indicates clearly that it is an important; Commonwealth institution. It is important to the welfare of the people. One wonders, therefore, why it is proposed, at this stage of its history, to establish a board which will have power to decide the policy of the bank and to see that that policy is carried out.
It is true that at one period in the life of the bank a board exercised control over the bank’s policy and operations. That ‘being so, we are entitled to ask ourselves how the people fared during the period of operation of that board. We are entitled to go back over the years and to see for ourselves whether the bank then made a greater contribution to better living conditions for the people - of Australia than it has made without control by a board. It is my impression that a hoard controlled the bank until some time in 1945. For the purpose of ascertaining what were the conditions under which the people of Australia lived during the regime of a Commonwealth Bank board, let us examine the living conditions of the people about the year 1930, having in mind the duties and functions of the bank to which I previously referred. In 1930 there was in Australia unemployment at a record level. I propose to quote to honorable senators some statistics in order to give them an idea of how prevalent unemployment was at that time. The quotation reads -
The available data on unemployment are confined to information supplied by Trade Union officers, representing about 424,000 unionists. For the returns supplied, the following percentages of unemployment have been published. They indicate . . . the actual unemployment in all occupations, especially during the harvesting season: -
But the figures for the last two quarters of 1929 and the four quarters of 1930 were as follows: -
That indicates the extent of unemployment in Australia during 1930, and that was the time when the Commonwealth Bank could have been used to promote the welfare of the people. An idea of the downward trend of Australia’s credit at that time may be gained from the fact that on the 15th January, 1929,
Commonwealth 5 per cent, stocks were quoted at £98 5s. They fell steadily during 1930 until, on the 22nd January, 1931, they were quoted at £74 12s. 6d. Comparable New Zealand and South African stocks fell during the same period from £102 15s. to £99 2s. 6d. and from £103 10s. to £101 7s. 6d. respectively. In 1930, 23.4 per cent, of the working population of Australia was in a permanent condition of unemployment, and Commonwealth 5 per cent, stock was saleable at £74 12s. 6d. One would have expected the Commonwealth Bank Board to use the credit resources of Australia at a time like that to relieve the needs of the Australian people. In those days bankruptcies were numerous. Indeed, they were the order of the day, and a solvent business was the exception. There was distress on every side. Wool, which is bringing over £1 per lb. to-day was then being sold at 9-d. per lb. There is now a demand for more coal than can be produced, but in 1930 many coalminers were unemployed. In Queensland, legislation was passed to prevent the mines from being worked to full capacity. In all States a system of intermittent relief work was introduced. A great many of the breadwinners had to accept one day’s work a week. Some were more fortunate than others, and were given one and a half days’ work a. week. Now Australia is admitting immigrants from Europe and Great Britain, and that is a good thing, but so acute was the poverty in Australia in 1930 that attempts were made to prevent men from passing from one State to another. At intervals along the border between Queensland and New South Wales the Queensland Government erected placards requesting the workers of New South Wales to remain in their own State because it was impossible for the Queensland Government to do more than feed the unemployed people in Queensland. What did the Commonwealth Bank Board do in those days to alleviate the distress of the permanently unemployed? It did nothing whatsoever. The Commonwealth government of the day wished to raise £18,000,000 with which to finance developmental works far the relief of unemployment, but the Commonwealth Bank Board would not grant so much as £1,000,000.
Therefore, the people had to remain in a state of acute suffering until world economic conditions improved. It was customary in those days to see whole families walking the roads in search of food, shelter and employment. It was a very common sight to see men sleeping in the stockyards at railway sidings. Unemployed and penniless men travelled from one part of the country to the other on the railways. They had no fear of imprisonment, because they knew they would be better cared for in the gaols than when travelling about the countryside. The Commonwealth Bank Board could have made money available to the ‘Common wealth which, in turn, could have advanced it to the State governments for the construction of roads, bridges, railways and irrigation works, but it disregarded the needs of the people and was quite content so long as it applied the policy which it had laid down for itself.
Let us now consider whether the Commonwealth Bank has functioned in the interests of Australia since it has not been under the control of a board. The Commonwealth Bank Board was abolished in 1945, before the end of the war. The financing of the war placed a very heavy strain on the financial resources of Australia. When the war was over, the country was confronted with the task of changing over from war production to civil production. It was also faced with the problem of getting members of the armed forces back into civil life. From 1945 onwards, the Commonwealth Bank assisted the Government in all its projects. No matter what tests we apply it is evident that, from 1945 up to the present time, the Commonwealth Bank has functioned satisfactorily in the interests of the people of Australia. The simplest and best test of all is to ask some person in the street whether the bank is controlled by a board. Almost certainly he’ will reply that he does not know, and what is more he does not care. The average citizen prefers that the people’s bank should be managed without the assistance of a board. I am convinced that if there had been no private banks between 1929 and 1939, but only th..Commonwealth Bank, the depression would have lifted much sooner than it did.
What is the motive of the Government in introducing this bill ? The answer to that question may he found in the following extract taken from an article published in a journal known as the Australian Banker: -
This is against the accepted principles for a Central Bank, as the assets of the Central Bank may become frozen and it will be unable’ to help other banks’ in a crisis. But it has been argued that a, certain amount of trading by the Commonwealth Bank is necessary to take the place of the money market indicators’ of other countries. Trading activities enable it to perceive without waiting for indications from the trading banks, changes in the financial needs of the community. There is a. certain amount of truth in this argument, but the trading of a Central Bank should bo strictly limited. At the present time the Commonwealth Bank’s trading activities are too wide for those of a purely Central Bank, and as it develops into the Central Bank of the Australian banking system, these trading activities must be curtailed. They ave unfair to the trading banks in that the Commonwealth Bank uses its superior knowledge of the financial position of Australia, and also the funds of the trading banks to carry on its business. In addition to that fact, there is a decided danger, that if the Commonwealth Bank continues even limited trading activities and bases its policy on this sample, the limited activities may not be representative of the general financial movements of all Australia. They may not accurately balance the demands of the primary producers and the manufacturer.
The Commonwealth Bank’s second method of judging the demands’ of the community is through the movements in London funds. The amount of funds available in London to meet overseas commitments is a fairly accurate indicator of the financial position in Australia. An abundance of funds in London will lead to an easy credit policy in Australia, while credit will generally be restricted in Australia if funds’ in London are scarce.
That article puts the position in a nutshell and accurately sets out the objections of the private ‘banks to the absence of a Commonwealth Bank board. ‘It states definitely that the trading operations of a central bank should be strictly limited, in the interests not of the central bank but of the private banks. It sets out fully the objections of the private trading banks to the Commonwealth Bank engaging in general banking business and operating in competition with them.
– The private banks have no objection to the Commonwealth Bank engaging in general banking business provided it uses its own funds for that purpose.
– What I and other honorable senators on this side of the chamber are concerned about is the welfare of the people of Australia as opposed to the profit-making activities of the private banks. The private banks have their proper sphere of operation. Let them exercise their proper functions; let them make their profits and pay their dividends to their shareholders; let them employ their own staffs; but let it be understood at once that the people of Australia are under no obligation to them. Any person who has obtained a loan from a private bank well knows how stingently the terms of the loan are enforced. Tha private banks have .always demanded and obtained their pound of flesh, and they will continue to do so.
– At a big public meeting in Melbourne recently it was revealed that the private banks pay their employees less than the rates paid by the Commonwealth Bank.
– In 1949 we heard a great deal about the rights of private enterprise. We were told that the fields in which private enterprise had functioned for many years were far too narrow, that they should be broadened, and that only by a change of government could private enterprise come into its own again. Honorable senators on this side of the chamber uphold the rights of private enterprise which provides employment for 70 per cent, of the Australian population. We do not seek to destroy any of the rights of private enterprise.
– That is a new one !
– Not at all. ‘ We have consistently sought to improve the position of private enterprise.
– By socialization ? The honorable senator cannot have it both ways.
– Senator Robertson has said that I cannot have it both ways. Private enterprise will continue no matter what form our society may take. We shall always have people who own their own homes and private individuals will always seek freely to exercise their rights.
The Government has introduced this measure to permit the private trading banks to enjoy a larger share of the banking business of Australia than is now available to them. It will be remembered that, in 1947, an attempt was made by the ‘Chifley Government to nationalize banking in Australia. During the general election campaign in 1949 unlimited funds were available to the opponents of Labour to defeat the Chifley Government. They used approximately £1,000,000 for that purpose. I do not exaggerate nor do I indulge in guesswork. In 1949 the cost of a full-page advertisement in a metropolitan daily newspaper was approximately £750. During the months prior to the general election in December, 1949, full-page advertisements appeared in the press day after day setting out what the Liberal party and the Australian Country party would do if they were elected to office, including promises to put value back into the £1 and to reduce the cost of living. The broadcasting facilities of Australia were also used to advertise the steps which those parties proposed to take if they W 81’ returned to office. On a very conservative estimate, then, the anti-Labour parties spent £1,000,000 on .pre-election propaganda. Who provided that money ?
– Who provided the election expenses of the Australian Labour party?
– They were provided from the earnings of the workers of Australia and not, as was the case with the anti-Labour parties, by the private banks. Does not this Government owe something to those who subscribed so generously to its election funds? In these circumstances is it astonishing that a bill of this description should be before us? If I were the managing director or a director of a private bank I should not be satisfied with this bill ; I should want something more than it offers to protect my interests.
We are entitled to ask why a Commonwealth Bank board was established in the first instance. Was it not with the plain object of crippling the business of the Commonwealth Bank? Was not the board originally established to stultify the progress of the Commonwealth Bank and divert some of its business into other channels in the interests of the private banks? Why have so many mergers of private banks taken place during the last few years? In the early months of this year we read of still another proposed merger. It is obvious that the banks are strengthening their position to enable them to meet the greater demands being made upon them for credit. They are granting larger loans and as a consequence they will make larger profits.
– They believe in the principle that there is strength in unity, which is adhered to by the party to which the honorable senator belongs.
– I invite honorable senators to silhouette all the things that I have mentioned against the conditions which existed in Australia in 1930 when people we’re roving the streets, hopelessly searching for employment, when unemployment had reached an unprecedented level, and when the Commonwealth Bank Board would do nothing to assist the Scullin Government to relieve the distress that existed in the community, and then to contrast the resultant picture with the action of this Government in seeking to re-establish the Commonwealth Bank Board to further the interests of the private banks. It will then be realized that this bill has not been introduced to improve the administration of the Commonwealth Bank or to foster the welfare of the people of Australia, but has been introduced solely in the interests of the private banks. In a community of 8,000,000 persons only a certain amount of business is available for all the banks. If the Commonwealth Bank takes a share of that business, only what remains is left to be divided among the private banks. So, quite plainly, the object of the Government in introducing this legislation is to take from the Commonwealth Bank its right to engage in certain forms of trading business which it has conducted well and profitably for the nation in recent years. The proposed board, which will have the right to formulate the policy of the bank, will not interfere in any way with the interests of the private banks. The proposed board would strangle the Commonwealth Bank. Why does the Government wish to dothat, except to repay the private banks for the contributions that they made to the election funds of the anti-Labour parties? The private banks helped the
Government. The Government is in debt to the banks, and is anxious to do something for them.
– I rise to support my colleagues in their opposition to this bill. Our main objection to the proposal to reconstitute the Commonwealth Bank Board is that, under the present form of control, the bank is operating effectively and efficiently in the interests of Australia. However, before I deal specifically with the details of the legislation now before us, there are one or two matters which, I believe, should be clarified. I should like to know, first, the constitutional position of the Senate in debating this measure. There are two Commonwealth Bank hills and they are identical. The first was fully considered by this chamber and was returned to the House of Representatives with message No. 26. To that message there has been no reply from the House of Representatives. That is just a further example of the treatment that the Senate has received at the hands of the House of Representatives and of the Government which controls the destinies of this country to-day. There is another question that I should like answered if that is possible. I hesitate to appeal to the Government’s legal advisers for advice lest they offer advice of the kind that they have been giving to the Government for the last fifteen months on constitutional and other questions. That advice, as we now know, has been almost invariably wrong and misleading. Are we in reality discussing the first of the two Commonwealth Bank Bills? If not, then we are discussing the second measure before the Senate’s action on the first has been recognized by the House of Representatives. Those questions should be answered.
The next matter upon which I shall touch is of great importance to the country. Last week, and apparently even as late as yesterday, the Government considered that the most important legislation with which the Senate should deal was the National Service Bill, yet to-day, an unprecedented course of action has been followed. After a notice-paper had been circulated to honorable senators this morning setting out the business of this chamber, it was withdrawn and a new one substituted in which the orders of the day had been completely re-arranged. We found that the Commonwealth Bank Bill (No. 2) had taken the place of the National Service Bill at the top of the notice-paper. What inference are we to draw from that action? Surely we are entitled to assume that the National Service Bill is no longer of primary importance; that once more the wordy words of a wordy government are meaningless; and that Government supporters have forgotten the views that they held yesterday. Past experience shows that Ministers themselves are usually the first to forget their own policy pronouncements. They paraded this country telling the electors of thb extreme urgency of .the National Service Bill. In a most disgraceful fashion, the Prime Minister made a press statement in which he informed Australia that there would be war within three year*..
Government SUPPORTERS. - No !
– Now that warning is being qualified. We are being told that we “ might “ have war in three years. We might have war in three minutes or perhaps 300 years, but the whole purpose of the Prime Minister’s statement was to convince the people, of Australia that they had only three years in which to prepare for a war. Let honorable senators opposite deny that statement if they will. Whatever the Prime Minister’s ‘words may have been, their purpose was to scare the people and to distract their attention from everyday problems. If the Prime Minister is honest and honorable why has the. National Service Bill been removed, from the top of the noticepaper in this chamber? Is that action consistent with the Prime Minister’s warning that the efforts of all sections of the community, including those of the eighteen year olds who are to be called up for military service under the National Service Bill must bend all their efforts to war preparations in the next three years. Three years is said to be the limit of time that is available for our preparations, and the foremost plank of the Government’s defence programme - and what a poor plank it is, is the training of a few thousand eighteen-year-old youths. Honorable senators opposite cannot deny that the crux of the Government’s defence plan is the training of these boys. Yet here we are to-night discussing a banking measure that has been elevated from a humble place on our notice-paper to supersede the National Service Bill ! In these circumstances, what are we to believe? Are we to believe that thi*! legislation which has lain dormant - not through the will of the Opposition but through the will of the Government - for months and months, has suddenly become the most important measure on thi’ notice-paper? Obviously the move is purely political. It is typical of theGovernment’s political approach to ever? problem that it and the nation has had to face. No major problem has been tackled by this Government for other than political motives. The big jobs have been left undone. The output of words per minute from this Administration has been astonishing. No other government has ever poured out so many words, with so little meaning in so little time. The words of the Prime Minister himself have a high silvery quality, but I am beginning to believethat all he can do is talk. When one looks at any of his high sounding utterances, a month, a week, or sometimes even a day after they have been made, one realizes that they were mere words with no real promise of action.
In the handling of this legislation, tha Government is treating the Senate with absolute contempt, and not for the first time. Last week, in a speech in this chamber which was broadcast to the nation, the Minister for Trade and Customs (Senator O’Sullivan) condemned the Opposition for its alleged contempt of everything that is good and pure in our parliamentary system, but there is no limit to the contempt that the Government has shown to the Senate in the handling of the legislation that has been placed before us. There has been a political motive underlying everything that the Government has done in this chamber. Will the reconstitution of the Commonwealth Bank Board enable the bank to operate more efficiently than it has been doing since 1945, or even since December, 1949, when this Govern ment came to office? Does the Government believe that the elimination of the present successful form of control of the bank and the substitution of control by an unknown group of men is a matter of urgency to the community? I suggest that the proposal is purely political, as have been most of the other banners that the Government has flown in the course of submitting its legislative programme to the Parliament and the country. What has been the fate of the Communist Party Dissolution Bill? In referring to that measure only last week, the Minister for Trade and Customs said -
I shall also refer to the shameful protection that was afforded by the Labour hang-over majority to our communistic subversive disrupters. The Labour hang-over majority extended a protective mantle over the Communist wreckers for a. .period of six months, frustrated the Government and denied it the right to deal with them . . .
That was obviously political propaganda, because on the following day, the High Court by a. majority of six to one, upheld the Labour Opposition’s criticism ,a.nd condemnation of the bill. The verdict of the High Court vindicated our concept of British justice. Unfortunately, our experience of this Government during the fifteen months that it has been in office has taught us that people who look to it for justice will look in vain. The present Government has f ailed to take definite and consistent action against the industrial wreckers, and during its term of office it has taken action against them on only one occasion. I refer to the waterside dispute in Brisbane last year, when the Government invoked the Crimes Act. As ‘ the result of its action on that occasion the waterside workers returned to work. Since then the Government has taken no effective action against the subversive elements in our midst, although last week it was driven to threaten the waterside workers that it would ‘again invoke the Crimes Act to settle a dispute on the waterfront. In doing so it was merely acting on the advice that -Labour has consistently tended to it since it has been in office. During the last general election members of the anti-Labour parties said that if their parties were returned to power they would deport the Communists.
– Nobody said that.
– Members of the present Government said that they had power under the Crimes Act to do so, and that if elected to office, they would do so. The Attorney-General (Senator Spicer) even went so far as to say, “3 am rolling up my sleeves to deal with them “.
– I did not say anything of the kind.
– If the Attorney-General now chooses to deny having made that statement it is quite competent for him to do so, of course. However, the fact remains that either he must have very long arms, or the action that he proposes to take will be a most long-winded one, because nothing has yet been done against the subversive element in the community. Notwithstanding the Government’s complete inactivity in this matter, I remind it that it ‘has complete power to take effective action.
– What has that to do with the Commonwealth Bank Bill?
– I am merely pointing out that this measure is just as much a political banner that is being waved before the people in order to induce them to forget their real problem* as was the Communist Party Dissolution Bill that this Government introduced.
– Then let the honorable senator vote against this measure, and be done with it.
– I am surprised that the Attorney-General should offer such counsel, because I know of no one who fuses more words and does less than does the honorable senator. The elimination of the subversive element in our midst could have been accomplished without any one rolling up his sleeves. However, the Government has dillydallied for months and has done nothing. Of course, it has consistently blamed tho Opposition for its own inaction. If ever an Administration should be condemned as a thing of words, ineptitude and inaction it is the present Government. One has only to walk down the streets of out capital cities or visit a country town in order to feel the reaction of the people against the Government’s ineptitude in such a critical period.
– Then go to the country !
– That responsibility rests with honorable senators opposite. The Government can have a general election to-morrow if it wants one.
– Is that a promise ?
– Knowing the “form” of the present Government, however, I know that it will do nothing of the sort. All that will happen is that we shall hear more and more words, and see less and less action. Indeed, if inaction and ineptitude were the trademarks of good government, members of the present Government would be branded in every link. In saying that I am merely repeating criticism of the Government that one hears everywhere. Members of the Government have poured forth words in a silver torrent, but what is the result ? Most people judge an administration on its actions, and not on its words.
– That is why they kicked out the previous Government, of which the honorable senator was a member.
– Yes, they were misled by the present Government’s promises. After fifteen months the people are adding up the Government’s promises and setting them against their accomplishments. .The balance-sheet does not present a very flattering appearance. People are saying, “What has happened to the promises contained in those glorious words? What promises have been fulfilled?” I think that the balancesheet must shame even members of the Government in this chamber! Imagine them complaining of contempt of the Senate ! I propose now to deal with one more point.
– Will it relate to the bill?
– I shall make my meaning so clear that even Senator Mattner should be able to understand it. I have tried to simplify the expression of my views, but if I have not been able to get down to the honorable senator’s mental level I am sorry, for I cannot reach any lower point.
I recall the occasion when the leader of the Government indignantly referred to the shameful morning when the Senate bells rang and this chamber was unable to obtain a quorum. Of course, the honorable senator blamed the Opposition for that happening, but I remind him even now that on the morning of that occurrence 40 per cent, of his own supporters were not present. Members of the Opposition were present in Parliament House, but we placed on the Government the responsibility of conducting the business of this chamber. If the Government had had its supporters present it could have transacted the business of the Senate, but I repeat that 40 per cent, of its supporters were not present.
– With what part of the Commonwealth Bank Bill is the honorable senators now dealing ?
– I am sorry that I cannot make my meaning any plainer even for the benefit of Senator Robertson. During the last fifteen months the Government has announced to the Parliament its intention to proceed with the implementation of a whole series of political objectives. What has been the result ? Although the Government has done its utmost to mislead the people, to disguise the truth and to distract attention from the real issues that confront us, it has not once attempted to grapple with realities. Every one knows that if he goes into, say, a chemist shop for, perhaps, a small pot of vaseline that used to be only 10d., the chemist now apologetically charges him ls. lid. for it. The reason for the startling increase of prices that has taken place is that every ingredient that the chemist uses has almost doubled in price during the tenure of office of the present Govern-, ment. What has become of the solemn undertaking of the present Government to restore value to the fi? Despite the glorious cascade of promises that was made in the general, election campaign prior to December,. 1949, the cost of living has since soared incredibly. That is but another example of the falsity of the political banners that the anti-Labour parties have waved so violently before the people.
– How the honorable senator hates having to make a decision !
– The making of decisions has been the easiest thing in my life. Although I am not a clair- voyant, I prophesy now that the Opposition will insist that this measure shall be referred to a select committee for review. The present extraordinary state of affairs in the Parliament has arisen, of course, because the Government is in a minority in the Senate. We know that there are strong minorities, militant minorities and many other kinds of minorities, including feeble minorities. Unfortunately for the Parliament and the country the Government minority in this chamber is a feeble one.
Having made that clear, I desire to say something concerning the necessity for a very close examination by parliamentary committees of all major legislation. During the present Parliament certain legislation on several important matters has already been referred to select committees of this chamber. I want to say at once that I believe that the appointment of a select committee in such instances serves a most useful purpose. The select committee which reviewed constitutional problems arising out of the debate on the Constitution Alteration (Avoidance of Double Dissolution Deadlocks) Bill did most valuable work, notwithstanding that it was boycotted by members of the Government. The select committee that presented its report last week on national service in the defence force also did most valuable work’.
– It was a complete farce.
– If the committee was a complete farce, then honorable senators opposite must accept the blame for that state of affairs. The appointment of select committees to review legislation is an important part of the work of the Parliament. In making that statement, I admit at once that governments of all political parties have been guilty of omitting to refer important legislation to parliamentary committees for thorough investigation. I remind honorable senators that the work carried out by committees of the United States Congress is regarded as a most important function of that parliament. In one of the first speeches that I delivered in this chamber I stressed the necessity for the reference of important legislation to parliamentary committees for review.
– The honorable senator forgets that he was a member of the last Government for some years, and that that Government did not trouble about select committees.
-.- That is so. As I have already said, all political parties are equally guilty in this matter. Because of an accident that gave the Government a minority in this chamber - -
– Did the honorable senator say “an accident”?
– Of course, there are good as well as bad accidents.
– There was no accident in the present Government attaining only a minority in this chamber at the last election.
– The fact remains that in the accident to which I have referred no one broke his’ leg, although some people did serious damage to their skulls by smashing them against stone walls. To return to the bill, I was about to say that the Opposition proposes to refer this legislation to a select committee. Because of the extraordinary political situation that confronts us in this Parliament the Opposition is able to compel the Government to refer this bill to a select committee.
– Why did not the Opposition adopt that course when the previous Commonwealth Bank bill was under the active consideration of the Senate?
– We might not have thought of it at that time. However, we have certainly thought of it now. We have placed our proposal before the Government in due humility and in complete honesty, and have asked it to co-operate with us in our proposal. Why not put politics aside even for just a short time, and do something worthwhile? As I have already said, in my opinion the work accomplished by parliamentary committees, in which I have always been a firm believer, is of incalculable value and great advantage has accrued to the Parliament and the nation from the appointment of previous committees. It is, admittedly, unfortunate for the Government that it should have only a minority of supporters in this chamber. It has not the prestige or the weight that attaches to a government that possesses a majority in both Houses of the Parliament and I have no doubt that if the Government had a majority of supporters in this chamber the Opposition would obtain more cooperation from it, particularly in this important matter of appointing select committees to review legislation. If the .Senate decides to refer this bill to a select committee of the Senate I shall applaud its action, and I take this opportunity to express my view that the more representatives that the Government appoints to such a committee the better it would be for every one. The Labour movement has been forced into the position of being custodian of the Commonwealth Bank. However, that is natural and logical since, as honorable senators opposite know, the establishment of a Commonwealth bank was included in the platform of the Federal Labour party right back in 1905. On the 25th October, 1911, Andrew Fisher introduced the Commonwealth Bank Bill and it was passed almost without amendment. The Labour party, having a conception of the value of such a bank, having placed an appropriate plank in its platform and having caused the initial bill to be passed through the Parliament, it is only right and just in these days when the bank is threatened from outside, that the Labour party should regard itself as being the guardian and custodian of this great national institution. I shall reveal briefly to honorable senators the background of the banking system, and show how quickly a bank can be founded and how profitably it can function. It i.« only right that the Commonwealth should take part in our banking system. Honorable senators should not forget that in the days when it was proposed that the Commonwealth Bank should be established the anti-Labour Opposition members of the day attacked the proposal bitterly and did all in their power to prevent the Parliament from approving of it. Finally, when they could not do that, they did all they could by slander to “ kill “ the bank and to destroy the confidence of the people of Australia in it. Looking back on history, one of the great tributes to the Australian people is that their confidence in the Commonwealth Bank was not shaken. With a capital of just £1,000,000, which, interestingly enough, was never called up, the Commonwealth Bank opened its doors for business on the 15th July, 1912, with a staff of twelve, including the Governor. The wheel has now turned a full circle. The Governor who started the bank and conducted it with high efficiency until his death was Sir Denison Miller, whose memory still lives. In 1924 the right honorable member for Cowper (Sir Earle Page J, who was known as the tragic Treasurer, with the collaboration of the then Prime Minister, Stanley Melbourne Bruce, now Viscount Bruce, and the private banks outside took away the control of the Commonwealth Bank from the Governor and the Parliament, and gave it to the private hanks to handle directly. There is no doubt that that is exactly what they did. In 1945 the bank was again placed under the control of a governor. The story of the Commonwealth Bank is a romance. Although any nation could be very proud of the bank as at present constituted, we find in this enlightened day and age a government trying to interfere with it.
– Has the honorable senator a list of the initial staff ?
– They were all 0’Flynns, 0’Halls and O’Shannessys. The bank board established by the BrucePage Administration comprised Mr. J. J. Garvan, of the Mutual Life and Citizens Assurance Company Limited, Mr. R. S. Drummond, who represented the wheatgrowers, Sir Samuel Hordern, who represented the retail traders, Mr. J. Mackenzie Lees, chairman of the Associated Banks in Queensland, Sir Robert Gibson, Mr. R. B. McComas, merchant, and Mr. A. F. Bell, of the Union Trustee- Company of Australia Limited. From 1924 until Labour secured a majority in the Senate in 1945 that board controlled the affairs of the Commonwealth Bank. We do not say that a bank board is a bad thing merely because we do not like it. When we address the Senate we like to give evidence in support of the case that we put forward. It is interesting to compare the rate of expansion of the Commonwealth Bank under a board with its rate of expansion under a governor. At the 30th June, 1920, the number of full branches of the Commonwealth Bank was 32. The number grew to 70 by 1925. Between 1925 and 1930, under board control, only eight more branches were opened. Was not that strangulation? Was that giving the people’s bank a fair go, or was it complete sabotage? There is only one answer. It was complete sabotage ! The Scullin Government came to office at the end of 1929, and between 1930 and 1932 the number of branches of the bank rose from S8 to 261.
– That was the period in which Lang wrecked the Government Savings Bank of New South Wales, and the Commonwealth Bank took over its branches.
– From 1932 to 1939, a notable period in the annals of Liberalism, the fat years of prosperity, the number of branches increased from 261 to 275. In those seven years only fourteen more branches were established. From 1939 to 1949 the number of branches rose from 275 to 415. That is real growth. In addition, there were subbranches in London, at airports and at immigration centres. There was a real policy of expansion under Labour. Now honorable senators opposite want to revert to board control. What for? Do they want the former sabotage to be resumed? Do they want to take their own wealth away from themselves in order to satisfy some foolish ambition, or is it because they cannot stand up to the insistent driving of people outside who have armed themselves with whips and are in a position to whip supporters of the Government into a line which they have themselves marked out? There is no reason that will stand the light of day why honorable senators opposite need or want a board to control the Commonwealth Bank. There is a real reason, one that supporters of the Government will never admit, but” one that is terribly important. It is the complete cowardice of this Government and its inability to run its own affairs. Why does the Government want to bring in five people from outside ? The Government is growing completely away from its responsibilities. Surely one bounden duty of a government, whether it is right or wrong, is to stand up to its responsibilities. I am not here to give credit, or to take credit away, but I will always give credit when a government makes a decision, stands up and fights for it, and then puts it into operation to see if it works. After fifteen barren months of words, honorable senators opposite do not even want to accept responsibility for the Commonwealth Bank. They want to give it away again. Let us on this side of the chamber survey the position to see whether there is anything to be gained for the people of Australia in this move, for there is not a supporter of the Government who will make a survey of the position and tell the country categorically what advantages would be gained by reverting to board control of the Commonwealth Bank. Such a board, might perhaps, solve the problem of revaluation for the Government. Honorable senators opposite might be able to say that a Commonwealth Bank board had decided that the Australian currency should be appreciated by 12£ per cent, forthwith, and in another two or three months, having given everybody due notice, all the “hot” money would be brought to’ light. If we attacked the Government and contended that that would ruin Australian industry, or that it would impose too great a burden for industry to carry, the Government would be able to reply that the Commonwealth Bank board was a government instrumentality, and that the Government would not interfere with its decisions. In that .way the Government could walk away from its responsibility when big decisions had to be made.
There is a big matter at present under discussion in connexion with the industrial life of this community. I refer to interest rates. Perhaps a decision in this respect is one of .the things that the Government would like the proposed board to make. The Government could then also run away from that decision after it had been made. These are problems that affect every man and woman in the community, either directly or indirectly. From the day that the Government assumed office, it has failed to face up to the responsibility of making its own decisions. It may also be thought that because the private trading banks might wish to retrieve some of their deposits that have been lodged wit.h the Common-wealth Bank since the war years, another heap of faggots would be thrown on the inflationary fire that is spreading so rapidly. Those things are possible, and some of them may he probable.
It seems to me that the Government wishes to have a Commonwealth Bank Board in order that it may escape the responsibility of standing up to the obligations that democratic governments automatically and per se assume. Is this Government frightened that the people will hold it responsible for the blazing inferno of inflation and for having done nothing during the last fifteen months to halt that inflation? “What is bad to-day will be doubly bad to-morrow. That is the tragedy of the position that now confronts Australia. It would be serious enough if the position were static, but it is even more serious when it is realized that to-morrow it will be much worse than it is to-day. It seems that this Government hopes to ride out this period of inflation, but it nevertheless wishes to sit and think and to talk until the balloon bursts. If that happens, there will be a depression and Australia will return to the unemployment of the 1930’s. A depression can come from this infla- tionary period just as it did in the 1930’s, when, to use the words of the bankers, there was over-production. At that time too many commodities were being produced. There was too much coffee, too much wheat, the wool could not be sold, and there were too many houses. People were moving out of big houses in order to live in rooms. “We now have a situation where there is under-production, full employment and a high standard of living. However, that situation may be swept away with the same end as in 1930, when there was over-production. If the circumstances that I have envisaged come about, whether through over-production, or under-production, or because of increasing inflation, and if men find that the prices of the goods that they produce . are so high that those goods are left on the shop floors, the manufacturers of those items will begin to count their men and to send their efficiency experts through the factories. Once that movement starts, the result will be the same. If men cannot obtain work, no matter what the reason, the country and the Government will have fallen down on their most sacred trust. If that day comes, the greatest bulwark behind the government of the day will be the Commonwealth Bank. It can solve that problem. If the task is given to a board, as it was during the last depression, do honorable senators opposite think that there will be any chance of the bank standing up to the obligation that the Government and the people have placed on it? Or will there be repetition of the bank board dominating the Government and laying down conditions for the issue of money, as it did in 1931? Shall we again witness a government body turning on the people, increasing their burdens and making them carry those burdens for an unnecessarily long period? Old history is sometimes startlingly new when it is repeated.
I wish to read to honorable senators a letter that Sir Robert Gibson, who was then chairman of the Commonwealth Bank Board, wrote to the Honorable E. G. Theodore on the 13th February, 1931. The letter reads-
Dear Mr. Theodore. - With reference to your . discussions with the directors of the bank board on the subject of rehabilitation of the financial and industrial position of Australia, when it was agreed that some concerted effort must be made to cope with the situation and so avoid, if possible, the ultimate disaster which will otherwise eventually face the country, I am requested by my board to convey to yon a resolution of the board as set forth hereunder : -
Subject to adequate and equitable reductions in all wages, salaries, and allowances, pensions, social benefits of all kinds, interest and other factors which affect the cost of living, the Commonwealth Bank Board will actively co-operate with the trading banks and the Government of Australia in sustaining industry and restoring employment.
What an incredible state of affairs it was, that when assistance was most needed, when almost 30 per cent, of registered trade unionists were vainly searching for a mere subsistence, the one organization that could help and which, from its very inception, was designed to help in circumstances such as those, adopted such an attitude ! When the unfortunates of Aus tralia held out their hands for bread they were given stones. It is futile to laugh and to say that those things could not happen again. The fact is that they did happen. In order that it might evade responsibility, this Government wishes to set up a Commonwealth Bank board behind which it can hide, if necessary, or for the operations of which, if the bank functions as it should, it can reap the credit. As usual during its fifteen months of office, this Government wishes to have it both ways. It wants the credit, if it can have it, without carrying any of the burdens; but if matters do not go as well as they should, and if the public becomes angry, disillusioned and even violent, it wishes to take up the age-old position of hiding behind a Commonwealth instrumentality.
I am concerned with the lack of capacity to govern displayed by the men in charge of the country. I say that not from any political angle but because I feel that their approach is wrongly based. I remember that when Mr. Menzies was previously Prime Minister of Australia he was returning from one of those journeys that he found it necessary to make to Great Britain and was entertained at Auckland. Addressing a gathering of important people in that city, the right honorable gentleman stated -
If the price of victory be poverty - and I believe it is - then it is the duty of statesmanship to see that this poverty is honorably shared -
That was the kind of defeatism with which he approached the 1939-45 conflict. As I read that statement I instantly thought of him sharing the poverty. The picture that came to my mind was a strange one. I thought to myself : What reduction of cigars will he consider a reasonable share of the poverty, or will he think of some other method by which he can share it? We all know that poverty can never be shared and that it is carried on the backs of individuals. It is true throughout the world that where there is the greatest poverty, in many cases there are also the greatest riches. The democracies have tried, particularly under Labour governments, to ensure that it is net poverty but prosperity that is honorably shared. It may be said that Labour governments have wrong policies and wrong ideas, but there is one driving force within the Labour movement. It is a state of mind, of which there has been a continual development. It is that while the Labour movement can influence a situation there shall never be any poverty to share.
Many people in this community and throughout the world seem to have a vested interest in poverty. It appears to be to their advantage that many persons are poor. It may perhaps assist them to conscript labour. During those periods when there is a surplus of man-power and when men wait at the factory door in the hope of obtaining employment so that they may take something home to their families, the owners - and, thank goodness their percentage is decreasing every year in this enlightened country - are enabled to obtain results from the workers without which they seem to think that they cannot make their businesses prosper. Business men whom I know and admire for the work that they have done, have told me and have also publicly stated that unless there is a 10 per cent, unemployment pool there cannot be efficiency in industry. I therefore suggest that there is a vested interest in poverty and in being able to control the workers in order to obtain the utmost from them. So it is with this question of the establishment of a Commonwealth Bank Board. The Commonwealth Bank is a bulwark, a fortress from within which the Government, if it possesses sufficient courage, can fight off poverty and can spread what is left of the prosperity in the community so that no one shall suffer as in the depression of 1930 and so that men and women will be able to maintain, in their own right, their standards as ordinary human beings. Nothing destroys those standards more quickly or more permanently than the inability of a man who wishes to work to obtain work. We pray that the day will never come again when men will be forced to walk the streets looking in vain for work. The first responsibility of a government is to provide employment for the people, and any government which, during a time of world economic depression, can lessen the impact of unemployment in Australia will receive my praise. [Extension of time granted.’] There is, unfortunately, a vested interest in unemployment and poverty. In October, 1949, Colonel Karl F. Baldwin, in an address to Melbourne Rotarians. said -
Apparent pegging of American unemployment at its current level of 6 per cent, has infused new spirit into the American worker; the slackness that grew from so-called full employment had vanished. With their eyes on the fi per cent., the 34 per cent, of workers in jobs were on their toes.
The 0 per cent, level in unemployment would probably be found to be ideal!
About the same time, a prominent Australian professor expressed himself in similar terms, although he subsequently denied that he had ever stated that an unemployment pool had some value. However, I read his statement very carefully, and I am convinced that what Colonel Baldwin expressed so concisely Professor Hytten said more diffusively. To the economist or the political dilettante, 6 per cent, of unemployment is just a figure, and, he says, “ That is just right “. Hn never stops to consider the effect of unemployment on the individual. Unemployment breeds communism. Although Communists in executive positions in trade unions are causing much trouble at the present time, the Communist party is numerically weaker to-day than at any time during the past 25 years. That is because the average workman has a good income with which he is able to buy the necessaries of life for his family. It should be the objective of the Government to preserve a high living standard. People talk glibly about an unemployment pool of 6 per cent., but 6 per cent, of 150,000,000 people, which is the population of the United States of America, amounts to 9,000,000, and a body of 9,000,000 unemployed constitutes a favorable breeding ground for communism. How can we blame the man who cannot find work for turning to communism ? When he has to come home night after night to his wife and children without having found a job, it is little wonder that his outlook becomes warped, and that he turns to a political philosophy which says : “ Throw off your chains. Nothing is achieved without struggle. From each according to his ability; to each according to his need “. That sounds so very attractive. In my opinion, the greatest single barrier to the spread of communism is the effective control of national credit for the benefit of the people. Mr. McKenna, an ex-Chancellor of the Exchequer, and chairman of the Midland Bank, summed up the position very well when he said -
Those who control the credit of the nation direct the policy of governments, and hold in the hollow of their hands the destiny of the people.
Let us make no apology for parliamentary control of banking. It is something to be .proud of. We, the members of the Parliament, are here to take responsibility, and we shall be judged upon how we discharge our responsibilities. Final responsibility for monetary policy should not rest with a bank board. That policy should be the direct responsibility of the Treasurer, acting under the direction of the Cabinet. Let us not tamper with a successful business. The Commonwealth Bank, under the present method of control, is outstandingly successful. Indeed, it is the envy of the world, but this Government, in order to avoid responsibility, is prepared to abandon a method of control that has proved so successful. Difficult days will undoubtedly come again sooner or later, and in those days the Commonwealth Bank will be tested. We should be careful not to do anything to make it more difficult for the bank to pass that test. If in those days the bank should be under the control of a weak governor the government of the day should direct him to place the resources of the bank at the disposal of the people, so that never again shall there be in Australia that poverty which the Prime Minister (Mr. Menzies) declared was the legacy of victory.
– I trust that the speech of Senator Armstrong has made an impression upon Government supporters. He showed how the people of Australia have been exploited by the private banks in years gone by. He traced the history of the Commonwealth Bank, and demonstrated that the work of the bank had been made more difficult by placing it under the control of a board. I find it difficult to under stand the attitude of the Government. Only recently, we were told that the National Service Bill should be passed urgently. The Prime Minister (Mr. Menzies), in a broadcast address, said that war was near, and that we should prepare for it. It would seem that the Government is prepared to drag Australia into every dog fight that breaks out overseas. I trust that the Government will not interfere with selfgoverning communities. If other countries want to fight among themselves let them fight. We may have our full share of trouble in the future. Does the Government consider this bill to be more important than the National Service Bill? Apparently, it is trying to create a state of public hysteria which, it believes, would be favorable to its cause in a general election. We know that the promises made by anti-Labour parties before the last election have not been honoured. It may be claimed that the Opposition in the Senate has frustrated the efforts of the Government, and in a sense that is true, but we have opposed the Government’s measures because they were not in thi best interests of the people. In his second-reading speech the Minister for Social Services (Senator Spooner) said that the bill was very important in that it provided for the appointment of a Commonwealth Bank board. That is the issue between the Opposition and the Government.
Sittings of the Senate.
– Order ! In accordance with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
– It is only fair that I should acquaint the Senate that, in view of the volume of business on the notice-paper, it is possible that, on Thursday, I shall ask ‘honorable senators to sit on Friday. That course will be followed only if there still remains on the notice-paper a considerable number of items to be disposed of.
– Characteristically, the Leader of the Government in the Senate (Senator O’Sullivan) does not know what he wants us to do or what the Government wants us to do. He does not know even now whether or not he wants the Senate to sit on Friday. The Opposition proposes to adhere to the sessional order relating to the sitting days of the Senate as it has done on other occasions in recent months.
Question resolved in the affirmative.
The following papers were presented : -
Commonwealth Bank Act - Appointment - R. E. Plumridge.
Customs Act - Regulations - Statutory Rules 1951, No. 5.
Customs Act and Commerce (Trade Descriptions) Act - Regulations - Statutory Rules 1951, No. 8.
Defence (Transitional Provisions) Act -
National Security (Industrial Property)
Regulations - Orders - Inventions and designs (3).
Regulations - Statutory Rules1951, No. 10.
Education Act - Regulations - Statutory Rules 1951, No. 9.
Interim Forces Benefits Act - Statutory Rules 1951, No. 8.
Judiciary Act - Rule of Court, dated 18th January, 1951 (Statutory Rules 1951, No. 4).
Lands Acquisition Act - Land acquired for -
Defence purposes -
Department of Civil Aviation purposes -
Letter from the President of the Knesset (Parliament of Israel), together with Resolution adopted by the Knesset on the 10th January, 1951, concerning the proposed re-armament of Germany.
Public Service Arbitration Act - Determinations by the Arbitrator, &c. - 1951 -
No. 1 - Commonwealth Public Service Artisans’ Association.
No. 2 - Association of Railway Profes sional Officers of Australia.
No. 3 - Non-official Postmasters’ Associa tion of Australia.
No. 4 - Australian Journalists’ Association.
No. 5 - Federated Public Service Assis- tants’ Association of Australia.
No.6 - Variation of Determination No. 39 of 1926 - Common Rule re Sick Leave.
No. 7 - Australian Broadcasting Commission Staff Association.
No. 8 - Hospital Employees’ Federation of Australia.
Nos. 9 and 10 - Amalgamated Postal Workers’ Union of Australia.
No. 11 - Electrical Trades Union of Australia.
No. 12 - Peace Officer Guard Association.
No-. 13 - Federated Clerks’ Union of Australia.
No. 14 - Amalgamated Postal Workers’ Union of Australia.
No. 15 - Professional Officers’ Association, Commonwealth Public Service.
No. 16 - Commonwealth Public Service Clerical Association; and Federated Clerks’ Union of Australia.
Public Service Act - Appointments - Department -
Civil Aviation - J. R. Adams, R. F. Alexander, P. H. Allen, K. Arnold, W. F. Barnfield, J. A.Bashford, R. H. Bayly, E. G. P. Beevors, R. C. Bennett, T. Blackley, A. Boag, E. J. Bradford, D. W. Brown, J. H. Buckman, R. B. Butters, D. E. C. Charlwood, F. A. G. Cooper, S. H. B. Cooper, R. H. V. Cullenn, K. Eddy, R. J. M. Edey, M. D. Evans, A. A. Gillett, A. H. Green. K. R. Hansen, H. F. Harrison, R. D. Heazlewood, W. L. Jeffrey, F. E. Johnston, G. M. Kendrick, J. E. Lauder, K. J. Leonard, I. C. Lewitzka, R. A. Locatelli, E. G. Long, B. H. Macauley, E. J. McCubbin, J. P. McCubbin, P. L. McMillan, M. S. Miles, T. R. Miller, W. J. Molloy, H. T. Moores, W. A. W. Overell, N. L. Petchler, M. F. Pittman, H. L. Pleydell, R. M. Power, G. J. Quinan, J. P. F. Reid, R. S. Rich, I. R. Richardson, I. D. Rolley, J. E. Sanson, L. A. Sayers, W. B. Skinner, R. D. Stair, A. E. Steel, E. H. Summerville, S. E. Sutcliffe, F. J. Swadling, C. L. Taylor, N. N. Taylor, G. F. Turner, G. Uttley, R. H. Watts, L. J. Weatherburn, B. J. Wells, L. B. Willis, I. H. Winkler.
Repatriation - M. Cooper.
Works and Housing - I. S. Bickerstaff,
W. A. Brosnan.
Repatriati on Act - Regul ations - Statutory Rules 1951, No. 7.
Seat of Government (Administration) Act -
Variation of the plan of lay-out of the City of Canberra and its environs, together with the plan referred to, dated 7th March, 1951.
War Crimes Act - Regulations - Statutory Rules 1951, No.11.
Senate adjourned at 10.31 p.m.
Cite as: Australia, Senate, Debates, 13 March 1951, viewed 22 October 2017, <http://historichansard.net/senate/1951/19510313_senate_19_212/>.