20th Parliament · 1st Session
The President (Senator the Hon. Edward Mattner) took the chair at 3 p.m., and read prayers.
Bill returned from the House of Representatives without amendment.
Assent to the following bills reported : -
Public Service Bill 1951.
Post & Telegraph Rates Bill 1951.
Sugar Agreement Bill 1951.
– Has the Minister for Shipping and Transport perused the 1949-50 report of the Australian Stevedoring Industry Board, which attributes inefficiency on the waterfront to a variety of factors, including (a) limited degree of mechanical equipment on the waterfront; (6) low standards of supervision; (c) outmoded methods and techniques . of management; and (d) quick turnover of labour, for the fact that for every thirteen men who come into the industry no fewer than nine leave it? In view of these scathing and condemnatory findings, can the Minister inform the Senate whether immediate action is to be taken by the Government to improve this most regrettable and sorry state of affairs on the Australian waterfront ?
– The matter referred to by the honorable senator is the concern of the Minister for Labour and National Service; but representatives of my own department, who are particularly interested, are examining the report. As I mentioned before, the Government has arranged for an expert from the other side of the world to make an independent survey of the waterfront position in Australia. When that survey is completed the Minister for Labour and National Service will be able to make a statement to the Parliament. If the honorable senator wants more specific information on the subject, with special reference to the report of the Australian Stevedoring Industry Board, I suggest that he place his question on the noticepaper. If he does so I shall refer it to the Minister for Labour and National Service for a considered reply.
– Will the Minister representing the Minister for Labour and National Service inform the Senate how much longer the rolling-strike tactics of the Seam en’s Union are to be tolerated ? Will the Minister also state whether this matter and other similar matters are to be left in abeyance until a referendum has been held on the Constitution alteration legislation now before the Parliament?
– It is unfair to say that the rollingstrike tactics of the Seamen’s Union are tolerated by the Government. We have taken, and shall continue to take, every possible action within the law to prevent a continuance of this conduct. The Government’s hand will . be greatly strengthened when the Constitution has been altered to enable the Commonwealth to deal directly with the enemies of the country who control certain unions.
– Has the attention of the Minister for Shipping and Transport been directed to a press report that states that the provision of labour to two shipping companies, Howard Smith Limited, and G. S. Yuill and Company Proprietary Limited, has been suspended because of the action of those companies in signing crew members off before their time? Does the Minister propose to take any action in relation to this matter, or will he resort to his usual alibi, the Communists ?
– I have seen the report to which the honorable senator refers. Power to take action is vested in the Australian Stevedoring Industry Board, and that body has already taken appropriate action.
asked the Minister representing the Minister for Labour and National Service, upon notice -
– The Minister for Labour and National Service has provided the following information in relation to this question: -
– I preface a question to the Minister for Shipping and Transport by pointing out that the supply of wheat in Tasmania is so critically short that unless the ship Dubbo reaches Tasmania by Saturday next the baking of bread will cease. The Labour Premier of Tasmania is so concerned about the matter that he has even suggested that naval personnel should man the ship. Can the Minister say what is the reason for the delay in the vessel’s departure, and what steps have been taken to despatch it ? “Will he act upon the suggestion made by the Premier of Tasmania and move the vessel under the direction of the Royal Australian Navy?
– I regret that although the Australian Shipping Board lias made the vessel Dubbo available to shift wheat to Tasmania that vessel has been held up in Adelaide for fourteen days. The dispute with the crew, which was the original cause of the delay, was settled yesterday, but I regret to have to inform the Senate that although a portion of the required number to man the vessel was flown from Melbourne to Adelaide for that purpose, when a call for labour was made this morning the complement was short by three firemen. However, the latest report received this afternoon is that it is expected that the three firemen will be obtained to-morrow morning and that the vessel will sail to Port Pirie to load. In view of the continued delay in the ship’s sailing, instructions have been given to. the representatives of the Australian Shipping Board to explore the possibility of making available another vessel to overcome the difficulty, and that the shipment of wheat to Tasmania must be given the highest priority. Instructions have also been given to ensure, as far as it is possible to do so, that stocks of wheat in Tasmania shall not again be permitted to fall to such a low level. The suggestion that Dubbo should be manned by naval personnel really concerns my colleague the Minister for
Labour and National Service, and I shall refer that portion of the honorable senator’s question to him.
– Some time ago tenders were called by the Chifley Administration for the construction of television stations, but the present Government rejected those tenders and instructed the Australian Broadcasting Control Board to call for fresh tenders. Can the Minister representing the Postmaster-General inform the Senate whether any tender has yet been accepted, and, if so, when details of it will be made available? Notification of the acceptance of such a tender is important because the radio industry will require time to train technicians in order that it may be enabled, to provide a satisfactory television service, for which the people of Australia have been waiting for so long. If no tender has yet been accepted, can the Minister say when we may. expect a tender to be accepted ?
– Although I realize that time will be needed for the training of technicians, I cannot inform the honorable senator whether any tender has yet been accepted for the erection of television stations. Since the matter concerns the Postmaster-General, I shall refer the honorable senator’s question to him and obtain a considered reply at an early date.
– I ask the Minister representing the Minister for Immigration whether it is correct that under the Italian-Australian immigration agreement that was recently approved by the Italian Senate, 15,000 Italian immigrants are expected to come to Australia during the first six months of the operation of the agreement ? Will he also say whether the agreement specifically mentions the numbers of immigrants and the dates of their arrival? Is the Minister aware of the fact that it has been reliably reported that the number of Communists in Italy is the highest in any country in Europe except Russia? Will he assure the Senate that proper regard will be paid to the screening of prospective immigrants from Italy and also to the capacity of Australia to absorb and assimilate them ? iSenator SPICER. - I do not think that the honorable senator need have any doubt that proper steps will be taken to screen all applicants to emigrate to this country. However, the other aspects of the honorable senator’s question can be answered satisfactorily only by my colleague, the Minister for Immigration, and if the honorable senator will place that portion of .her question on the noticepaper I shall bring it to his notice.
– I ask the Minister representing the Treasurer whether the Government will instruct the Commonwealth Bank to lower interest rates to a maximum of 2 per cent, on loans for the purchase of war service homes, on loans for the purchase of homes erected under co-operative building schemes, and on money advanced to any working man who is endeavouring to purchase a home in any other way. If the Government proposes. to increase interest rates generally, will the Minister undertake to ensure that preferential treatment shall be given to people who wish to purchase their own homes ?
– The answer to the first question is “ No “. The subjectmatter of the second question will receive consideration when the Government’s budget proposals are being formulated.
– Will the Minister, representing the Treasurer inform me whether the winners of the Commonwealth jubilee competitions who receive cash prizes out of funds that have been provided by the Commonwealth, are required to include the amounts of those’ prizes as income for taxation purposes? I have in mind the case of an amateur who interests himself in such competitions apart altogether from his normal occupation.. I consider that this matter is of public interest in view of the number of persons who will receive cash prizes for winning jubilee competitions this year. If the Minister is unable to inform me of the position I should be glad if he would obtain a reply from the Treasurer.
– The honorable senator’s question involves an interpretation of the provisions of the taxation law. I hesitate to express an opinion, and I do not think that the Treasurer would do so without knowing the full facts. Each case would have to be considered individually, in order to determine whether the amount of the prize should be regarded as income earned. Instead of seeking a general answer to a general question, I should advise the honorable senator to bring specific cases to the notice of the Treasurer.
– I - Is the Minister for Repatriation aware that the New South Wales Workers’ Compensation Act provides for the payment of a pension of £9 a week to a totally disabled workman, and an allowance of £2 to his wife? I point out that the Australian Soldiers’ Repatriation Act provides for the payment of a pension of only £7 a week to totally and permanently incapacitated exservicemen. In view of the increasing cost of living in every phase of our economy, will the Minister consider amending the Commonwealth legislation in order to provide a pension of at least £9 a week for totally and permanently incapacitated ex-servicemen, and increasing the allowance for a wife to £2 a week?
– I am aware that legislation recently enacted in New South Wales provides for the payment of £9 a week as compensation to a totally disabled worker for a specified period; it is not a continuing payment. I presume that ultimately the recipient would qualify for an invalid pension or some other ‘benefit from the National Welfare Fund. In October last the amount of pension payable to a totally and permanently incapacitated ex-serviceman was raised from £5 6s. a week to £7 a week. In addition his wife is paid an allowance of £1 10s. 6d. a week, so that the total amount payable to such a pensioner and his wife is now £8 10s. 6d. a week. In addition, lis. 6d. a week is payable in respect of each, child of the pensioner if he has children, and child endowment also is payable. This matter will be reviewed when the budget is being prepared. I assure the Senate that this Government will see that ex-servicemen shall be given a fair deal.
– On the 27th June, I asked the Minister representing the Minister for Supply a question regarding the report of the interdepartmental committee on sulphuric acid. I understand that the Minister now has a reply.
– On the 27th June, 1951, Senator Seward asked the following questions, without notice: -
The Minister for Defence Production has supplied the following answers : -
– Is the AttorneyGeneral aware - 1. That a supporter of the Government in the House of Representatives, in the company of a representative of a capitalist newspaper, recently was found trespassing in a prohibited naval area? 2. That both gentlemen were taken into custody and detained by naval guards? 3. That after certain officers of the Department of the Navy had consulted with members of the Cabinet, both men were set free? Is it a fact that provisions of the Crimes Act afford authority to deal with such breaches ? If it is, why was not immediate legal action taken? In the absence of such legal action, will the Attorney-General inform the Senate whether the privileged few who commit such breaches are immune from the operation of the law, whilst the provisions of the same law are rigidly enforced against workers? Will the Attorney-General state whether it is the policy of his department to administer the law so that it favours a privileged few and operates against the working class?
– My answer to the last part of the question is a most definite “No”. The incident to which the honorable senator has referred was a somewhat indiscreet escapade which was indulged in recently by certain gentlemen at Garden Island, and I understand that the Minister for the Navy has already dealt with the matter. The incident served a useful purpose in that it showed that the protection of that area is such that it ensures that intruders of the kind referred to are discovered if they trespass on naval property. As I understand the matter, the ‘Minister for the Navy, having regard to the circumstances, does not propose to prosecute those concerned. He has indicated, however, and I repeat his warning, that conduct of that description will not be tolerated, and that those who indulge in it will be required to face the full rigor of the law.
– I ask the Minister for Trade and Customs whether it is a fact that, if the confidence of the people is to be retained, a government must be frank in its relations with the public. Can the Minister state when this Government will emerge from its selfimposed mental black-out on the question of revaluation of the £1? Should the Minister decline to answer that question on the ground that it is a matter of Government policy, I assure him that I am merely seeking information. Will he also supply to the Senate a statement of the views on this matter that are held by the “stand-patters” and the “revaluers” in the Cabinet?
– It It is vital that a government shall enjoy the confidence of the people. It was precisely for that reason that the Labour Government was defeated and the Menzies Government elected.
– On Friday, the 6th July, officers of the Queensland Weights and Measures Department examined bread that was being delivered by two bakers to householders in Brisbane, and found shortages in weight that ranged from oz. to 6 oz. in 2-lb. loaves, and from 13 oz. to 18 oz. in 4-lb. loaves, and that in respect of the 175 loaves examined the total shortage amounted to 702 oz. Will the Minister representing the Treasurer ascertain forthwith whether either of the two bakers concerned has a contract with any Commonwealth department for the supply of bread? If either of them has such a contract, will he request the Treasurer to take adequate action to ensure that the interests of the Department of the Treasury shall be safeguarded ?
– I shall bring the honorable senator’s question to the notice of the Treasurer with the suggestion that he take such action as, in the circumstances, he considers to be appropriate.
– Some days ago I asked the Minister for Trade and Customs whether, at the recent conference of Commonwealth and State Ministers, the Prime Minister had asked the Premiers to refer to the Commonwealth power to control prices. I was then informed by the Minister that the conference had been open to the public, and that I could obtain the information for myself. I have since made inquiries and have ascertained that the subject was not listed on the agendum prepared for discussion by the conference. I now ask the Minister whether, in view of the rapid and alarming rise of prices that has taken place during the last eighteen months, he will give to the Senate a promise that he will request the Prime Minister, on behalf of the Labour Opposition in this chamber, to give an opportunity to the people, at the forthcoming referendum, to say whether or not they are prepared once’ again to have Commonwealth prices control.
– I - I should not for one moment presume to speak on behalf of the Labour Opposition. If the Opposition has any request to make to the Prime Minister, it should make it through the proper channel. Leaders of the Opposition have been appointed in this chamber and in the House of Representatives, and, as the honorable senator is aware, if either of them feels disposed to make representations to the Prime Minister, there are proper ways of doing so.
– Is the Minister representing the Minister for Supply aware that, owing to a serious shortage of tinplate in South Australia, wholesale dismissals of workers are taking place, that the Glen Ellen cannery, in Adelaide, has already dismissed approximately 50 per cent, of its employees, and that, unless supplies of tinplate are obtained the cannery will close down altogether within a week or so? Can the Minister say what has been done to obtain tinplate? Is it likely that extra supplies will be allocated to South Australia soon so that food processing establishments may be kept in full production ?
– There is an acute shortage of tinplate throughout the world. I shall bring the honorable senator’s question to the notice of the Minister for Supply who, I am sure, will do everything possible to prevent the closing down of food processing establishments.
– Is the Minister for Shipping and Transport aware that numerous motor car bodies are being sent to Western Australia by rail and that, because of their bulk, they occupy considerable space on trains? Is the Minister also aware that galvanized-iron piping of i-in. and -in. gauge, as well as other heavy materials, are being sent to Western Australia from the eastern States by road? In view of the fact that galvanized piping, galvanized iron and other heavy materials of the kind are urgently required in Western Australia, will the Minister endeavour to have them sent by rail, seeing that rail transport would be cheaper and much more suitable ?
– I shall have the matter examined with a view to seeing whether effect can be given to the honorable senator’s suggestion.
– Having regard to recent developments in connexion with the proposal to close down the Glen Davis shale oil project, will the Minister for National Development co-operate with the Minister for Labour and National Service with a view to holding a conference with trade union representatives, citizens of Glen Davis, and representatives of the Australian Government and the Government of New South Wales? Ifthe Minister is disposed to accede to this request will he immediately advise the parties concerned ?
– I have received several requests for conferences with representatives of the unions affected by the Government’s policy in respect of the Glen Davis project, and I find myself in a somewhat difficult position. We have set up a committee of officers to advise the Government upon the procedure that should be followed, and I believe that it would be only a waste of time to bring people to Canberra to talk the matter over before I receive the report of the committee, which I am expecting from day to day.
– But, according to press reports, there have been some further developments.
– They have not reached a stage that would justify me in making a public statement. When a method of procedure has been evolved, I shall confer with those interested. In the meantime, it would be wrong, I believe, to bring them all the way to Canberra when I have not yet received my brief from the committee. If I were to hold a conference now it might happen that, 48 hours after it was over, information would come to hand from the committee that would materially alter the situation. I have every desire to meet union representatives and residents of Glen Davis, and to deal with them courteously, but I do not wish to bring them here to no good purpose.
– Will the Minister give an assurance that when he receives the report of the officers’ committee he will meet a delegation in Sydney? Fail ing that, will he accompany me to Glen Davis to meet representatives there?
– I wish to do what is most convenient for all concerned. Some time ago, I wrote to the secretary of the committee that represents the residents of Glen Davis, and told him that as soon as the Senate rose I should go to Glen Davis. Seeing that other Ministers also are involved, I cannot promise that I will meet the representatives of trade unions in Sydney. It is really a matter of arranging a meeting place which will be satisfactory to all concerned.
SenatorSANDFORD. - In view of the very steep increases of rental charges for telephones, will the Minister for Repatriation inform the Senate whether the Government will consider making available free of rent to totally and permanently incapacitated servicemen telephones that have been installed on the recommendation of medical practitioners? Since it was announced that rates were to be increased several totally and permanently incapacitated pensioners have asked me whether the Government would afford the relief which I have now suggested.
– I assure the honorable senator that the matter mentioned by him is already engaging the attention of my department.
– I - In view of reports from the Korean battle front which admit the superiority in performance of Russian M.I.G.5 jet fighter aircraft over the Sabre jet, will the Minister representing the Minister for Defence assure honorable senators that the proposal to build Sabre jet aircraft in Australia will be re-examined before the tooling-up process is completed?
– The The importance of the matter referred to by the honorable senator has not been overlooked by the Government. It is at present engaging the attention of experts.
– Having regard to the fact that cease-fire negotiations in Korea are being conducted on behalf of the United Nations entirely by Americans, will the Minister for Trade and Customs see that the Government will take this matter up with the Government of the United Kingdom with a view to ensuring that the British Commonwealth of Nations shall be represented at the discussions? .Seeing that British and Australian forces have taken a big part in operations on land, at sea, and in the air, would it not be fitting that we should put forward our views in the negotiations for peace?
– I - I assure the honorable senator that the matter raised by him, which is very dear to the heart of every Australian, will not be lost sight of by the Government.
asked the Minister representing the Minister for Health, upon notice -
– The Minister for Health has furnished the following answers to the honorable senator’s questions : -
asked the Minister representing the Minister for External Affairs, upon notice -
– The Minister for External Affairs has provided the following answers to the honorable senator’s questions : -
Debate resumed from the 5th July (vide page 1026), on motion by Senator Spooner -
That the bill be now read a second time.
Senator CAMERON (Victoria) [3.47T. - In the course of the remarks that I made during the debate on the Post and Telegraph Rates Bill 1951 on the 5th July, I said that I favoured the nationalization of banking. Since reference to my statement was made by the Minister for National Development (Senator Spooner) when he moved the second reading of this bill, I propose now to mention a few reasons why I favour the nationalization of banking. The introduction of nationalized banking would permit us to unify our complex systems of bookkeeping and would result in the saving of a great deal of clerical labour. “We know from our experience during the recent war that the manufacture of a large number of aircraft of different types considerably delayed production and resulted in the adoption by manufacturers of practices that were inimical to the best interests of the country. The great savings that would be effected by the introduction of nationalized banking would enable the interest charged to small business concerns and primary producers to be reduced. We all know that the overhead expenses of nationalized institutions such as the Postal Department and the Government railway systems are much less than those of large-scale private enterprises that have to compete with other concerns. By reducing the wasteful expenditure on overheads that is characteristic of competing financial instiltutions we could not only reduce interest rates on bank loans, but also safeguard the equity of debtors or borrowers who default in their obligations. Under the present system defaulting debtors lose the whole of their equity, and it is only just and proper that we should endeavour to protect them against such exploitation.
The nationalization of banking would also enable the Government to control inflation and to regulate the purchasing power of money. The present Government has failed utterly to control inflation, and its members have even stated that they are not prepared to consider taking effective action to control the depreciation of our currency, which is rapidly getting out of hand. We all know of the tragic effect which inflation and the reduced purchasing power of money are having on wage and salary earners, pensioners and other persons who are dependent on fixed incomes. Apparently the Government considers that it is under no obligation to protect the interests of those people be- cause nothing has been done since it assumed office in 1949. It is true that prices have been fixed here and there by State authorities, but, generally speaking, prices have increased much more rapidly than have wages. The purchasing power of pensioners and others on fixed incomes has been reduced drastically. The Sydney Morning Herald to-day published letters from pensioners which stated that they are unable to buy food and other necessaries because of increased prices. The nationalization of banking would permit more effective control of inflation than can or will be exercised by the private banks. So long as inflation is workable and profitable, nothing will be done by the private banks to prevent its accentuation.
The nationalization of banking would enable the Government to control capital expenditure, particularly expenditure on the production of luxury goods. Under existing conditions, no control worth speaking of is exercised on such production. Costly buildings of all kinds are being erected for private organizations while thousands of men and women, particularly new Australians, are inadequately housed. The man-power and material now being used on nonessential production should be diverted to housing. The Government is either powerless to act, or does not consider action to be desirable or expedient. In fact, the Government has condoned the expansion of luxury production instead of having made every possible effort to ensure that the working class shall be adequately housed. The reconstitution of the Commonwealth Bank Board will not improve the position in the slightest degree. I base that opinion on my knowledge of the work of the board between 1924 and 1945.
The Minister’s second-reading speech included a quotation from The Growth of a Central Bank, by the late Professor L. P. Giblin. I remind honorable senators of the following passage in that quotation : -
When the war came, banking problems took a new interest and urgency and at the same time the increasing co-operation with Government added realism ‘ to the capital Board’s deliberations.
The truth is, of course, that wars always accelerate production. The national economy cannot stand still. Either production has to be increased to meet the requirements of war, or the consequences of defeat must be faced. The Commonwealth Bank had to bring its methods up to date because of the driving exigencies of war, just as the Australian engineering industry, which was 60 years behind the times in 1939, had to be modernized by the provision under governmental direction of up-to-date workshops and the latest machinery. Had the war not occurred, it is probable that we should still be importing many kinds of machinery from cheap labour countries instead of making’ it in Australia. I point out too that, prior to World War II., capital ships and other large vessels that required dry-dock repairs had to he sent to Singapore or Hong Kong because facilities in this country were inadequate. To-day, as a result of the exigencies of war, Sydney has a first-class dock. Therefore, to speak of the Commonwealth Bank having improved its machinery in time of war is merely to make a virtue of necessity. By quoting Professor Giblin, the Minister sought by implication and direct statement to convince the Senate that the Commonwealth Bank Board was justified, but a critical reader of The Growth of a Central, Bank will find that the board was very severely criticized by Professor Giblin. He stated in the epilogue that the board could be improved, but he certainly did not justify what the board had done. For example, he was critical of the action of the board in 1931 towards the request of the then Treasurer, Mr. Theodore, for a fiduciary issue of £1S,000,000. He stated in this regard -
Mr. Theodore returned to the Conference on Friday the 1 3th, and reported the results in camera. All that was published was the letter of Sir Robert Gibson of 12th February containing the resolution of the Board “ based on the Treasurer’s suggestions”: -
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 trading banks and the Governments of Australia in sustaining industry and restoring employment.
That is evidence of the previous hoard having actually dictated to the government of the day. We have no guarantee that the proposed board would not act similarly if it considered that the circumstances warranted such action. I believe that there will be another economic crisis or depression if war preparations cease. Already there are signs of the beginning of an economic recession overseas. Professor Giblin related that Sir Robert Gibson was called to the bar of the Senate and was’ questioned very closely by honorable senators. He made a reference to an alternative, but in answer to specific questions refused to explain what alternative measures the Government could take. In that connexion Professor Giblin commented -
One mau at least hud no doubt what ‘ the alternative ‘ meant. Senator Sir George Pearce, the Opposition Leader, after Sir Robert’s examination, called on the Senate to reject the Bill outright. ‘ There is only one alternative to default and the Government knows what it is as well as we do . . . the only way in which Australia’s credit can be restored is by this Government being torn awny from the Treasury benches ‘.
The implication was that Sir Robert Gibson had collaborated with the Opposition to assist it to “ tear the Government away from the treasury bench”. The Senate appointed a select committee to consider the proposal of the then Treasurer, Mr. Theodore, to make a fiduciary issue. A number of witnesses was examined, but Sir Robert Gibson refused to give evidence. In his epilogue, Professor Giblin stated -
The problem then was for a Board ot amateurs to learn their job. This depended on the Bank having a staff technically equipped for central banking work and this was slow to come. It would have needed imagination and initiative in a. high degree in the Governor to have built up quickly a strong technical equipment; and these qualities were lacking. The practical supersession of the Governor by Sir Robert Gibson as Chairman worked in the same direction. Sir Robert had a clear and confident but somewhat imperfect vision of central banking problems in Australia; his assurance and dominance tended to reduce every one else concerned on staff or board to the status of a rubber stamp.
That is how the previous bank board acted during the period of the depression. What guarantee have we that there will not be a recurrence of that attitude particularly as the Minister has not seen fit to announce the” names of the proposed appointees? Even assuming that the ablest men in the country were appointed, under the system of divided control, that is control by the Commonwealth Bank and by the private banks, the position in the future could be no better than it has been in the past. It would be more the fault of the system than of the members of the board. Even the ablest of men could not be expected to make a success of a system that was unworkable.
I emphasize what I pointed out last Thursday evening, namely, that in the event of another world war or crisis materialising, the Government would have to take control of banking. During World War I. the Bank of England took control of banking in Great Britain, and the Australian Government had to take similar action. In the words of Professor Giblin, the Commonwealth Bank was established in the hurly-burly of politics in 1911, and at the outbreak of World War I. it was the .bulwark of banking in this country. Wars always have a tendency to centralize authority and control, otherwise it would be impossible to wage war successfully and to effect necessary adjustments in relation to war-time activities. Notwithstanding the Minister’s references to Professor Giblin’s opinions during his second-reading speech, I am convinced that he has never read The Growth of a Central Bank although it is readily available in the Parliamentary Library. One would gain quite a wrong impression if one were to accept what the Minister has stated instead of reading the book. Some of Professor Giblin’s statements, removed from their context, are most misleading. Had the Minister not mentioned Professor Giblin, probably I should not have taken the trouble to read the book. Persons who resort to the practice that was adopted by the Minister on this occasion have only themselves to blame if their word is not accepted in good faith. When a Minister makes a statement, I assume that he accepts full responsibility for it. I should not dream of questioning such a statement offhandedly and without being in possession of the facts. In this instance, the facts are available on the authority of the Minister himself. and I suggest that if they prove anything they prove that the appointment of a bank board under existing conditions would make the position a great deal worse than it is.
Private banks are conducted for the purpose of making profits and do not give service for the sake of doing so. Insurance and banking are the most highly profitable undertakings known to me. If there is to be a Commonwealth Bank Board on which the private banks are not to ‘be represented by direct appointees, they will certainly be represented by persons who will act indirectly for them. The improvement of the private banks and the increase of their profits can be brought about only at the expense of the workers employed in essential production and services. As I have previously stated, profits are made by underpaying the workers on the job and by overcharging them, as consumers, across the counter. Therefore, the workers suffer according to the degree of profit made by banks. A nationalized bank would provide service for the mere costs of administration, which, I suggest, would be considerably lower than those of the private banks.
– I oppose this measure. I remind honorable senators of the statement made by the Minister for National Development (Senator Spooner) in his second-reading speech that this bill gives effect to a proposal for the implementation of which the Government was given a clear mandate at the general election of 1949. The Minister stated that the Government endeavoured to implement that proposal during the last Parliament, but the Opposition in the Senate failed to pass the necessary legislation. The Minister also stated that the deadlock that occurred in the Senate was resolved at the last general election, when a majority of the people gave to the Government parties a mandate to proceed. I think that that statement needs examination, because I am doubtful whether the Government can claim that it was given a mandate on this matter, or indeed, whether a majority of votes was cast in its favour on any question. When that proposition is examined, I suggest that it is presumptuous to make such a claim. If we examine the results of the last general election and the position occupied by the Government parties, we shall see that the majority of the people voted against the Government, although it is true that the electoral system which now operates for the election of senators enabled the Government to obtain a majority in this chamber. It is interesting, however, to recall some of the arguments presented by honorable senators on the opposite side of the chamber prior to the dissolution of the Parliament. Those honorable senators were loud in their condemnation of the system of election of senators, and they suggested that the Australian Labour party had deliberately planned the proportional representation system in order to maintain a majority in the Senate. In the light of that contention, it is remarkable that to-day the Government parties have a majority in the Senate under a system which they allege was planned to work against their interests.
If one reviews the election figures and appreciates the fact that in at least three of the six States of the Commonwealth there were majorities against the Government parties, the claim that this bill has been introduced as the result of a mandate becomes so much eye-wash. Indeed, the Government parties lost five seats in the House of Representatives, which clearly indicated that they were losing favour with the people. Rather than claim great merit for themselves because of the results of the last general election, I suggest that they should tread very warily. It would be more honest if they said that this bill has been introduced on instructions received from a small coterie of their followers. I refer to that small group of people which holds in its hands the political lives of the members of the Government and its supporters. It is that coterie which decides which candidates shall be endorsed at elections and is responsible for finding the finance to conduct an election campaign.
If the Government considered that the people of Australia were whole-heartedly behind its proposal to amend the Commonwealth Bank Act by again placing the control of the bank in the hands of a board of directors, that fact should have been mentioned during the last general election campaign. - It is true that the double dissolution was granted because of failure to pass a similar measure, but did that failure to pass play an important part in the election campaign? Was it featured by the Prime Minister (Mr. Menzies), by any member of the Cabinet or by any of the rank and file members? I followed the speeches that were delivered from time to time by. the leaders of the Government parties and by other candidates, and I failed to discern that this question had been made a live issue. I am therefore strengthened in my belief that this bill has been introduced in order to satisfy the desires of the small coterie which supports the Government. Further, I suggest that it has been introduced not at the behest of those who support the coalition Government but at the behest of those who support only one section of it, the Liberal party. I should be astonished if the organizations behind the Australian Country party were whole-heartedly in favour of the introduction of such a measure. We remember the history of the Commonwealth Bank and the raw deal it gave the primary producers when it was formerly controlled by a board. A very strong agitation then arose, principally among primary producing interests for monetary reform. The primary producers, a very valuable section of the community, found that, as the result of the stringent control of the financial affairs of Australia by the board during the critical years through which the country was then passing, foodstuffs that were urgently needed by people abroad could not be marketed. They wanted to be able to finance their activities and they opposed the financial policy of the board. Most of us have very vivid recollections of the conditions that existed during, the period to which Senator Cameron has referred, when an attempt was made by the then Labour government to authorize the issue of fiduciary notes to relieve the distress that then existed among the primary producers and the unemployed. The Commonwealth Bank Board, especially its chairman, Sir Robert Gibson, resolutely refused to sanction the proposal. It is on record that Sir Robert Gibson stated that money would he made available for those purposes only if certain interest charges were met and if certain economies were effected. The terms laid down by Sir Robert Gibson could not be accepted by a responsible government, and when he and his fellow board members remained adamant they were responsible for the worst depression we have ever known in our history. That period is remembered by most of the Australian people with anger and regret.
The bill now before us was not approved by the majority of the electors at either of the general elections held in 1949 and 1951. It has been introduced in the interests of a small section of the supporters of the Government solely to save the face of the Liberal party. The “Minister for National Development, in his second-reading speech, stated that he did not propose to deal with the bill in detail because ids details were already well known. I remind him that when a similar bill was before us on an earlier occasion he intimated that the Treasurer was then desirous of stabilizing the legislation governing the Commonwealth Bank. He then expressed a doubt whether the proposal to remove control of the bank from a governor, responsible in the ultimate to the Parliament, and to place it in the hands of a board, would meet with general approval. Even at this late stage I say to him that this change of tactics will not meet with the approval of the people, and that, if this bill becomes law, as surely as night follows day, in the course of a year or so they will make a strong demand for the restoration of the present system of control. We have had experience of both forms of management. History records the tragic incidents that happened when the bank was formerly controlled by a board. History also records the splendid achievements of the bank since it has been controlled by a governor responsible to the Treasurer and, ultimately to the Parliament itself. Are honorable senators opposite desirous of casting an intelligent vote on this matter, as they should do, in the interests of this country? Are they prepared to reason out the best method of controlling this great financial institution which successfully financed not only the recent war and the requirements of the nation during the period of transition to peace, but also the needs of the country during the present critical period? Let them remember the accomplishments of the bank during the two great crises of the past and I am sure that they will overwhelmingly agree to allow the bank to remain under its present control. Surely they do not forget that when the bank was previously controlled by a board this country suffered the greatest calamity that has ever overtaken it, and since it has been controlled by a governor, responsible to the Parliament, we have enjoyed a period of the greatest prosperity in our history.
– And of the greatest inflation !
– That may be true but surely the honorable senator does not hold the Governor of the bank and his advisers responsible for the inflation that now exists. I remind him that there was also a period of inflation following the termination of World War I. when the bank was under the control of a board and that the board was either unwilling or unable to deal with it. Indeed, the financial policy of this country drifted so rapidly that very soon we were in the midst of the greatest depression that we have ever known. Will history repeat itself? Will Australia once again experience the calamities that befell it after the Bruce-Page Government first established a Commonwealth Bank Board and a period of intense economic depression followed a period of inflation? Although history has a habit of repeating itself, I trust that we shall never again experience such a calamitous period. Already, since this Government came into office, the finances of the country are getting out of hand. The Treasurer has full authority, but nothing is being done to curb inflation. Bank overdrafts are being curtailed. That is what happened before the last depression, and if the same policy is persisted in, and business activities are restricted, a depression will surely come. Perhaps that is what the Government, or at any rate an influential section of its supporters, really want. That may be why the management of the Commonwealth Bank is being taken out of the hands of the Governor, and vested in a board of directors. We know that the representatives of secondary industries have been critical of present trends. How often do we read that while there is full employment the workers cannot be disciplined? In a time of prosperity like this they can choose their jobs, and it is suggested that only another depression can bring the workers up to the collar.
There seems to be a conspiracy to deprive certain industries of the means to carry on so that others may benefit. I am not referring to luxury industries only, but to some essential industries. It is well known that some big business interests resented the fact that, when the Commonwealth Bank Board was abolished in 1945, provision was made for the Commonwealth Bank to assist in the establishment of new industries, which might be in opposition to some of those already in existence. The Labour party believes that when new industries are established greater opportunities for employment are provided. We shall be curious to learn from what stratum of society the Government will appoint directors to the Commonwealth Bank Board. We know that businessmen do not confine their activities to one or even two industries. Some men, who are very well known in the industrial life of the country, have a wide range of interests, such as iron and steel, shipping, coal, &c. We know how various investment companies are linked up, and bow they resent competition. Of course, this bill will be passed because the Government has the numbers - fraudently obtained, in my opinion, because banking was not an issue at the last election. As I have said, it will he interesting to see what men are appointed to the Commonwealth Bank Board. I say men, because I cannot imagine that the Government will appoint a woman no matter how competent she may be.
– Not even a woman senator?
– No, not even a woman’ senator. Many of those engaged in industry are just as eager to learn the constitution of the board as we are. During the 1949 election campaign, the parties that support the present Government had a great deal to say about the nationalization of banking. The bill we are now considering provides for the repeal of the legislation under which it was sought to nationalize the banks. Because of the decision of the High Court, supported on appeal by the Privy Council, the Commonwealth Parliament has no power to nationalize banking. Indeed, I believe that the decision of the Privy Council will make it very difficult for the National Parliament to nationalize anything, so that the anti-Labour parties have lost one of their most valuable catch-cries at election time, namely, that the Labour party is out to socialize or nationalize everything it can get its hands on. When it was proposed that the private banks should be nationalized, the anti-Labour parties clamoured loudly for a referendum, claiming that on a matter of such importance the people should be consulted. The Labour Government, on the contrary, maintained that, under the Constitution, the Parliament had full power to nationalize banking. However, the decision of the Privy Council seems to have laid it down that, notwithstanding the fact that certain powers are written into the Constitution, the right of the Parliament to exercise them depends upon the language of the act in which they are embodied.
I should have thought that when the present Government came into office it would forthwith consult the people by referendum on the bank nationalization question, but it has failed to do so. The people might well prefer that banking be nationalized, particularly in view of the process of amalgamation that is going on now among the private banks. Since the Government introduced its first bill to appoint a Commonwealth Bank Board the process of amalgamation among the private banks has been carried considerably further. Probably further amalgamations will take place until the people will have only one choice: They will have to deal with the Commonwealth Bank or with the single institution resulting from the amalgamation of all the existing private banks. We can now see the reason for the determined efforts of the small oligarchy that controls the Liberal party to rob the Governor of the Commonwealth Bank of his power, and to place the bank- under-, the-1 control- of the representatives of outside institutions. Of course, it is unlikely that the names of the men to be appointed to the board will be found on the lists of directors of private banks, but they will be representatives of business interests in which the private banks are concerned. Once again, therefore, we are confronted by a conspiracy on the part of a small handful of people with vested interests to obtain control of our financial system. I impress upon supporters of the Government that the re-introduction of this measure represents more than an attempt on the part of the Government to get is own way at any cost. This measure is, in fact, one of the greatest and most momentous pieces of legislation that has ever been introduced to the Parliament, and its passage will represent a very real danger to Australia. Although Government supporters have so far failed to speak in support of the measure and intend, apparently, to vote in silence for the measure, I believe that many of them know in their hearts that they should oppose the bill. Those honorable senators opposite who are concerned about the welfare of primary producers and of persons who have had sufficient enterprise to begin new industries must experience feelings of great uneasiness about this measure. They realize, of course, that when the proposed board is appointed, the members of that board will have power of life and death over all Australian industries. Of course, the reason why so many honorable senators opposite who disagree with the bill are remaining silent is that they know that if they oppose the measure or criticize it the oligarchy that is springing up in this country will ensure that at the next election they will be replaced by others who will comply with its wishes.
As I said before, the record of the bank under the control of a governor has been one of uninterrupted progress. Do honorable senators opposite imagine that the nation could have come so smoothly through the difficult transition from war to peace if the Commonwealth Bank and the central reserve bank had been controlled by men such as the members of the former bank board? Does any one imagine that such men would have agreed to the circulation in the community of the millions of pounds that have been made available by the Commonwealth Bank to finance the rehabilitation of this country and its citizens since the war? If the former bank board had still controlled the Commonwealth Bank, we would have had a recurrence of the reactionary and unenlightened policy pursued by the anti-Labour administrations that governed this country during the aftermath of World War I. The board would certainly not have made funds available to enable Australia to meet its commitments and also those of other countries. After all, the sole motive of the directors of the private banks is to make as much profit-as possible for themselves and their shareholders by exacting the maximum tribute from those who avail themselves of the private banks’ services. The representatives of the private banks who will be appointed to the proposed board will undoubtedly be concerned, first and foremost, to ensure that their banks continue to make large profits. Thanks to the courage and foresight of a previous Labour Administration the private bankers were removed from the control of the Commonwealth Bank, and the previous Labour Government was able to proceed on its way without undue interference from vested interests. I have mentioned these matters in order to emphasize, for the benefit of honorable senators opposite, the importance of this measure, and I hope that supporters of the Government, and particularly those who were recently elected to this chamber for the first time, will rise and tell us exactly why they support the bill. Up to the moment they have not done so.
One aspect of the Government’s case in support of the bill that has been emphasized again and again is that it provides that in the event of a difference arising between the bank and the treasurer of the day concerning banking or monetary policy that difference shall be resolved ultimately by a vote of the Parliament. But if it will be necessary for important and highly controversial issues to be decided ultimately by the Parliament, why should we appoint the proposed board? After all, the day-to-day business of the bank can be carried on quite efficiently by the present administration of the bank, and it will only be necessary for the Government to intervene when the bank or the nation is confronted by some grave development. If the present control of the bank were not altered the government of the day, and perhaps ultimately the Parliament, would have to resolve any such issues. I fail to see, therefore, what advantage will accrue from the proposal to superimpose upon the bank’s present system of control a board which cannot make a final decision unless that decision happens to coincide with the views of the Government. It is reasonable to suppose, therefore, that the reasons advanced by the Government for the introduction of this measure are not the real reasons in the minds of members of the Government, and I impress upon supporters of the Government that members of the Opposition are quite serious in suggesting that there is something sinister behind this proposal. The establishment of the proposed board would enable the Government to use it in order to strangle any industry that it does not favour, and that process of strangulation could be carried out very quietly by the board, so that the matter would never come to the attention of the Parliament or the people. That is one of the most sinister features of the bill. When Labour is returned to office it pledges itself to remove the board, lock stock and barrel, just as it did in 1945. However, it may be some time before Labour regains the treasury-bench, and in the meantime the proposed board could do untold harm.
The Government has attempted to persuade us that the passage of this bill will enable it to increase the capital resources of the General Banking Division, the Rural Credits Department and the Mortgage Bank Department, but I point out that under any form of administration additional capital would have to be provided for those purposes, and that the provision of additional capital of the bank does not depend upon the passage of this measure. I warn supporters of the Government, particularly those honorable senators who have recently been elected to this chamber, that the proposed alteration of the control of the bank may very seriously weaken Australia’s capacity to withstand the financial drift that is menacing not only this coun try but all other countries. Under its present control, the Commonwealth Bank is a bulwark against the forces of financial and economic chaos, but the establishment of the proposed board must obviously weaken that bulwark by dividing the control of the bank. Of course, if Australia is overcome by a real economic calamity I know that Labour will be called upon once more to save the nation, but I point out that its efforts to do so will certainly not be assisted by the existence of the proposed bank board. We all recall only too vividly the actions of a former board when a Labour administration was trying to save the people of this country from the shocking hardships of the depression, and we have no assurance that on a similar crisis the new board will act in any different way. In conclusion, I appeal to supporters of the Government, even at this late hour, to give earnest consideration to the matters that I have mentioned and to vote upon the passage of this measure in accordance with the dictates of their conscience and not according to political expediency. I repeat that I emphatically oppose the bill.
– In reply to Senator Sheehan’s concluding exhortation, I say that I have given this matter the consideration that it deserves, and I intend to vote according to my convictions. I deny completely Senator Sheehan’s assertion that Government supporters are acting in obedience to the orders of an oligarchy, and, in reply to the honorable senator’s hollow rhetoric, I point out that honorable senators on this side of the chamber are not directed by an oligarchy to vote on a particular issue in one way to-day, in another way to-morrow, and in a totally different way at the end of the week. After all, this issue was decided by the people. This is the issue on which the double dissolution was secured.
Opposition senators interjecting.
– Notwithstanding the incredibly vulgar noise from the Opposition side of the chamber, I intend to obey the rules of the Senate and address my remarks to you, Mr. President. I say that this is the issue on which the double dissolution was granted and on which it was fought The people gave their answer, which was that the bill, rejected by the Opposition during the last Parliament, must be passed. We are quite entitled to say on this occasion, therefore, that there will be no vital amendment of the measure. It is a matter of the bill, the whole bill, and nothing but the bill. I feel rather like King Alexander at his famous feast “ when thrice he vanquished all his foes and thrice he slew the slain “, because every contemptible subterfuge for argument that has been brought forward this afternoon was advanced on two previous occasions and refuted from this side of the chamber. If it were a. mere matter of business, I might move that certain passages already appearing in Hansard be incorporated in my speech to-day, because they answer all that has been said by the Opposition. We have been told the Yarra Bank and Domain fable that the Labour party created the Commonwealth Bank ; that the bank is the creation of that party alone, and that the only desire of honorable senators on this side of the chamber is to destroy the bank. That base, mean and contemptible lie is refuted by the entire history of the bank. I listened not long ago to a broadcast by the man who is always being acclaimed by honorable senators opposite as the founder of the bank, Mr. King O’Malley. His words, as I recall them, were -
I was afraid they would merely make the hank a sub-department of the Treasury. I insisted that it should be a bank because 1 had a practical acquaintance with banking. I went to Mr. Russell French, the manager of the Bank of New South Wales, and asked him to release to me one of the best officials that that bank had. Mr. Russell French did so, and Mr. Denison Miller, afterwards Sir Denison Miller, became the first Governor of the Commonwealth Bank. From the first, his intention was to make it not a. public department but a bank, and a bank operating according to the banking practice that had been established by the private banks over many years.
F have never had my own personal bank account anywhere but with the Commonwealth Bank. T leave it there, not because I believe in government banking; not because I believe in building up that institution so that it will be able to swallow all the other banks; but because all the officers of that bank with whom I have had personal dealings have been courteous men, acting in accordance with the great tradition of banking which in England, and particularly in Scotland, goes back to the eighteenth and seventeenth centuries. If I were to find any discourtesy on the part of officers of the Commonwealth Bank I should immediately transfer my account to the Bank of New South Wales or to some other private bank. 1 find that my friends and relatives, including my wife, who insist on dealing with the private banks, receive exactly the same treatment as I get from the ‘Commonwealth Bank.
T come now to the question - the only one that has any substance - whether the restoration of the bank board will destroy the Commonwealth Bank by placing it under the control of representatives of private business - that mythical oligarchy that is supposed to be lowering behind us. The board provided for in this legislation is not of the kind which, under the chairmanship of Sir Robert Gibson, controlled the bank in 1931. I said that in both my previous speeches, and it has not been denied by one honorable senator opposite. The Opposition can be quite loud mouthed on some subjects, and can make all kinds of taunts that have no relation to the matter now before the Senate, but not one honorable senator has said that my statement is untrue. They all know it to be perfectly true. I shall not discuss whether Sir Robert Gibson’s policy was right or wrong. That has no relevance whatever to this bill. We are not proposing to restore a board of that kind. We are proposing to appoint a board of the kind contemplated in the Scullin-Theodore banking legislation of 1929. Let us compare the two boards. Members of the board that the Government now seeks to establish will not represent any outside interests at all. They can be chosen from any section of the community and chey will be chosen because of their experience. Furthermore, the Governor of the bank will be the chairman of the board. That is the vital principle about which there was so much discussion iu 1929 and 1930. I was a supporter of the Scullin-Theodore measure and I know exactly what the two Labour leaders had in mind. The board proposed under this legislation will act in an advisory capacity, and will also lay down the general lines of central banking policy. It is not intended that the board should attend to the day to day business of the bank or interfere with the Governor or any of the officials. Proof that the board will be unable to dictate to the Government is to be found in proposed new section 9a, and, except for a brief passing reference in Senator Sheehan’s speech, I have not detected in the speeches of honorable senators opposite any indication that they have even read that provision. It states first that the bank shall inform the Government of the monetary and banking policy of the bank. It provides further that in the event of a difference of opinion between the Government and the bank, the Treasurer and the board shall endeavour to reach an agreement. If no such agreement can be reached, the Treasurer will submit a recommendation to the Governor-General who may, by order, determine the policy to be adopted by the bank. Subsequently, the proposed section provides-
The Bank shall thereupon give effect to the policy determined by the order and shall, if the order so requires, continue to give effect to that policy while the order remains in operation.
That is a complete refutation of the irresponsible and absurd statement of honorable senators opposite that the board will be able to dictate to the Government. Clearly the board will not have anything like the power possessed by the body of which Sir Robert Gibson was chairman. It will be utterly impossible for the board to thwart the will of Cabinet or of the Parliament, Joe that will good or bad. Honorable senators opposite may say, “ Then what is the use of the board ? “ That is a childish question.
Opposition senators interjecting,
– Order !
– I was saying when that incredibly vulgar noise came from the Opposition benches, that it is childish to say that because the board cannot ultimately insist upon having its own way it will be useless. What is the purpose of any kind of conferring? Surely it is simply to exchange ideas. We have all kinds of committees and boards that have no final authority. This morning, a group of honorable senators sat in a committee room conferring with some of the highly skilled officers of this Parliament. That meeting was an exact replica of many other meetings of trained professional men who know the business that they are required to carry through, and amateurs who may or may not be well informed. We hope that they are well informed. Certainly people who are elected to the Parliament should be well informed. The meeting that I attended lasted for three hours, and much business was transacted ; yet the committee has no final authority. You, Mr. President, or Mr. Speaker, could quite easily upset the decisions that we reached. The Commonwealth Bank Board will be a body of that kind. It is the universal practice of public companies and, in particular of banks, to have boards. Is that not an argument in favour of this legislation? Honorable senators opposite have the fixed idea that the Commonwealth Bank should be controlled by a governor, and ultimately by the Treasurer, but that fixed idea is no substitute for the experience and wisdom of the whole world. We find that, in all parts of the world, joint stock companies are controlled by boards. All banks of any importance are controlled by boards and, what is even more important, all central banks, particularly those in the United States of America and Canada, are controlled by boards. Surely that is sufficient evidence that this legislation is necessary. However, I do not deplore the harping by Opposition senators on this miserable string because I know that as long as they do that, they will never occupy the treasury bench. There may be some honorable senators opposite who have invincible faith in the unwisdom of the people, but I have not, and I have no hestitation in saying that not until the Labour party revises its ideas and regains some of the initiative that it had in the days of Mr. King O’Malley, will it have any chance of displacing us from office. I do not believe, of course, in perpetual rule by one party. I accept the proper parliamentary conception that there should be two parties, one holding office and the other always preparing itself for office; not that there should be one which keeps on ruling, and another which, day by day, becomes less and less capable of even understanding the problems that confront the Parliament
Another hoary fallacy is that the Commonwealth Bank is the people’s bank in a sense in which other banks are not the people’s banks. A people’s bank surely is an institution that gives service to the people. No private bank that did not give service to the people could continue to exist. The plain fact is that, except for the central banking functions, the service given by the Commonwealth Bank is identical with that given by the trading banks. As long as the Commonwealth Bank continues to give efficient service, it will survive. Should it become less efficient than the. private banks, it might have to be removed, but I do not think that will happen because its traditions of service have become firmly established.
Opposition senators interjecting,
– I am resolute in my determination to address you, Mr. President, but I do not think that in any way palliates the insulting and lying references that come from the Opposition benches by way of interjection. I have not made one statement that is not grounded on, fact or cannot be proved. Whether or not I am a most contemptible person has nothing to do with my arguments. We are told that the Labour tradition is wholly against a Commonwealth Bank Board. In the 1930’s, our banking system was investigated by a royal commission on which Labour’s representative was the late Mr. J. B. Chifley. The right honorable gentleman took his duties very seriously. He agreed with his fellows when he could, but when he was compelled to disagree, he had no hesitation in doing so. I know that because 1 was in close touch with Mr. Chifley during that period. As the report of the royal commission* shows, Mr. Chifley expressly dissented from certain recommendations, but he did not dissociate himself from one important recommendation relating to the matter that we are now debating. In paragraph 575 of the royal commission’s report, appears the following passage: -
The present method of government of the Commonwealth Bank is by a Board . . . We are of opinion that this method of government is generally satisfactory.
That opinion was not dissented from by Mr. Chifley.
– Why does not the honorable senator read the lot?
– I object to .the implication of the interjection, which is that because I have quoted a definite thing I am attempting to deceive honorable senators. I am not attempting to deceive them; I am merely quoting what was said about a particular matter. It is not practicable to read the whole report.
Opposition senators interjecting,
– Order ! I must ask honorable senators on my left to cease interjecting.
– I have shown that there is no substance whatever in the contention that the setting up of a board of this type is contrary to the whole tradition of Labour policy, that it will in any way damage the bank as a central bank, or that it will strengthen outside interests that may happen to want to damage the bank.
The only criticism of the bill of any substance that I have heard has come from the so-called vested interests, .that is, business men, and men connected with banking. There are men among them who say that we are yielding too much to Labour tradition, and others who say that this is a semi-socialist proposal. I believe that this measure will establish a* central bank which can function fairly, and which will not in any way damage the legitimate interests of the private banks or any other institution, and which shall be responsive to the opinions of the intelligent members of the community. I think that that function of the bill .will be achieved. If, however, by any chance it should not be attained, and if it becomes necessary to amend the bill, that can always be done. It should not be done at this stage, because the bill is sufficient for all purposes that we have considered, and furthermore, the people have authorized us to pass this measure. As an acknowledgement that the people are the final arbiters, the bill should be passed in its present form. I do not think that any very serious modification of it will become necessary.
Two things have been demonstrated by the type of opposition that has been shown to the bill. The first is that the Opposition does not respect the deliberately expressed will of the people. Even if the Government parties had not been returned with a. majority in this oh amber, we would still have the right r.o pass this bill, because section 57 ‘of the Constitution provides that in the event of a double dissolution being followed by a continued deadlock on the measure that brought about the double dissolution, the matter shall be resolved a a joint sitting of both Houses of the Parliament. Obviously, at a joint sitting the measure would be passed. . It is imperative that the Senate shall pass this bill, since iiic people have returned the Government with a majority in both Houses. I concede that the Opposition has a perfect right to retain and express its opinion on this matter, but I do not consider that it should vote against the measure, in view of the decision of the people, irrespective of its attitude to other measures that the Government might introduce. i t is quite evident that the nationalization of banking is not a dead issue. The only merit that I could detect in any of t he speeches that have been delivered by honorable senators opposite was the continued expression of faith in the nationalization of banking. If they believe that they should continue to press for the nationalizating of banking, no one on this ride will be at all troubled, because the people of Australia have firmly resolved that the banks shall not be nationalized. I f has been claimed that the private banks are steadily amalgamating and Senator Sheehan has prophesied that in time there will be only one private bank. Even if that did come about, the supporters of the Government believe that it would be preferable to establishing a monopoly bank. But there is no ground other than the fallacies of the socialist mind to believe that that assertion will materialize. The amalgamations that have taken place have strengthened rather than weakened the banking system of this country. It is not true, as the great deceiver of mankind, Karl Marx, stated, that the tendency is for all institutions to merge into one. As has been stated by those who study the facts of the business world objectively, not those who adopt ideas of a person who lived 100 years ago and derived his original inspiration from ideology and formed general ideas which have little application to the things of to-day, the tendency is for businesses to amalgamate until they reach a certain size; they become more efficient to that stage, but afterwards less efficient. There is what a modern economist has described as an optimum size of a business. I believe that virtually most of the private banks in Australia have reached their optimum size, and I think that it is healthy for the community that they should continue to exist and that the Commonwealth Bank should continue as an ordinary trading institution, and also as a central bank to control the ebb and flow of credit, and to be in the last resource the great barrier against inflation.
– I emphatically protest against the proposed re-appointment of a Commonwealth Bank Board. Supporters of the Government who are honest will acknowledge that the late leader of the Australian Labour party, Mr. J. B. Chifley, made an announcement prior to the last general election to the effect that nationalization of banking was dead so far as Labour was concerned. Senator McCallum who, I notice, left the chamber immediately after the conclusion of his address, referred to what he described as contemptible lies made by Opposition senators in relation to the proposed banking legislation. I think that he is the most contemptible liar of the lot.
– The honorable senator must withdraw that remark.
– I withdraw it. Senator McCallum referred to a statement that was not dissented from by Mr. Chifley, when .he was a member of the Royal Commission on Banking and Monetary Reform to the effect that the previous Commonwealth Bank Board was a generally satisfactory organization. Unfortunately, the honorable senator did not read the whole of the statement, as he was requested to do by interjection. I believe that Mr. Chifley qualified that statement. I emphasize that Mr. Chifley strongly advocated the 1945 banking legislation, whereby the Commonwealth Bank Board was abolished. Whatever may have been Mr. Chifley’s opinion in 1937, as a member of that royal commission, he saw fit to alter his attitude in 1945. I consider that the proposal to re-introduce the board system is a serious menace to the welfare of the people of Australia. I desire my emphatic protest against the reconstitution of the Commonwealth Bank Board to be recorded. Senator McCallum stated that the members of the proposed board will not represent any outside interests. What is his authority for that statement? If they do not represent outside interests, whom will they represent? Are they to comprise a permanent body, on the permanent pay-roll of the Commonwealth on the basis of full employment, or are they to be called together from time to time on the basis of payment for services rendered during the period that they are in collaboration? Are they to come from private financial institutions or from other sections of the community, such as the waterside workers or the Communist party?
Since this measure was first introduced in this chamber the Opposition has requested repeatedly to be informed of the names of the proposed appointees. I should be pleased if the Minister, in his reply, would inform us of their names and where they come from. Throughout the debate the Government has maintained a strange silence about the proposed personnel of the board who will control all the activities of the Commonwealth Bank, including its central bank functions and the Commonwealth Savings Bank. Its control will extend over a wider range than the control that was vested in the previous bank board.
Senator McCallum asserted that the issue on which the double dissolution of the Parliament was obtained was the proposal to re-establish the Commonwealth Bank Board. We admit that that was the issue upon which the double dissolution was granted, but during the last general election campaign the opponents of Labour made scant reference to it. During the 1949 general election campaign no reference was made to an intention to amend the Commonwealth Bank Act, the emphasis being placed on nationalization of banking, despite the fact that the late Mr. Chifley had announced that that subject was dead. During the last general election campaign, I did not hear one honorable senator opposite refer to the necessity for amendment of the Commonwealth Bank Act by providing for the appointment of a board. Despite what Senator McCallum has said, that subject was not an issue during that campaign. The election was fought on the menace of communism and whether or not the Government parties should be given freedom to carry out the wishes of the people, unhampered by a Labour dominated and controlled Senate, as if was so frequently called. The people of Australia had no knowledge of the intention of this Government to interfere with the constitution of the Commonwealth Bank by placing it under the control of persons representing outside interests. I believe that this measure is a “ pay-off “ to the financial interests of the country. Although Senator McCallum has stated that there is no oligarchy which controls the political destinies of honorable senators opposite, I suggest that if no outside interests are involved there is no necessity for this legislation. Since the Com monwealth Bank Board was abolished by the 1945 legislation, what complaint.-: have been received from the people of this country to the effect that the bank has not given satisfaction? Nothing has been done to justify the establishment of such a board, the function of which will be to permit the government of the day to get out from under in the event of an economic collapse.
As I have stated repeatedly in thi.« chamber, the economic position of Australia to-day is in danger because of the uncontrolled inflation which has been permitted to flourish. Because of that inflation, there is danger of financial collapse at a not far distant date. Honorable senators opposite contend that the policy nf the bank should be determined by the Parliament of the country, whereas the existing legislation provides that the policy of the government shall be the policy of the bank under the control of a governor.
It is proposed to establish a board consisting of ten members, five of whom shall be representative of outside interests. Seven members of the board will always be able to out-vote decisions of the Governor of the bank. I suggest that all that this bill does is to take away from the Governor of the bank authority to determine the policy of the bank. He will be therefore relegated to the position of an administrator. Under the existing legislation there is an advisory council, the members of which are men who thoroughly understand the ramifications of national finance and the requirements of government in this country. The council is able to tender advice to the Governor of the bank, who then determines whether or not that advice will bc acted upon. This Government now proposes to do away with that council. Members of the Government stated not long ago that three persons, including Professor Melville and the Commonwealth Statistician, would be appointed to the proposed Commonwealth Bank Board, nl though no reference to that matter was made during the second-reading speech of the Minister. Apparently the Government has departed from its previous intention and proposes to appoint a board of ten independent persons who, it is alleged, will possess sufficient knowledge of banking to direct the affairs of the bank.
Much has been said concerning oneman control of the bank. I consider that that bogy has been over-emphasized for the purpose of trying to create the impression that the destiny of the bank has been in the hands of one man. All honorable senators know that that is not correct. The late Mr. Chifley announced not so long ago that since the introduction of the 1945 Commonwealth Bank Act on not one occasion had it been necessary to interfere with determinations mad« by the Governor of the bank. He also indicated that the Governor of the bank had carried out government policy, which consisted of the maintenance of full employment in this country and the financial provision necessary to meet periods of either prosperity or depression. That matter has been over-emphasized in order to cover up the absence of action on the part of the Government to control rising prices. It will be remembered that during the general election campaign which led to the defeat of the Labour Government in 1949, the supporters of the present Government parties told the people, “ Get rid of the autocrats and the bureaucrats. We can do the job better. The States should control prices “.
I suggest that inflation is now like a galloping horse which is going so fast that the Government is unable to stop it. I am concerned to protect the people of this country so that they will not have all their assets thrown away and lost because of a whim of this Government to appoint certain people to control the Commonwealth- Bank. We have been told nothing concerning those people. We do not even know their names. There has been a conspiracy of silence concerning them. At least when the Bruce-Page Government appointed a Commonwealth Bank Board it was sufficiently honest to say that the board would be representative of certain interests. I again suggest that this bill has been presented in order to pay for services rendered, a payment which will be made at the expense of the growth and development of the bank.
Since 1945 the Commonwealth Bank has grown by leaps and bounds. The Government proposes to add to the bank’s capital, although I remind it that the original capital, which was £10,000, was never utilized. When this Government speaks of making available millions of pounds to hasten the growth and development of the bank, I say that it is talking with its tongue in its cheek because the bank will not call upon it for any such accommodation. Its business has grown to such an extent that it has become a thorn in the side of the financial interests of the country, and for that reason the Government wishes to get rid of it. The Government parties want to hide behind a board which will be able to alter the functions of central banking and interfere with the existing arrangements between the Commonwealth Bank and the trading banks. The appointment of a board will ensure that the Commonwealth Bank will not be permitted to compete with the private banks.
I challenge members of the Government to point to a definite reason for the appointment of a board. I remind honorable senators opposite that the board system was responsible for leaving the people of this country to starve and the business interests to go without necessary finance. It should not be forgotten that under the control of a board the bank would not make available sufficient finance to meet the economic situation that then existed, nor would it assist the Government of the country to the extent of a paltry £18,000,000 with which to feed and succour the unemployed and primary ploducers. Does the Government think that honorable senators on this side of the chamber cannot visualize- a repetition of that state of affairs? It is possible at any time.
Sitting suspended from. 5.4-5 to 8 p.m.
– The Minister for National Development (Senator Spooner), in his second-reading speech on the bill, said that the legislation provides that the bank shall keep the Government informed upon the monetary and banking policy of the hank, and that if the Government and the bank differ on a policy issue, the Treasurer and the ‘board must endeavour to reach agreement. That seems to be a common-sense idea, with which I have no- quarrel. However, he went on to say that if the Treasurer and the board should be unable to reach agreement, the board would be required to furnish a statement of its views. I assume that in those circumstances it would explain the matters at issue as it saw them, but the value of such an explanation would :be rather doubtful. The Minister went on to say that after the board has submitted its views the Treasurer may then submit a recommendation to the Governor-General, who, acting with the advice of the Federal Executive Council, may, by order, determine the policy to be adopted by the bank. That procedure, he said, would ensure that any submission to the Governor-General on such issues would be made after full consideration by the Government. The point I wish to em phasize is that although the Government might, by order, determine the policy to be adopted, whether it would do so in such circumstances is somewhat doubtful. The Minister’s statement presupposes that in such circumstances the Government would do so. The Minister continued -
Where, in such circumstances, the Government becomes responsible for the policy to be adopted by the bank, the bill directs the Treasurer to inform the bank accordingly, and to have a statement of the policy, together with a statement of the views of the Govern ment and of the bank, laid before each House of the Parliament within fifteen sitting days after the policy has been communicated to the bank. The relevant provisions of the bill are framed to give effect to the principle thai great financial issues should be the ultimate responsibility of the elected representatives of the people.
That portion of the Minister’s speech, considered in conjunction with the relative provisions of the bill, has interested me ever since the measure was first introduced. These proposals appear to me to be just so much camouflage. Where the elected representatives of the people are to come into the picture, I do not know. How will Parliament or the people have any say about great financial issues if that procedure is adopted? Indeed, as the members of the board are to be appointed by the Government, what likelihood is there of the Government and the board disagreeing on matters of policy? It is obvious that the change in the system of control of the Commonwealth Bank has been proposed for very definite purposes. What those purposes are, we do not know. I trust that when the Minister is replying to the secondreading debate he will fully outline the purposes for which the board is to bc established.
Much has been said about the desirability of giving to the elected representatives of the people an opportunity to settle disputes that arise ‘between the board and the Treasurer in respect of banking policy, but it is most difficult to visualize such a situation arising because the Government itself will select the personnel of the board, and it will exercise a very wide discretion in so doing. It appears to me that the Government proposes to change the system of control of the bank solely to put it in a position to be able to cover up certain actions which it may take in the not-far-distant future. We all know that differences of opinion exist among the members of the two ‘parties that support the Government on the subject of revaluation of the Australian £1. Possibly revaluation may be regarded by the board as one of the steps which should be taken to place the economy of Australia on a more stable basis. The board may be regarded as a very convenient body upon which to place responsiblity for a subsequent decision to revalue the Australian £1. The Government could very conveniently shelter behind the board in such circumstances, and say, “ We had nothing to do with the decision to revalue the Australian £1; it was made by an independent tribunal to which has been entrusted the control of’ the financial policy of Australia “. Members of the political parties that form the Government would thus be able to avoid responsibility for an embarrassing decision.
The Government proposes to nominate seven of the ten members to be appointed to the board. Thus the Governor of the bank may be outvoted by the majority of government nominees and the bank may be placed in a very invidious position. We have been informed that the board is to consist of men of wide knowledge and experience. I again invite the Minister, when he replies to the debate, to unravel the mystery that has shrouded this debate, and earlier debates on this proposal, by announcing the names of the persons whom it proposes to appoint to the board.
The members of the Advisory Council have rendered excellent service in the past and the bank has prospered under their guidance. They have proved that they have independent views, and their great knowledge of banking practice and procedure has been of great value to the bank. They have a full knowledge of the Government’s financial requirements. The advisory council is a much more impartial and well-informed body than would be a board constituted along the lines indicated by the Minister. T should like to know whether Professor Melville, the economic adviser to the Commonwealth Bank, Mr. Watt, the former Secretary to the Treasury and
Dr. Boland Wilson, the former Commonwealth Statistician, will be appointed to the board. If the Government will announce that it intends to appoint them we shall have some indication of the type of men who will serve on that body.
The bill contains provisions setting out bow the board is to be constituted, but the outstanding fact remains that a majority of government nominees will virtually control the destiny of this great national institution. In this place wo hear a good deal about democracy. I suggest that if even a semblance of democratic control is to be observed in the direction of this great national institution, the depositors who will be most affected by this proposed change in the system of control, should be given an opportunity to express their opinion upon it. Meetings of shareholders of private banking companies are held from time to time, and shareholders are given an opportunity to criticize freely the actions of the board of directors. In all probability such criticisms and representations made by individual shareholders are given very careful consideration by the board of directors of the bank concerned. In this instance, however, those who are most interested in the proper functioning of the Commonwealth Bank, its depositors, are to be given no say in its administration and control. Why should persons who, in all probability, are not depositors of the bank, and have no direct association. with it. decide that the present system of control shall be replaced by a system of board control ? What right has a member of the Parliament, who does not do business with the Commonwealth Bank, to determine the future of this great institution? Surely ho has no greater right than I, as a person who does not transact business with a private bank, have the right to decide the destiny of a private bank. In all sincerity I submit that before a board is appointed to control the Commonwealth Bank the Government should ascertain the wishes of its customers by means of a plebiscite. Those customers and depositors with the Common-wealth Savings Bank number more than 1,000,000 persons. Surely such a large section of the community should not be denied an opportunity to express their opinion of this proposal.
– Did the Government which the honorable senator supported take a plebiscite of the depositors in the private banks before it proceeded with its proposal to nationalize private banking?
– No, but there is a vast difference between that proposal and the proposal now before us. At no time did the Chifley Government indicate that it proposed to interfere with the domestic rights of shareholders of the private banks. All that it said was that, in the host interests of the people, banking in this country should be nationalized.
– And the people did not agree with it.
– The proposal was abandoned because of the adverse decision of the highest legal tribunal in this country, which was upheld by the Privy Council. During the general election campaign in 1949 Mr. Chifley announced that, as the result of that decision the proposal to nationalize banking was “ as dead as the dodo “. We adhere to that statement to-day. We have always respected the decisions of the courts and wo shall continue to do so. We did not try to get around that decision by the introduction of other legislation designed to achieve the same objective.
The Commonwealth Bank is the people’s bank and it should be protected by every member of this Parliament. Had it not been for the Commonwealth Bank, Australia would have been in a. very difficult situation during the two world wars. I am opposed to the appointment of a Commonwealth. Bank Board. Indeed, I regard the proposal as a sell-out of the Commonwealth Bank, something which is not in the best interests of the people of Australia.
Senator BROWN (Queensland) [S.16J. - I doubt the wisdom of speaking on this bill, because, after all, I shall be speaking to a small audience, every member of which is already converted to one side or the other of the argument. Nothing that T can say will affect the decision of the Government, nor, I suppose, will it have any effect upon the minds of the members of my own party other than to confirm t.hem in the belief that they are right. However, I believe that I should not let this occasion pass without saying a fewwords of comfort and cheer.
Legislation similar to this has been before the Senate on several occasions, and we. have canvassed it and examined it thoroughly. One side has applauded it and the other has derided it. There has been a great deal of hot air and “ballyhoo “, and many fairy tales have been told. We have also heard some very sensible speeches of an entertaining and educational kind. I deplore the fact that honorable senators at times become heated. For instance, Senator McCallum called us liars - well, not exactly liars; 1 withdraw that, but he said that a lot of lying statements had been made by honorable senators on this side of the chamber. Such a statement offends my primitive Methodist soul. When a man says that we make lying statements, I take that to mean that he is saying that we are liars. A man cannot make a lying statement without wilfully trying to misrepresent the position. If he did not wilfully seek to do so, he would not be making a lying statement. Sometimes honorable senators become heated, and afterwards they are sorry for what they said. I do noi wish to say anything for which I may subsequently be sorry. It is my wish t < put the case reasonably. I do not wish to cover all the ground, but merely to make one or two points.
The Labour party is irrevocably opposed to the Government’s proposal to restore the Commonwealth Bank Board. We do not see that there is any need to alter the present system of control. So little importance did our opponents attach to the restoration of the board, which was first established in 1924, that during the last election campaign nothin/’ was said by Government supporters on the subject. One leader of the anti-Labour parties - I shall not say who he was - told me in a private conversation that he never mentioned the matter during the whole of his campaign.
– Is that how thf honorable senator thinks a private conversation should be dealt with?
– I have not mentioned any man’s name. Surely we are not -so namby-pamby that we are not to refer to such a conversation. I will say that two leaders of the anti-Labour parties said the same. I myself mentioned the banking legislation a few times. and pointed out to the electors who had the good fortune to listen to me that the Labour Opposition in the Senate had been so decent to the Government that it had agreed to practically all the legislation placed before it. I compared what had happened in the Parliament which had been just dissolved with what had happened in 1929-1931, when the Scullin Government was in office, and the antiLabour parties had a majority in the Senate. I said that out of 67 bills presented to the last Parliament 65 had been agreed to, and that of the four important bills submitted three had been agreed to by the Opposition majority. The only one we did not agree to was the Commonwealth Bank Bill, and we refused to agree to that because we honestly believed that the restoration of the Commonwealth Bank Board would, in the long run, place the bank under the control of vested interests. Honorable senators opposite may cast scorn on our belief, but our banking policy is closely linked with our general policy. If the banking policy of the Labour party were fully applied there would be no more economic depressions. There would be always available in the community sufficient money, which is the life blood of trade, to keep industry going and to keep men employed. The honorable senator from Tasmania, whose risible muscles have been working overtime, may find in my remarks ground for amusement, but we on this side are earnest in the advocacy of our policy, and we believe that if our policy were given legislative effect, it would be possible to avoid the worst effects of modern capitalism, and certainly to avoid the worst features of communism. Unfortunately, in this world of conflicting interests those who steer u middle course are swept to one side. Honorable senators opposite, by trying to turn back to the past, are giving a fillip to the cause of communism. After all, they, not we, are the accused. By their actions they are justifying the activities of the Communists, who say that the Government is doing nothing to avoid economic disaster.
By our policy we seek to avoid those extreme manifestations of the capitalist system which result in thousands of persons being thrown out of work every few years. It is only those who have stood in the breadline, who have gone home day after day without money to buy bread for their children - and I was one of them - who know what an economic depression really means. I speak from the bottom of my heart. I admit that I may sometimes speak humourously, bin. behind that exterior there is in me a serious strain, and I say to-night in all seriousness that if the Labour party’s platform could be implemented it would be possible to avoid the extreme effect of capitalism which is expressed in hunger, industrial unrest and unemployment. In 1929 and 1930, 45,000 Australians were out of work; yet, when we put forward our ideas honorable senators opposite sneer. As the result of economic evolution in this and other countries banking is coming more and more under government control. The process has probably advanced further in Australia than anywhere else. Despite the efforts and fulminations of the opponents of the Labour party, the process is going on. One of my friends in the Treasury recently typed out for me a statement showing how, from the very beginning of federation, the trend has been consistently in the direction of government control of banking. I have here a speech delivered on the 13th June, 1924, by Dr. Earle Christmas Grafton Page in the House of Representatives. It is a most illuminating speech, which took several hours to deliver, and it should be read by every member of the Parliament.
I admit that I have grown a little rusty because I sat for so long in the President’s chair. I defy any one to sit for eight years in that chair and not become rusty. I remember once calling on the then Speaker of the House of Representatives, Mr. Rosevear, to take him for a drink of lemonade. He confided in me that, after having sat in the Speaker’s chair for some years, he knew less about current legislation than when he was on the floor of the House. When a member is on the floor he takes an interest in the bills, but when he is in the chair he is half asleep a good deal of the time.
– I trust the honorable senator will now come back to the bill.
– I arn discussing the Commonwealth Bank Bill. I was referring to a speech delivered by the present Minister for Health (Sir Earle Page). Of course, if I am not .peril ii ted to talk about that I will sit down.
– The honorable senator has my permission to sit down.
– You say that I may not speak? Am I to understand that I may not mention the Commonwealth Bank Bill?
– Order ! I realize that the honorable senator, as an ex- 1.’ resident of the Senate, has had great experience. I trust that, having occupied the President’s chair for eight years, he will not treat the Senate to anything unbecoming to a senator.
– I shall not do anything unbecoming to a senator.
– Order ! I ask the honorable senator to continue his remarks, and I hope that he will confine them to the bill.
– My dear Mr. President, I do not wish to run counter to what you say.
– I do not expect you to.
– I know the Standing Orders, and I believe that, in order ro enlighten honorable senators-
– Order ! I am not here to listen to a homily from the ex-President. I ask him to continue his speech on the bill. I fully realize what is happening to-night, and I again ask the honorable senator to resume his remarks on the bill.
– In order to understand this measure it is necessary for us to review briefly the development of banking practice. In the course of a speech made in the House of Representatives by the present Minister for Health in 1924, the right honorable gentleman revealed some of the practices followed by the private banks at that time. Fortunately, the private banks cannot resort to such practices to-day. Despite the fulminations of those who are opposed to Labour. I point out that the development of the increasing system has necessitated an increasing degree of governmental control of the banking system. Perhaps the biggest difference in the approach of Labour and the antiLabour parties to this matter is that Labour is usually mindful of the future whereas our political opponents are more concerned with preserving the establishments of the past. In a real sense Labour is the forerunner of reform and progress. Although success does not always attend our efforts at the time, the history of politics shows that the reforms that Labour advocates at a particular period are usually the things for which the anti.Labour forces contend twenty years later. That observation applies to monetary and banking practice as much as it does to any other avenue of the community’s activities.
On the occasion to which I have referred the right honorable member for Cowper (Sir Earle Page), after dealing with paper money and its relation to gold, stated -
During this early stage of war finance a step was taken which lias never been satisfactorily explained. I refer to the fact that the Government gave to the banks the right to get £3 in notes for every sovereign presented at the Treasury. At the time bank notes were legal tender. Two out of three notes issued were treated as loans to the banks, which were required to pay interest at the rate of 4 per cent, per annum.
The reasons for granting those, privileges to the. banks are not recorded. The right honorable gentleman continued -
No good purpose would now be served by surmising what the reasons were. Without being unduly critical of action taken during a period of great anxiety, 1 am permitted to say that this three-to-one arrangement was more doubtful in character than any other aci of war finance.
I have been informed that the banks subsequently compelled the Government to issue more notes, and that the additional bank notes formed the basis of further credit for the community. In that way the banks used the public credit to further their own interests. Of course, Labour has protected the community against a repetition of such conduct, and the banks cannot now amass huge profits by resorting to such tactics. The limitation of the irresponsible power of the banks is a part of the general evolutionary development of the banking system which has come about in consequence of the pressure of internal and external developments. Of course, further changes in the control of banking will be necessary in order to safeguard the community against the rapacity of individuals and groups of individuals.
Labour’s policy is always based on the interests of the people. We do not want to control banking in order to obtain any pergonal advantage for ourselves. After all, what benefit would individual members of the Labour party derive from even the nationalization of banking? However, it i3 an undeniable fact that honorable senators opposite represent people who have substantial interests in big enterprises, including private banking. We say, therefore, that honorable senators opposite must have good reason for desiring to reestablish a board to control the Commonwealth Bank. Whilst I do not blame them for desiring to protect their own interests or those of their friends, I emphasize the fact that the interests of a comparative handful of wealthy individuals do not coincide with the interests of a community as a whole. That is why Labour believes that the Governor of the Commonwealth Rank should have full power to control that bank. We realize, of course, that it is necessary for him to have the assistance of expert advisers, and the organization of the bank already provide* a number of highly qualified officials for that- purpose. Although we know who those officials are and their special qualifications, we do not. know the name, ami still less do we know thu qualification.:, of even one of the gentlemen whom the present Government proposes to appoint to the board. If we knew the identity of the proposed appointees it might, allay some of our anxieties. However, the Government has been most careful to refrain from giving us the slightest information on that point. It is clear that: the proposal to appoint a number of persons from outside to the control of the bank will reduce the authority and status of the Governor of the bank. Proposed new section 9b (3.) makes that fact quite dear. It states -
In thu management of the Bank, the Governor sim II net iii accordance with the policy of the ::n<l with any directions of the Board.
I remind honorable senators opposite that under the control of a Governor the bank has functioned efficiently and in the interests of the community, and it has done no wrong. 1ts successive Governors have been men of the highest intellectual calibre, and they have discharged their duties to the satisfaction of the people of Australia. Who are the gentlemen whom the Government now proposes to appoint to the control of the bank? Naturally, they will represent some sectional interests. Of course, they may attempt to justify their attitude towards the Commonwealth Bank and banking generally by assuring themselves that they are acting in the interests of the community. Many people who are advancing their own interests to-day justify their activities by persuading themselves, and endeavouring to persuade other people, that they are acting in the interests of the community. .From time to time many individuals, including industrialists and investors, have solicited my assistance to obtain some advantage for themselves and the people whom they represent, and many of them have endeavoured to press their requests by confiding to me that acquiescence with their particular wishes would be “ a great thing for the working man of this country “. On such occasions I invariably say to them: - “I quite understand your desire to obtain this particular concession because it will bc of material or pecuniary benefit to you, but for goodness sake do not try to tell me that you are pressing it in the interests of the workers “. in the course of the debate reference has been made to the views expressed by the late Professor Giblin. Although honorable senators opposite have cited Professor Giblin’s views in support of the proposal to re-establish a bank board, the fact is that he was very critical of the former bank board. In a work entitled, The Growth of a Central Bank, Professor Giblin emphatically stated his belief that the Commonwealth Bank would have progressed much more rapidly under the control of one individual than it did under the control of a board. However, I desire at all times to be fair, and I shall read a passage from the work I have just mentioned in the course of which Professor Giblin expresses both sides of the case. The passage is as follows : -
A board has, perhaps, stronger claims, as being more likely to find favour with the public. There are, however, a number of
Activities of the Commonwealth Bank to conaider. These are of more interest to the general public than central bank functions, and it was Labour policy greatly to expand them. For this work a single manager is more likely to be effective than a board.
I point out at once that Professor Giblin was not a Labour supporter. The former bank board was composed of representatives of the pastoral industry and of the business world generally, but I do not think that those gentlemen did very much to assist the development of the bank. In fact, they met only once a month, and Professor Giblin has made it quite plain in his book that in the early stages of the board’s existence it was not of much use. However, by the time that thi’ Chifley Administration introduced this Banking Act of 1945 it had become of some use. Nevertheless, its general record is by no means impressive, and I cannot understand therefore, why honorable senators opposite are so delighted at the proposal to re-establish the board. In another passage, on page 285 of his book, Professor Giblin reviews the happenings of 1941, when further control of the banking system was introduced. After consulting the Commonwealth Bank and Treasury officials, the Curtin Government issued certain National Security (Banking) Regulations under which, amongst other things, all banks other than State banks had to be licensed. The licences could be withdrawn by the GovernorGeneral on the recommendation of a justice of the High Court for wilful and persistent contravention of the regulations. The existing banks were licensed automatically. That was another step in the evolutionary development of a central bank. The regulations also provided, according to Professor Giblin’s summary -
The Banks shall comply with the advance policy laid down by the central bank from time to time . . .
A bank. shall “lodge” in a. Special Account with the ‘ Commonwealth Bank such part of its surplus investible funds as the bank may direct . . .
Professor Giblin shows clearly, despite the arguments of honorable senators opposite, that there has been a continual growth of control of the banking system. After dealing with Labour’s suspicion of members of the previous Commonwealth Bank Board because of their background, Professor Giblin says -
So much for the political side. On the technical side the issue was far more controversial No doubt, if it had been possible to appoint a competent Governor with full power in 1924, the Bank’s development would have been much more rapid.
As I have said, that is entirely in accordance with Labour’s point of view. There can be no doubt that the bank’s activities were hamstrung after 1924. Professor Giblin also states -
Again, from about 1933, the Commonwealth Bank had an overdraft rate which was too low in relation to the general level of interest rates and more than 1 per cent, below that of the trading banks. It was politically difficult to raise it and the Board thought that active com petition with the trading banks might result in a very embarrassing flood of advances at unprofitable rates.
Personally, I believe that Labour’s policy should have been to enable the Commonwealth Bank to enter into keen competition with the private banks. However, nationalization was decided upon, and all honorable senators are aware of the result. The passage that I have just, quoted from Professor Giblin’s book shows that the Commonwealth Bank Boa I’d fca rod to permit the bank to enter into active competition with the trading hanks. He continues -
So Commonwealth Bank practice took firm shape. The Bank would welcome deposit accounts or the account of new business. It would not accept the transfer of an advance account from another bank unless it was satisfied that the client was not being given a fair deal by its previous bank.
Labour believes that that was the wrong policy. I recall an occasion on which I travelled to the Barrier Beef with two Commonwealth Bank managers. Their conversation with me was most illuminating. They said that, as branch managers, they were not permitted to do things that should have been done in the interests of the people. I have spoken on banking on many occasions in various parts of the Commonwealth, and my views are well known. In preparation for a speech that I made in this chamber some years ago, I made an exhaustive study of banking practice in other parts of the world including the Douglas credit system, the Russian system and the socalled capitalist system. In every community, of course, there are many conceptions of the ideal banking system. There arc those who believe that by altering methods of finance all our problems can be solved. That is quite wrong. There are those who believe that if the control of finance and banking is left in private hands, all will be well. The Labour party does not subscribe to that view. We believe that by exercising proper control over the banking system, a government can alleviate, if not eliminate entirely those capitalist contradictions that lead to so much economic and industrial trouble. Control of the banking system has already produced ti high standard in this country, and I do not think that the reconstitution of the board will solve any of our economic problems. It would be preferable to continue the present arrangement, but apparently the Government is determined to secure the passage of this legislation.
Honorable senators opposite claim that the proposed bank board will be a democratic authority representing various interests in the community. It is true that the bill expressly states that no director of a private bank will be eligible for appointment to the board. That, of course, is quite proper; but there will be nothing to prevent a director, of a private bank from resigning from the directorate of that institution, and then being appointed to the board of the Commonwealth Bank. That, I believe, was done in the past. I have no wish to malign members of the previous board, but it is logical to assume that, because of their experience and their environment, they naturally tended to lean towards the vested interests with which they wore associated. The bill provides also that no employee of a private bank shall be eligible for appointment to the Commonwealth Bank Board, but what chance would an employee have of securing such an appointment ? He would have to leave his job, and he would receive only a few hundred pounds a year as a member of the board. The idea is preposterous.
Labour does not want this legislation but apparently we are to have it. We have expressed our views on it. We believe that, under the present form of control, the Commonwealth Bank has done honour to itself and to this country. It has rendered a valuable service to the community, and there is no reason why the Government should meddle with its administration. Frankly, I do not think that the Government itself has much interest in the measure and has introduced it merely to keep its promise to the private banking fraternity which, to further it* own ends has supported anti-Labour governments in the past.
Senator SPOONER (New South Wales - Minister for National Development; [8.54]. - in reply - This is the third occasion on which the Senate has listened’ to a second-reading debate on this legislation. There will be general agreement, [ am sure, that the third debate has nol brought to light any new material worthy of thought. I shall reply to two pointsthat, were made by Senator Brown because they are on a theme that has run through the speeches of most honor’ able senators opposite. First, the honorable senator would have us believe thaimembers of the Labour party are thu pioneers, the deep-thinkers, and the leaders of financial and economic policy, whereas honorable senators on this side of the chamber have done nothing but follow Labour’s lead. Political history proves that to be quite incorrect. At the 1949 election, the Labour party failed because of its financial policy. The people mistrust Labour’s lack of financial wisdom more than they mistrust any other phase of Labour’s policy. It is quite wrong to say that the Labour movement has led national thought on financial matters. The Labour party has not had the confidence of the Australian public on such matters at any stage of its history. The parties now in Government laid the foundation of the reserve banking practice in Australia. I take the strongest possible objection also to Senator Brown’s assertion that we on this side of the chamber represent some particular interests in regard to this legislation or any other legislation.
– It is perfectly true.
– The allegation not only is without foundation hut also shows a lack of sincere thinking. This Government was elected by a majority of the. Australian people, and it will do its job sincerely and honestly in the interests of those people. All the arguments that I. shave previously advanced in support of’ this legislation, stated on this occasion. There is, however, one additional strong argument that I have not had in the past - a majority in this chamber.
However, I propose briefly to answer tlie arguments that have been advanced by the Opposition in the course of the debate. Senator Armstrong made three points which I shall group in my reply. He said that the Government was hot really interested in the bill, that hanking had not been a topic of very great interest in the 1951 election, and that the Commonwealth Bank was the great bulwark of the economic fabric of the community and a most important institution in the economic life of the Australian people. Let there be no doubt that the .Government regards this as an important measure both politically and economically. There is a grain of truth in’ the. claim that the re-establishment of the Commonwealth Bank Board was not in the forefront of the 1951 election campaign, but nobody in this chamber can deny that it was in the forefront of the 1949 campaign and, after all, it was that campaign- that led to the defeat of the Labour Government. The Chifley Government was beaten because, above all other things, the Australian people had no confidence in Labour’s financial policy. There is a very good reason why this legislation was not in the forefront of the 1951. campaign. Nobody could ever say that the earlier bills were not thoroughly debated in this chamber. On the first occasion that similar legislation was before honorable senators, 28 members of the Opposition and fourteen members of the Government spoke on it - 42 speakers in all. Eight Opposition senators obtained an extension of time. I commend to new members of this chamber the thought that life has still rich experiences ahead of them when, having heard an Opposition senator speak for an hour on a measure, he is granted an extension of time. It is a great commendation to the Christian virtues of the members of this chamber who, having gone through that experience, still bear no ill-will. On the second occasion that this legislation was before this chamber it was debated by seventeen honorable senators, including ten of the Opposition, of whom two took the full hour and obtained im extension of time. In all honesty, how could any member of the Opposition expect the public of Australia to regard this as an interesting matter at a general election, after the sad experience of its being debated fully by the Opposition on two occasions?
– The people had not heard the views that were expressed.
– I think that the people heard enough about them. I agree with Senator Armstrong’s assertion that the Commonwealth Bank is an important factor in the economic life of the community. That is beyond the realm of argument. It is not only the resources of the. Commonwealth Bank, but also the manner in which they are administered that is important. This bill, as did its predecessors, deals with three principal issues: The repeal of the Banking Act 1947. the provision of additional capital for the trading section of the Commonwealth Bank and the administration of the bank itself. The Opposition contends that the administration of this great national institution, for all practical purposes, should be in the form of one-man control. I submit that it is an unreasonable proposition in a democratic community to advance the proposal that so much power should rest in the bands of any one man. It is not done with the Public Service Board, or the Joint Coal Board, or any other Government instrumentality so far as I know. There is no other government institution that 1 can readily remember in Australia in which the Parliament places so much power in the hands of one man. I think it is quite unreasonable and unreal, and completely out of touch with democratic thinking to advance the proposal that to control the greatest of all our national institutions we should appoint a dictator. “With few exceptions, in no other part of the world has that principle been adopted, and it is not adopted in either governmental or commercial circles.
The Government proposes that the board shall be a well-balanced and wellconstituted body. The alternative to that is, in truth, a one-man dictator surrounded by a small group who, at the best, can only have specialized experience. I put this point of view for the consideration of the Senate : One of the great things that we have to avoid in the administration of our great public institutions and our great public utilities is to have management and control of them inbred. That is a real danger because, without making any criticism of our public servants, but, on the contrary, paying them the highest compliments, over and over again when an important, position has to be filled the number of men of outstanding merit whose names are advanced is not great. What will happen if we are not very careful is that we may reach a stage in Australia when these big appointments will become a close preserve. By all means let us use the men of ability to the best advantage, by placing alongside them men with experience in a different sphere. Senator Armstrong also asserted that this board would be weak because the newcomers would lack knowledge of banking. That argument i? completely fallacious. The appointment of men with commercial and industrial experience, who may not have technical banking experience or public service administrative experience, is preferable to the appointment of a coterie of public servants with no knowledge of commercial and industrial experience. We aim to blend both sets of virtues together, and I am confident that that will give us the desired result. Senator Armstrong said, very rightly, that this great national institution should have the confidence of the Australian public. That is common ground. This institution must be supported by the confidence of the people of Australia. We cannot reasonably expect that confidence if the bank is controlled by one person.
I very strongly object to any criticism of the Public Service. I believe that a Minister’s task is to take political criticism that may arise, and he should not allow his officers to be brought into the forefront of political debate. But if that is the position surely the converse arises. I agree with Senator Armstrong that a government in power must take full responsibility. If the Government in power is to take responsibility then surely it must have a right to select for positions of trust men who will carry out the administration in the way in which the Government considers it should be carried out. That is our position in regard to this institution. We are strongly opposed to one-man control of an institution of this kind. We are strongly opposed to the control of this institution by a. small group with specialized knowledge, a small group without commercial and industrial experience. We believe that in the interest of Australia it is necessary to have this bank controlled by a body which is well balanced, and has knowledge and experience in as many fields of Australian activity as possible. In short, I believe the position to be that every generation makes its advance in banking and economics no less than in science and medicine. Let me test that belief in this way. There is to be control of the bank by a board. I think there would be general agreement in the chamber that the greatest time of testing for the Commonwealth Bank was during the war years of 1939-45. I think it would be admitted all around the chamber that the Commonwealth Bank did a truly magnificent job during those years. At that time it was under the control of a board similar to that proposed to be appointed under this bill. I do not. think it a bit unkind to say that although the Commonwealth Bank has grown enormously since then, it has declined in prestige. We cannot test an institution such as this by the number of its employees. The test is by the value of the work which it does nationally. I do not think that the bank has advanced in public opinion and in national work since 1945, when its constitution was changed.
– That statement is grossly unfair to the Commonwealth Bank.
– I do not think it is one-tenth as unfair as the wild and woolly statements that have been made by honorable senators opposite. The statement that the proposed appointments will be for special purposes is one which any decent fellow should be ashamed to make. What we are doing we believe to be in the interests of Australia. I believe that the proposed reconstitution of the Commonwealth Bank Board is a forward step. Should the political pendulum ever swing and honorable senators opposite become the responsible political party, and thereby lose the glorious irresponsibility of opposition, those honorable senators will look to what has been done in this measure and will vest content and let it be.
Question put -
That the hill he now reada second time.
The Senate divided. (The President - Senator the Hon. edward Mattner.)
Majority . . 10
Question so resolved in the affirmative.
Bill read a second time.
In committee :
– I suppose that this bill will now move into history, which will decide whether the Minister for National Development (Senator Spooner), speaking for the Government, is correct, or whether the members of the Opposition have right on their side. The Opposition has done all that it can to make its views heard, even though they be not under stood. As the Minister has stated, this bill can be broken up into three parts : first, the repeal of the Banking Act 1947, to which the Opposition has agreed completely; secondly, the financial arrangements of the bank, which have the wholehearted concurrence of the Opposition ; and thirdly, the administration of the bank, which is where the fatal bank board comes under discussion. The Opposition makes it clear to the Government and to the country that despite the arguments advanced by honorable senators opposite, it is of the same opinion still - that there should notbe a bank board which will include representatives of outside interests, whatever they may be. The Opposition will vote against the bill because of the fact that clauses 4, 5, 6, 7, 10 and 15, and the schedule refer to the appointment ofabank board. The members of the Opposition wish to ‘register their objecton to those clauses, and in order that that objection may be recorded it is their intention to vote against the bill.
.- The Minister for National Development (Senator Spooner) said when replying to the second-reading debate that although the Commonwealth Bank had grown it had declined in prestige since 1945. I would like the Minister to explain what he had in mind when he slated that it had declined in prestige.
Senator SPOONER (New South Wales - Minister for National Development; [9.18]. - As I stated during my secondreading speech, I believe that a disservice was done to thebank when the Commonwealth Bank Board was abolished in 1 945 and one-man control was introduced, that that disservice is reflected throughout the community, which has not now as much confidence in the bank as it had prior to 1945, and that the prestige of the bank will be restored when this bill is passed and another board appointed.
– Proposed new section 24 provides that a member of the board shall be paid by the bank such remuneration, if any, as the Governor-General determines. Can the Minister inform me what remuneration was paid to members of the previous Commonwealth Bank Board?
– I am informed that each member of the board received £600 a year.
– Proposed new section 23 deals with the membership of the board and provides that it shall consist of the Governor, the Deputy Governor, the Secretary to the Department of the Treasury, and seven other members who shall be appointed by the Governor-General in accordance with the succeeding provisions of that section. Are we to understand that the seven other members referred to could be appointed from outside organizations or industries of various descriptions?
.- The answer is “ Yes. they could”.
– Could the Minister inform me what persons the Government has in mind as prospective members of the board?
.- Proposed new section 9 provides that the board shall have power to determine the policy of the bank, and proposed new section 9a (1.) provides that the bank shall, from time to time, inform the Government of the monetary and banking policy of the bank. Is the word “ Government “ referred to in that connexion, mentioned in a limited sense? Is the policy of the bank decided by the board to be submitted to the government of the day, or in effect, to the Treasurer and the Cabinet, or will it be publicized? To simplify my question, supposing that the board is in operation next week and decides certain policy, will honorable senators on this side of the chamber be informed on that policy?
Senator SPOONER (New South Wales - Minister for National Development) ‘ 9.24]. - The members of the Opposition will know as much as they have always known, because this proposed new section is merely a reiteration of a similar provision dealing with that aspect.
– Without wishing to cast any aspersions or to malign any honorable senator opposite, will the Minister inform me whether, in the event of the seven unnamed members of the board being appointed from outside vested interests, the policy of the Commonwealth Bank could conform to the policy of those vested interests?
Senator SPOONER (New South Wales - Minister for National Development) 9. 26]. - The honorable senator previously asked me a plain question to which I gave a plain answer. He wil! remember that when similar legislation was introduced, certain statements were made by members of the government, of the day concerning who would be appointed as .members of the Commonwealth Bank Board. Since those statements were made, Professor Melville ha* gone abroad and Mr. Watt, ha.s retired from the Department of the Treasury, so that a different set of circumstances now prevails. I consider that it was fair to give a plain answer to a plain question and I therefore said “ Yes “. However, the Government has not considered what it will do in consequence of the changes to which I have referred.
– Under the bill, as it now stands, the Government could appoint seven members from outside interests.
– That was always the position.
– Will the workers he represented ?
– I am unable to answer questions concerning the composition of the board.
– In view of the statement that has been made by the Minister for National Development (Senator Spooner), I think that the committee should reject the proposed new section providing for the appointment of a board. The Minister has stated that the salary of the gentlemen who previously managed this great institution, which he suggests has deteriorated since the dissolution of the board, was £600 a year. The main point of the argument advanced by members of the Opposition against the appointment of a board is that its members would have outside interests and could utilize their position as directors of the bank to assist the industries which they represent. I. ask the Minister where he thinks the Government will obtain, for £600, or even £1,000 a year, suitable men to occupy the important position of directing the financial policy of Australia. I suggest that it is obvious that such men would need to have other interests. Does the Government expect to find eminent men who will be so generous that they will accept appointment for a mere pittance? T do not think that such, men exist. It will l)o interesting to see what salaries are paid to those who are appointed to these positions of great responsibility and trust, as they have been described by members of the Government.
Senator CAMERON (Victoria) [9.301- - “Will the Minister state whether it is intended by the Government that a very important and influential section of the community, the trade union movement, shall be represented on the board?
Senator ARMSTRONG ‘ (New South Wales) 9.31]. - When introducing the earlier legislation upon which the double dissolution was sought and fought, the Minister stated that the board would consist of the Governor of the bank, the Deputy Governor of the bank, the Secretary to the Department of the Treasury and seven other members, of whom two may be officials of the bank or of the Public Service. This bill provides that the board shall consist of the Governor, the Deputy Governor, the Secretary to the Department of the Treasury, and seven other members. I believe that there is an implied responsibility on the Government when appointing the new board to select two officials of the bank or of the Public Service to fill two of the seven position?.
Senator SPOONER (New South Wales - Minister for National Development) 1 9132]. - A. single answer is sufficient reply to the points raised by Senator Cameron and Senator Armstrong. It is that the Government has not yet given consideration to the personnel of the hoard.
– Will the Minister, in considering appointments to the board, ensure that representation is given to the industrial trade unions?
– In my secondreading speech, I stated that a director of a private banking company had resigned his position with the company and had become a member of the original Commonwealth Bank Board, but had subsequently returned to his former post as director of a private banking company. When this hill becomes law, will it be possible for a. director of a private bank, or a number of directors of private banks, to do likewise?
– It is useless for honorable senators to speculate on the constitution of the board at this stage and only a lawyer could answer the question posed by Senator Brown. I am not prepared to say whether or not it will be possible for a director of a private ba.uk to become a. member of the board and subsequently to return to his former posi-tion. The Government will do a.s it always has done and always will do ; it will administer this measure in the spirit as well as the letter of the legislation.
– Will the Minister issue an order prohibiting a director or a. former director of a private bank from becoming a member of the board ?
Question put -
That the bill stand as printed.
The committee divided. (The Chairman - Senator George Rankin.)
Ma jority . . S
Question so resolved in the affirmative.
Bill agreed to.
Bill reported without amendment; report adopted.
Motion (by Senator Spooner) pro posed -
That the bill he now read a third time.
The Senate divided. (The President - Senator the Hon. Edward Mattner.)
Majority . . 9
Question so resolved in the affirmative.
Rill read a third time..
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Spicer) read a first time.
.- I move-
That the hill be now read a secondtime.
The purpose of this bill is to amend the Conciliation and Arbitration Act with regard to a number of matters. The two most important of these matters were dealt with in two bills introduced in the last Parliament but not passed by the Senate, one dealing with secret ballots and the other with the enforcement of awards and with contempts of the authority of the Commonwealth Conciliation and Arbitration Court.
The present bill also includes certain provisions which are new. It is proposed to add to the four matters which by the amending act of 1947 were placed within the exclusive jurisdiction of the court, the two further general matters of paid sick leave and long service leave. Finally, the bill re- writes section 78 of the act. which prohibits incitement of breaches of awards. The proposed new section is in terms which are more appropriate to present needs, but does not depart from the basic conception of the section.
So far as secret ballots are concerned, broadly speaking the bill does three things : First, it provides that the rules of industrial organizations shall require that, elections of officials who occupy places of executive or administrative responsibility in the organization shall be by secret ballot, and that the rules shall be such that, so far as rules can go, they will guard against irregularities, or in other words will ensure the full andfree recording of votes by all members entitled to record votes and by no others, anda correct ascertainment and declaration of the results of the voting.
Secondly, it permits electoral ballots to be officially conducted not only when an industrial organization so requests, as provided by the 1949 amendments enacted when the Clifley Government was in office, but also where a given number or proportion of the members, believing that only if the ballot is conducted by a Commonwealth officer can they be certain there will be no irregularities, requests the Industrial Registrar accordingly.
Thirdly, it expands the provisions in the present act dealing with secret ballots in connexion with industrial disputes, as well as with elections. In this regard, ir enables the arbitration court to order that the views of the members themselves shall be ascertained by secret ballot, when tincourt considers this might prevent, oi bring a settlement to, a dispute. The proposed section is sufficiently wide to authorize the court to exercise this power in relation to those bound by the award ot any Commonwealth tribunal.
The important part that registered organizations play in the whole system oi conciliation and arbitration scarcely needs to be explained to honorable senators; nor, I believe, will any honorable sen ato i deny that the community has a clear interest in ensuring that these great industrial organizations are democratically conducted. The Government believes that it is the duty of the Parliament to find ways and means to secure the effective internal control of an organization by its own members. Our predecessors in office took the same view. On this matter there is no difference in principle between any of the parties in the Parliament, lm’ the Government brings forward the present proposals because it does not think that the existing law is effective for its acknowledged purpose.
The matter has come very much under public notice lately, because, at least in some instances, Communist leaders of trade unions have not really spoken on behalf of their members, and occasionally, as the Chifley Government took note, there has been reason to believe thai, ballots have not been properly conducted. A good deal of disquieting evidence on this subject was given in Victoria, -before a royal commission on communism. Proceedings in the Commonwealth Arbitration Court under the new sections introduced by the Chifley Government have also shown the existence of grave irregularities. But the Government thinks it is not sufficient to provide for fresh elections when irregularities have occurred. On the familiar principle that prevention is better than cure, it is necessary to protect the members of organizations, as far as is practicable, against the possibility that irregularities will occur.
The bill does not require that elections of officials shall be conducted according to any set code of rules. The formulation of the rules appropriate to their particular needs is left to the organizations themselves, but the Industrial Registrar and the court will, of course, have to be satisfied that the rules submitted do satisfy the requirements of the act.
It has been urged in some quarters that all ballots should be conducted officially, that is, by the Industrial Registrar or by Commonwealth electoral officers. We do not think this is necessary. We believe that the great majority of the unions are well managed and that their officials are conscious of their responsibilities, especially that of conducting elections with propriety. Under the law as it stands at present an officially conducted ballot can be held on the request of the organization, but naturally such a request would not be expected to be made by an organization which was dominated by Communists who wished to control an election so as to be certain of the result. The present measure will, however, enable elections to be conducted officially when a sufficient number or proportion of members think that this is necessary to ensure that their interests are protected. The regulations will fix the number or proportion who can apply to the Industrial Registrar. We have in mind, for elections to a central body, 1,000 members or 10 per cent, of the membership, and for branch elections, 500 members, or 20 per cent., whichever is the less in each case.
We are proposing an important and necessary extension of the court’s power to order a secret ballot of members. Section 72 was not amended in 1947 when jurisdiction was divided between the court and conciliation commissioners, with the result that the court probably can not. order a secret ballot except where the dispute relates to one of the four matters within its own jurisdiction. Most disputes do not, of course, relate to these matters, and so are now dealt with by the conciliation commissioners. Therefore, we now propose to give the court power to order a ballot, irrespective of which industrial tribunal - whether the court, or a conciliation commissioner or other Commonwealth tribunal - has ov would have cognizance of the dispute. The ballot can be a vote either of the members of the whole organization, or of a branch, or of a limited class of the membership; for example, those in a particular shop, or those following a particular calling.
It is, of course, necessary, in order that there shall bc proper ballots, that there should be proper membership rolls and that, if the Industrial Registrar is to conduct a. ballot on request or the court is to direct a ballot, current rolls should be available. While there are provisions about such matters in the act at present, they arc somewhat defective. The improvements proposed are based on State legislation on the point. For example, the provisions to be found in the bill requiring an organization to keep a duplicate or butt of the latest union tickets issued to each member showing his name and place of residence are based on the Queensland act of 1946.
I turn now to the provisions relating to enforcement of awards. Here the intention of the bill is to restore to the Commonwealth Arbitration Court the power of enforcement, of awards which, I think, was generally understood to be possessed by the court until the High Court decided to the contrary in March last in the metal trades and gas employees’ cases. The act, as it now stands, authorizes the Arbitration Court to grant injunctions to prevent contraventions of the act, and it was thought that this included injunctions in respect of breaches of awards made under the act.
These cases I have mentioned arose under section 29 of the act which gives the court various powers that are usually possessed by judicial tribunals, including the power to impose penalties, to order compliance with an award, to grant injunctions, and to give interpretations. In the two cases mentioned, a majority of the Commonwealth Arbitration Court granted injunctions restraining the unions concerned from continuing overtime bans, in contravention of the relevant awards. On prohibition proceedings, fi majority of the High Court held that while the Arbitration Court could issue injunctions in respect of contraventions of the act itself it could not do so. in respect of awards and orders made under the act. Clause 6 of the bill is designed to restore the position that was generally believed to exist before the High Court decision.
The bill also makes clear that, in addition to the parties to the award, the Attorney-General of the Commonwealth may apply, in the public interest, for an order of the court under section 29 of the act. The Crown as the representative of the public interest has, in the Government’s view, a clear responsibility to intervene to protect the public interest where it is being wantonly disregarded.
This bill goes one stage further than its predecessor. It enables the jurisdiction of the Common wealth Arbitration Court, as the superior court in this arbitral jurisdiction, to bc extended to breaches or non-observance of awards and orders made by other Commonwealth industrial conciliation and arbitration tribunals. The Government’s policy is clearly known. It is that in the long run all other tribunals in the Commonwealth sphere should be subordinate to the Arbitration Court. Some of these special tribunals have their own code of enforcement, but it is the Government’s view that there may be cases where it is appropriate that the powers given by the bill to grant injunctions and order for compliance should be exercised by tho court even in relation to the awards and orders of these other tribunals.
The other provision on this subject, clause 7, is intended to clarify the powers of the Commonwealth Arbitration Court to punish contempts of its own power and authority. In the Government’s opinion, the bill does no more than what the Parliament set out to do when in !1947 it altered the previous law on this subject, but which, again in the metal trades case, the High Court has held that it did not completely accomplish.
At common law, superior courts of record have inherent power to punish contempts of their power and authority. Before the 1947 amendments, the Commonwealth Arbitration Court was nor. expressed by the act to be a superior court of record. There was, however, a special section which, gave to the court the power nf a superior court of record to punish by attachment and committal any person whom it found to have been guilty of contempt of the court. It was held by the High Court in 1945 that this provision did not enable the court to punish a cor- i :oration
By section 17 (3) of the 1947 amendments, introduced by the Chifley Government, the court was for the first time specifically created a “ Superior Court of Record “. The former specific, and limiting, provisions with regard to punishments of contempts were omitted. Clearly, it was assumed, that the court would have all the inherent powers to punish for contempt that flowed at common law from its declared status as a superior court of record. The view of the majority in the High Court in the recent case, however, was that because the Conciliation and Arbitration Act rnakes specific provision for the punishment of disobedience of the court’s orders and awards, it ought to be construed as impliedly excluding the use by the court of its inherent powers to punish contempts in this particular field.
From this judgment, it is clear that the act as it stands is not expressed in such a manner as to give the court a power which the Government thinks was contemplated in the 1947 amendments and which the Government thinks the court should have. In clause 7 of the bill, therefore, the Government proposes that the Commonwealth Arbitration Court, should be clearly vested with all the inherent powers, of a. superior court of record to punish contempts of its authority, including the power to punish as contempt, disobedience of orders made by it directing compliance with awards or enjoining against broaches. These particular forms of contempt are, however, in a somewhat special category and the bill proposes, in relation to them, to set limits to the maximum penalties that may be imposed. This has been done in sub-section (4.) of the proposed new section 29a.
Just because our .arbitration system arries the very general support of the Australian people, it is seldom necessary for the arbitration court to exercise powers of judicial restraint of the kinds that are provided for in this bill. But honorable senators scarcely need to be reminded that there are a few unions, especially those under Communist leadership in key industries, which occasionally try to hold the community to ransom. The Government thinks that the institutions of arbitration should be clothed with sufficient authority to enable the community to defend itself when this does happen. Let us be quite clear about this. The court’s power to issue injunctions is discretionary. It may decide in a given set of circumstances that an injunction should not be issued. And where an injunction is disobeyed, the punishment awarded in any subsequent contempt proceedings is again in the discretion of the court, subject to the limits which the bill proposes to fix. The existence of other remedies, and their efficacy, are matters which obviously the court will take into consideration in deciding whether or not to exercise its powers to punish for contempt. These injunction and contempt processes are no novel conception. I emphasize that they were clearly regarded by the party now in Opposition, when it. occupied the Government benches, as appropriate for exercise by the Commonwealth Arbitration Court. This is proved by the proceedings it took under the National Emergency (Coal Strike) Act 1949 and by the provisions of its own amending section 96n of the Conciliation and Arbitration Act.
As I have said, this present bill introduces no novel conceptions. It adds no new principles. “What the bill sets out to do is to re-state principles and provisions which were believed to be the law and to extend and clarify existing provisions to cover weaknesses that have become apparent in the working of the conciliation and arbitration system. That there are other provisions in the existing act that need attention will be well known to those who know the act in detail. It is the intention of my colleague the Minister for Labour and National Service (Mr. Holt) to continue discussions with all interested parties with a view to attempting to’ find common agreement on legislation that might be introduced later to deal with these matters. I commend the bill to the Senate.
– I do not propose to seek an adjournment of the debate upon this measure because the Opposition is prepared to proceed with- the debate forthwith. I make it clear that the Opposition takes this course it. the direct request of the AttorneyGeneral (Senator Spicer), who has just made his second-reading speech. However, I would not like him, or any other honorable senator, to believe that by doing so the Opposition is surrendering its time-honoured right to obtain the adjournment of the debate on an important measure such as this. Therefore, I ask the Attorney-General not to hold our co-operation in this matter against us on some future occasion when we seek the adjournment of the debate on a particular measure.
Dealing with the bill itself, I say at once that industrial unrest is a matter that can seriously impede the progress of the nation in many directions. The expressed belief of the Government is that this measure will either eliminate or reduce the amount of industrial unrest in Australia. The belief of the Opposition is that no such happy result will be achieved by the passage of the bill, hut that, on the contrary, it will stimulate industrial unrest and cause further trouble between the parties who appear before the arbitral jurisdiction of the court. I think I need advance no further argument in support of that belief than to say that the Australian Council of Trade Unions, which is the governing body of trade unions in Australia and controls all trade unions, except the Australian “Workers Union, is completely opposed to every principle in this measure. That is also true of the Australian Workers Union, which has 180,000 members who are engaged in many industries in this country. When a measure is enacted in the face of the complete and open hostility of two such powerful organizations its chance of success is succeedingly remote. I have no doubt that there have been discussions between the leaders of the trade unions and the Government in relation to this measure. Nevertheless, I am prepared to claim that no trade union leader has conceded to the Government the co-operation of the trade union movement in respect of any single provision of the measure. When the Attorney-General replies to the debate in due course I invite him to name one organization of employers that has sought any of the provisions in the measure. If I am correct in believing that no such request has been made, then I think I will have demonstrated my proposition that the passage of this bill will cause more industrial unrest than it will allay. There is no real support for the measure from the employers’ side, and there is strong hostility to it from the trade union movement.
I do not propose to embark upon a dissertation on the causes of industrial unrest. However, I shall say something about three of the factors that I think are causing industrial unrest in this country. The three factors that I shall mention are not necessarily the most important, and, in any event, I shall not attempt to cover them all. The three factors that I cite as being amongst the major causes of industrial unrest are, first, the very limited nature of the powers’ of this Parliament in relation to matters industrial; secondly, the present instability of the Australian economy; and, thirdly, the political activity of the Communists who are in charge of a few key trade unions.
Dealing with the first of those factors, I point out that, placitum (xxxv.) of section 51 of the Commonwealth Constitution provides -
The Parliament shall, subject to this Constitution, have powers to make laws for the peace, order, and good government of the Commonwealth with respect to -
Conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State:
If any honorable senator has ever turned to the annotated copy of the statutes and has examined page. 26, he will find that every word of that brief head of power has been the subject of much litigation and legal argument in the courts. If we will take the trouble to glance through the ten pages of closely printed notes of decided cases that follow he will realize that surrounding that head of power there is not only grave limitation, but also a vast amount of legalism. In fact, the words of the placitum are so overlaid by judicial interpretation that no one who is not an expert in law and who ha3 not made a particular study of the industrial jurisdiction could possibly acquire any real understanding of the implications of that power. One can understand, therefore, the confusion that exists in the minds of the ordinary workers in relation to matters industrial. It is exceedingly bad that the law should not be clear to the ordinary worker in the community. In this country men are working side by side, some of whom work under conditions that are regulated by State awards, whilst others are subject to Federal awards. Many of those men cannot understand the inability of the Commonwealth Court of Conciliation and Arbitration to intervene in many of the matters that arise from day to day. I need only remind the Senate of the Kemira tunnel dispute approximately two years ago, when a serious difference arose between the Australian Workers Union and the miners’ federation as to which union had the right to carry out tunnelling work.
– Such a. dispute could have arisen under any circumstances.
– I suggest to the Attorney-General that the dispute would not have occurred if the Commonwealth Parliament had possessed full power over terms and conditions of employment.
– But the Kemira tunnel dispute arose out of a difference of opinion concerning, the terms of awards.
– I think that perhaps the Attorney-General should wait until I complete the development of my theme. The point that emerged during that dispute wa3 that the Commonwealth Parliament could not legislate completely to settle the dispute, and ultimately it became necessary for this Parliament and the Parliament of New South Wales to pass complementary legislation and to take joint action to appoint an arbitrator to resolve the dispute between the tv» unions. That elaborate procedure was necessary because one union was registered with the Commonwealth Arbitration Court, whilst the other union was registered with the New South Wales industrial authorities. The dispute concerned a matter in New South Wales, and that fact was sufficient to prevent the Commonwealth authorities from dealing with the matter. In the end the dispute was resolved only after considerable delay and expense. There were hard feelings amongst the men concerned and violence occurred at the scene of the dispute. One can sympathize with the dissatisfaction of workers who find that arbitral proceedings are cluttered up with so much legalism, and I cite legalism as a fundamental cause of unhappiness and unrest in this country to-day. I do not know whether honorable senators have attempted to examine the scope of awards made for the coal-mining industry, but if they have they will be aware that those awards occupy probably 40 volumes. One would need almost to make a life study of them to obtain a complete understanding of the industry and the incidence of its awards. Much of the difficulty that besets our industrial workers would be resolved if a single authority had complete power over the terms and conditions of employment.
Many of the difficulties, much of the legalisms and delays, and a good deal of the confusion that afflicts the mind of the average worker, would bc overcome if we “ould “confer on a single authority the power to regulate terms and conditions of employment. I take the opportunity to remind the Senate that a. previous Labour administration put to the people a proposition that the Commonwealth Parliament should be invested with such .power, and, in order to allay any doubts or misgivings, an addendum provided that there should be no possibility of civil conscription. I rein i nd the Senate that the political parties that, now constitute the Government, opposed that referendum proposal, and were thereby responsible, very largely, for its defeat. Accordingly if the confused state of industrial laws in this country is one cause of industrial unrest and unhappiness, then some measure of blame must be laid at the door of the present Government parties, in concluding my remarks on this phase of the measure, I remind honorable members of the vast expense in which unions are involved. Only those parties that are cited by a union as respondents to an application, and their immediate successors, are bound by an award. Consider, for instance, rural industry, in which there is no registered organization of employers that can be served on behalf of its members. I was informed by the general secretary of the Australian “Workers Union a few days ago that it cost £1,400 to serve the various respondents to a claim against the pastoral industry, whereas a claim by one or two pastoralists against the union can be initiated at a cost of 2s. 6d., simply because there is an organization representing all the employees that can be served. One must concede, therefore, that there is some justification for a feeling of injustice on the part of the organization. The great difficulty is that the Commonwealth Arbitration Court, which deals with the vast majority of workers in this country, is not in a position to make what is known as a common rule. When it makes an. award, that award binds only the parties which have been specifically cited as respondents. The court cannot provide that the award shall be binding on all employees in the particular industry. That matter cannot be rectified owing to the limited powers possessed by the court at present. .
I come now to the second cause of industrial unrest in this country, the instability of the Australian economy. That instability has arisen primarily from this Government’s inability to do anything effective to halt the raging inflation. The workers are not fools. They realize that there must be an end to inflation, and they know instinctively that the end will be disastrous for them. That knowledge creates uncertainty in their minds ; it causes a sense of insecurity; it produces instability, and, worse still, it encourages irresponsibility. In short, it undermines rlip morale of the worker and encourages the outlook :” Let us eat, drink and be merry for to-morrow we die “. We have the constant spectacle of wages chasing rising prices. The Government which, in December, 1949, told the people of Australia that it would put value back into the £1, has failed dismally to fulfil that promise, or even to take effective steps in that direction. Therefore it must accept a major portion of the blame for whatever measure of industrial unrest is attributable to present-day economic conditions.
The third cause of industrial unrest is, of course, the Communist influence in certain key unions. I wish to make it clear, however, that not all the industrial unrest that flows from those unions is due solely to Communist influence. Many strikes have had a genuine industrial basis. The Communist is not slow to exploit a legitimate grievance; but even some Government supporters in the House ofRepresentatives acknowledge quite freelythat some recent strikes by the coalminers and by the waterside workers have had a genuine industrial basis. On the other hand, there are disturbances such as the coal strike of 1949 with which the Chifley Government was faced. That was purely a Communist-inspired conspiracy. It was so dubbed by the Chifley Government, and it was fought and beaten as such.
– But it had its basis in an industrial grievance.
– The excuse was an industrial grievance, but it was not a legitimate excuse, because when the strike started, a judgment was on the point of being delivered by the Coal Industry Tribunal. The union knew that when it ordered the strike. Therefore from a truly industrial viewpoint the strike bad no ‘justification. Not only did the Labour Government have no” hesitation in passing legislation to deal with the strike, but also its supporters went to the coal-fields and told the miners that the strike was unfounded, and ultimately the miners were convinced that for political purposes they had been misled by their Communist leaders. The point I wish to make is that whilst strikes of that kind can be disastrous to the community, they are relatively few and far between, and, in the whole field of industrial relations,they assume relatively small proportions. . .
I do not propose to review all the provisions of the bill, but I shall have something to say about a few of the main powers that are sought. I come at once to what I regard as the major provision, that is, the power that the bill proposes to confer on the Commonwealth Arbitration Court, to enjoin an organization or a worker to comply with an award, and, in default of such compliance, to inflict the punishments prescribed in the bill. The measure prescribes a fine of £500 for an organisation, £200 or one year’s gaol for an employer or an official of a trade union, and a fine of £50 in any other case. That provision arose suddenly on the 5th March when judgment was given in the metal trades case. The High Court, dealing with prohibition proceedings, held that as the Conciliation and Arbitration Act had already provided specific penalties for breaches of awards, the court’s power to deal with persons for contempt did not extend to those particular matters. Three days later a most extraordinary tiling happened. Angrily, hastily and in a fit of pique, the Government introduced a bill into the Parliament to reverse the effect of that decision. The bill sought to give to the Commonwealth Arbitration Court power to impose an unlimited gaol sentence or unlimited fine on anybody who committed a breach of an award in defiance of an order of the court. The Government was in a state of hysteria. Since then it has had time’ to think. The legislation was severely criticized on the hustings and the Government apparently decided that it had acted rashly. It also found legal defects in its original bill which it seeks to correct in this measure. I am delighted by the naive expression used by the Attorney-General at the opening of his second-reading speech on this measure. He said -
The two most important of these matters were dealt with ill the two bills introduced in the last Parliament hut not passed by the Senate.
What a charming statement - “Not passed by the Senate”! One of the bills never came to the Senate at all, and the other arrived in this chamber on the very fifty upon which theSenate adjourned indefinitely. Not one single opportunity w as given to the Senate to consider either measure, yet the Attorney-General referred quite reproachfully to “ two bills introduced in the last Parliament, but not passed by the Senate “. It was of course literally true.
Government senators interjecting.
– Honorable senators opposite seem to be getting rather heated, so perhaps it would be appropriate for me to ask for leave of the Senate to continue my remarks at a later stage.
Leave granted; debate adjourned.
Motion (by Senator O’Sullivan) agreed to -
That the Senate, at its rising, adjournto to-morrow, at 2.15 p.m.
The following papers were presented : -
Public Service Act - Appointments - Department -
Civil Aviation - F. W. Brunsdon, M. J. McGrath.
Defence - F. M. Petchell.
Health - L. W. Alderman.
Public Service Arbitration Act - Determina tions by the Arbitrator, &c. - 1951 -
No.60 - . Association of Architects, Engineers, Surveyors and Draughtsmenof Australia.
No.61 - Professional Officers’ Association, Commonwealth Public Service.
Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance - 1951 - No. 6 - Advisory Council.
Senate adjourned at 10.28 p.m.
Cite as: Australia, Senate, Debates, 10 July 1951, viewed 22 October 2017, <http://historichansard.net/senate/1951/19510710_senate_20_213/>.